check on the markets this morning. we're about half an hour before the open things looking up 104 points higher on the dow, s&p 500 nasdaq looking to open about 47 points higher. make sure you join us next week. have a fabulous weekend, everybody. "squawk on the street" begins right now. ♪ ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. despite one of the flattestmajo month, kudlow says u.s. china trade deal is getting down to short strokes. here is europe's action and yields as retail sales for october are mixed. as is empire manufacturing road map begins with the record-setting rally a deal is getting close, cukudw

says military cloud contract win. >> and restoration hardware surging at the open, buffett's berkshire hathaway revealing a new stake in the furniture retailer stocks are looking to make more history a day after the s&p posted its 21st record close of the year futures up on comments from larry kudlow about progress of trade talks in china, upbeat news about the consumer adding to positive sentiment. retail sale s rebounded in october .3 but strip out gas, it is a miss. strip out autos and gas, it is a miss as the three-month average continues to slow. jim? >> look, i -- there is just -- the mixed picture keeps making it so it is bullish. it is amazing. if it were too strong, we would have to say that jay powell has -- they still play by jay powell there is just enough tease with trade talk i have my view on what is happening now and it is not as sanguine as what people are saying

this is about farm, about ag, and it is about -- this is my understanding, not necessarily about soy. a lot of pork involved because they actually don't have pork so, in other words, this is not one of those buys where they're making it so that the president has a win. they need pork. >> swine. >> i do not think that they're going to buy one more slice of bacon than they need and that the president is not happy with it so -- >> chinese state media, south china morning post saying getting to 50 to 60 billion would be really difficult for the exact reasons you're getting to. >> yes so larry has a very positive narrative. other people in the white house are saying, are you kidding me they need -- they need pork so badly, and they're negotiating are you kidding? here's the price you must pay. and so that's the kind of thing, because the chinese don't seem to want to pay the price it is a defeat for the president

if larry is out there saying, hey, listen, there is a deal, the president doesn't want to be trapped into making a deal he wants a deal that is great for farmers and pays a lot for pork otherwise you couldn't get i think the chinese are being very adept at saying, hey, we have a great deal for you. it is a great deal for them. and the president i think is sensitive to losing here >> so you don't -- after a year of watching larry say there is a breakthrough, positive progress, fantastic surprises, you're not buying it? >> larry is a very optimistic fellow he's optimistic. >> very much so. >> optimistic about, i don't know, he's optimistic a better close on monday. always optimistic. it is an aside. >> friday, it is higher, okay? >> look, do i have to be facetious? he's very pro a deal there are -- i call him a technocrat paulson, kissinger, mnuchin,

kudlow all want this to be about trade. there are other people in the white house, lighthizer, we know where peter navarro is, who say it is in the about trade it is about the seven deadly sins, giving up on everything from the stop sending us deadly fentanyl to stop these state-sponsored subsidies. and a pork deal does not answer that part of the question. it is not ideological. >> market doesn't agree with -- they're optimistic too. >> i think the market likes -- the market is a little delusional but if the chinese say, we'll pay the posted price of pork, then the president has something to crow about. so they don't think that they're saying, listen, the 10 billion extra you want us to pay, the 15, we're not going to do it if they come up, we'll have a deal instantly instantly. and then everybody is happy. and the market is right. so it is really up to the

chinese to make it so this market is going to be -- >> meantime, the pork inflation is double digit, right how long can they sustain that >> they need our pork. it is -- it is kind of -- that's what it is about and the hard-liners are saying it is not about pork at all. it is about giving in and they pick this long issue, the chinese. negotiating is something they have to buy anything this is not soy. i remember when dupont was telling me, they switched to brazil you can switch to brazil all you want they don't have the hogs they don't not having the horses. they don't have the hogs they don't, david. david? they don't have the hogs. >> got it. really i never thought we would be spending this much time talking about pigs >> it is bacon -- it is -- in what country is general cho outranked by a colonel

ever been to chick-fil-a on sunday >> no, they're not open on sundays. >> finally he knows something. >> then when does reality sink in to stocks >> i think this is up -- honestly, a deal if the chinese come up 10 billion >> 10 billion? 10 billion in pork purchases. >> and a deal. >> we'll get a phase one signing. >> we'll get jpmorgan will be in there, credit card >> december 15th never happens >> no. december 15th is fine. restoration hardware, by the way, made their -- they're making all -- they're moving out of china dramatically. everyone is doing it the hard-liners are saying let's keep stringing them out. the president wants a deal on his terms and the chinese have to come up come up right now, and the market goes to a gazillion and larry is on saying we have a big victory. >> you don't think a signing is a sell the news event? >> no. >> really? >> it is the beginning -- well, there are other hard-liners who

say, we're going to give them that one thing if the market goes up big, the president loves the market going higher and loves larry the president loves larry. laurie has been pretty great for the stock market the chinese have to stop playing hard ball over something they need they need it they don't need the -- >> just -- we'll end this discussion in a moment, they found other sources of soy, why can't they find other sources of pork >> the amount of -- because we're the only real certified. we're good our pork is not tainted it is -- look, you know what, at one point we could have been talking about the soviet union and bread. they ran out of bread. this is one of those cases like the soviet union where they needed our bread, okay they need our pork the last thing i say about it is that they can make one phone call this weekend and we could have a talk, we could have a deal >> and you think that's market positive. >> yes >> all right >> i don't -- they act rationally will they feed their people and

give the president a win that's the question. >> all right we're going to -- we're going to watch it as we do every day. other big story, amazon is planning to challenge pentagon's decision to award that $10 billion cloud computing contract to microsoft amazon contends politics may have played a part in that award. the president, a long time critic of amazon and its founder jeff bezos in an email to cnbc, amazon says numerous aspects of the jedi evaluation process contained clear deficiencies, errors and unmistakable bias and it is important that these matters be examined and rectified this is a big deal, even for a company the size of -- >> this is a hard fought contract it went on for years amazon always seemed to be in the pole position, but they had a lot of people after them people trying to spread information about bias, frankly the other way, or about different things that went on at dod, even under mattis all i can say is it is not a surprise that they would -- that they would do this, because it

was something of a surprise that it didn't go to amazon they seemed to be the favorite along the way. and you have to take into account the president's comments and his contempt for the washington post and its owner, mr. bezos. it is a big $10 billion is not an insignificant sum of money. >> two years ago wouldn't be a question amazon, web services would be vastly superior. i now think that satya nadella, microsoft, they have a compelling product six or half a dozen, honestly. i don't think anyone who is choosing right now to use azure is choosing to use an inferior product. i think azure can be equal now, amazon web services to their own credit keeps cutting cut prices like 40 times but i could argue that they could cut pricing and get the government a better deal i don't understand how they negotiated this. why didn't the government go back and say, listen, we'll pay half why didn't the government do

that did the government -- we don't know very opaque policy. >> somewhat opaque oracle was in there. microsoft, amazon, maybe even some ibm i think at some point >> they're not competitive. >> it was -- it was a very toughly fought battle, don't forget amazon already had the cia cloud computing, in some fashion. the cia may be going out yet again for a bigger cloud presence a new contract but this paves -- that's -- this is also linked to that and future contracts the revenue sources you might imagine, revenue is going to be enormous coming from the government as it moves various -- highest level of sensitivity outside of the premis premises. >> do you think the president put his finger on the scale here

>> i have no idea. would you be surprised is there anything given his behavior that would surprise you? i've never seen that before. >> it is a podcast. >> you didn't speak. >> i don't need to >> we got that legendary ukraine funny man making the calls supposed to be really funny. i don't know if you've seen his stuff. >> never i don't speak the language >> we're going to keep our eye on house intel, the impeachment inquiry hearings and now a new memo from the white house. to that, we get to ilan mui. >> the white house released a memo between president trump and president zelensky that occurred on april 21st. it was about 16 minutes long and in this call president trump extends an invitation to president zelensky, according to the memo, he said that when you're settled in and ready, i would like to invite you to the white house. we'll have a lot of things to

talk about, but we're with you all the way. president zelensky then accepts the invitation and says he looks forward to the visit zelensky also extended an invitation to the president to visit the ukraine for his inauguration now, this is important because, of course, the president has been saying that there has been no quid pro quo in his dealings with ukraine in this exchange he was extending an invitation to zelensky without any conditions on it. and, of course, they're releasing this memo of the phone call just as the house intel hearing gets under way so we will continue to read through this text and also monitor the hearing. i believe chairman schiff is still in his opening statement and we'll bring you the latest as we have it, guys. >> thanks for that. we'll get cramer's mad dash and countdown to the opening bell tons of news to get to, including nvidia and amad and under armour and berkshire as we mentioned, restoration, jcp. let's get the promaemarket here

"squawk on the street" back in a minute

retail sales let's get production with rick. >> this is not a good number industrial production down .8% that's a steep drop. double the expectations. we're looking for down .4. we did garner .1 in a revision still negative from minus .4 to minus .3 let's look at capacity utilization.

76.7 76.7 that is the weakest number going back to, boy, we have to go back quite a ways there weakest number since september of 2017. now, let's look at what is going on with regard to the market place. keep in mind, interest rates are up a little bit on the day, up a basis point in 10s as you open the chart up to tuesday, bond market closed on monday, you can see we deteriorated, down 11 basis points and from a key level, right in the low to mid190s. if you look at what is going on in europe, bunds, which in many ways sparked some of the selling a little over a month ago that started to push rates up and create some optimism paired with some better data at the time and maybe more optimism in the announcement of phase one, boy, it certainly gave up ground. down 8 basis points on the week. the dollar index, it is now just hovering above 98. last friday, it closed at 9835 on this two-day chart, gave up a lot of ground yesterday.

we're not gaining it back today. carl, jim, david, back to you. have a great weekend. >> thank you very much let's get to mad dash here as we count down to the opening bell 17 minutes -- sorry. 14 minutes 13 minutes 13 minutes i like to count down here. last mad dash of the week. nvidia reports on earnings. >> my head is chilly cold in new york i put on my nvidia cap why? because the quarter was excellent. the guide may not be enough. the quarter was so great, why did they guide up? there is some issues about whether gaming is strong that's ridiculous. it is seasonal this is a story about artificial intelligence and machine learning this is a story about, say, alexa, how does alexa know they don't reveal clients. they can think around the corner they're so many years ahead of everybody else it is about gaming in the sense that they have -- they have

gpus, make it so it is so life-like. >> nintendo is a big customer. we know that. >> big quarter. >> they sold a lot of -- >> exactly right. >> that's good but jensen huang delivered again and again. there are people right now who are skeptical saying, this stock just did this. sorry. >> something else. >> anyway, the -- >> here, try this. >> okay. this move was entirely because of this quarter and now it is what have you done for me lately i think it regains the high. by the way, one of the things, david, people don't talk about anymore, they do simulations they do simulators for airplanes. isn't that interesting the pilots need another 20 hours? >> that's a lot. you think it regains the high? >> yes. >> really? >> yes because they're so far ahead of everybody else i went to nvidia, they have robots, they say, get me a cup of coffee, the robot gets you a cup of coffee.

>> what about lisa sue at amd. >> they're cousins they're related. >> that has nothing to do with whether or not they're competers. >> gaming, yes, they are competitive. there is no doubt if you speak to their executives, they'll say lisa sue has done an amazing jo at amd but she's not in ai at their level. no one is. no one is at their level you can basically -- here's one. you like a song? would you like violins in the song you can use that artificial intelligence and decide, listen, i'll put violins in the song it learns the song the machine learns the darn song listen, billy joel, and decide you want to put -- there is only ten instruments they can put it. i met billy joel the other day, he said, can i have a selfie billy joel, me, selfie, me he said separated at birth he asked me for a selfie. >> i'm aware. >> do you know how many times i wanted his picture does he know i'm the spokesman

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nice rock. it's time to drop gold. go digital. go grayscale. a lot of familiar dynamics in play this morning as industrial production comes in worst in 17 months, largely due to gm. we're looking at record highs as the markets hoping for a trade deal still opening bell in about seven minutes. my parents never taught me anything about managing money.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in over four minutes as we put this week to bed here on this friday. ton of news, jim, as we just got this -- pouring through this industrial production number, as we said, largely gm related.

>> right look, it is really hard to try to figure out. i keep going back to that walmart quarter yesterday. 275 million people we go there and stock reversed i didn't understand the reversal stock should be higher the consumer is strong, the consumer is strong if you sell into the consumer, you're doing very well you sell into manufacturing, you're not and yesterday when we had -- i thought it was kind of seminole. when we had chuck robins on, he sells into big companies, big companies, they're tapausing. he said something interesting, it takes more people -- more people have to sign off. and that's the kiss of death it is like let's delay, let's delay. the consumer, no it is like whatever they need, give it to them. and i'm going out next week to dream force. the thing i don't know is how about software

i know marc benioff thinks business is strong we know that -- that ryan said that adobe is very strong. so i think that that area is strong, but that is -- i was talk -- doing work on service now. their business is very strong. so i think that you're okay if you're in that software is a service. you're really good if you're selling the consumer and just awful if you're selling to worldwide industrial. >> a dream force and will also get a ton of retail earnings walmart being the first of many. i see yesterday cowan upped pvh target, dick's target, the cold weather is helping, markdowns are controlled. >> also, look at kohl's. my travel trust owns it. a disaster suddenly it is back. jcpenney, people like jcpenney, you would say not much of a factor but they have sephora is in there. >> david has some on this journal under armour piece about

aggressive accounting and dumping it off price retailers >> they came back to the story that they did last week. under armour itself just responding saying they're aware of the recent media coverage and firmly believe their disclosures and accounting practices have been entirely appropriate. and the management and board have reviewed the matter extensively. they go on to say over the last two and a half years stand by the company's financial reporting because the investigation is on going, they're constrained beyond that, they say they can't address every allegation that's where it stands >> one of those things, very hard, they -- a lot of this revolves around sports authority. sports authority had financing to buy under armour stuff. under armour sends a lot tothe and sports authority closes. so it is very hard just like very hard for hasbro to figure what to do with toys "r" us. and all these things kind of call us at the same time

i did not see a smoking gun in that story >> that's the general take on the story. hard to square that with a legitimate probe of any kind of -- >> this is not valiant where they were sending it in order to stop the channel. >> going on for a long time. you were very outspoken in criticizing them for not having disclosed it >> well, but, then again, when i did some more work on it, because the justice department did not specifically tell them what they were investigating, they didn't know what to disclose that was the wrap internally what do we disclose? the justice department has been hanging around the justice department -- wasn't until they leaked it to the journal today, no, this is -- they didn't really know what to say. that's why they didn't disclose. what do we he do the justice department -- what do you do? charge them. it is like when you're in the station house, i'm leaving if

you don't charge me. got it >> yeah. >> you don't like that answer? >> you're critical. >> well, they come back and they're saying -- if you charge us, we'll -- interesting the journal charged me the journal doesn't have subpoena power, david. >> there is the opening bell on the s&p 500. breadth good open at the open. big board, broad market realty capital. and movember. >> i have this guy, cuts my hair clever barber. i said, do whatever you want i don't care he does whatever he wants. >> i like you with the hat. >> he charged me $40. >> sharp hat. >> $40, i don't know how much you flip them when you do things i flip him how about applied materials?

>> how about that apmat. >> it was like circus maximus, we're crushing them. they said, look, nan is bottom i had dinner with sanjay, micron these guys signal that dram is bottoming. it was a joyous call this is the highest trough ever. four quarter correction. and this -- the company never really, you know, used to be the old days you get crushed during these inventory gluts. look at that chart, david. >> that's a thing of beauty, that chart >> exactly. >> you own the stock. >> exactly, david. it is a -- what would you call it, rembrandt, more realist, or more post expressionist? >> post modernism. >> it is such a good -- they -- i have to salute them. if you're saluting, look at lam research lam research at 150 made a stand on their stock

tim archer, great ceo, said, listen, we're buying every share. people laughed they all laughed at him. they laughed in the valley, david. now look they're not laughing now >> i see lisa sue's been added to the best ceos of the year again this year. >> number one last year. >> that's going to take you back to 61 back to march of last year >> it is incredible. and, by the way, lisa sue, people thought that last quarter was not great. stock fell from 33 to 31, still one more buying opportunity. apparently there was unusual option activity yesterday. >> when was this >> yesterday >> oh, really? >> yeah, sky, a lot of stuff going on there we haven't mentioned billionaires. >> we'll get to that later. >> yeah. >> apple, 264, record high jpm to 290 today. >> brilliant piece it was a brilliant piece they are starting to talk about the bundle this is going to reveal the

lifetime value of a customer to apple. this is what is going to do it >> i'm sorry what is the this? >> the bundle. you'll be able to figure out, a guy takes a bundle, okay. >> linking together of all of the services >> you can do the present value of a contract and be able to come up with what the value -- >> and pretty soon like 2020, right >> i know when i ask him and josh laughs about it, but i've been saying to them over and over and they now finish the sentence, i would like to get the president, the value of the bundle, i use the broken record about breaking out service, broken record, they're going to listen to me and the stock goes to 300. >> cook and the relationship he's fostered with the president seems to have minimized any tariff risk. >> well, strange bedfellows, kind of crazy. but he's got a great represent -- with xi listen, 2 million jobs in the united states threatened, involving apps

2 million jobs in china. the guy is a jobs machine. he prize more jobs than anybody other than walmart and the government itself. >> are you counting suppliers? >> i'm counting all the -- also, like -- i have friends -- i have friends who design apps. and i designed an app that they -- you give them 30%. we have snap ceo on, on monday >> we tried to get evan on a couple of weeks ago and the fires intervened >> he's the man. he's the man if he can -- that's going to be the best interview of the year that stock goes to 17 if he can say -- >> of the year >> in terms of moving a stock. if he says the magic words that consumer package good companies, we have figured out how to do programming, i don't know if you see -- they have like 90% share of the people that everybody wants to reach that's a big interview >> julia has that at 10:00 a.m. monday >> he and i are good friends >> you and evan? >> yeah.

>> that's great. congratulation congratulations. >> not a true statement. >> it is not >> you're not good friends >> i want more than that t-shirt. honestly go, to tjmaxx and get a button down or something >> you did nvidia during the mad dash the stock is not doing much of anything i think it is worth every so often in just stopping because they do report adjusted eps measures >> you are going to blast them >> i'm not i'm not going to blast them. i am going to take this as an opportunity to point out how much adjustment is going on in every single one of these. >> 6 billion in cash they'll finish the mellanox deal in the first quarter and buy back all the stock >> they did delay -- they did say it is going to take a little longer. >> european, got a little chinese indecision. >> they did go on -- if you want to read the footnotes, reconciliation, gap financial measures, they exclude stock-based compensation

expense, restructuring, other acquisition related and other costs, gains and losses from nonaffiliated investments, interesting expense related to amore tization of debt discount and associated tax impact of these items were applicable. want people to know. a lot of adjustments going on. microsoft doesn't adjust any. >> mr. clean satya is mr. clean i didn't like what you just said about -- that does -- it hurts the investment case. just like it hurts sales force adjustment case. that stock is at $8. >> mentioning what companies are adjusting for. >> that's true if we didn't have good cash flow and there wasn't a big cash position, i would say we got to do more digging. so you're absolutely right adjusted gap. >> i'm not picking -- >> no, no. you're right adjusted gap, i wish it were just -- i like apples to apples. there is not -- we have adjusted gap. >> that's the other thing. one company's adjustment is not another company's adjustments.

they adjust for different things by the way, companies that are serial acquirers, adjusting every single quarter for acquisitions. >> do you see ge, ge is trying to make it so it is going toward what you want. >> right. >> the cannabis stocks -- >> he's pushing up on $100 billion market cap again. >> notwithstanding tusa's note from wednesday, where he said that it remains a tool to manage quarters essentially, right? >> i'm just going to say it, i'm going to say it for the record, okay he has become very boring. >> you turned on tusa? >> i turned on tusa. >> he didn't nudge -- is his target 5 or 6? >> he is one of the nicest people in the world. the fact is the stock is saying, look, that was really good, that was solid work but -- >> terrific. >> but we moved on now, i'm not willing to take a

helmet to tusa's head. i'm not going there. >> good. i'm glad to hear that. >> i'm not going there but i will -- i will throw a red -- challenge flag to the most recent research and it may be one of those -- it may be a -- i'm challenging the defensive holding. but his stuff, as good as it is, is no longer relevant to the stock price. now, you want to be right, but more important you want to be relevant and he's not relevant. he's still relevant to 3m but not ge. >> interesting, jim. >> yeah. >> aurora is catching up to the tilray kronos -- do we call it a disaster at this point >> yeah, i mean, oh, geez, go to aurora, analysts, the long knives are out a lot of people have been calling about, you know, burning the whole crop in canada, like an agricultural adjustment in 1930s. that piece was just -- the aurora quarter was an abomination, the best thing

they're doing is they're canceling a giant facility that they're going to build it is just -- this quarter is just -- i don't know they're setting benchmarks here, mkm, fantastic piece aurora is curtailing capital spending by immediately ceasing construction on aurora nordic 2. >> and the aurora sun, to more closely align with demand expectations >> wow what a chart holy cow >> canopy interim ceo on yesterday as well. inventory issues, trying to get more stores built quickly for distribution purposes, like ontario. >> yeah. >> they have one for every 600,000 people >> there is a place in north ontario, window, that's where they need to -- they need to open that window that neil young had and throw the cannabis in. there is too much cannabis and

they can't -- remember, canopy growth, big stake by constellation brands the way you want to do -- the thing you had to have was hard seltzer. >> may want to wait until the stock was down here. >> take your company private they don't have a ceo. that gentleman is resigning. isn't it interesting that no one seems maybe to take that ceo job unless it could be a bed, bath or something, target merchandise takes it i don't think so constellation has a very good cfo and he's on the board of canopy they'll pick someone good. but it is very frustrating because america did not go this way. and kronos, it looks -- people starting to think that kronos is joining juul with hapless investments. >> you had oversupply, you had -- i think vaping, maybe the cannabis vaping problems may have hurt. >> so important. people don't know what -- now there are people who say this particular chemical, but the edibles, not coming. where is the cannabis beer

not coming. >> lack of follow through from major cp. >> pepsico >> packaged goods. >> james quincy on the record saying no, no. hugh johnson, no they need these companies. campbell's soup could use a little cannabis. not happening. >> i don't believe -- >> and thc, can't even mention it nothing changed. thc sends you to jail. one of the problems everybody has is we don't know what the true -- the police, when they pull you over, we still don't know each person reacts differently, you have 90 proof liquor people react 90 proof, everybody. you do not -- thc, one guy -- one guy is square of a thc chocolate bar is equal too enough to send you to the moon and another guy, like, give me another, i don't feel any different. >> dosing is very uncertain. have to be very careful. >> thank you >> finally, jim, euro at the

highest level against the dollar since november, early november. >> yeah. >> and bamle has a note about rotation out of u.s. into europe >> yeah. after brexit, things are good now. chuck robins threw cold water on any turn in europe i am getting lots of people saying, there is starting to be activity in europe chiefly spain. some in germany, but nothing to make you excited what we need to see is a bank revival, the biggest bank in europe, not doing that well. you know what that is. say it say it i demand you say it. >> no. >> santander. >> banco santander. >> that's making fun of -- >> you do that all the time. >> i stopped doing it. i stopped doing it, okay i want people to know, i don't make fun of that that bank is darn good

using them in mexico they do a good job anna butin survived, everyone else, no keep your money there overnight, would you to it? yeah. >> record highs across the board. 3106 to bob, good morning, bob. >> good morning. new highs, retail sales better than expected of the industrial production not so good mixed economic news. we're sort of monving on the trade headlines. trade headline movers, semiconductors, banks up, yields up today after several days of down moves in yields banks a little on the weak side. transports, another trade mover here retail doing well. retail across the board doing well this morning. utilities a tad weak as the yields have moved to the upside right now. take a look here, for the week here, this sort of reflects the indeterminate nature of the week banks are still down remember, we had a significant move down in yields this week.

a lot of this is just trade confusion, we're not sure what exactly is going on, how close it a deal we are and the market reflects that disappointment on nvidia and what was going on there, and light guidance look at applied materials, the old high is $61. and we are essentially there we're sitting right at the doorstep of an historic high for applied materials. numbers were excellent and the guidance, the sales guidance was outstanding. they have raised numbers right across the board, sales guidance, excuse me, price targets raise at jpmorgan and morgan stanley, wells fargo, rbc and nomura the important thing about applied materials, this is largely asian sales company here only 9% of the revenues are in the united states. and the rest are essentially the major part are all in asia china, south korea, taiwan, japan, so when they raise the sales guidance, that is a good sign that we're certainly not seeing a collapse in demand for

semiconductor capital equipment company. that's the equipment that makes the semiconductor stuff itself here retail sales, i have four things i like to watch in retail sales. easy to understand for everybody. generally good news overall. internet sales 14% that's a strong number, this is year over year that's the way i like to watch this that's a good number close to the highest numbers of the year restaurant and bars like to watch that people still going out, up 5%, that's another strongnumber that you're seeing overall and, of course, we all know what is going on in department stores this is a weak number. but we have been seeing this all year apparel down 3%. so people are still going out, certainly spending a lot, spending online a lot, those numbers keep going up. the stores, in store numbers that keep going down here. just a confirmation of trends we have been seeing all throughout the year sitting just off the highs for the day. carl, back to you. >> we'll see you in a little while, bob pisani. bob iger sharing his secrets of success on a learning site called master class.

the disney ceo offered up some negotiating strategies >> no way that you can achieve great gains without taking great chances. i'm going to cover a number of subjects leadership attributes, how to manage creativity, how to develop a strategy, the role of humor in the workplace is an extraordinary distraction and really is no place for humor at the walt disney company. >> interesting master class of course does online videos, they had steve martin teaching comedy, and annie leibovitz teaching photography. he talks about going into negotiation, putting everything on the table immediately >> look, first of all, in his book, he's the only person who seems to be friendly with steve jobs toe to toe in the book, there is this great moment of humility, he's fired he's learned -- he learned from his setbacks and in the end, i think he's a

very inspirational figure. i think we're just now beginning to learn who he is he's starting to open up he's always been pretty buttoned down and the more he talks, the more you realize he's teaching younger people how to be in business he's actually transcended, i think, the -- my generation is the generation that says you have a migraine, take two excedrin he's that. he understands younger people. and maybe it is because of theme parks, i don't know. he has a tremendous beat on what it was like when he was younger. a lot of people who were successful have forgotten. not him. talks about his dad. and what it meant for his dad, troubled and what it meant for him. had stuff in there, attacks people i think he thought he would be retired, he wrote that book. >> evidence he really did think he was not going to the ceo any longer, the book came out. he had committed to it in some time in advance when he thought he was going to be

2021 is now the year and there is a lot of debate and question about who it is going -- who it is that is going to replace him and as next year, we move into it, it will become certainly something we tend to -- >> i want to be one of the 100 people fired who makes millions at cbs >> they quietly for a lot of people at disney, don't forget. >> that's true >> fox deal. a lot of people. >> make it less quiet. >> another -- he's good at that too. >> actually talks about the price paid for the fox assets is part of this video last week, of course, he mentioned bringing more sports to big networks. disney networks. which brings us to football, jim. you talk about water cooler moments. this miles garrett moment last night is -- it is one reason why people watch, they -- it is something we have in common. >> yeah. look, these are -- everyone i know is sick about this. guy is down there, but this is just -- it is just lawlessness

just lawlessness i think someone is going to have to get prosecuted to finish this stuff. i do not know. very discouraging. by the way, bob bakish talking about why the nfl is going to stick with cbs, which is the incredible -- how good the coverage is, how beautiful i hate to say it, but that was the most -- that was like the best footage i have ever seen. they had everything. >> yeah. very unfortunate moment. not going to take away from the nfl's power, though. >> no. >> and when it comes to our part of the world in business, that contract, renewal, going again next year, a big deal particularly for companies like viacom. >> viacom is -- bob bakish is so confident, david. >> and fox >> he's so confident. >> and for disney, abc said it would tar pieparticipate and am >> and nbc flexed the eagles

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jim, what's on mad tonight >> live person when you speak to some people when you call on a data center, a call center times you get a live person, covetrus, my dog uses those products for inflammation my dog is not doing so well today. i think there was a guy who questioning her accounting. >> that's not true a lot of adjustments going on with your dog. >> you question under armour's accounting, that i remember

accounting, is there anyone's accounting you are not questions? >> a lot of adjustments. >> next week we will see you at dream force. >> the lineup there, my people tell me, is so good that i will be 3:00 a.m. with you. >> they usually book it pretty well. >> they do they're great. heather gaines, fantastic. katie spencer, amazing. >> you have a great team it's never easy being out there. >> no. >> you're doing everything live. >> we have to crush it. >> jim, we will see you tonight, "mad money" 6:00 p.m when we come back stacey cunningham about the ipo landscape plus we will talk to the executive chair of aurora cannabis it was sophie's big day.

by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.

welcome back to "squawk on the street." rick santelli with the last live breaking news of the week, it is a september read on business inventories, expecting up one.tenth we end up with zero. unchanged is interesting we have three unchanges this year, but this one doesn't add to it because last month's unchanged becomes minus 0.1 due to revisions we haven't had a negative number in this series since april of

2017 no surprises here. even some of the data today has had little effect on what is a down rate, down dollar week at least up until this point. carl, back to you. >> rick, thank you very much good friday morning, welcome back to "squawk on the street," i'm carl quintanilla with david faber, record highs for the dow, the s&p and the nasdaq today despite mixed retail sales, mixed empire manufacturing but more hopes for a u.s. client trade deal. >> our roadmap starts with the trade real new record highs with larry kudlow saying the u.s. and china are getting close to a trade deal. >> pot stocks going up in smoke. we will talk to the executive chair of aurora cannabis on their latest quarter. >> and the ipo market is in a slump. nyc president stacey cunningham will join us and we will look at the health of the overall public markets. >> markets hitting fresh record highs this morning after white house economic adviser larry kudlow said china and the u.s.

were getting close to reaching a trade deal where have we heard that one before joining us now to discuss a mike santoli. so, markets feeling optimistic this time or is it getting to a situation where it's the boy that called wolf >> obviously the market is not dramatically pricing in instant gratification after what larry said, but i do think that the premise of this real that we've seen from early october and before that since august is deescalation of trade. other parts of the premise of why we're rallying here is confidence that third quarter is the trough in growth, cyclical stocks doing better, bond yields going up, maybe the fed stuck the landing. all of those things am a mosaic are the picture of where we've come from and where we're hovering at these highs. i do think that the activity of unusually flat action in the major indexes for seven days when they were already overbought, when people were getting a little bit more bullish i think it shows you

that kind of the -- the market has declined, lots of excuse toss pull back and it's seizing on this small kmus to nudge higher a little bit. i don't think we've gotten a decisive move. rick talking about a down rates week is significant. what's giving pause to people thinking we are in a good place in terms of cyclical rally and all the rest is bond yields being down over the last couple days is that a pause, is that the market overshot in a short term to the upside in yield or are we back in the slow growth world. >> we've only got six more weeks left in this year. >> yeah. >> how do you distill some of the economic data we've seen decent numbers on the retail sales side, industrial not so much it's that tale of two economies we've been talking about with regard to manufacturing on one hand and the consumer on the other hand. >> it is it's all consistent with the general picture of we're in a 2% world, 2% growth, 2% treasury yields roughly, maybe 2% inflation if we can get higher i think it all fits in that

direction. i think it takes an element of kind of really parsing the leading indicators of where we're going, the economic surprises and the overseas numbers in terms of growth to say we've hit an inflection point and the worse of world growth is behind us. so i think that we definitely have gotten away from the idea that recession is at the doorstep the question is just how positive is the positive growth going to be. >> the yield curve inversion. >> it's gone and everything has been right-sized over there. >> i wonder why you think the market is overlooked not just the reports of snags in the discussions but obviously cisco, daimler had a warning this week that got lost. it's all being ignored a lot of it is being ignored, again, i think it fits into this idea where it was a messy third quarter, the market kind of told us that in august and september when we had the freak-out. the numbers themselves on balance are okay i also think if you look at forward guidance in aggregate it's not more negative than

unusual. so cisco, you know, sure, is it a proxy for kind of nominal growth in world kind of business spending maybe. >> i guess my point is a year ago earnings were up 26, now they are down a little bit and we're having the best year in five years, right? >> right. >> so we're looking for something. >> right. >> next year >> or we're down 20% in the fourth quarter from high to low last year, that was telling you 2019 was going to be a growth struggle now the market is firmer than the current economic numbers are telling you and maybe the indication at least the inference there is we're maybe firming up in terms of growth into next year that's the way i would think about it also the fact that the climactic low came right before the turn of the year, to me it's kind of fouling up the year to date stuff. >> such a mess. >> you were flat for 20-something months, really from january 2018 until recently. >> right. >> as opposed to up huge. >> right i wonder if it's complacency or if it's just disagreement --

>> we're getting to a point of greater confidence i don't think it's overconfidence just yet. >> all right. >> that's the hope. >> mike, thank you meantime, aurora cannabis dragging after reporting earnings yesterday, the canad n canadian-based company joins a slue of cannabis related names taking a hit in recent weeks aurora is upgraded today citing the company is better positioned for growth in 2020 than its pearce woe want keeps an outperform rating due to lower production cost joining us this morning is aurora cannabis executive chairman michael sing. thanks for being with us. >> carl, nice to be with you. >> talk to us about this decision to cut back pretty immediately on capital expenditures to meet new expectations of demand what is going on >> so i'd love to, but let me take a step back and give you a sense, you and your viewers what, we have announced. you know, as the global cannabis leader we have taken definitive

action today so important steps in positioning aurora for long-term success. we've taken concrete steps to strengthen our balance sheet and you saw a lot of that as we announced in terms of the early conversion of our convertible die venture, to your point about cap ex spending we have put on hold two major projects that will save us $200 million. that's important because we see an ability to be able to scale those projects up as we see global demand coming on. we're positioned to meet our current needs. by virtue of our industry leading gross margins we're driving to near term profitability. could in this evolving market those margins and our low cost of production at 85 cents a gram positions us nicely to deliver long term profitability quicker than our peers and we condition to be focused on the u.s. market. >> i understand all that and especially the long-term strategy, but when recreational

is down 33 quarter on quarter, what's -- why is that? >> so great question, carl so we guided this back in our september sort of q4 release there were two key issues that needed to be resolved. there was a backlog of inventory in the provincial distribution centers and that's cleaning itself out we knew in q1 we would see this slower ordering, if you want, pro the provinces. two, there is not enough retail outlets in canada and that's a common theme we've heard from all of our peers even with our significant ranking in this country, we're number one and number two in key markets like ontario and quebec there are not enough retail outlets. we're encouraged that that's moving in the right direction. with the rollout of 2.0, a new market of derivative products that are coming out around the christmas time frame, we're well prepared for that and a see that as a tremendous opportunity to sort of capitalize on that opportunity and help grow our business into the 2020 calendar

year. >> now, michael, you mentioned the partnership with nelson pellets, it's about six months old now, how is that shaping up in terms of getting additional partnerships in the consumer world to strengthen your business >> so great question nelson continues to be very active with us and helping us in a number of discussions we had with these global cpg companies. it's actually all part of a u.s. strategy for us. we see the u.s. as an opportunity for us to use as a platform to grow not just in the u.s. but in this kind of -- this cpg world globally nelson with his connections and obviously his help in helping us sort of navigate through multiple discussions with multiple partners in different industry verticals we're confident when we do make an announcement about how we see and how we're going to enter the u.s. market it's going to tie together the numerous discussions we have with nelson's help with these mature cpg companies and how we will be able to leverage that in

different industry verticals going forward. we are excited about an announcement when we're ready to do so. >> how close are you in turning some of those discussions into actual announcements, though >> look, we haven't provided any guidance, but because we're talking to numerous partners in different industry verticals we want to make sure when we do announce it is clear to the market the direction we're going and, again, we will use the u.s. as an opportunity to -- as a platform, if you want, for us to really sort of explore and continue to develop out these cpg opportunities on a global scale. >> yesterday we had the ceo of canopy join us expressing similar frustrations with the lack of growth and outlets that you just referred to same questioni asked him i wil ask you. how long did going to take for the inventory that's already there to burn off, i will say it again? how long will that take in your opinion given all the different things you're doing here to obviously try to maintain some margin, i would think the end

demand remains the dee question. >> i think you've seen some of that backlog cleanup you've seen the provinces return a significant amount of product to earn certain of the licensed producers. to date aurora has not had that experienced that so we are in a good position, we believe our products are in high demand. we don't expect we are going to see the returns that our peers have seen. i think with 2.0 coming out this why you derivative market coming out we are i believe better prepared than any of our peers given our high margin and low cost of production i think we are in a unique and exciting position to capitalize that on that going into calendar 2020. with the right launch of those products that we're ready for not just on the initial launch but ready for follow on orders that's something we will quickly be able to capitalize on and will drive us to near term profitability. >> you are not worried that your industry has overestimated the overall demand for cannabis in canada >> it's a great question i think we haven't taken our eye

off the big picture. we see a huge -- the long term vision here hasn't changed, i think what you've seen is just kind of a short term sort of if you want level setting so, no, and that's obviously why we've made the decision, if you want, to slow down two of our bigger pro k jekts and almost park those to a point at which we believe we will see the global demand pick up and be able to launch those no, we're confident that the market is just sort of, i think, adjusting, if you want, to some of the issues that i just described in terms of the provincial sort of challenges and the demand is there. our job will be to effectively try to remove as much as we can from the unregulated market to the regulated market you will see that happen with the launch of our 2.0, cannabis 2.0 products >> finally i wonder if you think the concerns this summer about cannabis vaping specifically have had a material affect on demand are we seeing that in sales of vaping derivatives

>> well, remember, in canada those vaping -- the vape pens, the vaping products aren't coming out until christmas, but what i can tell you is different than what you see in the u.s., in canada there are not -- we are not going to be able to have any additives or -- additives or dilute ants in those vape products we are also working closely with health canada to ensure we meet or exceed knows safety standards. the products we are going to be putting out are going to be safe to ensure our consumers are not at risk. we also put out certificates of analysis and that really does help i think give confidence to the market that the products we are putting out are safe, free of contaminants and gives consumers the comfort, i think, that they need to ensure that those products are going to be safe that they buy off the shelf. >> michael, appreciate you coming on and helping investors understand what's happening with the stock and the company. >> thank you for having me appreciate it. when we return, nyc president stacey cunningham will

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a number of this year's ipos continue to struggle with some high profile companies at least now delaying in favor of perhaps sourcing funds in the private markets. our next guest says staying private longer also needs to lower governance standards in companies. joining us is nyc president stacey cunningham. nice to have you here. >> thank you. >> what's your sense given some of the performance that we've seen recently, some fairly high profile names that have not done well. >> i think the market is asking important questions right now and i think there are issues that have been around for a long time, they are not very new but over the past few months we're starting to hear investors ask questions about what is the impact a lot of talk about why there is so much growth in the private market space and whether it's legislation or regulations or access to private capital but i don't think we've been spending enough time talking about what are the second order impacts of these companies staying private much longer, namely the lack of

discipline and governance for much larger corporations where their bad habits have grown alongside the companies in the private space, two the private markets do not value companies the same way the public markets do so you have a much more limited sense of participation trying to figure out what the value of these companies are and whether they're misvalued intentionally or unintentionally the fact is the same three, i think very importantly, it contributes to the bifurcation of wealth in this nation when only a select few people have access to those opportunities as those companies are growing so dramatically. i don't think we can understate the importance of that issue. >> you raise a lot of interesting points and ones we have certainly discussed, ones i have had a lot of conversation about in particular is that growth question. >> yes. >> where the greatest growth is taking place while they are in private hands as opposed to when they hit the public markets. in terms of being able to access private financing.

what's going to change that. >> i want people to understand how important that issue is. sales force is a great example, 15 years ago they went public, since their first day of trading that stock is up 3300% since it's been public that has been available growth to the public investing compared to 160% or 170% return in the s&p 500. if you bought 100 cares shares of coca-cola when it first listed it would be worth $55 million. returning the public markets into more of an exit strategy than a growth strategy and there is a lot of people talking about capitalism right now -- >> but i will ask the question again what's going to change -- because it's not as though the venture money is going away or even the secondary market has become a lot more robust in terms of the ability of early investor to sell to another private investor. >> just like it's not one cause it's not one solution. we need to make sure that our regulations and some of the changes that we made within the jobs act and some of those changes making sure that's

right-sized. we're also asking ceos to think about stakeholders and their jobs and their impact on society. we should be doing that in the private space, too companies bring their companies public they're providing a social food. vcs and early investors need to think about that value and make sure they're supporting capitalism by doing that. >> i don't know if you've commented about the journal's reporting to what you talked to wework about in the chase to get them here if they were going to list, but did you feel pressure to make ridiculous promises on how you run your business to get them as a list >> i come in in the morning i think about what we need to do run our business and that's separate from any conversations we would have with any companies. i'm not going to talk about a specific company -- >> the journal said he was going to have to ask you to have -- what was the story -- no -- no plastic utensils in the cafeteria, right, that seemed like it was above and beyond. >> i think the reporting talked about beef and serving beef in

the organization. >> right. >> and as many people know who know me, i went to culinary school so i certainly -- i'm a meat eater. >> but in that case with wework the public markets did seem to say no. >> yeah. >> no. and you could argue that's a good thing. >> i absolutely think it's a good thing this isn't about just one company but i think important and critical that investors are starting to ask the right questions and starting to speak up so you asked, david, what is going to change this trend investors need to use their money and vote with their money. with he see that starting to happen right now some companies are delaying and we saw others because they're retrenching and thinking are investors going to support our markets and path to profitability and governance standards. those are really important issues we have to make sure we get them right in order for capitalism to work for the broader society. >> what about the role of the public exchanges i mean, it used to be the case that a company had to have certain governance standards in other words to list here at the

nyse and other places around the world, it seems like those have been paired back are you considering changing governance standards -- >> we have the highest listing standards around the world we take governance and listing standards very seriously what we also think is important that investors have access to opportunities. so we want to inform investors, focus our listings standards on investor protections but empower them with information and give them the right to choose, give them the right to have access to these opportunities. if we disallowed dual class structures, voting structures, many of those -- investors lose access to those opportunities which makes it worse. >> or they would go to your competitors. >> it's not a competitive landscape. i get that question a lot is this about other exchanges it's not to me, it's about public versus private. i think if investors don't have access to those opportunities we're denying them the same success rate we're giving to others. >> i guess i just keep coming back to what's going to channing the thinking in a founder to say

i want to hit the public markets earlier in my gestation. >> i think we need to make sure that the regulations aren't too onerous for public companies, we need to also give them new solutions. the reasons why we focused on direct listings can we want to give them an easier path when they no longer are looking to raise clalg as their primary driver for listing are there alternatives to get them into the public markets that's been a successful enterprise with spotify and slack and barry mccarthy first adjusted that as the ceo of spotify because he recognized the fact spotify is a well-known brand, they didn't need to raise money but they wanted to be a public company we need to tell that story and part of my job is to make sure we're telling that story, providing solutions and encouraging others to think about the overall benefit of society. >> stacey, more to be discussed i'm sure. >> i have to tell you one quick story, i left here the other night i had a taxi driver and he

asked me where i worked and i said the new york stock exchange he said you work for i.c.e.? i own i.c.e. he starts telling me that he owns 13,000 shares of i.c.e. that he bought it years ago, that it split five for one and he bought his taxi because he was able to invest in ice. those are the stories we need to make sure continue to happen for every day investors. >> i hope he got a good medallion price. >> i was just thinking uber. >> hope he bought his mad long a long time ago. >> it sounds like he did. >> ice has done well stacey, thank you. >> thank you >> when we return, what's the best way to sell a house we'll speak with one real estate agent who is turning to moesvi, "squawk on the street" is back after this obvious.

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manhattan real estate markets seeing a major boost in luxury rentals sales on the decline so i guess that's one way to try to make up some money robert frank is live at a new york penthouse rental and he's got the story for us

robert >> luxury sales in manhattan have been falling for two years. huge demand and huge prices for luxury rentals luxury rental prices up 14% at the top of the market, that compares to luxury sales which are down 10% so why would the healthy who can of course afford to buy, choose to rent well, a lot of it has to do with new taxes and tax changes that have made it more expensive to buy and to own and with prices falling in manhattan the wealthy are preferring to camp out in a rental until prices get to where they're comfortable jumping back into the market. on the seller's side they have all these giant expensive apartments languishing on the market so at least if they rent them they can get some income. that has led to a new market segment which is the six-figure a month rental this apartment, this penthouse in downtown manhattan rents for

135 -- i'm sorry, $123,000 a month or over $1.4 million a year >> sometimes people want to try out the neighborhood, they want to try out to see if it's a building that they necessarily like other times there is people that only want to be in manhattan for six months or one year at a time >> so what do you get for $123,000 a month where this is 6,000 square feet, six bedrooms, 4.5 bathrooms, 14 foot ceilings. we are on the 56th floor of this brand-new buildings in tribeca and it comes with tens of millions of dollars worth of art. just to get into the rental between the security deposit, first month's rental, broker commission it's a half a million dollars before you even move in. guys, back to you. >> but you get the furniture and the art? that comes along with it, you can't keep it but you get it. >> yep, everything you see here,

david, everything is included. >> that's a bargain. >> yeah, that's a bargain. robert, you mentioned taxes. new york has moved up its so-called mansion tax, so it's even higher levels in terms of percentages. >> that's right. so the very top of the market apartments over $30 million are now close to 4% on this mansion tax. david, this is interesting, albany is talking once again about a tax that would mean if you own a second apartment in manhattan that's over $2 million there would be another tax on top of that annually so they are talking about even more taxes now that the mansion tax has barely been in place for six months and that is why buyers just want to sit on the sidelines and say, look, we're going to rent until you guys figure out what you're going to do with taxes. >> makes sense robert, thank you. >> i guess if you are not renting how do you sell a home today? well, if you are the southern california based boutique real estate group then you make a

movie about it the company is using hollywood-style movie narratives designed for social media to help sell homes faster and joining us now is ceo raj kasar. you call this video brokerage. what does that mean and how does it work for you is this? >> what happened in 2008 we shot our first video, what was to exciting about that is the video actually didn't even sell the home but it was the homeowner who sent the video to every single person in their neighborhood to show them, hey, look what these guys did, they went hollywood on our house and got it sold. so the point is that things are moving to video. it used to be a huge focus >> these videos could cost you up to $70,000 which you pay out of your own pocket do you always see a profit on this are homes being sold at $70,000 more than they worth yies would

have in your opinion if the video hadn't been created and disseminated >> they should probably take their rent from being in manhattan for $123,000 a month and come over to orange county and we can shoot a video for them homes that we are shooting video on are selling faster and for more money it's a really special home that we would spend that much money on, but there is a huge return for shooting video and very well executed produced video on these homes here in orange county. >> you've got plots, you've got high end video, videography, how do you come up with this stuff >> what's fun about our company is we're able to come up with a story board and the story board is pretty much the crux of how we're going to shoot the movie what is it like to live in this neighborhood, in this street in orange county? we have beautiful houses, beautiful people, beautiful cars and how do we get the buyer who could be literally on their

phone anywhere on the planet emotionally connected to this home here so we can get them to orange county and in those doors. >> is this a southern california thing or is this something that you think could be used anywhere in other words, is there something that hollywood can particularly appreciate because it's in the business largely in that part of the world or is this something that you think could be translated anywhere across the country >> well, i think like anything in business anyone can do it if they put their mind to it. we are fortunate here in orange county being so close to l.a. we do have talent and talent that's readily accessible, we have directors, producers, great video crews and we have beautiful homes we could showcase these videos with. >> all right raj, thank you for that. >> you're so welcome let's send it over to rahel solomon for a cnbc news update at this hour. >> it's friday, david. hi here is your cnbc news update at

this hour. secretary of defense mark esper meeting south korean president moon in seoul after a bilateral defense policy meeting esper press he go south korea to pay for for the cost the station thing u.s. troops in the country. >> this is a strong alliance we have, but korea is a healthy country and could and should pay more to help offset the cost of defense. >> iran imposing rationing and an increase in fuel prices every private car will have a 16 liter or 16 gallon monthly quota at 13 cents per liter up from 9 cents. residents in tehran were unhappy with the decision saying it affected their purchasing power. >> more than 600 students, parents and community members gathered thursday night to reflect on the she get at saugus high school in santa clarita, california two students killed, three other injured by a student who hot

himself in the head. he is in grave condition and clans were canceled for today. this is our cnbc news update for this hour. >> thanks very much. as we go to break take a look at shares of snap today up more than 150% for the year. coming up on monday an exclusive with evan spiegel, 10:00 a.m. eastern time right here on "squawk on the street. it is nice. his haircut is "nice." this is the most-awarded minivan three years in a row. the van just talked. sales guy, give 'em the employee price, then gimme your foot. hands-free sliding doors, stow 'n go® seats.

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♪ i think sofi money is amazing. ♪ thank you sofi. sofi thank you, we love you. ♪ the street." time now for our etf spotlight taking a look at the spider s&p retail etf ticker xrt hovering around the flat line this morning. the commerce department reporting u.s. retail sales rebounding in october, the sector's story a slightly different picture. under armour a report out saying that the athletic apparel company borrowed business from future quarters in 2016 to hide slowing demand under armour saying they stand behind the company's reporting that stock up about 2%

>> one of the biggest corporate con artistes in history or certainly somebody charged with that fraud former world com ceo bernie evers asking to get out of prison early after serving roughly half of his sentence and he may have a shot scott cohn covered the trial for us back in 2005 and joins us from silicon valley. he's got that story. >> as you well know it is prime bernie ebers was known as the telecom cowboy former basketball coach who cobbled together a company that ultimately helped lay the foundation for the internet as we know t but it was all bit on a massive brazen fraud cooking to the books to the tune of $11 billion he was convicted on nine felony kounds in 2005, sentenced to 25 years in prison, with good behavior he is due out in 2028 today according to court filings he is a shell of the guy we saw all those weeks in court back in 2005, now 78 years old, he is

legally blind, has a heart condition. the former bouncer has withered to 160 pounds and 13 years into his sentence his daughter is appealing for his release, telling the court that it is evident to her that her dad's days on earth are short and she fears he may only have weeks to live, even the judge who sentenced him, barbara jones, now retired, says she's okay with an early release, she said it would show compassion, would not jeopardize public safety and she said he has been published enough well, the government is not moved by any of this pointing out that barbara jones at the time of the sentencing said that anything less than life in prison would be wrong and also pointing out that ebers directed the massive fraud which caused tens of thousands of shareholders to suffer billions of dollars in losses this all falls to the new judge in the case, she gave the victims in the case through yesterday to respond and be heard about this no word on whether anybody took

her up on that she also just yesterday asked for more medical information from the bureau of prisons including whether he's faking any of this. guys. >> scott, you and i both covered this closely and the other major frauds of that era, certainly i'm thinking enron, adelphia, there was a bunch of them as you well now. >> right. >> in 25 years, though, always did seem to me to be -- it was the largest single sentence anybody from that era received. >> it was by a bit initially jeff skilling received 24 years that was ultimately reduced on appeal to 14 years and he is free after serving about 12 years of his sentence yes, it was a stiff sentence and barbara jones the judge at the time i remember it well talked about how that was appropriate given ebbers' role in orchestrating and directing the fraud as the jury found in that case and she felt and said very

specifically in her remarks at the sentencing that she knew it was a life sentence, ebbers at the time was in his 60s and that it was appropriate the understanding all along was that he was going to die in prison well, now she has softened that stance and clearly the family and his legal team and presumably ebbers himself feel he has been pun lishd in you have. >> we always draw the contrast, scott, with that era and the people who were sentenced and of course the financial crisis itself where virtually nobody was. >> that's right. it really is something you know, world com at the time was the largest bankruptcy in u.s. history only to be eclipsed in the financial crisis. you're right, nobody did any time to speak of in the financial crisis which in a lot of ways caused much, much more damage that we're still dealing with today. >> scott, thank you. as we go to break, awfully

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the dow holding near records, but more than a third of the blue chip index still sharply off highs. could any play catchup here? find out on tradingnation.cnbc.com more sidewalk on the street coming up. squawk

in the meantime we continue to monitor the latest in the impeachment hearings down in d.c. let's get to our own elon mui with more. >> that hearing is now in recess so lawmakers can go vote but during the morning democrats questioned the former ambassador to ukraine marie yovanovitch they tried to paint her as the first casualty in the series of events that led up to that

infamous july 25th phone call. >> he said, well, she's going to go through some things what did you think when president trump told president sza lel s zelensky and you read that you were going to go through some things. >> i didn't know what to think but i was very concerned. >> what were you concerned about? >> she's going to go through some things, it didn't sound good, it sounded like a threat >> did you feel threatened >> i did >> republicans tried to push a different narrative today, arguing that democrats are being distracted by impeachment by legislative priorities like trade. >> it's unfortunate that today and for most of next week we will continue engaging in the democrats' day-long t vchlv spe

techels instead of solving the problems we were sent to washington to address. we have a major trade agreement with canada and mexico ready for approval. >> trump also slammed house speaker nancy pelosi in a tweet, calling on her to approve the u.s. mca we had pelosi did say she hopes to make substantial progress on this by the end of the year but clearly the challenge for democrats is to show that they can legislate even as they investigate. back over to you. >> ylan, the speaker said the progress on that was imminent, which is being echoed by some officials in mexico. you mentioned the president's tweets and his tweet about yovanovitch as she's at the microphone has added another layer to this hearing. >> reporter: that's right. it's interesting because what we had heard from the white house was that the president was only going to be listening to the opening statement by devin nunes, the ranking member of the committee. it appears he may be following

along here as she gives her testimony which at times has been emotional she was removed from her position and she says that is a symbol, perhaps, to other bad foreign actors that a person who has been appointed as an ambassador, as an representative of the united states could be removed under political pressure that is the argument she's trying to make and that's why democrats feel that she is such a credible witness >> ylan, thank you >> thank you when we come back, we are going to reveal wine spectator's wine of the year first let's send it over to john forward. >> david, you know about palmer lucky's dealing with ai and oculus, but he has also co-founded anderal industries. chlo il talk to him about tenogyn service of war fighting and the government that's coming up on squawk alley. servicenow put our workflows in the cloud.

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as we get set for the holidays, people will be looking for a nice bottle of wine to share with family and friends. wine spectator is set to unveil the number one wine of the year. joining us for the reveal, tom matthews good to have you back. welcome. you want to do this first?

let's talk about it. >> let me give you context wine spectator reviewed more than 15,000 wines in 2019 in blind taste tests. to pick the top 100, not so easy we used a multi variable analysis we take quality which is the score, the value which is the price, availability, and what we call the x factor, what makes the wine exciting. all this week, we have been counting down the top ten on our website, wine spectator.com, today exclusively with you guys, we'll unveil it. >> a nice tradition. go ahead >> the number one wine of 2019 is this. this is a red bordeaux, made from cabernet. it costs $98 it is a beautiful bottle of classic red bordeaux >> what was the x factor >> the fact that this chateau has been in the same family

since 1826 they're wonderful people, they're irish, the barton family, run by anthony's 88 and his daughter lillian, and they've always been very fair priced the average price for a 97 point wine, $475 this bottle is $98 good value for a bordeaux. >> what would you say about the universe of candidates this year versus prior years >> more diverse than ever. we have 44 wines, first time appearance 17 countries we don't have any orange wines, leslie, not this year, maybe next year. those are definitely coming on the classics are always classic. >> is it getting harder to grow a good vintage i wonder if things, climate variability, is that becoming an issue. >> it is effecting grape growing regions around the world now california has fire season, sonoma had terrible fires in october, fortunately, 92% of

grapes were already harvested. it is impacting how they grow grapes >> the planting season >> earlier in germany are 20 weeks earlier. >> does that effect price or inventory? >> price is impacted by trade wars i don't know if you are aware, the government slapped 25% tariffs on wines from france, spain, germany >> not to mention some whiskeys. >> and parmesan cheese for whatever reason. >> would that wine be $75 instead of $98 >> not after it is wine of the year but this is already in the country. the tariffs won't impact this one. >> in other words, are they able to eat the cost of additional tariffs? >> the consumers will eat the cost prices will go up 10 or 20% for those wines effected. >> may help domestic wine producers. how much does the price go up as a result of what you just

revealed >> we'll see, but it definitely will take a bump >> 10, 20, 30% >> it could even be more than that, david, could be. but this wine is going to last in the cellar 10, 20, 30 years, so by that time the wine prices will be in the millions and this will look like a great value >> tom, you come in every year, help us unveil this. great to see you congratulations as always. get to work on next year tom matthews >> thank you all right. taking a look at shares of rh, soaring after warren buffett berkshire hathaway revealed a stake in the furniture retailer, 1.2 million shares, worth a little more than $200 million at the end of september the new stake makes them the fourth biggest stakeholder in rh, that symptom up more than 50% in 2019.

5.7% on the revelation that berkshire hathaway took a stake which is remarkable. by berkshire standards, $200 million is pennies. >> rh restoration hardware, in case people don't know, and the market cap increase, the percentage increase is equal to if not exceeding what they spent on the stake so the company is happy. sometimes you don't know if it is warren, one of his lieutenants, whose fund it came from >> a lot of people look at this as does berkshire see this as a play on the cyclical recovery of luxury housing market. obviously rh, restoration hardware, you find it in higher end homes. is this a play on his or one of his associate's belief there's more room to run in the market >> oxy is the other name in there. got a few things going on. >> yes, it does.

and then buffett has the big preferred there. >> what will be interesting, icon said they want to run a proxy contest next year. >> he keeps selling shares doesn't quite equate. >> says it is too risky. rally still on our hands, not buffetted by the headlines out of house intel we'll talk to the ggbiest apple bull on the street when we come back

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