overall the other retailers, they're going to hold the price and take share >> jan, dana, thank you for being with us this morning it has been wonderful having you here and we hope you come back to tell us more about what is happening as we get through the season. >> thank you. >> that was fun. make sure you join us on monday have a fabulous thanksgiving weekend? >> yes. >> "squawk on the street" begins right now. ♪ ♪ >> good friday morning welcome to "squawk on the street." i'm david faber with morgan brennan and mike santoli, live from post nine here at the new york stock exchange. let's give you a look at futures as we get ready to open a shortened training session today, this day after thanksgiving we're looking for a slightly lower open on all the major averages european markets open for some time let's take a look and see what the tone has been like over there as you can see the ftse

all ahead for the session so far. ten year note yield, crude oil, you ask, and we always like to answer as well, look at our ten year note yield, 1.78. let's get to our road map this morning, it starts with what you expect, the shopping surge, facing a condensed holiday season, retailers raking in a record 4.4 billion online on thanksgiving day this is ahead of, of course, what is traditionally the busiest shopping day of the year, today. >> the final trading day of november and stocks pointing to a lower open on this holiday shortened session. >> buffett thwarted, the oracle of omaha's latest attempt to put his cash hoard to work, outed by by apollo global. >> we begin with retail's busiest day. courtney reagan is at the woodbridge center mall with what to expect this weekend as the holiday shopping season officially kicks off hey, court. >> reporter: good morning, happy thanksgiving to you, morgan. here we're starting to see the second wave of shoppers come out to the mall. they do those early door buster

deals, all the big box stores, department stores, that's on thanksgiving, even had early black friday deals as early as october. still today is expected to be the busiest day of the year for retail that's according to both npd and shopper rack 115 million americans are going to shop today in store and online we talked to a couple of them. >> around like 10:00 they picked me up and we went to walmart, took a nap and came here. >> woke up at 4:00 in the morning, got my girl's stuff and $200 or $300 it was worth it. >> we love black friday. this year we decided to go all out. we had thanksgiving dinner, then we packed everything up and we got a hotel up near this mall on purpose so that we could be here at 6:00 a.m. >> it is a really critical weekend and day for retail

last year black friday generated 6% to 7% of total quartererly sales for american eagle and best, compared to a normal day of 1%. that makes it equivalent to an extra week of sales. so far this morning, the stop searched for deals, echo deals laptop and kindle. lego is the top searched for toy brand right now. cap the phi notes there is particular interest in disney's frozen toys and some online hiccups early on, catch point noticed that costco.com was slow wednesday night and went out briefly on thanksgiving morning. however, we did see some heavier traffic there, so that makes some sense h&m.com also went down for five minutes. that's back up and running now still a lot of shopping and weekend left here. i'll send it back down to you. >> courtney reagan, thank you.

retail here, we'll bring in two guests, b. riley's susan anderson and ubs retail analyst michael laser. michael, i'll start with you, six fewer shopping days, one less weekend, between thanksgiving and christmas this year seen a lot of sales pulled forward. really right around halloween, after halloween. how much is that going to eat into not only this weekend but the rest of the holiday shopping season and how consumers are spending >> trk tricky holiday spending,i scha is happening with tariffs, inventory and challenging environment for retail overall what this means is that we're going to see a lot of promotions, saw that starting very early consumers will be out, there is going to be clear winners and clear losers during this holiday season >> susan, are the promotions as steep as we have seen in years past we keep hearing about the strength of the consumer right now. >> yes so i think a lot of the

retailers critically within the mall are trying to plan for flat promotions, they left in some their pockets if they have to pull out other promotions. a little over 6% 0% has left soe promotions a good portion of the shopping season also comes after black friday and last year we had that december lull and that is when a lot of extra promotions started to come out. >> michael, tariffs, something that many of the retailers didn't have to contend with on many other products this time a year ago how is athat fathat factoring i equation is it something that companies absorb the cost of. >> they're engaging in a variety of different strategies, many are pushing back saying this is your responsibility. you handle it. others are pushing price to

consumer with varying responses from the consumer and in some cases having an impact of demand on the home furnishings sector way fair was open that sales slowed once they started pushing price. this is still going to be a risk that we have to be mindful of as we go through the holiday spending season. >> winners and losers. seems as though that's already been the case in retail overall. you talk about it all the time is anything going to change this holiday season or the winner goesing to continue to win and the losers continue to lose. >> what we're going to see is that spread between the good and the not so good is going to widen. that's because the good are going to continue to do things like get engaged in ultra fast free shipping, which is going to be very expensive for those who don't have the cost structure to offer those types of services. so the spread between the good and the not so good is going to lag. >> susan, along the same lines, any more traditional retailers we focused so much on the

instore crush and the shopping experience right now, anybody that is more traditionally positioned have a chance to actually prove this holiday season that their stocks are unfairly maligned, that basically they got too cheap and neglected? >> yes, so i think a lot of the good retailers have invested in the technology to be able to compete from omni channel perspective and really the teen retailers probably given their customer obviously has shopped online earlier and sooner. so we really like american eagle right here the ae brand is benefitting from the fashion cycle, they're offering curvy denim, bringing new consumers into the store 30% of sales are online. they have a number of omni channel initiatives going on also they have the aerie brand growing double digits for multiple years now that's our favorite in the mall for holiday this season. >> michael, we keep hearing about death of the department store, yet nordstrom's stock

rallies on the heels of earnings in the last couple of days is it overblown? overdone >> i don't think the death of the department store is overblown. the death of bad department stores certainly understated and we'll continue to see that play out over the next few years. where the stocks are responding is where expectations get a little too low and when that gets overdone, we're seeing outside reaction. i don't think we're going to see an end to volatility of retail stocks because it is so hard to price these types of turning points in a sector and still have an imbalance between the supply of available places to buy goods and the demand to buy goods through physical places. >> you mentioned home improvement as an area where you want to watch the season not something we often think about in terms of the gifting season just describe that a little bit. you mentioned way fair actually as one point. >> so we like home improvement it is a structurally better place to be in retail over the long run

there is less price competition here than in other areas in addition, you know, these retailers are doing a good job from an execution standpoint we like lowe's stock it trades at a modest multiple relative to growth rate. they're in the midst of a transformation and turn around we think it is in the early stages and that's going to accelerate in 2020 >> susan, on monday, we're going to be sitting here talking about how friday and the weekend looked in terms of the numbers how important is that really going to be given the rise over the last decade of the omni channel, of online buying? is black friday overblown these days >> well, it is definitely been spread out over the course of november, we started seeing deals shortly after halloween and those accelerated as we got closer to this week. we're starting to see the deals come out for cybermonday, so the consumer knows if they didn't get anything for black friday, they can wait until next week and get it during cyberweek. so i think it is important to set the tone of the environment,

particularly for investors, but in the terms of shopping now, and the percent of sales, it has been declining each year so it has become less important. >> susan and michael, thank you for joining us today. >> thank you all right, we also want to get to tech data this morning. agreeing to be bought by private equity firm apollo for $145 a share, valuing the company at just over $5 billion the competing suitor in the bid, none other than us at the bottom of the hour with more apollo had an agreement to acquire tech data for $130 a share. investment bankers on a kind of stop dard standard go shop for other buyers warren buffett, berkshire hathaway moved quickly to offer 140. and apollo said 145. overtopping buffett. a few interesting wrinkles in

terms of the sequence of events and the fact that buffett's willing to get involved in a quasi auction. now, very small deal in the scheme of things, 5% of what buffett has in cash sitting around but even at that, just the idea that willing to take a fly over on a deal that was already on paper. >> as you point out, what has become the typical go shop, this wasn't always typical, but private equity deals we see that included, which is basically the ability to continue to solicit other bids during a period of time still hasn't ended december 9th is when it concludes. not that they're going to necessarily see another one. i'm with you, mike it is interesting to see, even though it is a small portion, $128 billion in cash he's under pressure, one would think, maybe internally from himself, to spend some of that money. i've talked about it oftentimes, you set berkshire up and didn't tell anybody what it was and laid out $128 billion in cash, underperformed the s&p for the

last decade, mike. >> yeah, point to point. >> and has an 88-year-old ceo with no succession plan, i would say, hey, you know what, that's a company own to activists >> absolutely. >> this is berkshire -- >> doesn't otherwise make sense outside of buffett. >> so you certainly would imagine he's anxious to put it to work. how you do that and get the returns that he's accustom ed to is hard to figure out. >> it is kind of a prosaic business, you know, pretty steady, but cheap and neglected. >> yeah. absolutely this is a company that last year brought in $37 billion in revenue, but doesn't get talked about very often largely flies below the radar, global distributor of tech products and services, supplies small companies with software, hardware, and it looks like a lot of the revenue, 16% of sales are tied to apple products, cisco and hp enterprise make up 11% each but really one of the biggest tech names that don't necessarily pay that close attention to until you have a

bidding war like this. >> a broad middle man, which is a play on general, you know, gdp growth, which a lot of berkshire hathaway is now. >> absolutely. >> shareholders should be thanking mr. buffett regardless given the 11.5% increase he was able to get them really apollo was able to pay more, wondering in terms of the process itself that's why they have go shops. when we return, how best buy is raising the stakes for next day delivery another look at futures, we got an opening bell 17 minutes away here "squawk on the street" will continue right after a very quick break. sundown vitamins are all

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best buy trying to separate itself from its retail peers its holiday season through delivery. frank holland explains from new jersey good morning, frank. >> reporter: good morning to you. best buy increases spending on logistics by 90% last year and is continuing that this year as it meets customer demand, including demand for free next day shipping to 99% of its customers. best buy is not giving us exact numbers on its investment, but we know overall the industry is just increasing spending amazon expected to see $3 billion increase in costs from offering free next day shipping this year.

walmart acquired jet.com in 2016 for $3 billion to boost logistics and is expected to see its costs increase by $215 million this year. best buy's logistics spending includes metro e-commerce centers that allow it to offer 50 million customers in the new york, l.a. and chicago areas free next day shipping on orders over $35, placed as late as 8:00 p.m. the company boasting that's the latest deadline in the industry. the company's plan also is focused on sustainability and savings. this is a custom box cutting machine, chief supply chain officer rob bass says this is key to long-term savings >> you look at the package of materials and the save there you also what a lot of people don't think about, if you look at the profile of these, i could put about three of these in the same space as this one so ultimately that means we're filling up less trucks, putting less trucks on the road, and then on some of our air shipments fair to say we're putting less airplanes in the

air. >> reporter: the company says it reduced cardboard waste by 40% and this also helps reduce the amount of money it spends on shipping with u.p.s., fedex and in some cases xpo that handles delivery of larger items like appliances back to you. >> all right well, all the major averages coming off fresh all time highs. one more look at futures again we got an opening bell 12 minutes from now don't forget, shortened session today, 1:00 p.m. eastern time close. "squawk on the street" back after a couple of minutes.

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the tech leading the gains, but how much higher can stocks melt up here as we close out the year kenny pukari is with us. the market punished anybody that came into november feeling defensively positioned on wednesday, when we got this news about the president going to be signing this hong kong human rights bill, futures backed off, but doesn't seem like it is affecting the overall view of a potential trade deal what do you think that leaves us here as we head into december. >> so, listen, i think today is going to be a nonevent only half a day, a lot of noise, political stuff. i think as you come into december, you have the market kind of churn right here and edge higher. i think the market is going to end the year closer to where we are, that's about 100 points better than where i thought we were going to end, but i do think based on what we have seen and the way the market acted,

that the markets probably come through right here the only thing that could really throw a monkey wrench into this is if the rhetoric around december 15th gets more heated than it is potentially already going to get because the expectation is that no deal, he's going to raise those tariffs, he's not going to back off, just a matter of what is the rhetoric around raising those tariffs if and when he does i think that will be kind of the next leg of which way the market goes. >> and just to be clear, 100 points ahead of where we thought we would be on the s&p >> yeah. i thought, you know, i thought the market would close somewhere between 3,000 and 3025 we're at 3150, right so i think we're -- we're about 100 points, 120 points better than what i expected but, look, i'm down here in florida, what do i know? >> larry is it just about not overthinking it? it seems like everyone can point to the seasonal strength, the fact that you have sort of the

fed out of the way, bond yields really low we got through earnings season is the risk here into december continuing with that trade or fighting that trade? >> funny thing happened on my way to the mall today, i saw fed chairman jay powell dressed as santa claus taking a victory lap around target at black friday. i think it speaks to the idea that everyone talks about the consumer, saving the u.s. economy this year. the consumer two-thirds of the economy, wages are good, unemployment is at 50, a record low. all those great things it was the central banks around the world that allowed the consumer to cash the checks that they have been writing at this holiday season and i think it is a very dangerous concept because it is that fed and central bank policy that is driven certain sectors of the market like defensives, like reits, utilities to high and lofty levels in a third year of a presidential term. we may have seen peak liquidity. the stimulus around the world is having a diminishing benefit in the central banks.

they're worried we're encouraging too much savings i think it is about rotation from here on in. it is about rotation away from some of the liquidity beneficiaries into more cyclicals, more industrials, into areas like international. i'll tell you, we talk about tariffs with kenny, one of my concerns is not so much black friday, it is small business saturday i worry that the tariffs are beginning to have more of an impact on small businesses in this country that can't absorb all of those tariffs small business is half of the economy. we need to be more concerned about how it affects those companies rather than the headlines in the s&p 500 right now. >> kenny, if the u.s. and china don't get to a phase one trade deal until the end of the year, is the market ready for it >> yeah. listen, i think the tariffs are going to kick in if we don't have a deal. he's laid it out he cannot back down now. that would be viewed certainly from chiniaa's point of him of i caving that being said, i do think that the market is recognizing the

fact that we may not get this trade deal so might you get the market to back off a little bit, i think yes. i don't think by any stretch you're going to get -- see the market crash or correct if the tariffs come on december 15th. i think you get some pressure, and some volatility around it, like i said, but i think in the end, the market will be fine. >> >> i think kenny makes a good point. >> all right, guys, hang right there. we're going to have you stick with us. we're going to continue this conversation after a quick break. take one more look at the futures right now. edging slightly lower. coming off the record highs that the s&p, the dow and the nasdaq all hit on wednesday before thanksgiving opening bell is just a few minutes away does your broker offer more than just free trades?

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there are zero reasons to invest anywhere else. by the way, she's the it wasnext mozart.g day. 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. you're watching cnbc's "squawk on the street. we're live from the financial capital of the world an opening bell in a minute and a half always a nice day here at the new york stock exchange. everybody brings in their families, a lot of young kids as

you can see running around around the floor, fun activities for them to do and what i like is there is free coffee and food, don't get that too often. >> no. once a year. >> yes >> once a year >> just look at the indexes initially, wednesday evening we get this headline about the president going to sign this hong kong bill just a reflex move futures trade lower 3140 or so on the s&p and then day to think about it, we kind of -- we're weaker today, but really doesn't seem like anything responding to too much people think there is momentum for something cosmetic on a deal and i think the sense of every day people feel less fully invested because the market keeps going up without them. so we'll see if that's been the november phenomenon or if we crashed in december, we still have this spiral higher just because people -- >> comparisons with last december have to come to mind.

>> 180 degree difference, yes. >> we're at the highs, everything is very calm. the volatility index is below 12 and investors are pretty complacent >> there it is the opening bell for this friday you see the s&p real time exchange, back at our headquarters here at the big board, american express celebrating the 10th annual shop small business saturday heard somebody reference that. over at the nasdaq, hf foods group, distributor to asian restaurants in the united states >> kenny and larry are both still with us as well. and, kenny, i'll go to you, modestly lower on the major averages today, still on pace for the best month since june for the s&p, the dow and the nasdaq how does that play out into the end of the year? >> i think we are -- i still think santa claus is coming. some people feel like he's already came the market is up almost 4%, 4.5% across the averages.

but like i said, i think there was this underinvestment as we moved into the end of the year people being more cautious than they should have been. now there is a catch-up playing as we move into it i think the santa claus rally is alive and well, which makes me think that we're going to stay right about here i don't think we're rallying another 3%, 4% this month in december i think that the market is going to back off and churn and end the market right about here. so i'm all good with it. >> i think kenny makes a good point, look, there is $3.5 trillion worth of cash sitting in the sidelines in mup maoney e yields and every day they tick a little lower and the market ticks a little higher. i think it speaks to the idea that the gift of stock, which is the best gift you can give this holiday season, is a lot more expensive than it was last year. and it is getting harder and harder to give that gift as warren buffett found out today in his failed acquisition. i think people should be mindful of valuation at the same time they're looking at momentum.

valuation is a much more difficult conversation in the s&p 500 today, especially if liquidity starts to come away from the market. >> larry, you said in the s&p 500, just curious, one of the things people have been fixated on is the smaller cap stocks, russell 2000 breaking above a one year range we have seen these kind of head things before if that's what this is. do you think that's relative value? >> i think it is a very relevant point and i'm glad you brought it up. we talked about the idea the market is moving toward the barbell approach, investors are so blindly following the s&p 500. they don't care what's in it anymore. they don't care what the valuations are or they're in private deal because they're afraid of the market and the truth is, it is the middle of the vote where it is less volatile and more opportunities. and we see volatility picking up next year, but that volatility also brings opportunities. so small cap stocks have been left for dead. plenty of good businesses there, especially if tariffs are resolved you have an opportunity for the market to broaden out here instead of looking at a market

cap composition where it is just a big company driving the rest of the market. it is a more even keel market, we get midcap driving small caps driving, much more excited about that type of market because it is less blindly valuation agnostic. >> if there is this -- these tariffs that are coming in december 15, like we said in the last segment, is that maybe those small cap companies, those smaller companies are going to be the ones that are more difficult, so i think your point is correct, because i think it has underperformed, but i think you have to be very specific can't just broadly go in >> that's right. that's right and another good point, i think that's a great point if you look at this time of year, typically you see tax law selling. mutual funds doing tax law harvesting, mutual fund distributions will be high very few losses to offset those gains this year. so you have a muted january effect that we typically count

on and more muted tax law selling this year. and i think it actually could calm the market toward the end of last year very different than what we saw last year. totally different paradigm that's a good thing for investors who need to sleep easy this holiday season. >> kenny, we also have seen a number of companies go public this year. we have seen how many of those stocks have performed, not necessarily as strong as anticipated before they actually came to market as well how do you think that continues to play out into next year, you got really big names like aramco still to come to market. >> listen, you do have big names, i think a lot of that ipo story, i think part of it was their own fault. a lot of them built up -- all this conversation about these unicorns and unicorn and how exciting and they built up all the expectation and then in the end, you know, they weren't necessarily as you look under the sheets, they weren't necessarily the stories that you know everyone has been talking about. and look, wework is the perfect example. once you looked under the

sheets, you realized what it was, right i think ipos will still be there next year, relevant, a lot of story, saudi aramco i don't think will be as big of a deal here in the u.s. partly because they're not coming to the u.s. twill be more of a global story. that will be very interesting to watch as we have seen what happens then in the energy sector. >> 2019 is the year of the failed ipo look how disappointing these deals were it was uber, lyft, you had airbnb still waiting to see, but a lot of the businesses, wework showed you the public markets, much more transparent, the public markets can tell you where value is the private markets are rainbows and unicorns that's where we have been -- >> larry, don't you think there has been a shift within the public market and how investors are looking at these companies as well? >> yes, but we worry there is too much money in the public

market, there is way too much money in the private market. that's the problem i'll take the public market any ta day of the week. people start to think it is an easy game. it is not. venture capital is a difficult game it is just the returns have been so high for so long, everybody wants a piece of that. i think that's going to be the story is people go back to the public markets and realize that was -- that was the losers game, the game that was the rigged game, not the public market, which is a safer place to be for investors. >> look, and that -- that plays right out the private market is valuing these companies at much higher multiples than the public market and it plays out perfectly. >> yeah. >> wework was the extinction birth that blew all of those i unicorns and rainbows. >> the public markets remained inoculate for now. we'll see how it goes next year. happy thanksgiving, thank you very much for being with us.

>> in the early going, obviously a little profit taking happening, two-thirds of stocks down apple down a little over half a percent, 70 basis points now to me, that's always the -- one of the tells for are people buying to get involved with the obvious big large cap names? that stock is giving back from an all time high little bit of a rest for the indexes. >> risk off today. three secretary nrz ttors in th. >> and, of course, as you might expect, walmart is opening higher up about two-thirds of a percent as well. >> yeah. amazon barely in the green as well yeah let's move on for a second here as well. talk about warren buffett. because he lost out in a bid to apollo or a bid to buy a company called tech data lost out to apollo becky quick brought us that story, broke it earlier this morning and joins us now with more

it is not a huge company, becky, but it is an interesting story in that obviously and it includes buffett and his desire to start spending some of that huge war chest he has. >> yeah, i think that's what really jumped out to me too. the exclusive details on this, but i think what is so important is so many people wondering what happens to buffett's cash hoard. $128 billion according to the most recent filings from the s.e.c. and people have been wondering what is going to do with this money? this deal wasn't a huge one, but it is interesting because it is a different place for buffett and berkshire to be playing. on wednesday, tech data corporation announced pretty quietly that apollo had agreed to buy the company for $145 a share. that valued the company at $5.14 billion, you take out the debt that would be included with this as well. that was a sweeter offer than the original one that apollo put forth. they agreed to pay $130 a share. there was an undisclosed bidder that came in that bidder happened to be

berkshire hathaway's warren buffett. the deal they had come in with was for $140 a share this was a deal that came together pretty quickly for berkshire hathaway they were first approached by bank of america, who put out a call to todd combs saying, hey, we have a go shop provision in this, would you be interested. within a day he was ready to say, sure he would bid $140 a share. greg abel swung into action, went down to florida to meet with the management team there and without really seeing much more than they already knew about this company at that point, they were ready to make an official bid by saturday, the following day. they really just picked up apollo's contract, changed a few things and said, here is how we run with it, didn't bring a law firm in, not a huge amount of process that took place on that, but it is because they -- they know the companies so well and follow this industry it is interesting from the perspective that things could happen very quickly and buffett is looking around for other places to make deals back in may of this year,

buffett told us that when he looked at things, of course he would rather buy stocks than buy treasuries, that was a decision he said took him a nanosecond to make he said when lookingat outrigh purchases of companies, he thought the premium there had gotten big and a lot of that is because of how much liquidity is out there and how much competition there is to buy companies outright it is interesting and different. he usually doesn't get involved in bidding wars. and just a new place for us to watch to see what he does next. >> as you point out, his ability to move quickly also is unique i can remember from that from the occidental petroleum deal. who do you go to, who gets it done, mr. buffett does the cost for them, 8% a year but it does point as you say to this enormous cash pile. maybe if he had done this deal, would have been virtually nothing in terms of taking it down 128. what do you hear given how well you know this company and mr.

buffett, in terms of his ambitions to really try to figure out something to do with this money >> i think they're opportunistic. he's always been patient, always very willing to sit on the sidelines and even when everybody else is making a lot of money if he doesn't think the price is right, if he doesn't think the pitch is right over the plate, he's not going to swing. that has led to disappointments over the short-term, made people question his judgment on things. but his point is that over the long haul, you don't overpay and that's how you are able to continue to perform. the numbers have gotten bigger, $128 billion, a lot of money to put to work. he said over the years that it is going to be harder and harder to outperform the market when talking about big numbers that have been put to work. what he's been doing to this point i think is interesting buying additional shares of companies that tend to buy back a lot of stock apple comes to mind. that's berkshire hathaway's biggest position they hold and apple has been buying back a ton of cash. he looks at it as more of a consumer company but what they have been doing

with services is interesting too. not how many eye phones iphoness you sell it is a constant evolution in terms of what buffett and berkshire are willing to do and how they play in the market in terms of what investments they're willing to make. >> you mentioned apple and berkshire hathaway invested in a number of tech companies at this point. given the fact that the company owns so many different entities across so many industries, how unusual would it be to actually see them acquire a tech company specifically >> you know, i think if you look at it, it is probably not that different than some of the other units they have. again, these are such broad-based, you're right, in so many different places this is like tti, another middleman had which sells lots of different skew and works with lots of different companies along the way too, lots of different customers. what is interesting about tech data, the middle men who are really just taking and selling to smaller companies some of the

products that these bigger technology companies have to offer. i think apple makes up -- apple products make up 16% of sales. they have cisco and hpe which make up 11% each of their sales. interesting to look at tech data from that perspective, being a good bellwether of who is doing well, whose fortunes are up and down in the technology sector as well that's interesting in itself. >> becky, you mentioned buffett and berkshire's evolution. you pointed this out many times, they don't like to participate in auctions or any sort of -- and yet they came in here knowing of course there was a deal with another company. can we assume that that's a change or is this a one off? >> look, i think that they would be very open to somebody calling them up and saying, you know, we have to shop this around, here is the go shop provision, take a look at it if they think it is an underbid, they'll bid over it. but they aren't bidding twice. buffett is somebody who is not

phone for overpaying for deals and a lot of people call him cheap. if he looks at it and sees value, he thinks he can make money at this, it is interesting, i think i think i heard you point this out, apollo was able to come back and say we'll take it for $1 $145 they had a good price going into this why you have this go shop provision. that's part of delaware law you have to shop it around, undisclosed deal up to that point. >> yes it has been a part of most private equity deals at this point and certainly in this case as you point out, profitable one for existing shareholders who can thank mr. buffett for 15 bucks. becky, thank you >> good to see you let's get to dom chu more on the floor. >> morgan, what we got is a market pulling back, but still near the record high levels. as you can see here, a little red across the board fractionally not a sell-off dow industrials down 1.25%, same

thing for the s&p 500 and nasdaq, still well above that 3100 mark for the s&p 500. so this is, again, a pullback from those record high levels. if we look at over the past month or so, what really has been driving these markets toward the record highs, you take a look at the dow, the s&p 500 and the nasdaq again, 4% gains in november. s&p, 4%. 5% in the nasdaq overall this has been a broad-based move higher in the stock markets. as for what's driving the action, pushing those markets toward the record highs, certain key sectors in focus let's talk about technology, the big one, up 6% you mentioned apple down just a little bit today, still a big part of this market move higher. healthcare up 5% and financials up 5% as well. those are all generally cyclical sectors with the exception of healthcare, you can marg moargue payments very much a risk trade happening, risk aversion off the table. let's look at some of the stocks

really moving this, look at dow movers, disney up 17%. united health group up 11% meanwhile, you got consumer products, down 5% for cisco, down 5% for hp the dow is a shifting dynamic right now. today, being black friday and all has to be about the retailers. many biggest volume premarket movers on a lighter volume day, albeit, have been the retailers. no surprise there. a lot of people focusing on these types of companies on this particular time of the year. so take a look at walmart, amazon, target, macy's and kohl's all these guys in some way getting some action today because of that retail holiday rush these guys will be in focus. i'll point out, guys, that target and macy's, right here, this is an interesting one, because this represents the best performingier ining year to day up 90% and, guys, macy's, the worst performing retailer in the

s&p 500, down 48%. imagine if you put a paris trade on in some of those guys, david, morgan, mike, i'll send things back over to you. >> he's giving you a little run for your money with the telestrator action. >> he's already. left hand too. which i always have to reach across my body his technique, i'll take a few pointers dom, thank you. let's get to bond pits, rick santelli at the cme group in chicago. good morning, rick. >> good morning, mike. you know what jumps out at most of us when we look in the rear view mirror at how interest rates have behaved not only for the month of november, but for the last couple of months i'll show you. let's take october 1st start date look at two-year note yields other than the volatility in the middle of the chart, the last fed ease, october 30th, we had some movement going into that meeting, with movement going out.

very compressed. right now, two year note yields up one on the day and one on the week ten year, a little wider spray pattern on that chart, same thing. lots of volatility around that 10:30 fed meeting going in and out. fla flat one up on the day, one on the week bunds similar as well. it is really starting to have very little volatility close to close. guess what bunds are up 1 on the day, up 1 on the week dollar index, this had a rough october. very quietly and small chunks, coming back. as it sits now, it is at seven week highs mike, david, morgan, back to you. >> rick santelli, thank you. still to come, primetime for jeff bezos a look inside amazon's holiday shopping strategy next don't go anywhere. "squawk on the street" is back after a quick break. (vo) the moth without hope, struggles in the spider's web.

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it is the last trading day of the month major averages backing off slightly from all-time highs you see the dow down about one-third of 1%. nasdaq also a bit lower. s&p, though, up about 3.5% for the month of november. "squawk on the street" is back in less than three minutes stay with us it is nice.

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welcome back is prime really prime? that's what investors are asking about amazon as the holiday shopping season officially kicks off. deirdre bosa has more. >> reporter: we're looking at this question through the lens of popular items this year courtney reagan said air fryers may be this year's instant pot we checked out the ninja at amazon and target cost $99.99. amazon with the delivery advantage monday versus a full week later at target amazon which is giving a run for the money for next day delivery is listing it for 15 bucks more. mike, on your holiday shopping list you are looking for a pair of nike women's air jordan mids for the sneaker head in your

life you hit a sensitive spot nike severed the deal with amazon so you can only get this shoe at a higher price point from a third party seller on amazon which had a number of negative reviews over the last 12 months and ships between december 6th and december 13th nike has been leaning into the direct to consumer on the e-commerce process so you can get free shipping and returns through the site, but here's the catch they're sold out in most sizes so, mike, your best bet may be foot looker. $110 same as on the nike website. plenty of sizes available and it ships for free in five to six business days. but this nike example, guys, represents one of amazon's challenges as it struggles with knockoffs and gray market items. more brands could decide that listing on the platform just isn't worth the convenience. morgan and david, i did not forget about your shopping lists. i will take a look at them later on back to you.

>> all right >> thank you >> hope my daughter's not watching right now >> i know. i made my generic. i didn't say who it was for. >> i guess i just did. >> but those are not for you >> the women's mids, no. >> you never know. all right. we've had fun with mike today. still to come here on "squawk on the street," outlook on the busiest day of the shopping season, ethan allen ceo. we're back in a couple of minutes. ♪ oh, ho! oh, ho, ho, ho!

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good friday morning. welcome back to "squawk on the street." we are live from post nine at the new york stock exchange. carl and sara both have the morning off. let's look at the markets a half hour into trading. remember only three hours to go as we have a 1:00 close today. we are down across the board at this still relatively early hour >> our road map starts with retail's busiest day a surge in online shopping

bringing in a record $4.4 billion on thanksgiving day. >> plus it is the last trading day of november. stocks having been the best since june but can they keep up the momentum as we get closer to 2020 the billionaire investor buffett thwarted, mising out on a company called tech data we start with retail today it is the biggest day of the year for those that sell stuff our courtney reagan is live at the woodbridge mall in new jersey >> reporter: good to see you traffic is starting to pick up here the cadence of this holiday shopping weekend has definitely changed over the years last night i'm told a number of retailers had a pretty good night. aeropostale was giving out free blankets but then i heard some other stores saw traffic down about 50% from last year you got to have the right deals

at the right time to win the shoppers we know a lot of those deals start earlier this year, but this is still the busiest shopping day of the year for retail according to shopper track and npd. for the whole weekend, 165 million americans are expected to shop. today around 115 million both online and in store. so it's a very critical time alex partners analysis for cnbc says that thanksgiving weekend sales made up about 15% of retailers' total holiday sales in 2017. that dropped to 13% last year. expected to be about 12% this year largely because of both the earlier black friday deals as well as the six shorter days in the holiday shopping calendar. now, of course, black friday deals go beyond the big retailers. shopify said their sales totaled $442 million this year that's up from $250 million last year and u.s. sales on the platform

up more than 60% the average household is expected to spend about 415 bucks this holiday weekend i haven't even gotten started so i have a lot of work to do last year the average consumer bought five and a half items in store this weekend and 3.6 items online leslie, back over to you >> quick question for you. it's morgan. i, like you, have not really started my holiday shopping either i think part of the reason is because i know i can go online and get one or two day shipping. i wonder how much of a risk that can be if it's something the retailers are talking about that you can see this last-minute surge which we know has ensnared delivery companies and retailers in years past. >> reporter: you definitely know that story, morgan it is a little dangerous to wait because of obviously the volume of packages that is going to go through the system for all of the major carriers but also that calendar that i mentioned. you've got six fewer days this

year between thanksgiving and christmas. that's not nothing you have to consider that as you wait to shop and also remember that retailers have better inventory sort of management this year going into the holiday season which means supply could be a little shorter if you wait, you may be out of the size or color or exact item you want be aware, be careful this is a message to both you and to me who have yet to start our shopping >> and to all fellow procrastinators out there. >> reporter: thank you >> all right joining us now to discuss the state of retail. the ceo of storch advisers, jerry storch jerry, you've got this cornucopia of factors out there that people are concerned about with regard to the shopping season you've got tariffs you've got six fewer shopping days between thanksgiving and christmas, the potential for weather hazards that are going on does any of this concern you or do you feel like the state of

the consumer right now is strong enough to supersede any of these head wind? >> the consumer is very strong, and for months now shopping has been very strong the weather doesn't matter short season, that might have married a hundred years ago or so you can get to stores easier that doesn't matter. christmas is always december 25th there certainly have been sales early in the month of november but black friday is going to be massive between online and in store. and the people have jobs, high consumer confidence. the tariffs, frankly, haven't seemed to effect business at all when you look at what's been going on one or two retailers had mentioned them but they have other problems besides the tariffs. and the big ones, target, costco, best buy, dick's, they're all doing fantastic. >> do the tariffs affect the steepness of the discounts we're seeing this year across the board? you know, are there any retailers that you think are, you know, maybe needing to not

discount as much on black friday and black november as some people are calling it because of they can't really afford to given some of the hair cuts they're required to take as a result of the tariffs. >> look, that's just not happening. when you take a look at the largest retailers, they've done a great job in negotiating with suppliers, getting the discounts they need. they're in great shape if anything, any study i've seen say discounts may be a little higher this year so that's not really a factor. i said for months i don't think it's going to be a factor. when you add up the tariffs, they simply don't amount to a lot of dollars compared to the entire consumer economy. i'm not saying they're good or bad. i'm saying they really aren't a factor they haven't been a factor it's unlikely they're going to be a factor for the foreseeable future what is happening this year that is really striking is while in years past, it's clear the internet is the most of the growth in retail and that's still true some of the best players are growing both in their stores and on the internet now. when you look at what target and walmart have been doing, for

example, because they've mastered this in store pickup, ship from the store. you're seeing growth across the board in a full employment economy. and some retailers have gotten very savvy about how to use the internet to drive their business both in stores and online. so the winners are going to win even more. the losers like department stores, mall-based apparel, it's going to be worse and worse for them over time >> jerry, who owns the toy turf? it was two years ago that toys r us was declaring bankruptcy, right? all the major retailers were looking to -- big box retailers were looking to take over some of that market share i know toys r us opened up its first two new stores this week but in general, who's going to claim that slice of the holiday pie. >> market share got divided up among the other big players that had the market share walmart's been the largest toy seller in the u.s. for a long time they gained a lot. target's had a good market share.

target gained a lot from toys r us anyone who goes to the toys r us website now will get the sale from target. they've done well. and amazon has gained a lot of market share those are the big three in toys. other try to dabble and keep trying to dabble and they're finding that toys are not child's play you get a lot of product options. if you buy the toys in the wrong quantities so those three big players, walmart, target, and amazon are capturing the market share and they're all way up in toys as you've seen from their reports they're doing dpragreat. >> jerry, you mentioned perhaps less steep discounts for black friday and this holiday shopping season among retailers in general. how about in terms of shipping we know amazon and walmart have been increasing their costs as they basically offer more one-day shipping on more products right now but are retailers able to push those costs out to consumers in a way they haven't in the past

>> absolutely not. the costs are going up for retailers. amazon has raised the bar yet again. they are spending a fortune as you know to speed up their shipping and it's coming off their bottom line meanwhile, walmart has to match it if they want to compete fortunately, you know, walmart and target are using their stores as fulfillment centers. when the customer drives to the store, for example, to pick up the product, then they don't have the shipping cost so that's fantastic. and both target and walmart have said that when they fulfill from the stores and basically drive it to the consumer's house, that's a lot cheaper than shipping it across the country so they're using their stores to help lower that cost but as the bar keeps getting raised, it's going to keep costing money. there's a negative arbitrage in the profitability of a sale on the margin in the store versus online a sales shift online, these retailers are having to overcome that profitability drain through other factors. so far, the winners are doing a really good job of that as we've

seen from most recent earnings reports. i'm expecting them to continue to learn and adapt and change. as they do that, they're going to thrive. there's a lot of other people doing great. you know, the off price retailers. tj maxx. >> jerry, let's end on this theme you've mentioned many times. we saw some of the department stores and their stock prices. you've said this before, it's just going to get to be worse and worse for them over time, the department stores. is there nothing you could imagine that could reverse things for them? >> they have to fundamentally change their business paradigm and none of them are doing that. they have some great managements, but what they're essentially doing is trying to merchandise better or do what they've done for a century and that is not going to work. they need to rethink the model and it's going to change nordstrom has one of the greatest managements in the borl world. although their sales were still

negative can you imagine that in this economy and their stock popular. over the long-term, this business model doesn't work anymore. they have to change it they have the brand names and the loyalty that they could change it, but i don't see anyone being inventive enough to make a difference. they say make it more experiential like they haven't been trying to do that all along? of course they are it takes more capital than any of them have to make a new circus every day, a new play every day. they've got to change the business model there's a bunch of ways to do that but none are doing that right now. >> all right jerry, thank you >> my pleasure meantime, retailers are not the only ones hoping for a busy holiday shopping season. our steve liesman joins us with the look at the consumer impact on the overall economy hey, steve >> good morning, morgan. the u.s. economy more dependent right now on consumer spending than it has been in years. this black friday, it may well be shop or we'll drop as in growth could be flat or even

negative without a strong consumer an analysis over the past two quarters you can see right there. it would have contracted without consumer growth. that is all of the components of gdp added up to less than zero third quarter, the u.s. would have eked out a small gain without consumption. that's not usually the case. usually other areas can often overcome a slowdown in consumption. you have to go back to 2015-2016 for a time the economy was so reliant on consumer. a slowdown in business investment and a drawdown in ve - inventories. most economists blame that on the trade war. you can see that right there on the right side of the chart. 2015, 2016 that's on the left. now, data wednesday gave us a mixed picture. welcome rebound in business investment for october and an easing in jobless claims, consumer spending in october decent income, though,was flat.

spending and incomes have moderated. they've stepped down by a percentage point or two. but still remain at a pretty good level the consumer benefitting right now from low unemployment, sentiments high, and the stock market being up is going to be important for this holiday season it shapes up for a good hole today season it's important to keep the economy going while we figure out this trade and business stuff. >> i noticed in the gdp revision y erl earlier in the week that there was an upward revision in the inventories as well. should we talk about a possible pull forward ahead of the potential tariffs in december? are businesses planning for it >> you know, it was a long dinner last night. we drank some wine if you want to tell me how this trade stuff is affecting the economy, it's crazy. you have a pull forward in spending you're right there can be a pull forward in inventories. right now we may be in the middle of a larger than expected inventory drawdown from the trade data we got the other day

which showed imports are down from perhaps tariffs that could have been after the september tariffs went into place. and that could be dragging down fourth quarter growth. but the volatility, the difficulty in predicting what's happening in a normal economy comes from inventories layer on top of that the trade war and it makes predicting it more uncertain >> all right steve liesman, thank you for your insights on an uncertain situation. we're getting new numbers from adobe black friday on track to hit $7.4 billion as of 9:00 a.m. eastern this morning $600 million already spent online 19.2% growth year on year. keep watching those numbers as we get them. if steve was having french wine, he was already paying a 25% tariff on that too >> yeah. >> unfortunate when we come back, stocks on their pace for their best month since june the question we always ask right

here, is there more room to run? we've got one month of trading left in this year. plus buffett's bid thwarted. we're going to break down warren buffett's latest attempt to put his cash to work big show still ahead don't go anywhere. i am totally blind. and non-24 can make me show up too early... or too late. or make me feel like i'm not really "there." talk to your doctor, and call 844-234-2424.

it's last trading day of the month, and stocks are coming off those all-time highs still on pace for what will be the best month we've had since

june joining us for more chris harvey and barry banister chris, let me start with you the trade war and/or the resolution thereof has been the defining theme in terms of a news peg for this entire year. is that what we're going to continue to see in december? >> i think so. it's all about trade will tariffs be put on, will tariffs not be put on? will we get a deal everyone is acting as if a deal is minutes away. if it doesn't come through, the equity market rolls over if it does come through, we have an initial pomp but then sideways after that. it's hard to beat expectations as you point out, we've been talking about a trade deal for a long time. >> what does rollover mean >> i think you have a 2%, 3% pullback in the equity market. something reasonable >> so we're all -- again, we ask this question a lot. are we fully already valuing the benefit of a trade deal in the

market >> david, i think we are so our opinion is our price target has been $30.80 we're about 2% above that. the risk reward doesn't make that much sense. what are you playing for the deal has to be above expectations for the market to pop and have a sustained rally after that i joust don't think that's possible in the short-term the other issue is trump has pushed his bets when sentiment has been rather good that probability is out there. that's why we're worried about the risk reward. >> barry, if i told you the beginning of the year we were going to be over 25% in the s&p, i don't know if you would have believed me. but we are are we going to maintain those gains full year? >> it's remarkable october 2nd is when we really rotated up on the market we've gone up 9% on the s&p 500 since october 2. i mean, in a typical year, 9% price, 2% dividend, that's a full year return so it's been huge. the other thing is when you look at it, technology, health care,

financials, communication services are doing very well when you've got growth and value working well together, that's a sign of a bull trend the third thing i would say is that money supply growth using m-2 is up at a 10% annualized rate the last three months it's more than two and a half times what you would expect nominal gdp to be this quarter that's excess liquidity for the stock market i just don't want to stand in the way of the freight train >> so barry, you've got utilities in real estate higher today in what's a down market. although only modestly down. but they're the worst performing sectors. they're neg fative for the mont of november. we've been talking about this rotation we're seeing in the market is it sustainable? does it continue and do you buy into it >> we had been overweight -- significantly overweight and recommending utilities, staples, and real estate for the year up until october 13th and over that weekend, we decided to rotate into a

pro-cyclical stance. i would like to see for the sustainability of the economic cycle, a pullback in the dollar on better global growth abroad and i would like to see some higher 10-year yield, a more steep curve than what we've seen so far those are the two things we'll be watching besides trade as we go into the end of the year next year >> chris, it's hard not to forget what happened last december, however. we didn't have that 25% gain going into thanksgiving last year, but, you know, there are a variety of technical factors that really led to some significant volatility, some significant losses is there a risk of that actually repeating this year? have those technical factors gone away? >> leslie, i think that's kind of tough i think one of the reasons why we're up so much is everyone was afraid of last year. so they were positioned very defensively. they weren't very long they weren't overrisked. and now we're seeing that grind higher as people kind of miss the market and there's fomo out there. everyone has fear of missing out

at this time i find it highly unusual if we saw something similar to last year i think we continue to drive higher but we think you want to start slowly taking profits here >> barry, a year ago you had a fed tightening now you've got a fed that's been easing over the last couple of months as well how contingent is this market on fed policy >> yeah. a year ago around this time, we were very concerned with the fed. i mean, they were ignoring the fact that they were approaching the neutral rate and we were able to show that just being near neutral was too tight they had also continued with the quantitative tightening. and we saw we the repo blowup, that was a mistake to continue into 2019. we hit the fed's bench point in the fourth quarter they've been easing ever since i think the fed's done its part, but i would say if you don't get relief on trade, some sort of a trade deal or armed truce, we would lose some of these gains we've had since october.

>> so you agree, chris, that it's -- trade is connected to it as well? >> absolutely connected. afraid of global stresses and trump did a very good job at pressing his bets. he did a very good job at putting uncertainty in the marketplace and the fed did react to that. so the answer is yes >> guys, thanks to you both. when we come back, we'll take a closer look at warren buffett's attempt to buy a company called tech data that stock up double digits. more than 12% today. and later, how jewelers are gearing up for the big holiday season we'll hear from the ceo of pandora jewelry when "squawk on the street" continues. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes

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welcome back to "squawk on the street." it is time now for our etf spotlight. looking at vanek vectors trading slightly lowers this morning.

down 0.6%. still the group is on pace for its best year in a decade. up more than 50% year to date. we've got four semicomponents. all doubling this year already. but that's not too unusual for some of these names. more than doubled back in 2017 and 2016 respectively. broader tech sector, currently the top performing sector for the year on pace for its best monthly performance since june meantime, take a look at shares of tech data surging today after pe firm apollo management sweetened the bid for the company. up from the initial bid of $135 per share. valuing the deal at around $5 billion excluding debt the competing suitor in the bid, none other than warren buffett our own becky quick has learned he bid $140 a share and does not intend to make a higher offer at this time. so what is tech data

the company supplies small corporations with technology software and hardware made by larger tech companies helping names like apple, cisco, and microsoft bring their products to the market. ceo richard hume was on "mad money" back in september discussing the stock price >> we're very confident in our company and where we're going. so, yes, we like our future and we like what we see. so, you know, our board authorized starting last october over three different authorizations about a half a billion dollars. and we've actually acquired back $275 million at the close of the last quarter so we like our stock >> okay. so last october they were trading around $75 a share today based on the new news out, trading about double that price. still a lot of people looked at the initial apollo offer to be undervalued. it was low 6.8 times ebitda so it's not too surprising you

would see these advisers reaching out to other potential bidders saying, hey, apollo's getting a good deal here how would you like to be in the mix? it's be interesting to see if this new offer is a fairer value for the company and does solicit additional bids. i think they have a provision for another week and a half or so >> december 9th. giving them the fiduciary out that they need to say, hey, just because we signed this up doesn't mean we aren't still looking. we think this may be the best outcome. but in this case as you point out, it wasn't certainly at $130 perhaps $145 will prove to be given it's a higher multiple you can thank warren buffett for that unclear yet if we see another topping bid. i have no idea seems unlikely given they already have reached out, you'd expect the advisers to see and solicit other potential offers >> yes absolutely and i mean, one thing that you

spoke about with becky earlier today is this idea that it's unusual to see buffett come in and make a competing bid he doesn't participate in auctions at least certainly not publicly. he's been on the record saying that's not something he likes to engage the one might think that maybe, you know, that ship has sailed for this company the market seems to be at least looking at this as a $145 if not surpassing that right now. >> a premium now does look a bit better in terms of the unaffected stock price all right. let's move on now. send it over no rahal solomon. >> good morning. so here is your cnbc news update at this hour in london, police say several people have been injured in a stabbing in what's being called a major incident it happened at the london bridge which is now shut down we know one man is in custody and they're treating it as a terror incident but as a precaution north korea launched two

projectiles. kim jong-un was present and expressed great satisfaction at the results. it was the fourth rocket test since august in ohio, ten exotic animals died after a fire broke out at a wildlife park last night officials say four antelopes and three giraffes were among those killed no word on the cause of the fire and oil prices are expected to remain about the same heading into 2020. that's according to analysts in a reuters poll they project brent crude will average 22 cents higher than the outlook last month you are now up-to-date i will send it back to you morgan >> rahal, thank you. when we come back, retail caught in the trade cross hairs. the ceo of ethan allen will join us more "squawk on the street" when we return. the dos wn4 f e ws w'do 6ofthlo - [spokesman] if you've tried college but never finished,

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retail giant target hoping to top last year's record-setting holiday season coming off a strong earnings report just last week. our kate rogers is live with more >> reporter: hey, leslie you just said it target heading into this holiday season with an advantage having reported stronger than expected earnings especially compared to some of its competitors like kohl's and jcpenney. 2018 was the retailer's strongest year in more than a decade digital sales increased by 31% in the most recent earnings report but target's also focusing on the in-store experience. it's made investments to spruce up its stores. it's also introduced smaller format stores in certain locations and launched some new

in-house brands. target is working with disney to open disney shops in many of its locations. and it teamed up with true kids to help relaunch the commerce operation. another huge area of focus is delivery target's teamed up with shipped for same-day shipping options. and also has same-day pickup in stores they also doubled the number of workers in fulfillment the company released its black friday deals a bit early for its red card members online only on things like beat headphones, roku tvs, and more the holiday season is here we've been talking about it. it's about six days shorter. so the retailers wanted to make sure that customers were able to access those deals nice and early. and we should mention the stock is up nearly 600% since black friday of 2018 morgan, back over to you >> it may be shorter but has felt longer with all of the

holiday decorations up since halloween. kate rogers, thank you retailers faced with a condensed holiday shopping season as well as the effects of the china trade war. joining us now to discuss is ethan alan ceo and chairman. also author of the new book "trail blazer: from the mountains of cashmere to the summit of global business and beyond." great to have you here >> it's a pleasure to be here. >> how big of a deal is black friday and the holiday shopping season to ethan alan in the furniture business >> i tell you outside the exchange, there's a statue of george washington. there's a revolutionary event going on george washington was a revolutionary. we've decided to create the next revolution and the next revolution is treating our clients with dignity. there is a disease, a crisis it is a race to the bottom

before the great recession, we used to offer everyday best price. it was great for our clients because we're a vertically integrated company with 75% of our products we make ourselves 1500 interior designers. we have 200 design centers we provide service to get caught into this whole question of black fridays and all that stuff, we decided to get out of it to offer our clients everyday best value, best service, and you know what? it has been well received by our clients. it's well received by 1500 interior designers so we are going right against all this craziness now, it's not easy because it's like, you know, coming down from the mountain. because after the great recession, we also went 10%, 15%, then 20%. we offered a lot and no more we do offer, you know, to our clients everyday 20% savings

from our everyday best price we're offering them financing. free in-house delivery we are offering them good -- you know, good service >> but do consumers buy more at this time of the year when it comes to furniture especially given the fact we've seen green shoots in housing have you seen that play out in the sales numbers at ethan allen? >> not for us. if you're selling a commodity, yes. in our case, our designers work with clients they develop great homes we are not selling items for us, in fact, it's the other way around yes, if you're selling a commodity, you're selling an item certainly there are people in our industry that are going to most definitely benefit. but for us, we've gone right against it and we -- now, we just started in october. it's going to take us six months or so. you know, i'm a mountain climber. in fact, i got for all of you a present. a mountain climbing gift >> oh, thank you

>> two of those only but if you can pass it on >> we'll share >> what it really is coming down from the mountain. but you've got to make sure you do it right. and so we are going right against all this craziness that's taking place. >> another way you've been going against the craziness is a lot of the furniture you make you make in north america, in the u.s. specifically. we've been talking a lot about this u.s./china trade war situation right now. i realize that that's been a market you've been selling into the fact you've been exporting products that are made here into that market, how has that impacted >> tremendously. last fiscal year our sales were somewhat down mostly because of the 15% decline in sales in china. even then, we increased our earnings we increased our dividend by 50%. you know, we are one of those very few companies that has no debt you folks might know this. i took the company private in a management buyout.

not easy i took debt at 18%, 19% debt bu for the next 15 years we generated $2.5 billion of free cash then comes the great recession but still i think that we are doing well so china has tough we have got to make it up here in north america >> here in north america, there's more question on this. whether it's ethan allen, room and board, you're seeing it with a line of made in america. is there a trend is this becoming a thing in furniture and retail more broadly? to be manufacturing here in the u.s. is this something consumers want >> it's not that easy. see, 20 years back most furniture manufacturing went from the united states to china. in the last seven, eight years, it started shifting to vietnam vietnam is cheaper than china, but they're having logistic kal probl -- logistical problems. some is coming back. we are one of the few ones to

maintain in north america. not easy we have consolidated from 30 manufacturing to 9 but those nine are producing so we can ship not only to china. we got design centers in korea, philippines, cambodia, middle east and so in the united states all these folks are talking, not that easy because not many left. we are some of the few ones left making in the united states. >> farook, you came on to promote your book "trail blazer." then marc benioff comes out with a book called "trail blazer. who is the real trail blazer you or him >> i think we both are he's done a good job in his business and i think in our case, you know, forme it's my personal journey from the mountains of cashmere, growing up at 8,000 feet and at age 20 from those beautiful mountains ending up in

beautiful brooklyn and then ending up being part of the founder of ethan allen in 87 years ethan allen has had only two ceos. just think of this and i'm just getting started >> i was wondering we're glad to hear it. we're glad to see you. thank you. >> always a pleasure to be here. as we head to break, take a look at the three top performing stocks in the dow for november there it is. disney leading the way united health, walgreens boots alliance right behind. e re" rasqwkn t more "ua o thstetstight ahead edge-to-edge intelligence the , gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition.

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i do! i do! i have a really good feeling about this. [ dramatic music ]ing ] ahhhh! -ahhhh! elliott. you came back! now let's get to the cme group in chicago rick santelli with the santelli exchange hey, rick. >> good morning and thank you. i'd like to welcome my last guest of the week. jim bianco so much going on this week one thing i've always said if you really want to know what's going on in the market,

keep half an eye on the fundamentals, keep the other on charts but the other on capital where's the money going and to that end, what do you think? >> the money is not going where everybody says it is you always hear there is no alternative of fear of mising out. you assume that means that money has to be flowing in the stock funds. that's not the case. and that's not been the case for several years now. >> well, when i look up at the board, it's very odd because the stock market not only is losing vol like everything, if you look at historic volatility close to close and to the fixed income space, it is really getting low. and stocks are starting to join that crowd but at lofty levels. so let's go to the white board you have a surprise for us what are we looking at here? >> we're looking at the total flows of etfs and mutual funds together for stocks and for bonds. since november of 2015, a trillion dollars has gone into bonds.

since november '15, $100 billion has come out of stocks money is coming out of stocks going into bonds at an unprecedented rate at the time everybody says it should be doing the opposite >> i know. and there is no alternative. it's almost being used as a crutch because many don't believe the economy has the underpinnings to warrant such a hot stock market so if this is the case following the money, what's the driving force, "a," keeping stocks up? and "b," keeping interest rates from going down farther? >> i think there's two driving forces here. one is definitely higher rates the fed is hiked but that hasn't kicked up yet. so people are chasing higher yields understand now in the world, a high yield you jump over the desk and grab is 2%. and you're seeing a lot of short-term bond funds in aging demographics in the developing world, every day we had 8,000 more people at the age of 65. they're also looking at reducing

their risk by buying in fixed income on stock front, what i think is supporting the stock market is buybacks corporate bonds which companies have issued to buy back their stocks as well, too. so where the public has been putting their money is exactly the opposite of what you hear. they've been plowing headlong into bond funds. and no higher stock market is going to change this we've been saying this for ten years. if the stock market goes up, they'll capitulate it's gone up 400% and this trend is accelerating. >> oh, it's a contrarian trend. that's what you hear >> right the stock market is up 400% and look what it's done the last four years you could go up another 400% you need yields to go back to zero to get people to pull out of bond funds at this point. that's only going to happen if you have a recession >> jim bianco, thank you it's interesting to kick the tires in a way nobody else does. hope you have a great weekend. back to you.

>> thank you when we come back, pandora jewelry dropping a new fan favorite selection just ahead this holiday season. the ceo will join us next when "squawk on the street" returns as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer.

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it is the most wonderful time of the year for retailers and shoppers that is according to adobe holiday shoppers are expected to spend $7.5 billion today and $9.4 billion on monday representing a 20% increase from last year. still global retail stocks sliding alongside the rest of the market today the world's largest jeweler is hoping new designs like the harry potter collection will revamp the brand's relevance and sales. joining us now is ceo of pandora. alexander, thank you so much for joining us and you are in the middle of a turnaround you joined a few months ago at pandora. how are you looking at this holiday season in the midst of the recent changes >> the holiday season is very important for anybody that is in the gifting businesslike we are. we probably produce somewhere

around 30% of the turnover let's say from middle of november through to christmas sales so this is incredibly important for us we have lined up a number of different things to excite our consumer base. we've had some advertising on black friday like we've never had before i think we have strong offers both in store and offline. and we've launched a collection that is not on sale but that is also going into december so we have sharpened our knives this time around this is an important period for us >> and in terms of the collection that is not on sale, how orimportant are sales for t jewelry business do consumers expect to see deep it was counts this time of year or do they usually just pay up for jewelry? >> if you company back a few year, pandora had no sales and then we had a few years of

problems and so we got on this promotional trail. and these kinds of events become increasingly important if you want to compete for the customer money. so, yes, we play the game. but if i could choose maybe i would do something different >> how are you going after the millennials and up and coming gen zers when are they looking for and how are you targeting them >> so if you look at the pandora brand, it has been trans generational brand we see a quite normal distribution across the age curve going from 15 to 65. so that is not something that we've been focusing much on. what we've tried to do recently with the brand relaunch is to

rejuvenate the core proposition of pandora and part of that is also a most recent launch that we've done to kind of try to go after gen z with the pandora me bracelet that we just launched recently so we do some selective activities to go after segments in the market, but generally speaking, we have a very broad proposition. we compete, you know, in the middle of the market so we have to have a broad appeal >> so how would you gauge the health of the luxury market globally right now especially when there is consolidation coming to the industry >> if you look at the industry as such, it has been a quite healthy space the last five years. it has probably grown anywhere between 5% and 6%, which would put to on the gdp growth so that is an interesting space. we can also see that branded jewelry is still quite low it was probably a quarter of the total market is branded jewelry.

and that is actually the only part in the market that is growing. which then would suggest that things like the merger we are seeing from lbmh and tiffany makes some sense from a consolidation standpoint because that is the part of a healthy category that is growing. >> you mentioned that you were going after a certain targeted demographics as part of your turnaround strategy. does the chinese consumer count as one of them >> china as for many other companies is a very important market it is our number two market in the world. so i wouldn't characterize that as a specific demographic. that is more a geo graphigee ge target but very important for us of course >> thank you, alexander. and when we come back right here, primetime for amazon, we'll break down the company's holiday strategy when we return. - [spokesman] if you've tried college but never finished,

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good morning it is 8:00 a.m. at amazon headquarters in seemgattle, 11:0 a.m. on wall street and squaw"s alley" is live ♪ >> that's right, it is black friday morning welcome to "squawk alley." we're live from post nine here at the new york stock exchange and carl and jon