again, you will see all of the major averages are indicated higher opens once again. even after the record closes we saw yesterday. right now the dow futures indicated up by 26 points. s&p futures indicated up by six points nasdaq up by 23. andrew and i will see you back here on friday we hope everybody has a wonderful thanksgiving holiday right now, time for "squawk on the street." ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with david faber, mike santoli at the new york stock exchange. cramer has the morning off after ten record highs for the s&p, this month alone, looking for another at the open as data is going to cross the board today. durables, jobless claims, revised q3 gdp surprised to the upsi upside road map begins with president trump's upbeat outlook for trade talks giving a boost to wall

street stocks set to open at new records once again >> the stock market just hit another all time in history high, meaning 401(k)s and jobs everybody's getting rich and i'm working my -- off. >> shares of deere sliding, ahead of the open. issuing a profit warning for fiscal 2020 as trade tensions persist. >> the toys "r" us come back, after shuttering all the stores, the new companies first toy store set to open in new jersey this morning as stocks look to set some new records on optimism about trade, economic data today is also in the mix. 3q revised up. business investment up 1.2

proxy for investment, that was not a good number last month making up for it now. >> in tune with what the market has been trying to say, which is that we had this soft patch, we're pulling out of it, i think there is a real willingness by the market by investors to look through any near term kind of softness in the incoming numbers because they feel as if we kind of escaped the greatest risk i think these numbers would confirm that 2% economy was an upside surprise, where the markets were in august. the only question is are we going to run this market up to a level where the recognition that we're still at 2% economy will be a disappointment. i don't know where that level is we're kind of clicking higher, bond yields not doing much sitting there, very benignly not because of stress or recession fears. that underwrites the valuations of equities. >> lpl with nice numbers out today. ten new highs for the s&p this month is the most since january of 2018. one of the most ever for a november. >> interesting, good news that

we actually cannot exceed january of 2018, because that's the month that stands out as the massive overshoot. so the massive overshoot to the upside in that kind of post tax cut euphoria. >> david, whether you couple the data this week with the trade optimism, with the m&a that got piled on today and according to you, still room to pile on some more >> people are talking a decent game at this point we'll see whether that results in any larger announcements before year end. but your point is a good one, carl m&a is -- any banker will tell you, lawyer, anyone advising on th these transactions a reflection of confidence. you can assume there is ceo confidence out there if you're a multinational considering a large deal or a cross border, you're going to be giving pause whether it is about the overall environment right now, in terms of what your capital spending will look like or what the company you might be

acquiring is going to look like, what is coming in in terms of orders, regulatory reviews, if you need china, for example. all that said, that was a serious merger monday we had a couple of days ago and it does have to be taken as a positive >> you look at financing markets, i think november is one of the biggest issuance months for high yield debt in a couple of years market just like took it all in, happy to have it all, every dealer oversubscribed. you wonder why there isn't more -- it seems like the market cap, the overall aggregate market, we're not necessarily, you know, hitting highs for activity. >> no. we're not. there is a little bit of concern, sort of the ccc level and there has been a little over the last couple of weeks in particular some concern about the financing markets for the lower rated credits, mike, which could go to private equity and its appetite but you're right

i mean, you know, overall you can raise enormous amounts of money what the are relatively very low rates, which is why you do at least have some people thinking about crazy -- not crazy, i'll take that back, large, large deals like walgreens. >> sure. >> which had you pencil it out, it is hard to see how to returns really will be there, given the debt load they take on to your point, could be viable. >> people back in the envelope saying bloomberg lp could be for sale could private equity do it. >> bloomberg, if that was for sale, and i've tried to make calls on that, it is very much unclear that's the case, the question with bloomberg is who the ultimate buyer of that company would be because it doesn't necessarily fit, it is very large, right so fox, for example, no. by the way, him selling it to rupert murdoch, not going to happen they're way smaller. you got the media part of the business you have the more important cash flow part of the business, which is the data and the machines

but who is large enough to buy a $50 billion asset is a real question. >> black stone bought the thompson reuters business. >> they immediately almost flipped it to the -- >> appetite for that type of -- >> that was a much smaller deal. that's a huge deal i don't know, but i think if in fact he moves along, and it really becomes a question as to whether he's going to truly try to actually sell that business, which, by the way, is completely unclear at this point, i think it will be very interesting to see private equity really could step up or whether they need to go a different route in some fashion and split it. >> we got m&a, the data, and some guidedowns today. deere down in the premarket, despite better than expected results, company forecasts weaker equipment sales than fiscal 20. says deere has been hurt by uncertainties in the agricultural sector. their line is ongoing lingering trade tensions coupled with difficult growing and harvesting conditions is one of two

downward revisions to guidance, including dell, where we're still talking and wondering whether this is about enterprise pain or intel chip shortage. >> the deere announcement, you say, that's kind of what you might have expected given foreign economics now and stress in that area the stock is up 20% from the august low it was part of this broader trade toward cyclicals, maybe we have seen the bottom, we can reaccelerate from here and right now, it is not an expensive stock, but it in terms of how it typically trades is maybe -- had been a bit ahead of itself, to absorb this kind of a guidedown. >> typical cyclical. >> without a doubt question is, is it going to have leg and you'll see caterpillar, i mean, agco will open layer it will go beyond this exact equipment sector, to encompass broader industrials, i doubt it, it is ag specific in terms of the nature. >> a lot to work with on a day where liquidity drys up before the holiday.

joining us with perspectives on this record-setting market, david zervos, happy thanksgiving, good to see you. what is the s&p earn the right to top out at given the news of the last couple of weeks. >> that's a toughy i think what we're really adjusting to here is -- mike was on it earlier, lower rates, higher multiples, settling into a fed that is not going anywhere, any higher anytime soon probably could go lower if things got messy, even though the politics will be tricky next year for that. but we're really adjusting to the fact that people don't want to take these multiples up to 19 or 20, but if we're really sitting at 175 ten-year note, that's not an unreasonable multiple that's the tussle that is happening today. it is a grind. we had a great year, up until the summer, we hit 3,000 first, it was a 20% year. this last 5% i think does not

have a lot of participation in it people have kind of held back and said, maybe we'll get a pullback and -- i sense with our clients a lot, and even myself, there is a reluctance to jump in above 3,000, especially if you have the trade you're getting fomo and people dragged in a little bit. that's story i don't think there is a topping out here of any kind if we're really in an environment of this low rate structure and a fed back stop to the downside, kind of got a lot of room to run in 2020. >> phil gross would say, 175 a year from now and stock down 10. what do you think? >> i think could envision that world, but to david's point, i think there is the implicit put at play. they're worried about equity volatility, which could tighten financial conditions, and that's when they need to get involved again. and so if anything i would say a continued grind higher in the equity market, even -- if and when the fed actually has to get involved so that leaves the ten year

yield in a defineable range, a massive buy when i talk to bint clooi clients, they're waiting for the opportunity, we're waiting for the cyclical resteepening of the curve. >> terminal rate for this cycle is in. it is 140. it is not the 425 they initially estimated. >> so the right call, a year ago for 2019, we have a recession scare, three rate cuts, that's it for now and the s&p multiple goes from 14 to 18 on a forward basis. what does that set us up for right now in terms of the opportunity to build on that i wondered, in terms of, yes, you can incrementally inch ahead on the valuation side, are we looking at a static ten year type picture >> i don't think so. i think the ten year is the tricky place the front end is a much easier

place to get comfortable that we don't have a normal distribution meaning the probability of 100 basis points higher versus 100 basis points lower is very different. lower rates are much more likely at the front end in the back end, we have a fed that is going to change its inflation framework probably in 2021 the market will see that, hear about that, i think jay powell two nights ago pushed that point further in his speech that inflation undershoots are a big, big deal the long end will get a little skiddish on that and so this concept of a steepenering steepene steepenering, maybe you get some people squeezed out of it. i think that's really the story. you got to be careful in the ten-year because if the fed did change this framework, which i think they will do after the election, we will have a fed that gets very easy, very fast, that will bring the short end down, might even bring more qe

to the table it could take the long end yields higher. and that actually is a pretty interesting thing for the stock market because stock market is going to have to adjust to this longer term rate that maybe goes up a little bit. it could be a wash almost for stocks >> that's with judy shelton not on the -- >> that's with judy shelton -- >> if the next move is a cut, your mid-'90s analog goes away you had three rate cuts, and the next moves were up >> we had the 395s and three more >> i get you you had an intermittent -- i'm not trying to be cute about it, but are we still basically like trying to forestall the end of the cycle? >> that's what they have been trying to do for the entire cycle. by definition, monetary policy wants to take the highs and lows out, extend the sxnexpansion as long as possible i'm worried about the invasion

hangover there tends to be an 18 month lag between that compression and when it truly starts to hit corporate profitability. corporate profits shrink, layoffs increase, that's where it hits the consumer people stop spending probably won't be this holiday season it is certainly on the radar for 2020. >> inversion two that's a sequel we're not interested in. thanks, guys good weekend. >> happy holidays. >> when we come back, the return of toys "r" us just in time for black friday we'll take you to the mall where the new store is opening the premarket here, we'll get to other names, a lot of earnings on the tape on the day before holiday. hp, box, news on ford, tesla, boeing we're back in a moment

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today marks the return of toys "r" us and the new bricks and mortar store the last live shot had a bit of a co-star there. >> he did. he's a little busy he cut the ribbon on this brand-new toys "r" us store. if you're confused, that's because you might remember that the retailer did file for bankruptcy, it closed all of its 800 store

800 stortores. the brand was purchased by a whole new company. it is starting fresh it is called true kids this is the first two of planned stores this year right now they only have plans for a total of ten by the end of next year. so considerably smaller than the toys "r" us you once knew. the stores are 6500 square feet. the old ones, 40,000 square feet it is a lot more experiential and a bit less inventory driven. as you can see, there certainly is inventory here you can buy from 40 brands including toymakers like hasbro, lego, melissa & doug and a number of others what is interesting, toys "r" us.com, if you want to buy something there, you click on the link to the toy you want and it actually redirects you to target.com target.com is fulfilling all the orders so the website is sort of a landing page with a redirection. so ironically target is benefitting from this relaunch

too. >> we know what kind of a weekend quarter and year target had. just thinking about apparel, one sector that has not participated in the rally overall this month. >> if you look at how the retail stocks have performed, it is the apparel heavy ones that had the hardest time that's something that hasn't changed. it has been the kind of declared winners of omni channel that have been the ones, which are the ones that don't depend as much on clothes, so, yeah. >> first of many hits we'll be doing this week on retail. that's for sure. you are working friday black friday. >> we are. >> one of the most fun days of the year to work. >> you do? really funny you never show up for it. >> usually i do. >> it is very nice here on the floor. all the kids come. i'm always here for whatever reason seniority really works in my favor. >> courtney, thanks. we'll see you in a little while. when we return, vm ware and autodesk moving in opposite directions on the respective

earnings reports stay tuned we are coming off record highs, looking for more this morning, all three indices riding a three-day win streak and on pace for the best month since june. livongo's mission is to empower people with chronic conditions to live better and healthier lives. we started livongo with a vision of transforming the health and care experiences of people living with chronic conditions. we believe that our unique member experience will soon transform the healthcare system as we know it today. nothing could be more meaningful than impacting the health and happiness of our members and we're just getting started. but he wanted snow for thelace members holidays.. so we built a snow globe. i'll get that later. dylan! but the one thing we could both agree on was getting geico

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we also keep them ready for the next big opportunity. like 5g. almost all the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready. ♪ boeing shares under pressure this morning, new reports that the 777 x fuselage split dramatically during a september stress test. phil lebeau joins us now to put this story into context. hey, phil. >> hey, mike this is one of those stories you see the headline, you see the picture, the seattle times has a picture of it today, people will say, oh, my goodness, how can this plane get in the air?

this is part of the development process. and apparently in september this fuselage rip happened on a 777 x as they were checking the maximum pressure that the fuselage could go through. this is standard for all commercial aircraft. they do this in basically to see the limits of how far a plane can be pushed, the seattle times points out that despite the tear, this may not slow certification of the 777 x look at shares of boeing over the last three months, the 777 x is the next commercial airplane that the company expects to have certified. that certification and first flight is expected to happen by the end of next year guys, back to you. >> phil, we are -- as we mentioned, we're seeing a little bit of a backing away of boeing shares, which have been trying too come back lately do you think there is a lot of 777 expectation, you know, in the price right now? is that the -- is there a knee jerk reaction here does anybody think it is going

to change any sort of timeline on this new plane >> i would say the 777 x is not impacting shares this morning. i think it is due to the fact as we reported yesterday on "fast money," the faa sent a letter to boeing yesterday saying that had it comes to certification of the 737 max, in the past what would happen is they would say, okay, the plane overall is certified, this person is delegated from boeing to sign off on a number of the aircraft as they come off the assembly line, if they're good to go by this person's estimate, then they're good to go, they're certified. all the planes that are parked here, they have to be approved by the faa individually, one by one, which means the 737 max, when it is recertified, it could be a longer process for those deliveries actually to take place to customers. >> phil, thanks so much. a lot of news on your beat today as well. phil lebeau. the opening bell is coming up in six minutes. don't go away.

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the opening bell in just over three minutes on this last session before the thanksgiving holiday. we'll be talking about travel in a little while 55 million people on the road, so be careful if you are moving around the country today meantime, tesla shares up on the premarket. last night elon musk indicated in the tweet the automaker received 250,000 reservations for the cybertruck though that numbers with not immediately confirmed by the automaker. i did see that bookmaker, which is a bookmaker out of the eu, has the cybertruck over the ford at 3 to 1. and they have little to go on other than what we know so far. >> exactly i don't know if they really, you know, done the numbers on the specs for each truck but it tells you the company thrives on forever giving this impression they're working on stuff, the next new thing it a lot of spectacle and a lot of the big picture future the more that the story becomes about the blocking and tackling

of putting out cars and the existing models and what is the uptick and what do the subsidies look like, the worse the stock does that's the toggle for quite a while now. after the launch, you had a backing off of the stock, because of the broken window and all the rest and it is trying to recover that right away. >> $100, is that what the -- >> refundable. >> refundable $100 deposit. >> funny to see some of the other automakers adopting his showman like tactics ford says the first edition of the mustang mach e is sold out. everybody is getting in this game of building some tension. >> that's true the rest of the industry is really fighting this big battle of being viewed as in secular decline. obviously the unit levels are not what they were going to be and nobody knows what the next cycle will look like if we come out of a downturn, so, yeah, it is fascinating how -- you have

to go back to the showmanship days of earlier in automotive land when it was every new model, every year was kind of anticipated. hasn't been that way in a long time. >> that's why elon has earned comparisens to the greats, the giants of the industry, having created -- having busted up the whole model. on a week that has not been great for auto news overall, fitch, unit declines globally this year. audi with layoffs. the business is in rough shape. >> gm and ford, they with midsingle digit people e multiples. >> usa today with the front page piece on the top 10% spending by the top 10%, down 1% in q2 on annual basis, rolling basis, down for three quarters, first time since the recession we know how much that means for overall spending >> a huge piece of the pot maybe that's a little bit of what august and september's freakout of the markets was

about. >> the opening bell here at the big board, empire state realty trust, celebrating the opening of the empire state building observatory experience. at the nasdaq, time and technology, developer of cancer therapeutics let's touch on what we mentioned briefly that was dell. nice beat, revenue miss, they cut their guide, you get -- i counted at least three price target cuts. and after cisco and some of the other names this week, why would the enterprise be so weak at this point >> good question i don't know if they're going up against the 2018 numbers where you did get a little bit of a flush of software purchases, and it spend it seems like the market is not interested in old legacy tech at the moment you saw how the reaction to cisco went dell, the stock traded badly before these numbers hp, looks like it was okay

last night, but, again, it was -- it is pretty much a stock that is under a lot of compression, nobody is building any growth expectations. >> on the call, yesterday, they talk about two different macro sort of dynamics right now u.s. china trade being one of them they also did see a decent amount of weakness, the softness they talked about, buying servers, which we talked about and jim talked about as well they also talked about that intel cpu shortage, causing some dynamics that are causing us to be more cautious than perhaps we would have been say three or four months ago. and so that is why you did get at least them reducing the range in terms of their 2020 gap revenue, 91.5 billion to 92.2 billion in operating income of 2.9 to 3.1 billion eps is 593 to 598 and seeing that reflected in that 4% loss

in the stock so far. it has been extraordinary in terms of deflation and whether or not that's going to continue. >> consistent story, and another type of market, you know, missing a little bit because of a component shortage would be looked through the entire class, people, they want to buy tech, they want to buy these kind of automatic stories, automatic growers like a microsoft or some of the cloud names, just disruption these guys are neither one >> box, though, did have decent results, and raised their guide on full year revenue hp did the same thing on eps so it is a mixed bag when it comes to -- >> certainly is. again, box is another stock that is, you know, struggled to come off the lows, activist situation in there and box is seen as trying to focus in on some financial targets that will please the activists and other investors

and now it is can they get to them. >> i thought it was interesting, we started the week with schwab td news. and, remember, they all went to zero commissions, everyone slashed their targets by a large amount today they're going the opposite direction. barclays ups them both to equal weight they go from in the case of td, 33 to 53, 35 to 49 in the schwab case unraveling the concern that had come from -- >> you can eliminate 60% of the cost base of the company you're buying, which is pretty much what the synergies imply, then that gives an analyst a new reason to say you can refresh our numbers, and they can weather this much better together than they could otherwise. i do think that the fed stopped cutting rates, that's so far that's okay for them, because they do really earn a spread and i think there sis a little more interest in the fact they were modestly valued it makes strategic sense and will be a year and a half or two years when it is about merger integration and figuring that

piece of it out. yeah, i see why it went that way. if you put them together, really is not a company leveraged to self-directed trading business >> speaking of putting together hp is not interested in being put together with xerox. not yet. given the back and forth between the two companies. but hpq did report earnings last night. you can see how it is responded to in the marketplace this morning. not bad. let's call it more or less flat. they did not on the call really discuss anything to do with attempts to acquire it the letter yesterday from xerox saying we're going to talk to your shareholders, okay. and try to explain to them why you should be giving us diligence and we're offering to you. they did also go on to talk about capital returns, 75% in terms of at least how their long-term return of capital target and the screening they do to meet that and that continues

to be kind of where they're focused in terms of how much they will return, also indicated 5 billion share repurchase authorization. but you see hp, now it is up, actually. >> it is -- it firmed up since the announcement even if, you know, if there was interest in a deal, we're talking about kind of low premium, kind of costs, synergy type story. >> the xerox bid now on the table is 22. 77% of which is cash we talked about the potential inability to go that much higher in terms of the cash stock portion because obviously you already got a mix that would bring hp shareholders 48, 49% of the combined company but the key is this question of the cost synergies xerox will tell you 2 billion. i think they may think it is even higher. and hp responds by saying we have a cost cutting plan,

remember, they already announced significant layoffs. you have a cost cutting plan all you seem to be doing is taking the two numbers and putting them together to some way and we don't believe that actually it will be -- near what you're saying, we don't see those synergies on cost that you're talking about >> it is going to be a lot more on this to come as we well know. >> apple is helping the dow at least at the open here, it is reportedly as its chinese supplier to double production of its new airpods pro headsets in a potential threat to its usual suppliers, in order to meet demand, they asked ict to double production of the ear phones at its chinese facilities to 2 million a month. it is worth noting if you ordered today, from the website, the airpods won't arrive until december 30 at the earliest. as every incremental move they make on supply chain makes news. >> it is incredible. who knows what they're really anticipating but for $250 item, people were

aghast at a $1,000 phone apple shares at the close yesterday, they dropped from 266.50, it seemed related to this index rebalancing and it is just regained that at the open this morning apple has. it is right back to where it was at like 358 yesterday. it is driving the dow this morning. it is really recovering that weird little drop. >> the dow did set a record high at the open with the other two major indices, but boeing is helping to drag it down, along with cat if jim were here, we probably ask him why his charitable trust exited cat this week >> we might. i'm not sure what we would hear. >> given his relative confidence that these trade headlines are for real. >> yes, yesterday he made a real point of saying he had changed his view, which had been fairly

negative in terms of any progress really being made toward the phase one deal to believing those exchange of calls was very significant at least according to jim's sources. deere is down a little over 4% and not too much follow through in terms of cat, i guess but with that 1% decline. >> yeah. >> the big question has been for a long time, is exactly what is priced in, to what parts of the market, if in fact you get some kind of a -- anything that forestalls the test, which is the ultimate bottom line for the market rest of the details could hardly matter at all in terms of trading. so, you know, for something like a cat, which had come back fairly well, maybe it was reaping the benefits early. >> yeah, i mean, it is not -- >> the economy is not in great shape. if you're talking about the trade war goes away, they had some numbers now where it is not as if they seem like they're ready to start to binge on

investment >> industrial profits overnight down 9.9, the biggest drop since basically the beginning of the year they do have something called the economic work conference, which they said today is a conference -- second or third week in december, and they would like to have this wrapped up going into that. but do you believe if we heard that december 15 tariffs were going to be delayed, and we could get a signing maybe not at the president level, but ministerial level, market rallies further? >> i think it just kicked it out of the way and the current bias is just to grind up for the moment anyway. it is getting a little tired but i don't think that it would be a sell the news automatically type of event because it will enable investors to rationalize looking through soft economic numbers for a while. just, like, well, trade wars -- >> the gm strike. >> the gm strike the government shutdown early this year. it is one of those things where it would lower the stakes, i think, for every number. and, you know, not to say that

means we're going higher we're up over 25% in the s&p year to date crashed into the late december last year. but, you know, clicking new all time highs and very orderly way, it makes sense, but i just don't know how tightly wound the market is going to get as it continues to go higher >> does it affect loan officer survey and capex and -- >> the confidence piece would need follow to get -- you got an s&p from 14 times forward earnings to beginning of this year to 19 or 18 raise the hurdle pretty high. >> one name we pointed out many times, lagged overall rally in the big tech is amazon, 20% this year, five percentage points behind the s&p and behind stronger performance such as facebook and apple cybermonday, coming up, we

talked a bit here about as well the fewer days in the selling season for retail, whether amazon will benefit from that, i don't know their ability to deliver same day or at least next day, certainly something. also want to point out next week is aws reinvent -- the reinvent conference, big aws related conference that may get some attention and certainly focus some attention on what is still an incredibly fast growing business for amazon. fundament . >> fundamental case, almost all still love it. technicians look at the chart, double digit percentages down from the all time high doesn't look that great givend overall tech and consumer is doing fine. >> did you mention the pivotal call a moment ago. >> i did. >> they went 2500 to 2100. and the street hasn't sharpened their pencils enough on the next year. >> they don't think, that's right, exactly

i think there is a kind of a tass et thi tacit thing, it is a tussle between the fact that the stock has not kept up and yet there is a sort of complacent sale sign on it. >> we'll watch that name to bertha coombs, see what else is moving the this morning. >> the major averages on pace for their best month since june. the big story this month so far has been the comeback of the small caps, russell 2000, keeping pace with the major averages, hitting new 52 week highs. and it is still down about 6% from its 2018 record part of that comeback and that move has been the resurgence of small cap biotechs this quarter and the overall rebound of healthcare, which leads this quarter along with financials and tech investors have rotated out of those dividend paying utilities and real estate sectors. the ishares healthcare providers

e text f, including hospitals and ensurers is on pace for its best month since 2011. start of obamacare the start of -- in part because of the strong earnings that we have seen from the insurers and the fever breaking on that fear of medicare for all as we have seen elizabeth warren back tracking a bit, now introducing sort of phase-in public option plan and pulse showing democratic voters are not wild about getting rid of private insurers. some of the best performers this month, moved to the upside and they're leading in the quarter, cbs and cigna in particular, which have really been able to show that they're able to deliver on the strategies. on the other end of the spectrum, weather is impacting holiday travel, but it has been a tough month already for the travel sites look at these, expedia, trip adviser, worst performers in the s&p. booking holdings though a little bit better tough competition there, guys. back over to you. >> bertha, thank you very much

we got the chicago pmi due out in moments to add to the other data we got this morning to the bond pits, rick santelli at the cme group in chicago. hi, rick. >> we have chicago coming up the charts here, we had very solid data this morning, whether it was preliminary read on durable goods, proxy for capital spending, or, of course, a couple of tenths revision over the 2% hump on gdp intraday ten, it popped the whole curve. look at the two-week of tens even though this is a nice pop, it is still a long way from getting back up towards the top of the range and finally if we look at what is going on with regard to a yield curve, not 10s to 2s, let's look at 30s minus 10s. that distance is really narrowing. right now, what we refer to as the knob, notes over bonds, approaching 40 basis points currently at 3443, the tightest since april. dollar index, we first walked in, down a bit, now close to up

a fifth of a cent. one week of the dollar index, it is really powering ahead here. as we get into a thinner session. and finally looking at the dollar since mid-september, what is noteworthy here, we're 7/8 of a cent from the highest close of 2019 and that brings me within three seconds of our look at chicago pmi expecting 47, a bit of a disappointment, 46.3, 46.3, but let's not despair that is only the weakest number going back a couple of months, matter of fact, last month, of course, at 43.2 stands unrevised, that is the weakest number since december 2015, prior to that, 47.1 so we envelope this right in the middle carl, back to you. >> rick, thank you very much corporate america under attack on the campaign trail yet again, according to new data. presidential candidates have called out more than 80 companies in 30 industries on twitter. and the issue getting the most

online engagement is when the companies are targeted for paying little or no taxes. the top targets, amazon, facebook, mcdonald's, walmart, and surprisingly, no banks cracked the top ten. bernie sanders, warren, trump, harris, making the most corporate attacks online as this is just a taste, guys, of what we're going to hear in the 12 months ahead. >> no doubt about it it is interesting that, i mean, it is not surprising to me that no banks are up there right now. it seems we moved on to other issues i wonder if -- it is hard to find a consistency in terms of how the market has viewed the companies we mentioned as most frequent targets >> it is not like they're under regular lair to threats, but the theme of this election, why a lot of people think once the election heats up, the campaign next year, the market will have to, you know, navigate tough stuff. >> the new quinnipiac poll,

warren goes from 28 last month to 14. >> pretty significant fall for her. and, by the way, you can also see that reflected in the rise in healthcare stocks an & th s smaller or midsize her poll numbers come down. >> driven by the same thing her poll numbers come down in part because people don't really seem ready for a medicare for all. you can do a chicken or egg with that right now another possibility. >> you can see the drag from boeing there dow is down 11 by the way, be sure to check out our podcast, listen to the opening bell hour of "squawk on the street" wherever you listen to podcasts. dow is down 9 as we said and at 31.45.

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it is expected to be the busiest thanksgiving weekend ever for u.s. airlines phil lebeau is at chicago' o'hare airport with more on how the carriers are handing this year's holiday travel rush hey, phil. >> it is busy, but not terrible this morning here at o'hare. for the most part, fairly ordinary as far as what we expect the day before thanksgiving in terms of total number of people flying here in the united states, it is expected to be 2.98 million people, according to airlines for america. that would make today the second busine busiest travel day of the year the busiest is sunday. we have seen cancellations as weather systems moved from the upper midwest to the northeast right now it is a little over 450 flights that have been canceled if there is good news in the travel season for the people who are on the road, it is in the airfares they're paying. look at this from hopper we have seen airfares trending lower over time, that has continued this holiday season, close to the record lows quickly take a look at shares of

united, delta, and american, the reason we're showing this is because these airlines have added along with other airlines about 800 flights for this thanksgiving season. but, remember, they planned on adding even more but because united and american as well as southwest don't have the full complement of their fleets because of the 737 max, we are seeing slightly tighter capacity but, again, so far today, guys, it has been a relatively smooth start to the thanksgiving travel season here at o'hare. >> phil, if they haven't added as much capacity, why the decline in airfares? just generally kind of softer part of the economy at this point? >> correct and you're seeing a lot of the airfares in the flights that rm cou are coming in with the low end of the market with the low cost carriers that's bringing the overall pressure down, if you will, in terms of the legacy carriers and those more lucrative routes, that's not where we're seeing the capacity being added we're seeing it really on the lower end of the market.

>> all right, phil, good stuff everybody, be careful on the roads, if you are traveling for the holiday. blackstone on the record run as the dow holding its cards close to the vest today. don't go away.

♪ good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with david faber and leslie picker in for sara eisen we're live at post nine of the new york stock exchange. we got record highs at the open here dow settling back a little bit, being dragged down by boeing, which has news of its own. but s&p 500 its 11th record high of the month, the most back to january of 2018. busy morning so far in terms of data and almost beats almost across the board, durables, claims, q3, gdp, you name it. >> that record rally rolling on. that's what our road map starts with that record rally, stocks having their best month since june.

we'll speak with byron wien and what he thinks the end of the year is going. >> counting down to black friday, we'll check on how retailers are gearing up for the big holiday shopping season. >> and tesla keeps trucking. elon musk hinting at more reservations for the company's cybertrucks, we'll give you the breakdown. >> so we're not quite done with data yet to rick santelli for the numbers. >> we have more october read on personal income and spending on the income side, unchaufnged bit of a disappointment. on the spending side, up .3, exactly as expected. let's go through some quick numbers here if we look at the deflator month over month up .2, year over year, up 1.3, both of those are somewhat in line, if we take a core appearance on this, the core deflator up .1 month over month, up 1.6 year over year, those also pretty close to expectations and for october read, on pending home sales, the late data point

for thanksgiving, we turn to diana olick. >> fell 1.7% in october month to month according to the national association of realtors. that's a miss. they were looking for a slight gain this measured signed contracts to buy existing homes, not closings sales were still up 4.4% compared with the year ago the monthly drop was leicikely to a slight increase in mortgage rates in the past month but more due to a drop in the slew of homes for sale they are down due to high demand and much lower mortgage rates than last year regionally sales month to month fell everywhere except in the northeast. sales were higher in all regions compared to october of last year. >> thank you, diane. one of the names rejoining the list, toys "r" us. courtney reagan is live from new jersey and has that story for

us >> hi, david here we are at toys "r" us, a brand-new store, familiar name, but actually totally different than what you knew toys "r" us to be all about. if you're confused, here is the quick back story the retailer filed for bankruptcy, liquidated after an unsuccessful reorganization, closing all 800 of its stores. this new parent company is called true kids and it owns the intellectual property. the brand of toys "r" us, babies "r" us, and jeffrey. richard barry, he was the chief merchant at toys "r" us. now is when this brand-new first new toys "r" us store is open to the public for the very first time we're here in new jersey, at the garden state plaza mall. this is one of just two planned stores for this year, the second will open next week in houston, texas. there are ten total stores that are planned to open by 2020. so totally different concept this store is much more experiential it is done in partnership with retail technology firm beta.

there is inconvenieventory, butf the inventory is done by brand so hasbro has its own area, ner nerf has its own area and melissa & doug has its own area. smaller than the other toys "r" us stores. and this only has about 1500 products if you want more inventory, you do what you normally do, go to toys "r" us.com. this say little different. when you click on the item you want on toys "r" us.com, you pull up the item, you get the information, but if you want to buy it, it is going to take you to target.com, which is actually the retailer that fulfills the order, which is ironic because target is one of the retailers that has benefited most from that toys "r" us liquidation credit suisse estimates it picked up between 15 and 20% of the market share that toys us and babies "r" us ceded. with the new revival of toys "r" us, target is benefiting even further. back over to you guys.

>> do we know why they selected the paramus location for reopening? is there any kind of rhyme or reason as to which selection stores they have decided to reopen this holiday season >> that's a great question i just asked ceo richard barry that very question i said also isn't mall kind of a dirty word lately. he said no, not at a place like the garden state plaza, 20 million visitors a year located by the amc theater, the houston galleria mall gets 30 million visitors we think we'll be a traffic driver they're thoughtful about the locations they're opening. we all know what mall traffic has been like overall and certainly there are better performing malls and there are malls that aren't performing as well i'm sure that's analytics and data they're taking into consideration. >> thank you very much courtney reagan. for more on what investors might expect from this year's shopping season, byron neagle is here

with jay rogers niffen and january fiffen where are you look for pockets of strength? >> i'm not look at toys "r" us for pockets of strength. that's an interesting side light right? i think it is a great idea they're doing it what we're looking for is walmart, we're looking for target, we're seeing what happens on amazon, the big players here are going to drive this christmas and they're also going to drive toys, by the way so we're going to be looking for that, looking for the broad market, not the necessarily the high end, but the real strength coming out of the broad middle because that's where the money is coming, and that's where the customers are and that's what drives christmas so we're going to see big sales out of the big box retailers, that includes best buy, by the way. >> anything there you don't agree with >> no, i agree and look, we have a good report from best buy, just a couple of days ago and i agree with what jan said what best buy found its sweet spot a nice omni channel model,

competing well against amazon. what is key in my mind, there is not a big product cycle in consumer electronics what that does is that limits the random retailers fighting to the category and really makes a better playing field in the holiday for best buy. >> is there any concern about the weather. we have the bomb cyclone that is reportedly set to hit the middle of the country this year of the country this year is that something that slows down some of the holiday shopping >> absolutely. now one big equalizing factor is on line. if people can't get to stores they will shop on line right before this segment i was looking at news about different storms hitting different parts of the country that could be a risk particularly given a shortened holiday selling season we are six days shorter this year a lot of it is minimized because of on line, retailers moving their promotions but the weather is something we have to think about. >> jen, i wonder, on the sub of the shortened window that brian just mentioned how do you go

about changing promotions if you are a retailer is it an important strategy? >> it already started. christmas started november 1st this year. walmart started their stuff for christmas prior. everybody stretched out the season that was true last year. i am less concerned this year than when i was retailing when we had a short season. weather isn't as much of a factor plenty of business is done on line if there is a bad weather day you can pick it up on line the consumer has never been healthier. we are seeing all the right things on employment, unemployment, rising wage, all the stuff you want the weather will take care of itself we always get weather. the short season is not going to be a problem because we started so early and we are spreading it out through post christmas i think it is going to be a great christmas selling season imlooking for 4% i am not worried about the weather. i am not worried about the less six days between thanksgiving and christmas.

>> brian, we can continue to have the haves and the have nots the way we see it in terms of going through the earning season most recently? >> absolutely. i think that's a big story in retail there has been a significant shift in the row tail landscape. on line has been the shift what we are seeing now that encouraging me, going back to best buy, a great example of this, traditional retailers are fighting back against amazon really well. we have the haves and the have-nots. lower quality retailers are going to be out there talking about weakness, that's much more a function of their he can with aness than the consumer. >> i have been receiving mailers for weeks saying get your black friday deals now does it matter that the deals are spread out over a longer period of time versus traditionally it has been just one day when you go in and get the deals? is that typically better for the retailers? do you think it may encourage people to you know pick and

choose where they are actually spending their money >> init is absolutely fine. >> i think the earlier you can get them sorry. >> go ahead, john. >> the earlier you can get them to spend the better off you are if you are a retailer. you know your invinner to, you move it faster starting september 1st is better than starting in november 1st. the consumer has signalled they are ready to play if the deals look right. >> we may see black friday deals july 4th next year is what you are saying. >> yes. >> when the black friday meant more, the risk was if black friday didn't go well, or they had to match other retailers promotions margins got him now retailers can manage promotions better with the longer cycle >> jen, you say you are not worried about the high end u.s.a. today put this spending by the well healed consumers on

the front page why would the data even come out given what the equity market has done this year. >> i actually said i wasn't depending on the high end not that i am not worried about it however we have seen good numbers out of the high end retail i am thinking those numbers look odd compared to what we have seen going on with lvmh and keurig and gucci and the big players up there i was surprised to see the numbers. that's not what drives christmas. what drives christmas is the broad spectrum of the retail those numbers will great but asset values are great, savings rates are great. i don't see it >> brian the -- sorry, the on line pipe keeps growing. i wonder give your point give the ability of a target or best buy or a walmart to fight back in amazon should we see something surprising there in terms of not gaining market share? >> best buy as an example, they

are growing online sales as we think about the sales shift online, best buy is benefitting from that. and it depends best buy made great comments on their conference call this week about fulfillment. they are allowing consumers to buy on line, pick up in store, they are going to begin testing curbside pickup. one more iteration of buy on line, pick up in store traditional retailers, the well positioned ones are using their stores very, very well to help enhance on line shopping >> best buy and target are good examples. >> names that are underrated going into the season? >> i don't know if it is underrated nike sets up extremely well. the innovation coming out of that company is see pesche great shoes, great apparel this is a tail wind behind the athleisure category. >> jen, a dark horse to the upside. >> caring and product.

we heard upper end wasn't going to be good they are going to be wrong. >> have a great thanksgiving, guys good to see you guys >> thank you. when we come back, tesla shares are moving higher, elon mu musk we will be talking with pulitzer prize winner jim stewart. the s&p on pace for what would be its best year since 2013 blackstone's byron wean will join us on the record rally. we have a big show ahead of us don't go anywhere. 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.

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tesla is "new york times" pulitzer prize columnist, author of trump, deep state, fbi, and the law, jim stewart good morning. >> good morning. >> elon is tweeting again. >> to me, this is the big story. let's put aside the truck and the orders, whatever i have been critical of elon i want to say he seems to be back on his game to me the story is the dog who didn't bark here there haven't been any outrageous tweets there. hasn't been any controversy. we haven't heard about any more

s.e.c. investigations. i don't know if it is the new chairman, what happened there, but i do feel musk has calmed down, stabilized he's doing what he does best i was excited by the electric truck. i know it is controversial looking, unorthodox but look, there it is. he is taking a sledgehammer -- it didn't go quite as planned but who else is using a sledgehammer on their truck? it is attention getting, i think it looks intriguing. >> tweeting numbers like this, 250,000, 200,000, you don't think that's going to be something that's a person to the s.e.c. >> -- scc? >> it won't be a concern if it is true. yes, it makes me nervous having just said. the danger is i finally say something positive about musk and then he goes off the reservation. that's always a risk he has done it before. that means he has the capacity to do it again let's give him the benefit of the doubt here i assume, until we know otherwise, those are accurate

numbers. and in that case, it's fine. it is a public disclosure, there aren't going to be problems with that what i would really love to know is to be behind the scenes to see what kind of back and forth has he had with the board w the outside counsel, because he was chaving in the beginning -- remember, we immediately defied his scc restrictions that were imposed. but we have had several months of calm, now i think a successful product production is and a return of orders i have been saying all along one of the things that would make me nervous about buying a tesla is whether the chief askedive can be counted on to run the thing, to be table, you want a car company to be around there when you need repairs or something. i think consume remembers regaining confidence based on the order flow. >> do you think that, you know, kind of given -- there has been some back and forth with regard to whether these orders really mean anything because people only have to put down $100 to

reserve it and it doesn't go directly in to -- as a deposit for these cars -- for these trucks can we really put much stock in 250,000 as being a meaningful number when it comes to the actual sales of these cars which really can't even take place until 2021 >> who knows how many of these will come to fruition. i haven't seen data on yield, like the number of poem who back out of these contracts but i never heard that it is anything particularly material. we are seeing now in the regular cars an actual order flow and delivery number. so there are some solid numbers there. and the trucks are going to show up on that eventually. again i think these -- as the beside if get bigger, driving around myself i see more and more teslas zipping by it psycho logically gives you more confidence. the final truck may not look

exactly like the star warriors trapezoid that they showed they often get modified before they get into production it is so distinctive that when they drive by we are we are all going the see it as it starts showing up on roads, that gives consumers confidence, others are doing it. it may be okay. >> it is not a comment whether he can make them profitably, whether consumer service is good or bad. >> the consumer numbers on tesla is very good one of the impressive things -- they created an auto company from scratch it doesn't end with the point of sale there is the service followthrough, the reliable. people seem to love them consumer reports gave them a boost after a few rocky incidents involving some of the cars. >> you don't seem rattled by incoming competition, whether it is ford or bmw or anything like

that >> i was just thinking about that this morning, because the legacy car companies -- any legacy car company that has to make a paradigm shift is facing challenges, we all know that from the media business. i think thifs about gms sort of half hearted and failed effort going back years to kind of develop an electric car which really didn't get anywhere i think it is really really hard again, the ford truck -- we have got that movie out there now, about the race cars, but now we've got a real live kind of movie going on like ford, the f-150 versus the tesla truck, which is going to be a fun competition to watch. reminds me a little bit about netflix and disney they are not necessarily going to cannibalize each other. there may be a whole segment here it is going to expand the segment. but it will be fun to watch them going head to head i think there is always a place for the heavy-duty traditional

truck. this is a bold challenge i think it is great. it is competition -- tesla has forced the legacy automakers to up their game. i think they do have electric initiatives going on, europeans, too. where are they the years are going by and we haven't yet seen any really significant competition. >> did you see the lego treat? >> i didn't. >> lego tweeted the evolution of the truck is here, guaranteed shatter proof. his mystique is crossing product categories now. >> right in time for christmas there. build your own signer truck. jim switching gears now, former new york city mayor michael bloomberg among the long long list of democratic presidential candidates he is one of the world's richest with an estimated net worth of $52 billion. he has $150 million to self fund his campaign, spending more than $100 million for internet ads

attacking president trump. millions more on an administration drive and ad buys of $30 million in this election season, can you buy the presidency is this enough to make it work for him? >> i think the simple answer, can you buy the presidency the answer is no i think that's a good thing. i don't think we want to live in a democracy in money does decide it let's face it, that said money has a big influence. bloomberg was a very effective mayor of new york city he is a pragmatist, not an idea log. he has billions of dollars is that money going to work for him in the democratic primary? that's my concern for bloomberg. i assume he has polling that looked into this it is one thing to be a billionaire running as a republican he was a republican at one time. the democratic primary voters i think are far less naturally sympathetic towards billionaires, especially when they have got candidates going

around bashing them day in and day out getting a significant percentage of the primary vote polls. now suddenly they have got one stepping right in. it will be interesting to see the debates when he finally gets on the stage and we see elizabeth warren take her sledgehammer to him. i think it is a tough -- >> he may not make the debate state stage. it is not about raising money, which is one of the metrics they use to make the stage. he could run a campaign that's based on data. we know he knows that business quite well and having effective staff members going that route with enormous money behind them. >> right i agree. i think four years ago it might have been given, eightering yao, even more. but in this particular climate you put a billionaire into the democratic primary race and i think that's probably the biggest hurdle he's going to have to overcome i don't know that calling attention to how much money he's spending on the race is going to appeal to the kind of voters who are skeptical that any billionaire could have possibly made all of that money in a

legitimate way. worked for bloomberg about five years it looks like he is willing to make some sacrifices, potentially selling his company and spending all of this money of the it will be interesting to see how it shapes up in the en. >> i should say, i have been friends with him for years, he gave a book party for me years ago. i have a lot of admiration for him. he is no trump he will -- i don't have any question about that. he is committed. particularly at his point in i have loo he doesn't need to squeeze more money out of the bloomberg igs practice absolutely certain, he will have all of the ethical strands tied up and we won't need to worry about him conflicting with his business interests i think the problem is, give his business history which has been a virtue for most of his life that has to be seen, i think, as a liability in the democratic primary. >> it will be interesting to see. jim stewart thank you. >> sure. as we go to break, look at

shares of deer under pressure despite this beat on earnings. the company is expecting weaker physical sales in 2020 down more than 4% today. dow is down 29 back in a moment guess who just got reinstated! well, not officially. nervous? yeah. yeah me too. don't worry about it, we'll figure it out. i'll see ya in there! just ok is not ok. at&t has america's best network, now with our best plans, at our best prices, starting at $35 a line for 4 lines. new from at&t. - [spokesman] if you've tried colleg(group cheering)shed, snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are, you can do it, you can finish. - [spokesman] finish your degree at snhu.edu

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time now for etf spotlight we are looking at the rent fans etf ipo this morning beyond meat, zoom, other companies that hit the market this year. on the flip side, smile direct and uber booked down 30% from where they priced their ipos ipos topped billions of dollars. >> the drug industry be that under siege for prices being too high low price force some drugs are leading to short ans it is a market failure with dire consequences for patients. meg tirrell's special report

>> to karen hey, her diagnosis with bladder cancer in her 50s came as a shock. >> i had barely come to terms with that. >> reporter: after her initial treatment she was dealt another blow the best trug drug to treat her disease wasn't available to her. >> that kind of took away the last little bit of strength i had for a while. >> reporter: the called is bcg, a decades-old treatment thought to stimulate the immune system. >> it was the first and still the most effective imtherapy for cancer. >> reporter: but there is a shortage one that has been going on for years originally made by merck in santa fe in 2012, they stopped making it in 2016. though merck says it more than doubled production bcg still isn't available to everyone who needs it it angers doctors. >> for someone to say we don't have it and we can offer

inferior products -- there is no question it has caused deaths. >> reporter: experts claim market failure. >> it is not profitable to make these products it is also difficult to make the products in many cases it doesn't make economic sense for company to make old cheap drugs when they can make something more expensive. >> reporter: merck says it continues around the clock to get bcg to as many patients as we can and that it remains termly committed to patients where others have chosen to exit the margaret and no others have chosen to enter the market we are capable of making these products our system chooses not to. >> reporter: bcg costs $157 a vial other similar merchandise are priced at more than $13,000 per month. it is not just cancer drugs facing this problem. it is also happening in

antibiotics, pain merchandise, even simple products like saline solution and sarl water. they are cheaply priced, but expensive to manufacture >> any theories as to why in this business it is difficult to find ideal pricing >> there is consolidation in the industry on both sides these drugs are old, off patenedent keytruda was introduced in 2014 and can command premium pricing. these are commodity products they should be low priced but then you don't have manufacturers committing to make them cleanly and purely every time >> meg fantastic story. thank you for bringing it to us. >> thank you. >> sue herera? >> good morning everyone here's what is happening at this

hour residents near a refinery in texas were ordered to evacuate after a chemical explosion accused a major fire the plant injured three employees and blue out the windows of nearby homes. the plant produces chemical and petroleum based products the centers for disease control and prevention finding fresh evidence linking synthetic vitamin e oil added to illegal thc products to the outbreak of vaping related illnesses 48 people have died and more than 2,000 have been sickened in the u.s. the u.s. birth rate falling for the fourth straight year in 2018, reaching the lowest level in more than three decades as women wait longer to have children the good news is the teen birth rate for girls between 15 and 19 has fallen 7%. one out of three families in the u.s. serve salad on thanksgiving but this year the cdc is

recommending you skip the romain the warning comes after 67 people in 19 states were infected with a strain of potentially deadly e. coli after eating romain lettuce grown in salinas california you are up to date this hour. >> check your lettuce. >> check the lettuce wash the lettuce. >> check the box see where it is fro. thank you sue. when we come back we will speak with blackstone's byron wein about this rally. more squawk on the street when we return.

welcome back to squawk on the street stocks looking to build on record highs for the fourth day in a row you can see however the dow is down but the more important broader averages, the s&p and the nasdaq both up. joining us now, byron wein of

blackstone good to have you good morning to you. >> good to be here, david. >> you know, we always talk about your ten surprises we are going to get them i guess a month or so from now, of course early in january. >> right. >> you did well though so far, so good at least i mean the market exceeded what you saw. but you saw at least a 15% gain for the s&p. you had the fed stop raising and perhaps even moving lower. all right. what do you think as we head into the last month of the year? >> well, i think the market is okay until the end of the year you know, people complain that the market is overvalued but in my dividend discount model at these interest rates, the market is at fair -- really, below fair value still has some room to move up >> below fair value being what where are we right now we are at least 19 times, aren't

we >> 18 times next year's earnings but at these interest rates that's not an excessive valuation. this is nothing like 2006 or 1999 >> so does it end up still being about rates and your view of rates at this point in terms of your overall market prognostication? >> it is about rates and earnings and the china trade deal but rates are attractive earnings are still coming through. it looks like 2020 is going to be a 2% year, at least the last revision of u.s. gdp was up so we are in a pretty good situation domestically around the world, there is plenty to worry about. but the u.s. seems to be plowing through the adversity. >> yeah. well, you do sound fairly positive one thing that we have talked to you about in the past of course is the impact of what had been

an impasse on trade with china, what had been a worsening situation but now appears to be moving towards perhaps a resolution does the market already have that priced in, byron? >> yeah, i think so. it has a low level resolution. you know, trading, they will buy soy beans and pork, and we won't raise tariffs on december 15th but that's not the broad plan, which would involve intellectual property, joint ventures, and the access to their markets for our financial institutions that would be the big deal and that's still a way off. >> byron, if not for the trade war, what do you think is keeping the market depressed below its fair market value right now? >> what is keeping it below fair value? i think there is a lot of skepticism out here w. t with the performance of the market this year you would expect there would be eforria. but the market doesn't exhibit

eforria, at least the way i look at it. people are still pulling their money out of equity mutual funds. you don't see hedge funds enormously overexposed there are people -- there is plenty of skepticism about the market we have been a bull market for more than ten years now and people think it can't go on forever. they are right it can't go on forever but it can go on a while longer. >> byron, a lot of people look at the rally of the last few weeks and look at how it has coincided with the reexpansion of the feds' balance sheet goldman says that the gains for the year probably wouldn't be here if it hadn't been for central bank support do you lean in to that do you agree that we owe most of this year to the central banks >> i believe the whole move of the market since 2008 is the result of monetary easing not only in the u.s. but around the

world. the balance sheets of the federal reserve, the bank of england, the european central bank, and the bank of japan were $3 trillion in 2008. they are $16 trillion today. this market has been fuelled by enormous amounts of liquidity. and when that liquidity stops, then you can start to worry. but the liquidity has not stopped yet. >> did you just say a decade's worth of gains are thanks to central bank support >> yeah. i'm saying that the market -- that the most important factor influencing the market is central bank liquidity >> and there is no sign in your mind that that's going to reverse? >> i don't think it will reverse. it may go from plus to zero. i expect that will happen. but it isn't happening yet >> byron -- >> nobody seems concerned about

budget deficits or things of that nature here as well, byron, despite the fact they are running record deficits, especially give what are good economic times. >> absolutely. you would expect the deficit to be coming down but it is $1 trillion. here's something else that will worry you for the weekend. the balance sheet -- or the accumulated debt of the united states in the year 2000 when george w. bush became president was $6 trillion. the debt today is $22 trillion it's gone up almost four times in less than 20 years. the blended interest rate in 2000 was 6%. debt service was $360 billion. today, blended interest rate is a little over 2% debt service is $450 billion the debt has almost quadrupled

but the debt service has only gone up 25%. that has never happened before in economic history. >> fascinating and of course gives you pause as to what would actually happen if rates were to move up appreciably. it is almost as though it can't be allowed to happen it would swamp the entire budget. >> right every 1% is $220 billion you know >> yeah. yeah. >> i mean there is plenty to worry about. but the worries won't kick in for a while. >> nope. back in 2000 we were running a bit of a surplus back then in the annual budget. byron always good to see you happy thanksgiving look forward to seeing you again soon thank you for joining us. >> okay. thank you. when we come back this morning, the s&p retail sector having its best year since 2013. stores gearing up for big shopping season obviously with black friday around the corner we will talk to one of the co-owners of century 21 stores on what to expect when we come

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once in a year event could knock the record rally back on its heels. woton p strategist explains on trading nation.cbs.com more squawk on the street is coming up. (siren blaring) police officer: excuse me, sir. sit tight. yep, sit real tight, speedy. cause you've got to call it in, police officer: radio to dispatch... type it up, hey, dispa... (feedback ringing) deal with that, dispatch. write it up, walk it back,

police officer: slow down out there. and call hq-again. (sigh) (siren blaring) this isn't working. introducing samsung mobile first responder solutions. with the galaxy note10, you can get real-time data at the scene, all on one device. samsung business solutions. welcome back to squawk on the street rick santelli here with my last guest before his thanksgiving, chief economist from -- securities steve rizzuto recessions, the r word, aren't they an integral part of the long term health of any economy? >> you are 100% correct, rick. the reality is recessions are as we talked about earlier therapeutic. two types of recessions have to be talked about. real sector recessions or financial recessions real sector are short, shallow, one, two, maybe three quartering

long financial recessions are deeper, longer, why? because it takes longer to correct balance sheets but the balances have to be cleansed outside of the system that's why they are therapeutic. the other side of the rainbow we tend to come out of them they tend to be more market opportunities than they are disastrous opportunities. >> steven, i don't know if you have to hear byron reams, a favorite of cnbc and mine. >> i did. >> he brought up an interest point, since the great recession debt great drupelled yet servicing the debt is only 25% higher i know the fed in a way just stating that is actually putting a lid on a recession wouldn't you agree with that. >> i think there are two points that you are bringing up one is the fact that the reality is that the federal reserve has been an important influence behind the recovery that we have gone through and now the expansion that we have gone through. but the point against what byron was talking about, the reality is that the fed hadn't expanded the balance sheet we would be

looking at deflation deflation is the worst thing in the world, the largest net debtor in the world should ever face what the fed has done is 100% appropriate, not inappropriate looking at it as if there is something wrong with what the fed has done on the balance sheet puts the wrong cast on the scenario the fed did the right thing in an environment where others are facing deflation we are not that's an important difference if we were facing deflation this equity market, the bond market would be at lower yields and the equity market would be at substantially lower valuation. >> it is a great argument except for we haven't finished the back half of the book and maybe stating what is preferable might be better known after it ends. very quickly, almost out of time, what do you beg the chances of a recession in the next four to eight quarters? >> minimal less than 5% >> excellent

steven, i hope you and your family have a happy thanksgiving thank you for joining us today david faber, back to you. >> thank you rick santelli now time to send it over to jon fortt. >> enterprise tech focuses on a busy week of earnings for the sector we have the ceos of auto desk and vm ware live coming up on squawk alley i knew about the tremors. but when i started seeing things, i didn't know what was happening... so i kept it in.

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welcome back another day, another slate of record highs in the stock market the zch s&p is holding near the best levels of the day and if we take a look at the consumer discretionary sectors, you can see one of the top performing sectors so far today, also the top sector for the week as well, retail names leading the sector higher. you have under armour, nordstrom and macy's posting strong gains so far this down to you guys. a busy holiday shopping season has begun, but department stores like macy's, nordstrom

continue to struggle to bring consumers in how are companies adapting to the current retail climate joining us is century 21 stores co-owner eddie, so one way i can imagine this is part of this adapt station strategy, you guys have a pop-up store in herald square. about half a block from the macy's flagship. what are you looking to get from this >> when you are opening up a store anywhere, you have to go to the most dense foot traffic demographic that indicators to your customers and where we are in herald square, that is our customer over there and as far as a pop-up is concerned, it is really a tool for retail to, you know, test out new markets because it is short term you know, you can see how the temperature is there and if it is your customer and if you are doing well there and it is also because that area

is a great way to expand your brand awareness, more eyes on your store and what that does is bring more visitors to your website as well just more eyes and a great tool for your brand awareness >> so you started november 1 what has been -- has it been succe successful >> it's been very good the pop-up enabled us to show a different kind of face than our more traditional locations like when you walk in the store is wrapped in red on the facade and inside when you walk inside, it is very visual, there is very interactive, there is instagramable moments. the assortment and selection is very curated to that clientele downtown the checkouts are fast and efficient. and it just gives you that online experience in a retail

brick and mortar environment >> sounds expensive for a pop-up >> well, listen, you got to be willing to invest if you want to be successful. you have to be willing to take risks. good thing about a pop-up, it could be a fast fail if it doesn't do well. we're very confident in it and we think that it will do well and hopefully we'll say longer we' we'll see. >> are commercial rents getting more attractive? >> it varies where you are you might think because of the retail industry, but it depends. some landlords and some are really giving away t.i. and really doing everything that they can to draw retailers into their locations. that is the case but if you are a great location, it is kind of the same as it always was >> you're known for the high end brands at bargain prices but i wonder in the last year, we've had a nordstrom open,

neiman marcus open, high end stores do you think that they will have a chance to be successful in new york city? >> i hope they do. for us, because we're an off price retailer, a full line department store is our best advertising. why? because customers go to that store, see what they have, and then they come to us and they get it at half the price so i hope -- for me, i love competition. any type of competition. so those high end department stores come, flourish, do well, bring traffic to new york city, it will bring traffic to us as well >> anything that i should be walking over after the show to buy today? >> absolutely. we have some great deals we have if our holiday, you know, marketing impact, we have a thing called deal of the day which is some really great values as you walk in. we have a promotion called the drop, which we're doing online, which is the high end name brand

a-list vin doendors at incredibe values we have a thing call century cash for every $100 that you spend, we'll give you $21 back. you can he redeem it at different times. so a lot of great promotions >> eddie, thank you. when we come back, we'll take a look at the markets. dow trying to rebound a little bit. an exclusive with the ceo of vmware on their earngsin

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