going to do well because you look at what a jpmorgan has done in the tech space, they're embracing it the companies that embrace tech are going to do well as we move forward. >> yeah. courtney, j.j., real pleasure becky, toothpaste and soap, hopefully two things nobody is giving up on in 2020 >> grateful for a lot. friends, family and colleagues like you guys. happy thanksgiving, everybody. join us on friday. right now, time for "squawk on the street." >> you bet >> good wednesday morning. welcome to "squawk on the street." i'm carl keent nita with daveaqh david aber, jim cramer is off. last session before the holiday, a lot of data, gdp, durables and more on the way. road map begins with the record rally. futures pointing to a softer

open, but the dow currently having its best monthly gain since january of 1987. >> that ev revolution, it is rolling on in the stock market tesla tops half a trillion dollars in market value for the first time shares of nikola sinking this morning. >> covid surge, cases and hospitalizations at record levels why experts fear thanksgiving could be a so-called accelerator event. >> let's get your take on where you think sentiment is now i saw you writing yesterday about the fear and greed, pointing more to the greed. >> people are -- there is a belief phase in this rally that has probably started this comeback from march, eight months ago, ishas fed on disbelief. between the seasonal forces being strong and the clearance

toward this post covid moment with the vaccines, it all did come together. also, though, with the grab for cyclicals, laggards, anything that moves fast, anything that seems like it was really dented up by this whole phase, now, sentiment, it is not a moment in time people say, all too bullish and it has to stop but there is no doubt about it that people are starting to feel it and you're starting to see things like the percentage of stocks that are in a massive up trend is the highest in seven years. it has been a broad rally, but one that people are now buying into what is funny, though, carl, you say, i do cite the fact that fear of greed index is 87, 88, but the number of people who respond affirmatively in agreement with the idea that everybody else is too bullish is also tremendous. there is a sense out there of nobody is over the idea that there is a disconnect. perceived disconnect between what is happening in the markets and the rest of the world. i don't know you can sort of say that was fun, it is over

it is much more about one of the head winds this market has to chew through if it makes further progress the s&p, we didn't talk about it, s&p 36, 35, doesn't have the same ring as dow 30,000, that was a record yesterday but only by a few points we still are noodling around the levels that we first hit briefly on november 9th when we got that pfizer news on the vaccine. >> mike, we -- sorry, carl, we talked about this for many months, relatively new cohort into the marketplace, that seems to enjoy sort of speculation to some extent. talking about individual traders ewing new platforms or older platforms but to be very active. i don't know what you hear or see or expect, i don't know if you noticed at about 4:00, 4:30 in the morning, some people get started. you see moves in stocks in these early trades whether it is palantir or carnival cruise lines or tesla, but they're here and they don't seem to be going away >> no.

and because they have gotten positive reinforcement largely if you start on the premise this is kind of play money, it is a little bit of a video game, and i don't mean to belittle it, it is -- it is numbers on a screen and lines on a screen and playing them and rooting for one direction and you're thinking you have skill added that's what it is. there is a new energy in the market for that. an emotional sense that it is not just disciplined algorithms that know what the right cell levels are, that will keep things within the bands, and so there are secs a there are secs s there are secs ections of the me like ev, like cannabis, and like old energy right now, which is flying, because it is all beaten down to low price and high data, it is in there, i don't think that, again, that's how bull markets act s s act on some levu welcome it and fear it at the same time, carl.

>> that's a great point, to your larger point about energy, crude back to 45 and change. got to go back to march for that interesting piece in the journal this morning, they look at some internal documents at exxonmobil, david. planning documents, and their general expectation is that oil prices will fall by 11 to 17% in each of the next seven years as ar renewables in evs become more of a force. that doesn't stop crude from getting back to the high 40s. >> there is a belief that under a biden administration you'll have -- it will become more difficult to do new drilling so whatever you got going on is fine, but don't expect to potentially be doing new stuff and that could result in not shortages, but in supply constraints it a certain extent or the market not being as flooded tafloo ed as it has been things cut both ways

we do talk about the ev revolution often that's what we started the show with, watching tesla's market cap eclipse half a trillion dollars. as a percent of automobiles onnon the road now, it is small, it is going to grow. we talked last week making point you have to part of the talking points that it only represents 25% of their total in terms of at least what is used actually of the product they're getting out of the ground in an automobile but we're keeping a close eye on exxonmobil for any number of reasons including that dividend, the yield of which is very high right now for the company. but which continues to be a question mark in terms of their capital allocation. >> indeed. and then we'll talk more about what nikola told cramer last night. i see citi takes fisker to buy pretty thinly covered name to 26. implies 60% upside and jonas at

morgan stanley cuts ford it equal weight on what he's calling ev transition head winds. a lot of chop in this space over the next few quarters and years. >> no doubt about it i don't know what basis you're raising the fisker price target. if you're looking at some comps, whether they be the chinese ev companies or not, everything is being marched higher it is ironic, the market is not willing. this is the case with any industry, willing to look at integrated old economy with some new economy stuff growing within it, like ford. and try to assign the value to the new business that anything like what the pure plays are running for, we get that though maybe the exception to this right now is disney back at the old highs in terms of share price, with theme parks mostly closed and basically people giving a netflix type multiple to disney plus subs. >> that's what they wanted they have been very strong out of the gate.

still promotion in there, you had the verizon deal where people got it a year free, that will start coming off at some point. so we'll keep a close eye on subs overall we all know it has been an extremely positive launch of disney plus and certainly benefitted to a certain extent from how many people have been home longer hours than they might have been otherwise. and that's the key they have not been penalized that much by the closure of the theme parks or the reduced capacity of the theme parks. overall in media, they're the best -- well, netflix is up 49%. i don't need to tell you you know the numbers, you probably recite them before you go to sleep every night. but disney up 4% i did want to mention some news as well as we kind of end here, which is viacom, in the same area, getting a deal done. i mentioned it yesterday, the sale of simon and shuster just announced, bertelsmann is the buyer. the price tag is astonishing

2.175 billion in cash is what we're talking about. why do i say that? that's a multiple of 15 times ebitda and that is quite a lot. perhaps more than we have been expecting. more than perhaps viacom had when it began this process people talking about the asset beg wor being worth a billion, 1.2 billion. you can put that multiple on that now there have been some questions and will continue to be about an antitrust risk of this bertelsmann owns random house and penguin. would have market share on the order of some 35%. some will say market share is not an indication of market power. but i would know as well, i am told that this does include the language is not there in the release, and the release they say bertelsmann agreed to take all steps necessary to obtain regulatory approvals i am told, though, that is being

viewed as what we call a hell or high water priovision, they'll d whatever it takes to get that done you want antitrust security if you are viacom great to sign up a deal at that number if you can't close a deal, doesn't matter much. harper collins was a significant bidder as well, but falling short for a price by the way that is just far in excess of what people anticipated when this asset was put on the market for viacom, they also put their headquarters in midtown up, called black rock, where cnbc has be -- cbs is housed, that market for office buildings and the like in new york probably not what it was a year ago but they're taking in some serious money right now over at viacom and the stock price rebounded sharply from the incredible lows it saw a few months ago. >> proceeds will be used to invest in strategic growth

priorities including streaming and to fund the dividend, pay down debt. nice to put 2 billion to put to work on fresh content. >> that's why it fits in with what microsoft was talking about with disney, this is an important part of the strategy at viacom as well there are questions about what paramount plus will look like exactly, how much of it and how they're going to choose to make content for other providers and also have their own direct to consumer, but everybody has to have one, discovery, i was talking to malone last week about it, they're probably going to have one in the not too distant future as well everybody has direct to consumer how many of these services will people want to subscribe to, do you need to be on all of the platforms to be able to get to that consumer? how important is that? and how do you price them? coming back to direct to consumer at disney, that was the key thing. that's 699 that moment when they said that price, that really shook

everybody up >> yeah. >> carl? >> we'll take a break here a lot of earnings news we have not yet gotten to including gap and nordstrom, deere, dell, hp, with new data on the way at the top of the hour. new homes consumer sentiment as well futures mixed here nasdaq will take the lead at the open we're back in a moment what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity

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today is expected to be thes by busiest day for air travel. >> i have to say the crowds that we're seeing here today, the slowest since back after 9/11. even during the recession, it seemed like it was busier than what seer hei i what we're seeing so far today 1.1 million people across the country, compare that to what we would usually see on the wednesday before thanksgiving, last year about 2.4, 2.5 million people so you're seeing a decided drop in the number of people flying yet this will be the busiest day and sunday will be the busiest day since the pandemic began where do we see people going if they're not heading home to

various locates around t slocate country? the airlines expect a lot foxx go to florida, warmer weather, the state is not as shut down as many states around the country and the air slnz belines have b adding more flights there. the expectation is that we're going to see passenger levels down anywhere between 52 and 55% compared to the same time last year so it is a decided drop, the airline stocks have been moving higher with the rest of the market it is a little surreal, you usually see it much more crowded out here at o'hare you can tell that people perhaps they're heeding the warning from the cdc that you should just not travel for thanksgiving. because it is much quieter than even i expected. i knew it would be slower, but i thought we would see a few more people out here. >> yeah, fascinating look on the

ground, phil our thanks to you. we'll come back to you later on today. phil lebeau watching what would be the story of the morning, thanksgiving travel. mike, i think back to bill miller in the spring said that airline trades were basically a trade on the vaccine there is news today that pfizer could ship 6 million doses within 24 40hours of regulatory clearance. and you have herd immunity by mayasible given the forecast. >> when it comes to airlines, they're not just a vaccine play, they're cyclicals, they're laggards and massive beneficiaries of a generous credit market right now. all those things are basically your top four or five of what is working. right now. and at some point maybe the market has to maybe test its confidence that we're that close to a back to normal phase in all

this but at the moment, willing to look through that is going on now. and you're starting to see some commentary in real time, positivity rates are coming down and seems like people willing to wait just because of the strong seasonal period and the sense that people had clenched up around the election so much. and a lot of that -- a lot of that tension is getting freed up right now. we'll take another look at the futures here as we count down to the opening bell little bit of spillbackon the dow after crossing 30,000, just down 46 points bringing it around the 30,000 level at this point. s&p 500 flat at a record high. also indications of maybe a rerotation back into growth as the nasdaq was up yesterday and also outperforming now

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washington and wall street mourning the loss of a familiar face to nbc. ed lazier served as chairman of president george w. bush's council of economic advisers a professor of economics at stanford president bush issued a statement saying, quote, eddie was a trusted confidant who helped guide us out of the financial crisis, a beloved colleague at the white house by all who knew him most of all eddie was a loving husband to vicki and a proud father to julie. laura and i send them our heart fel felt condolences as they remember the life of a great man. this one hit hard yesterday. most notably because he guided our viewers through a lot of the

confusing world of labor economics and our viewers are better to are it. >> yeah, no doubt. very straightforward man, always willing to help as you say sort of give insight and guidance around complicated topics. and we will miss having that insight from mr. lazear. >> yeah. rick santelli, you talked to him the most our thoughts are with his family >> yeah, it really does hit hard, carl i didn't find out until late last night, early this morning and unemployment fridays just won't be the same for me i'm sure viewers will feel the same way it isn't that ed told you where the market was going to go or able to decipher everything in a jobs report, but it was the fact that he always delivered his comments with a big smile, he always tried to find the reality to a report not with any biases whether it was political or economic, just a straight shooter, but as i've been saying

all day to anybody i had this conversation with and everybody is going to really miss ed, especially when we're coming up with the jobs report next friday, but ultimately i think what i'll miss most about him is the fact that he was a great patriot, a great american, and he used his intellect in a way to share and to help everybody understand topics that were very difficult for many and let's face it, there is a lot of on the other hands with economists. with ed, he gave you exactly what he thought and he did it with class >> rick, thanks for helping us remember him, ed lazear, dead at 72 at fidelity, you'll work with an advisor

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special report from cnbc, dow 10,000. >> it looks like we're making history on wall street today. >> the first time the dow jones industrial average closed above

the 10,000 mark. >> up 83 points, the high for the session, first time ever above 15,000 for the dow and a new high for the s&p. >> we do expect the dow to crack 20k for the first time in its 120-year history and it has done. >> for first time ever the dow jones industrial average closed above 25,000 >> never gets old, david some of those milestones. >> they don't. >> i know you like the archive footage. >> yeah, i'm sorry we didn't see more of it i also like to point out the dow is a statistically irrelevant index and simple math and percentages, so, clearly it gets smaller and smaller percentagewise in terms of the gains we need. >> which is why we make a fuss on the 5,000 point increments. what is interesting, and almost never have you been able to look back and say that a big round

number, thousand point threshold, was, you know, a major turning point, a peak, but the 25,000 one is interesting just in terms of the cadence of the market now early 2018, market barreling higher for ayer a year and did above it, without any trouble of 25,000 in january of 2018. that's when everybody was very bulled up. you saw a lot of the sentiment stuff you're seeing now goes back to 2018, bullbullish, the extended nature of this short-term ramp and it peaked in late january you were contending with that level of 25,000 for a long time thereafter throughout that entire year and beyond just something to think about as you have this sort of mental accounting of whether re we alln all of this stuff. >> and cramer tried to encapsulate what the number itself does to sentiment and what the prospect of visible

vaccine distribution does for the market in the months to come here is what he said last night. >> i think that what is happening is there is a happy days are here again somewhat justified. if we get this thing under control, it is going to be like the end of prohibition >> that's a big day, guys. >> i'll bet it was. >> 1933, i'm not sure everyone was thinking about buying stocks, but a big part of it, yes. >> i'll party. for sure. >> we'll keep an eye on that a lot more wood to chop between here and there as we all know. i did see moderna finalized a deal with the european which igs commission to sell 80 million doses. europe will get in line for the vaccine. we're seeing texas talk about in what order workers and americans will be getting the vaccine. so that's all going to be part of the market calculus in the months and quarters to come as we get closer here to the opening bell we haven't gotten to a lot of the earnings from last night as

we await that, but gap and nordstrom and dell and hp will be in focus on this last session before the holiday >> just looking at gap, which does appear as we get ready for the opening bell to be ready to open substantially lower we talked about the incredible move that gap has made somewhat surprisingly one would think given the place in the mall, and the thought that mall traffic or the lack thereof would be a death blow to the company. they reported a strong number. same store sales up 5% overall flat because, remember, they're still closing stores overall sales number the same as it was a year ago at gap but they did come in with that 5% the market does not seem to appreciate it right now. the stock had been moving up dramatically into this print. >> moving up dramatically and also got an upgrade for the extra little bit of upside so just a little too much to absorb here. wasn't about the past quarter. in general, gap placed in that category of these old chain retailers that have really kind

of gotten a greater sense of urgency about closing more stores the market seems to like that. financially they're going to be able to make it through and some new leadership it seems like a lot of things fell into place for that rally and just a little bit of giveback here as really brick and mortar retail is one of the strongest laggard sectors this month in november. >> yeah. operating expenses up 8. and they did talk about pressure on margin, guys, as pertains to shipping costs, which brings us to fedex and u.p.s bloomberg has a piece this morning about just getting delivery vans for holiday is going to be tough. and a bit of a cost squeeze given everything else they had to do this year in terms of cost, regarding mitigation of covid, protection of their own workers, but you couple that with the story on peloton, that some of the delivery mis

delivery dates >> people want your orders almost immediately as of monday if you want to get it by christmas what you start hearing possibly but, of course, what we haven't missed is this incredible move and well, all right, peloton is unbelievable up 277%, selling off a bit over the last month or two. but u.p.s. and fedex have been amazing stories. they were not in the best place, it was thought, earlier in the year, and even early in like so many other things in the pandemic, but, wow, the accretion of market cap for both, just u.p.s. up 42%, and fedex you can see right there, up 93% year to date. >> fedex, too, what -- the setup was a couple of years in the wilderness troubled stock, company was missing quarter after quarter and not just obviously the delivery economy that we have right now, comes to the rescue, but this idea that there is a

boom and buying of stuff and most of it is getting delivered. but every time, you know, this time of year, we start hearing about that's the choke point in the economy, just the logistics of relying on these companies, and see if there is any giveback right now, but not really -- everyone loves the cyclical stocks, the ones that are leveraged to a global recovery and, you know, it is working right now and kind of keeping the dow transports together too, just to grab another dow jones index for you. >> yeah, which has been setting new highs of its own it is funny, we think of some companies in a jekyll and hyde way, mentioning did ining disne hp is another story, right leading the s&p right now, but revenue ahead, 62 cents beat by a dime. >> a huge number up and the sales into the home as you say net revenue 56.6 billion, down

3.6. 2.3% in constant currency from the prior year but diluted net eps 2 bucks down a bit, but market is quite happy with it. and that stock showed a little bit of life. you see it lately after the significant downtrend. look at some of the charts, mike, of the opportunity that, of course, at the time it wasn't clear that it was available to investors back in march and april in terms of just the dives that so many stocks took, wholesale selling, and we thought the market was in deep trouble and the economy was, bought all of that has ended up being so much of an opportunity. that chart is reflective of so many others. >> completely. a five-week purge of stocks and went down 35% or so in the s&p 500 and really all you can say near the bottom was things are so bad that usually they don't get worse, you can close your

eyes, you know, and buy stuff that has the financial where with all to survive. that has paid off. a tough bet then now it is trickier in terms of figuring out what is priced in disaster is no longer priced in. i mentioned earlier, we might see an unwind of the rotation to cyclical and value it has been going on if you look at this morning the s&p leaders, it is things like software, salesforce, service now, and etsy up there too a little bit of a pendulum shift back after people got very, very excited about playing the reopening stuff. >> you mentioned hp, i wanted to hit dell also. sometimes we forget dell, a larger company, and dell has traded publicly now for some time the focus there for many people, of course, we're still quite a ways away, vm ware, the 83% they own which they are going to separate in an effect of way from the company though for tax purposes that really is not going to happen for some time.

they did report earnings, though, revenue up 3%, 23.5 billion, operating income of 1.1 billion, that's a 35% increase, but you see the shares are, which have been quite strong, 25% or down now. this didn't get that much notice last week, greg lemkow, very senior goldman sachs going over to michael dell, msd capital, which is not going to just be the family office, mike, for mr. dell any longer who is one of the wealthiest men in the country or not only, but in the world, and seems poised to actually become a lot wealthier. they're going to be focused and doing more deals there in terms of private equity in particular, not as much a straight public equity investing, though john -- they had great success in that but worth mentioning, you know, it is not just the ownership at dell, michael dell has it going on a lot of different areas. >> he got such an early start, such a young age and building for so long and then if you think about it, he's been

through a take private transaction and -- he's been at the hub of a lot of these things for a while. the news was interesting last week and going to become some kind of a contender and buying longer term businesses and assets in -- >> amount tilternative asset ma. they are not a family office just running michael -- outside capital and a lot of deals so we'll keep an eye on that, carl. >> i wanted to get you on a few things, namely the deceleration in durables. we got 1.3 instead of 1.9. claims at 70.78 was hotter than expected we know what consumer sentiment has done for the last couple of weeks here and jpmorgan keeps warning about year end rebalancing from balanced mutual funds, have to sell 160 billion to maintain their balance. how much vulnerability do you

think there is in some of the data rollover and then positioning rollovers? >> i think some of the supply issues, just sort of looming potential mechanical selling that is out there is something that is going to be a story line for a couple of weeks, doesn't mean that it undercuts the entire run, but it certainly creates a restraint on what the market might be able to do you see not just the pension and asset allocator rebalancing, but there is going to be a noisy entry of tesla into the s&p 500. these index funds now how to do this, but it is a big one and the bigger tesla gets before it gets in the index, the other you got to sell the other 499 stocks there is a lot of noisy stuff happening at a time you had the market run a long distance in a short period of time the data is less of a concern in the sense that i think the market is saying a lot of this stuff is october, we're pricing in first and second quarter of next year. a level at which it starts to worry you, we have a jobs number next week that will get more

close attention on that front, but the bond market is not really repricing itself for new slowdown i think that's something that can equity investors can lean back on. >> we have been keeping an eye this week as we do every we can on ev. we mentioned tesla, down a bit, but its market value above 500 billion dollars. we also have been watching the spacs that continue to get created by the way we have a couple of new ones this morning, but also those that have announced deals or closed deals or nouannounced de to take public ev related companies and the leader there or first one out of the gate, that was before the pandemic, right before, remember it well, nikola, ceo on with jim last night on "mad money. one of the keys there, of course, had been when they will officially sign, i guess, this deal with gm to manufacture their badger trucks.

let's take a listen when jim asks specifically about that transaction. >> we're interested in gm's hydro tech fuel cell system. it is very interesting to us we're interested in their battery system both of those things are interesting to us and we continue to talk to them about those things. >> they did include in the presentation they put online last week in terms of their various efforts in the ev, i'm sure you've seen morgan stanley, awakening the ev spac within, talking about the effort those companies have been making in terms of electric vehicles, and referencing sort of the spac craze as well. you see gm has been very strong, ford has also. ford is downgraded to equal weight they talk their expectations for both companies in terms of focus

on that. you mentioned earlier that fisker initiation of coverage. and what we can see a lot of names, those names are down and some of these more speculative names, the one i've been watching is the ciig merger corp., a company called a rival taking public. they announced the deal, hasn't closed that's down 9% still up 143% or so. >> if you look at the leaders on a given day this month, the nasdaq, it is all those things that you kind of barley have heard of, and they all have that kind of fad bingo of ev spac or something like that, china ev as well. >> mike, on this topic broadly speaking, i asked you about the speculative nature of the market have either of you guys taken a look at shares of palantir and what is going on there this was a direct listing to the market, it didn't go

particularly well on its initial pricing. it has gone parabollic, mike, just in the last couple of weeks. and i think a lot of it is that same court we were talk about that has got noon itment i don't know where they get their information from or who they're talking to, but they like it now. >> the story line on the first move higher in the last couple of weeks was that somehow with a biden win they have fewer perceived conflicts or bigger companies be more willing it use them as, you know, as a vendor because they won't necessarily have that kind of overhang i have no idea if that is behind this it did start once you started getting some certainty around the election and now it is just, you know, one of these things that has a life of its own and has gone vertical. >> carl?

we may have -- i think we lost carl yeah i'll take it over. you can see that sometimes the audio goes out on these home setups let me send it over to rick santelli now get his bond report. rick >> hi, david this morning, i was listening it mike anatoly, best play by play in the business, and the treasury market is not looking for any miy major relay. it is looking ahead. it is optimistic about the vaccines and the therapeutics, maybe not as excited as the equity markets, but maybe that's the point. if you look at today's data, we had a 30,000 rise in initial claims nobody wants to see that in the levels are high. if you look at where all the experts thought things would be, in february, march, for today, the markets are much better off, the economy is much better off, of course, many people aren't better off and that's what we would hope for would happen over the next several months. and intraday of ten says it all. after the data released, the

small jump in claims, rates moved lower. there is no denying that if you started friday's 82 basis point close for a ten year, we built up a little bit of cushion here and if you contrast u.s. interest rates with european interest rates starting on august 1st, you can see they flopped. we're more optimistic because our rate structure is aiming higher the slope of that is aiming higher even though the patterns regrabbed an almost identical since we switched. if you look at the dollar, today is an important day. it looks li s like today we clot fresh 41-month lows, back to the second quarter of 2018 you see the high now on that chart is 119.30. if it closes above 119.36, it will join the dollar index and be an extreme unseen since q2 2018 but on the positive side of that relationship

the strongest in 31 months carl, back to you. >> all right, rick, thank you very much. rick santelli. so dow giving back 100 points of its record from yesterday. the nasdaq is trading above the september 2 all time record close. we'll take a break and be back in a minute. at dell technologies, we started by making the cloud easier to manage. but we didn't stop there. we made a cloud flexible enough to adapt to any size business. no matter what it does, or how it changes.

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there is a twist when it comes to the spac frieenzy on wl street two more that i picked up that were priced last night, but explain to us what you mean by that >> yeah, they just keep coming, david. if you boil down spacs and private equity to the most simplistic definitions, they sound pretty similar you raise capital from outside investors to fund deals. spacs typically take private companies public and buyouts can often take public companies private among other major key

differences. but this year's spac frenzy, which we have been covering in spac in action is shifting attention to the private equity model. here's black rock's larry fink who said it could put pressure on buyout industry. >> in many cases i think spacs could replace many private equity platforms because they could be another avenue for organizations or subsidiaries of organizations to be spun out so if spacs continue to grow in importance, i do believe it is going to be pressure on some private equity because you're going to see more money moving into these types of organizations. >> the concern of some is the excess of new capital from spacs will chase the same supply of deals driving up valuations. that's not always true not every target would benefit by a reverse merger. just like not every capital structure would benefit from some sort of debt from a

leveraged buyout sources that advise on these deals told me competition is fierce and that's causing hasty due diligence and willingness to pay higher valuations. rather than sit on the sideline, traditional private equity is getting into the spac game in a big way. apollo global, tpg raised spacs of their own this year >> apollo did one last night >> upsized upsized spac last night. >> you raise an interesting point, a number of different areas, one is, of course, the question of declining quality is so much money chases fewer deals perhaps. we have seen some of these companies that wouldn't otherwise go public at this point. they're very early in their gestation. so that's got to be a concern. years to profitability but then to your point, what i'm hearing more of, we might be there for a carveout from a company, from a divestiture from a company, we should be considered in that conversation

when a company is thinking of selling a division or doing something along those lines. >> you bring up a good point as actual sellers of the portfolio companies, if maybe the ipo market, the traditional ipo markets aren't the route they think they could get the highest valuation, maybe a spac is better for them, they could sell their own portfolio companies to other spacs even if they have their own spacs they're running. another conversation that is happening a lot is vcs are listing their own spacs and have considered, discussions about potentially acquiring portfolio companies of their own through their spac out of their actual venture capital fund, which raises all sorts of challenges at the board level and with the fellow vcs who invested in the companies. all really interesting considerations and i do think we'll start it hear more with regard to conflicts of interest. >> that would be a conflict.

wall street will go as close as it can if not way over the line in terms of pursuing conflicts if it means the ability to make money. thank you for your coverage of this area. we'll take a quick commercial break. stay with us this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

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if you policy qualifies. or call the number on your screen. coventry direct, redefining insurance. allegedly the administration has set up a rollout how they think it should occur, what will be available when and how. and we'll look at that, and we may alter that, we may keep the exact same outline but that is in -- we aren't gottgo haven't gotten that briefing i think we should be focusing on being able to open schools as rapidly as we can. i think it can be done safely.

so there is a lot to work out in the next two months as to exactly how it will be distributed. maybe the hope is we can actually begin to distribute it, this administration can begin to distribute it before we are sworn in and take office >> that's the president-elect talking to lester holt last night on "nbc nightly news" with a few different headlines, talking about vaccine distribution, likely he'll get the presidential daily brief reading today, david says we should open schools as rapidly as we can. says he would meet with president trump, of course, if asked. but basically the transition team now in touch with federal agencies all across d.c. >> yeah. and it is good to see that is moving forward listen, we had two hospital administrator on yesterday, we'll continue to check in with them both on vaccine distribution plans and in their areas how bad the virus is, carl, and it is pretty bad in many parts of the country. i was disturbed and i said you may have been as well when you

heard them, doesn't seem there has been a plan articulated fully yet. maybe it is too early and there will be. but we're not there yet. >> no, it is true. and got record deaths in maine, missouri, north dakota, oregon, wisconsin, deaths. even though we're beginning to see some signs of peaking in states like south dakota good morning, everybody. welcome to "squawk on the street." i'm carl quintanilla with david faber, mike santoli will stick around >> i'll start out with what is crossing the wires, november, final read, final read, which means the current 77 in place gets tossed and it gets replaced with 76.9, the same .1 lighter if we go through current conditions, 87.0, that's a point and .2 pop over our midmonth if we look at the final

expectations numbers, 70.5, a little lower than 71.3 the inflation data is important we look at one-year, stayed at 2.5. now to personal income, down .7. that is not good income down .7 is a disappointment we're looking for a number down but only slightly. and we have six months in a row now of spending being positive, which is a positive going into the holiday season, and that number is up half of 1%, about as expected, but about one-third of our last look, revisions coming in. 1.4 is our last look, now 1.2 on the spending side and .7 on the income side. now to the housing numbers we know those are super strong, the housing sector firing on all eight cylinders.

these are best numbers since '06 and better than expected and get this, the revision takes us over the 1 million mark so let month's revised 1,200,000. with that revision, this is a better than expected october read, that actually makes it down a little bit in percentages because we did pop over a million. if there is any person i know that can give us all the details of exactly how good of a new home sales report this is, it is diana olick. diana? >> well, rick, i would forget about that monthly drop, just forget it. new home sales are up over 41% year over year and prices of course are up. that's up from $322,400. the home builders are increasing prices because their price are increasing for land, labor,

material these numbers are based on signed contracts that is people shopping out during the month of october, when mortgage rates kept setting record lows. we had more than a dozen record low mortgage rates on the 30-year fixed this year so far and the year isn't over yet. i will say the one issue that bothers me, supply it dropped from 3.6 month supply to a 3.3 month supply. and this interesting stat of the number of homes that have been sold but they haven't even started building yet is up well over 60% from a year ago and again that goes back to those constraints on the builders, for land, labor, material. if those constraints continue to get worse, they're going to have trouble with deliveries, we heard the big public home builders talk about slower deliveries on getting that supply chain, moving out and how much will that hurt the bottom line going into next year and potential sales if they know they won't get into the homes for much longer than expected.

a blowout number for october new home sales >> stunning, diana, thank you. diana olick and rick santelli, thank you. we're giving some back after hitting dow 30k yesterday. nasdaq hanging on to the green above a record close lafayette cio joins us this morning. good morning happy thanksgiving >> good morning to you as well >> glad we got you, because, christian, i know you think all things are coming together for the cyclical rally so far you resisted the urge to bring your targets way up. it doesn't seem like you think that is secular? >> we have a 3800 target for the s&p 500 up about 5%. the sky is not falling there are some dark clouds we're near the upper limit of post world war ii market recovery there might be time for a pause

here we are below the street for next year's earnings. we think inflation will disappoint that will flatten the yield curve or raise yields, neither good for the market. your cyclicals had a great rally, versus defensives, 20-year resistance i think the buyers will come back in march of 21 after receding over the winter and lastly the defensive stocks, they're cheap versus the s&p they offer you a portfolio hedge, a barbell >> interesting, one clarification in that, when you see the virus coming back in the spring, after receding, what does that mean relative to vaccine hopes? >> the vaccine outtake is problematic historically if you look at past vaccines, go back to the 1976 swine flu, the uptick was 25% despite the media coverage at the time

there are other examplesof vaccinations being slow for the uptick and the distribution. we just don't know how fast it will get out to the general population so this virus actually spiked. the first month or so of every season now, three in a row why should we believe any different about march 2021 >> if you listen to the markets' message recently it has been that investors positioning for a pretty strong cyclical snapback whether you want to look at the valling with as of industrial stocks, or just the breadth of the market in energy and all the leadership areas does the market have that correct and is that recovery going to come on time to make it seem like this was the correct positioning? >> well, our estimate for -- >> sorry -- >> so, no, i think as i mentioned before, everything is falling in place i think while the virus is important, the economic growth picture, just heard about

housing, the economic growth picture is looking spectacular for 2021 so i think the cyclical turn for 2021 is very much in place the economy has enough momentum. there are enough drivers that will get us there, but profitability is increasing, you have these types of spikes and things like that along the way we have had that for six, nine months, but the market has continued to go up and economic activity has continued to increase i think key thing with respect it a risk standpoint for this to not work out is if we're going to have a general lockdown, and i think given what we see today, given what the political inclinations are, that's really not in the cards as long as that is the case, we will talk about virus spreads and vaccine and things like that, economic activity continues pace as things are already peaking from a spread standpoint and cyclical momentum

will get us in better shape first half of 21 >> based on what you were saying before about how defensives look attractive, you think in the short-term the market is overshot on the cyclical trade >> gdp and the market are not that correlated, right so it is mostly go to be a question of the pace of earnings recovery and the real and nominal yields and what they mean for valuation so, yeah, i think markets run up quite a bit. the pe is elevated it is not a straight line and that's what i'm concerned about. >> i think that is an -- it is not going to be a straight line, however, it is important to recognize that when you have those 5%, 6% global type growth, cyclicals are supposed to do really well in that sort of environment. >> i was going to ask you about

the savings rate it has been abnormally high, has come back to earth a little bit. there is some discussion and debate about whether or not it overcorrects and releases an explosion of consumption or conversely sort of remains historically high on average over time and keeps the economy from closing the output gap. i wonder seeing as we got spending and income numbers today, how do you think the consumer will handle that? >> i think savings probably remains elevated relative to what the norm would have been, the current point in the cycle for sure because there is still tremendous amount of uncertainty. but the point with respect to high savings rate is that it provides a little bit of cushion even if you see some level of softness and actual economic -- income growth, that may not translate fully in consumption in other economic activity so having a high savings rate i think at this point is a good

buffer for us to have. >> yeah. a lot of people who have survived the past crises, the consumer remembers the hot stove element. finally, barry, i'm thinking back to some of your calls earlier in the year. they lefrveraged the idea that n was low tolerance for weakness, you would wait for policymakers to respond with stimulus of fiscal or monetary types does yellen, powell, does that do anything for you? >> i have a lot of respect for janet yellen i think she'll be great at treasury one thing i would say is the politics of washington, particularly with divided government, we'll see a real fistfight in the first quarter on the shape of stimulus because it has become a grab bag of program and subsidies and bailouts and so you're going to see if the senate remains republican, you're going to see a real fight that might unnerve investors in

the first quarter over how much and i remember when 500 billion was a lot of money, that's what the senate approved, so they're going to have a real fistfight in the first quarter on stimulus i think that also unnerves the market. >> fistfight, and substantial, it will be substantial because both parties want it it doesn't help anyone to have an economic situation that gets far worse. >> guys, have a great holiday. look forward to talking to you after. thanks so much >> thank you >> thank you coming up next, how hospitals and manufacturers are preparing for the distribution of the covid vaccine, covid-19, of course. o nus.acin the street" bk twmite ♪

♪ ♪

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hospital systems are facing capacity limits as icu beds fill up as there is a ramped up demand for ultra cold freezers to store the upcoming vaccines with us is lee bond, ceo at

mississippi's singing river health system. and welcome. good morning lee, give us a sense of the situation right now in your hospital system, in terms of capacity, what you're expecting in the coming weeks and how stressed things are. >> well, they're getting fairly stressed we have done over 50,000 tests since march 9th and we had about 5300 positives and during the first and second wave we ran about consistently at 10.7% positivity. but in the last two weeks, we ran 16 and 19% respectively. so that's a sign that there is a rise, and we continue to get close to capacity, we haven't hit it but maybe twice, we continue to get close and so our concern is that that's going to lead to a lockdown, which we as a health system, unlike maybe some of my peers, we're opposed to lockdown type situation because we believe that we have workers, industrial workers in

our area that welders that build ships that can't work from home, tourism industry workers can't work from home so our concern is that this situation, where things are headed, to lead to a lockdown which would be a real problem in many ways, healthwise and financially as well. >> and so what is the main way you would hope to avoid that what has to be done in the meantime >> so as our governor said, there is no single silver bullet we think that the key actually what we focused on our community and we have been able to stay below the trend line for our region a little bit is education. you know, this virus does not see state lines or city lines, but it does see demographic differences. we focused hard on education, probably need to work harder here and as a nation on that, focusing on things likewe tell people, isolate if ill, that would help more than mask wearing if people had the slightest symptom, if they would isolate. people often don't do that

secondly, have hand awareness. whether it is waurk your hash y, if you haven't washed your hands in the last hour, that's a problem. we need to explain the science of how this spreads a little more the third thing we preach to people, don't be a close talker like on the seinfeld episode people spread this in close quarters, particularly in their homes, when they're visiting friends and family seems to be one of the major sources of spreading through close talking. we asked people to focus on that a little bit and we think that's what will help slow the spread there is a rise coming >> yeah. dan, of course, something really will help is when we all can get vaccinated and your company is going to be important and involved in that given the product you make tell me about what you're doing about the storage units you make, are you out of them now, are you involved in hearing from hospitals and others who are going to administer this

vaccine, where do things stand >> right now we are out of everything to back up a little bit, early in the spring, we started making inventory, we heard that the pfizer vaccine was going to have to be stored at minus 70 we took it upon ourselves to say, listen, we got to do something about this we started building inventory, got with our supply chain, ordering parts and raw materials and things, and we built inventory for when this all hit. when the cdc came out with their guidelines on the vaccine storage our phones started ringing off the hook, it got out in the public. and so that inventory was gone in three weeks so now we're building everything per order. we're running 6 to 8 weeks delivery now and it has been crazy. it is crazy. >> who -- you can do both, you can make them to get down to the temperature needed for the

pfizer vaccine and for the moderna which is not warm, but it is warmer who are you selling all the units to and do you have a sense when we're going to meet what we're going to need in terms of having enough cold storage >> right now, with the demand the way it is, i can't even tell you. i'm hoping maybe by later in the spring of next year that we'll be able to get caught up on a lot of this stuff. our employees have been great. they have been working five nights a week over time and on saturdays, we're going to work friday after thanksgiving, you know, we look at it as the quicker we can get freezers out, the more people can get vaccinated and we can get back to the old normal rather than the new normal >> lee, yesterday, there was a story on the wires that ford, ford motor ordered a dozen ultra cold freezers that can store

pfizer's vaccine to ensure that they have enough for their workers. i wonder if you think we'll see a battle between private enterprise and hospital systems in terms of demand for these things. >> perhaps we could. which is why our focus, we are excited about the news about the vaccine and i see all the irrational exuberance i call it about the vaccine. it is great there is a vaccine coming we're happy, thankful and blessed about that that's not going to help us tomorrow, today and through christmas. healthcare workers, they haven't had a break since march 9th. they're going to be working every single day, seven days a week, those healthcare heroes struggling through, so until a vaccine is physically here and widely distributed with challenges we have to overcome, we really are begging people to do those other things, be selfless, think about those nurses and clinicians on the front line and do the things you can do until the vaccine gets

here, you know, isolate, wash your hands, don't be a close talker, do those things, give thanks, not covid, until the vaccine is here. >> all right, let's hope people hear that. thank you very much. appreciate it. >> thank you >> thank you let's look at our spot loigt this mo spotlight this morning, ticker skyy, up over 40% this year. benefiting from the work from home economy one of the top holdings is vm ware a quarterly beat, raising their full year guide not necessarily helping the stock today, down about 6.5% we're going to talk to vm ware ceo next hour on "squawk aeyll". we'll take a break and be back in a moment. don't go away. it's been a tough year. and now with q4 wrapping up,

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hundreds of millions of dollars of unemployment benefits ending up in the wrong hands in california aditi roy has the details. good morning, aditi. >> a crazy story

state law enforcement officials say this could be one for the record books and that the enormity of the work ahead of them cannot be underscored enough in fact, as a result, they sent a letter to the governor asking for significant resources in their investigation. it all began with the u.s. labor department comparing the names of people receiving pandemic unemployment benefits in california against a list of incarcerated inmates in the state. officials say the volume of fraud they uncovered was just staggering, and that it involves rapists, child molesters and human traffickers. february ten tens of thousands of inmates allegedly scammed the state out of hundreds of millions of dollars between march and august of this year there were more than 35,000 claims paid out to prisoners for a total of 140 million the highest single claim, 48,600 and in one case 16 claims filed by a single inmate one name on the list, scott

peterson, convicted of killing his pregnant wife laci in 2004 prosecutors allege that in some cases the benefits were sent through debit cards to the prisons and the proceeds landed in the inmates accounts. some even sent out of state. in response to the letter from prosecutors, the governor says he's directed the office of emergency services to set up a task force to help in the investigation and, by the way, there have been similar reports of fraudulent unemployment claims in other states as well none involving prisoners as far as we know and, of course, as far reaching as this one >> california has been ground zero for a lot of that, amazing story. thank you. aditi roy. in the meantime, keep your eye on a couple of retail names. canada goose double downgrade to sell as a revenue ramp into holiday has not materialized dollar tree slightly lower,

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welcome back, everybody. i'm sue herera here is your cnbc news update at this hour. severe storms tearing the roofs off houses in north texas overnight. luckily no injuries have been reported but the national weather service is now surveying that damage to determine whether a tornado was the cause. duchess meghan has revealed she was pregnant with her second child. but suffered a miscarriage in july she went public with the news in an opinion piece for "the new york times." in berlin, a car crashed in the building that contains german chancellor angela merkel's offices, it caused only

minor damage the car was painted with a slogan against globalization you are up to date that's the news update at this hour carl, back to you. >> sue, thank you very much. we have a ton of economic data this morning, gdp, claims, durables, housing numbers. what does it all mean for the state of the economy steve liesman has a look at that this morning >> good morning. the market optimism got an economic gut check this morning with a slew of economic data showing both progress and pain in the economy ahead of better days when the vaccine arrives. the market flinched but didn't roll over from the gut check jobless claims were rising signs that an early sign that the virus surge is taking a toll, business investment was a bright spot. the consumer, income is declining, though you got to separate that. government benefits were rolling off, that was a negative but salaries were up, spending was up, but rising at a slower pace we watched the savings rate,

high but declining that's a sign of caution but it means there is ammo back there for spending for the holidays housing, what else can you say, sorry for the cliche, housing is through the roof looking ahead at what this may mean for the payroll report, payroll gains are at risk of stalling that's something we're going to have to watch and another gut check coming for the market. on this thanksgiving eve day where the dow jones industrial, it is worth remembering the latest data showed 20.5 million americans are receiving some form of jobless claims that rose in the latest week for the first time since september you see it right there, flattening out the improvement we had the early read of all this data and its early -- is economists look to be sticking with their call for fourth quarter growth

i don't know if you noticed, i did all of that data just one number >> that's right. you did. as you were talking, i was looking at the capital economics piece they say risk of stalling, they're not talking about job growth back to stezero though, right? >> not capital economics, but i saw some people that were speculating about the possibility of a negative print. when we get that first week of december so it is something we have to watch. we don't do things the way we used to by just looking at jobless claims we're now using all this high frequency data, some of it rolled off, did poorly in the survey week. but improved the next week got to do more work on that to figure it out. the jobless claims numbers are not a good sign for what is happening overall for payrolls and beyond that, though, carl, even if it was a negative print, i kind of get the sense that the market could stomach that in the sense that, again, all of the discussion, all of the outlook

has to do what is going to happen six months from now not next month >> steve, thank you. for more on the markets and a few names that he's keeping an eye on in particular, let's bring in wynn murray as we watch the broader markets, the s&p down .3% so far. tell me, you guys are known more as a value shop. there is a move in your favor recently, though it is always unclear how long that is going to be sustained. what do you think? >> you can barely see it on the chart. it is certainly a market that is still reminiscent to us of 1999, 2000, where you have subset of stocks that are doing extraordinarily well and then a whole bunch of names, you know that are classically considered value doing quite poorly if you look at the russell 1,000 growth index and the russell 1,000 value index, and you look back ten years, you know, if you

look back at the past 90 ten-year periods, value underperformed growth nine times. three in the great depression, one of them was before the tech bubble, and the five of them are the past five years. so it has been a stressed period for value managers it has been a nice couple of months >> yeah, well, i noticed in your portfolio, you do have names that have fairly low pe multiples, but you got names i would not think of as value, netflix. how does that end up there >> well, it ends up there because it is trading at a discount to what we think it is worth. we're trying to assess the present value of the future cash flows of the business. netflix today is not producing a lot of cash flow, but it is because they're putting a lot of investments into content that we think is going to generate quite

a bit of future cash flow and we think the service is essentially underpriced globally andund under penetrated internationally. >> when you talk about this losing streak on a relative basis that value has had versus growth, been so pronounce d recently, has it led you to reassess anything in terms of the types of things that you're looking for in a business, or how the market rewards different factors right now or do you think this is just the pendulum is just stuck on one side at the moment >> i mean, you know, we have seen this kind of thing before in 2008, you could have paid $80 billion for research in motion with $8 billion of revenue and, of course, that was an impenetrable software franchise for a business communications and technology changed, and, you know, i think you can buy it for

$6 billion, $8 billion right now. we were debating in 1997 whether we should sell eastman kodak because fuji built a big factory in south carolina to make film we should have been debating should we be selling it because the entire business is going away price is what you pay and value is what you get. the job of our analyst is to figure out what these companies are going to look like over the next five to ten years math will work eventually. we're finding companies you can buy for 7 times cash flow that are amazing franchises and we're happy to buy them and think that over time as usual that will work in our favor. >> you have a couple of examples of ones that maybe more recently did surface based on those metrics? >> well, you know, the pandemic when it first hit it certainly

created a ton of volatility in the market and we took advantage of that to essentially buy names. we think that three to five years from now people will be operating normally and so we bought names like hilton, we bought names like booking.com, cbre is known as a leasing company, half of their earnings come from an outsourced property management business outsourcing is its early and penetration for that, only 25% penetrated cbre, the big players there, outsourcing companies in the market trade for 20 something times earnings and you can buy cbre for 13, 14 times what we consider its normal earnings to be today it is a tremendous franchise, hit enormously by the concern that people were going to work from home forever during the

pandemic >> when you were mentioning earlier sort of those periods where growth has outperformed value, but then value eventually has come back, i wonder putting interest rates into play there, given the historic nature of where we are right now and where we're going to be for some time, how does that figure into the way you think about growth versus value and the relative multiple you're willing to pay >> couple of things about that first of all, we think if -- given the government a thousand dollars to get $9 a year and then your money back ten years later is a uniquely bad hurdle at -- most equity investments are going to look pretty good compared to that in a low interest rate environment, the future cash flows are worth more today because you're discounting them essentially at a lower rate.

we do think that, you know, five to ten years from now rates will probably be higher and we do think that it is particularly difficult to forecast what a business is going to look like seven to ten years from now i mentioned a couple of examples of businesses that essentially nobody could have seen the changes coming that affected them so generally speaking, the market is more willing to underwrite their growth forecasts than we are. we need to be able to see a real moat and barrier to entry like netflix content spend. the low interest rates do work in its favor and we certainly value growth. it is a big component of what companies are worth. the market just tends to add more confidence in the out years a lot of timesthan we do. >> finally, when you mention a couple of names, the business would normalize or maybe being misunderstood right now, but

business would normalize when we get a vaccine, when the economy gets back to so-called normal or the world does, anything else coming on to your radar as we start to look into the first and second quarter of next year and hope for a return to some semblance of normal? >> steve just talked about with the economic data, these numbers are uniquely unimportant right now relative to what will happen after the vaccine hits the value of these companies is going to be in the cash flows they produce over the next, you know, two, three, five, ten years. i was here in july talking about $100 stock leader we thought could earn $18 and makes automotive seats now $150 stock, we think it is going to earn $18, we think the world is going to need a lot of automotive seats things like this are out here. they're not exciting, but they look attractive to us. >> we'll leave it there. appreciate you taking the time

thank you. >> thank you >> and after the break, many still traveling for thanksgiving this year despite cdc guidelines encouraging people to stay at home we'll tell you what it means for the airline stocks, as you can see, all getting crushed this year, big comeback recently. we'll be right back.

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see yourself. welcome back to the mirror. and know you're not alone because this. come on jessie one more. is the reflection of an unstoppable community in the mirror. one of the busiest if in the the busiest travel day of the year, phil lebeau at the chicago o'hare looking at travel this thanksgiving hi, phil >> you used to live here in chicago. you've been here during the holidays you know how busy this airport can get. look behind me

we're seeing one, maybe two cars every couple of minutes dropping somebody off that's indicative of what we're seeing, not only here at o'hare, but i checked in with other airports and we're hearing about this at other airports as well this is a slow wednesday before thanksgiving how slow is it i'm estimating this is the lowest wednesday before thanksgiving since going all the way back to right after 9/11 there are more last minute cancellations and you also have the cdc recommendations that people not make trips this year. that's likely weighing on the number of people flying. but this is not the start to the holiday season that the airlines were looking for it is the slow start that many have been fearing. the passenger levels, yesterday, down 63% the airlines were estimating they would be down between 50 and 55% for the entire holiday weekend. it is likely to pick up on friday, and then into the weekend as well. but as you look at the airline stocks, all giving back the

gains that they racked up yesterday, all of them down anywhere between 1 and 2% today. as you have been talking about, it has been a terrible year for the airlines, they were hoping, hoping that they might be able to get a bit of a bounce in the holidays, but as we know, we're not seeing much of one for thanksgiving relative to expectations this sets up whether or not we'll see the same thing closer to christmas >> bad for the airlines, maybe not bad for the covid winter we're all experiencing or expecting here thank you very much. conversation does not stop here head over to cnbc.com/pro for more on one very successful airline investor's big bet on another form of travel expedia booking holdings and uber all in focus. and then after the break, ll bean ramping up production among a surge in demand this holiday season the ceo joins us next. geico makes the claims process so easy... ...i can file and manage my claim, all on the geico app. it's not just easy.

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increases in online shopping could cause a delay in receiving your holiday packages on time. frank holland reports for us >> here in the u.s. more than 200,000 fewer truckers will be in the u.s. as opposed to 2019,

that's according to estimates from some industry officials and it will definitely increase the delays in delivery and also potentially the price that we pay for everything 200,000 it may not seem like quite that much, considering we have nearly 4 million truckers here in the u.s., but the u.s., rates and is expected to increase the cost for big shippers like retailers. >> you heard frank unfortunately froze. still sometimes ironing out the kinks from the work-from-home thing. carl, let's go over to you and start our next guest. >> eventually, david, it won't be a problem it will be 5g and it will all be good retail is going to be a story for the next several weeks, shipping delays, delivery times and so forth stephen smith is with us, ceo of l.l. bean. welcome back it's good to have you.

>> carl, thanks for having me. happy thanksgiving to you and david and mike. >> same to you. >> great to see phil in an l.l. bean jacket. >> i do want to ask you about the category and what outdoor wear is going to do this season. just on delivery times, we keep hearing about the logistical challenges of warehousing and van supply and so forth. is it going to be that tight >> it is going to be tight, but we've known that for awhile. and i think the retail history and bean specifically have been clear with our customers to shop early to make sure that we're not stressing out our workers and our fulfillment centers and warehouses and that working inline for us specifically with ups, so i think the early shopping message has been really clear and i also think you're seeing people's strategies around black friday really extending the promotional period out over a longer period of time so we're not creating spikes, which are what's really difficult from a shipping delay. but yes, it is going to be

challenging to get packages to everybody by christmas >> i think the last time we spoke there had been this sort of narrative in the eegtthat pe eat outside as long as they could and that would drive demand for things that keep you warm outside are you seeing signs that's happening? >> yeah, definitely. 2020 has been a year of unprecedented stress for people, for customers, and what we've seen in our business is people are really searching for two things one is outdoor connections and the restorative power of being outside, and then also indoor comfort. and we saw that all through the spring and summer, bikes, boats, kayaks, hiking, camping gear, and then we've seen that shift really early, september, october. we've had snowshoes up 340%, cross country skis, snow tubes, kids' snow gear, all of that is really blowing out

so we've seen that early and then at the same time, you know, as you mentioned the work at home trend continuing, wicked good slippers, loungewear, things to be comfortable at home continue to be really popular as well and we see outerwear, puffy jackets, down jackets, those are starting to move now as people are, as you said, dining outdoors, outdoor classrooms so all of that is moving now and i do have to say sitting here in maine, it is full-on snowing outside my window. >> we've got that to look forward to stephen, your products obviously last a long time so if people are buying it this year, it's a good problem to have, but next year are you worried about essentially a real falloff in terms of demand >> we feel really good about where we are heading into the spring and summer. so many new outdoor enthusiasts with new gear, new activities, a new connection to the outdoors the fact that we've seen winter

gear selling so early, we're already seeing some signs of preorders around spring and summer activities. so we feel like this is not a trend, this is a connection back to nature. it's an understanding of, you know, the physical and mental benefits you get from being outside and we think that that will continue into 2021. >> stephen, the digital channel obviously is so important. can you make assumptions in terms of the future now and the percentage of overall sales that will come through that way given the acceleration that we've seen over the last seven months >> great question. for us, two-thirds of our business is direct through e-commerce and a little bit through the phones as well what we have seen, and such an important lesson through 2020, is you've got to be where your customer is and where your customer wants to be that's always been true in retail, but this year those who are winning, and you've seen it from the reports coming out from target and gap and others a, tht you've got to be in multiple

channels whether that's your own channels or direct on ecom. we think that being a channel retailer is how you win in the future as customers change, the best retailers need to change with them >> finally, i wonder if you think next year we see any kind of significant return to in-person shopping, and if that means you have to start directing more dollars to physical stores. >> yeah, i think so. so i think the vaccine is really encouraging. we think that travel will come back faster, just pent-up demand for getting out of your home, your town, your state, your country. so we think travel will pop. but for sure physical retail will come back and we will continue to invest in that channel. it's why we announced some of our wholesaling partnerships a couple of months ago we think people will want to be

in stores touching and feeling product again. >> even if you're not buying anything, it would be nice to shop in person, even once again. that will be great good to see you. happy thanksgiving. >> great to see you, too thank you. happy thanksgiving >> stephen smith as we close out the hour, market fairly static mike, you made the point earlier chy edoo market not unnerv t mu bsome of the weaker data.

see yourself. welcome back to the mirror. and know you're not alone because this. come on jessie one more. is the reflection of an unstoppable community in the mirror.

good morning it is 8:00 a.m. at vm headquarters in california, it's 11:00 a.m. on wall street and "squawk alley" is live ♪ so crazy right now ♪ ♪ history in the making good wednesday morning welcome to "squawk alley." i am jon fortt with carl

quintanilla. we saw the dow cross 30000 for the first time yesterday and the stocks leading the way, salesforce, apple and microsoft, the top performers in the dow for the year, salesforce, a new recruit to the index apple and microsoft among the biggest blue chip gainers since the dow crossed 20,000 back in 2017 they are also among the biggest players this critical holiday season, deirdre, with cloud, apps and gaming squarely in focus and computing, of course, that's been a big issue, connectivity for productivity, during this covid time >> that's right, jon and we've certainly seen techs that have underperformed in the last few months, but of course some of the big names you outlined, they have brought dow to this important milestone and just to put this in context, from 20 k to 30 k, that's a 50% move in the dow. take a look at the other major indexes. the s&p is u