it is 8:00 a.m. at salesforce headquarters in san francisco. it's 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ i'm getting my thrill ♪ from now on good wednesday morning i am jon fortt with carl

quintanilla and july borstin. salesforce is buying slack for more than $27 billion. that's the biggest acquisition for the dow component. the ceo talked about the deal last night on "mad money." >> slack changes everything and makes salesforce a whole new type of company, a company that is truly architected to work from anywhere. now, we have already introduced salesforce work from anywhere a couple months ago, but now with slack it really supercharges our approaches and lets all of our customers re-architect their workforce to be truly from anywhere. >> i'm going to go out on a limb and say this is certainly the software deal, maybe the technology deal of this covid period, because if not for ibm red hat, this would be the biggest software deal ever benioff says this changes everything i don't know if it changes it

for the better or worse, but they're paying about 30 times revenue here >> yes, this is certainly the biggest deal that mark benioff has ever done at salesforce. i think it's worth noting that he has a really successful track record with doing these meaningful deals, but this will be the biggest one not just in terms of the price tag but also in terms of the valuation. carl, you just have to wonder what does salesforce look like on the other end of this clearly analysts are worried about that price tagand valuation and whether or not they're going to be able to make it worth it. does this dramatically expand the number of customers they can have and the different ways salesforce is used within organizations? >> the concerns are definitely around valuation, the degree to which they're already digesting prior deals, what it says about organic growth, jon. i'll tell you one thing, for benioff, this interview in the

tooi times where he refuses to acknowledge microsoft's existence, saying who is that company, how do you spell it it almost seems personal now. >> that worked, carl, ten years ago, back when the narrative in the technology industry was that microsoft was this dinosaur. that doesn't work today. that's like somebody coming out with a smartphone and saying what is this about apple that sounds silly. you can't do that. >> these companies have been competing for so long. i was going to say, remember, guys, that not only did microsoft at one point look at buying salesforce, but both of these companies competed over linkedin salesforce, of course, is interested in buying linkedin and microsoft ended up buying it. >> and to say it's one of the most important deals of the year in tech says a lot we've already been through amd, record high today, and we've seen uber postmates, i mean,

there's been a lot of m&a this year, but to say this is in the top, which it may well be, that says a lot. >> second biggest software deal ever, julia. >> and it really speaks to that focus on work from home as mark beniff said. let's bring in josh lipton >> julia, as you were mentioning, this is a historic deal in fact, mark benioff's most expensive deal to date and the second biggest ever for the software industry, behind only ibm's purchase of red hat. and in case it wasn't already obvious, this deal makes it very clear that salesforce's big rival is microsoft these two tech companies go way back, of course. remember about five years ago the ceo nadella was in talks to buy salesforce then a year later both companies tried to buy linkedin, but

microsoft was the ultimate winner there, spending $27 billion. then you spin forward to today, the two battle in a number of areas, including customer relationship, management software, where salesforce we know, right now at least, is the dominant player, though microsoft has a rival product. now they're going to go head to head in enterprise chat as well. benioff making a big, bold bet on slack, taking on microsoft teams, where we know there's already plenty of bad blood. in fact, slack filed that complaint against microsoft with the european commission, alleging anticompetitive behavior speaking of microsoft, slack ceo stewart butterfield told the verge they are preoccupied with killing us no doubt butterfield is right to sound nervous. teams is now the dominant force, growing from 32 million daily active users at the beginning of the pandemic in march, to more than 115 million in october.

back to you all. >> josh, that growth in teams is so dramatic over the course of the pandemic i have to ask, though, when you look at microsoft's market share in the area that salesforce dominates, it's so much smaller. do you see microsoft either investing dramatically in that space, or making any acquisitions to compete with salesforce's bread and butter? >> right now salesforce has about 20% share, that's according to the latest data i certainly think it's possible that ceo nadella sees that as a growth opportunity when you look at the strategy, you can see why some are excited about it they look at salesforce and see a big cloud portfolio and now you move into communications software, too, with sales and marketing muscle maybe you grow slack more broadly and deeply in the enterprise part of the reason microsoft has been so successful here is

because you can bundle teams into office 365, so successful productivity software. how successful is benioff going to be bundling slack in the same way? will it prove as successful? how much does he have to invest and acquire to do that, guys >> josh, let's continue the conversation, bring in citi's walter pitchard, who did downgrade salesforce this morning to neutral good to see you. thanks for the time. >> thanks. you, too. >> your line is the slack acquisition stretches our conviction is it about slack, is it about having a plate that's too full or something more? >> no, it's more about slack i think having a plate that's too full has not generally been an issue for salesforce. this is a very large company that's scaled very rapidly and has taken on a lot and executed successfully it's really about our view that i think slack kind of stretches the thesis of what salesforce is trying to be it's sort of a question, do they have to own everything out there

that their broader ecosystem interacts with or not. you were talking about teams earlier. i think that begs the question of how users will interact with applications in the future and salesforce taking a stance there that we don't necessarily think makes sense. >> does that mean that you do not believe microsoft is necessarily in any kind of cross hair >> i think i agree with the conversation you had before about the little bit of obsession with microsoft if you look at where the two companies sit today, microsoft's market share in the front office is extraordinarily low and they haven't been that successful in that market. maybe they want to get into the market in the future and salesforce is trying to get ahead of that. i don't really see the companies as having as much overlap as is being played up right now. i think really teams as an interface, as a productivity interface has been successful because microsoft is ubiquitous and it's very hard to get around that. >> it seems to me that this also

kind of resets the field when you're looking at enterprise cloud-driven productivity and data i think about salesforce is also competing head-to-head with adobe in the experience space. sap is spinning out, and do you see a realignment happening more broadly in this area, and perhaps either more acquisitions or more partnerships to define that piece >> look, i see right now salesforce is far out in the lead in this front office market, whether you call it customer experience or what have you. salesforce has doubled, tripled the size of any competitor and is executing well. so i view it as everybody else is trying to catch up realizing this is an attractive market you mentioned a few players that are trying to do that. and i think salesforce has done some things to broaden their relevance, but i'm not sure this fits the bill like some of the

other moves we've seen in the last three years. >> in light of your skepticism about particularly the valuation of this acquisition, i want to ask you to respond specifically to benioff's comment that slack changes everything and makes salesforce a whole new type of company. benioff saying this acquisition was necessary to take salesforce to the next level to allow it to double its revenue do you think that it could get to that next level and achieve that growth without a meaningful acquisition like this? >> so i guess i would look at it and say i think each acquisition they've done that's been large has definitely put them in new categories that opened up significantly new revenue than they had in the past i think the other deals they've done have been better strategically aligned with what they've done and this is a landscape that's different than the others they've gone into i mean, they bought the leader in the space, really unquestionably the leader in the space and in this category slack is not necessarily the leader.

it's a very hard space to become a leader paying up for an acquisition that puts them in a leadership position in a new market is something i've endorsed in the past, but i don't think this puts them in the position in this market that some of the other deals have done. >> it's an interesting call today, worth reading we'll see if benioff proves you wrong over time. walter, thanks as always still to come, hp enterprise is the latest tech company to leave silicon valley, relocating headquarters to houston, texas the ceo is going to join us mpy'rnively on the big move, the coans eaings and a lot more don't go away.

position in what's called inference chips. the announcement today is about the training chips, one of the faster growing aspects of ai overall. so we expect this is going to be a large market and this is an extension of our abilities to play a more important role throughout the entire global infrastructure, and obviously being part of aws is a big deal for us. >> that was intel ceo, bob swan, last hour in "squawk on the street." joining us the ber steen semiconductor analyst. that's bob swan talking about intel's partnership on training chips with aws, but at the same time aws announced tranium,

which is coming out a little bit after this intel chip, in which aws says is better it sets up this interesting situation we're seeing across the industry where chipmakers are having to compete with their customers, right >> sure. i mean, look, in this case it's sort of a sign, like training is incredibly important this is a market that is large and very compute intensive and growing very much. and it's something that is -- you know, you want the costs to come down if you can get more and more customers to be able to apply these sorts of things. that's what amazon is doing and they're approaching it from multiple paths they still are using nvidia. they are going to be deploying intel, as you say, and they'll be deploying their own chips we'll see how these things net out once we have actual results to look at right now it's still a little bit early. but at the end of the day, i

sort of take this as a sign that the market itself is sizable, the market is growing. there's a real business model behind all of this and there's room for multiple players. >> this strikes me as more like "the hunger games", it's like, yes, we'll partner with you, but at the same time we're sending our own chip out to kill you same thing happening with apple and 5g, working with qualcomm, saying we want to own this ourselves. >> this is the debate, this idea of general purpose chips versus vertical integration not everybody can vertically integrate. apple can do it and google have the resources. there's always this trade-off, when you know exactly what you want to do, developing your own chip, it will always be more efficient than anything that is

general purpose, but it will also be less flexible. that's kind of the trade-off so that's what we're seeing. in cases where you know exactly what you want and exactly how you want to optimize it, we're probably going to see more vertical silicone. in places where flexibility is more important, where you're deploying to large numbers of customers, that may be more important. we'll see over the next five to ten years how this plays out. >> stacy, to me it's a little bit of a frenemy situation you're saying these companies are going to compete and they're also going to be customers of each other that's something i -- >> it's not new, right so semis in general is very intensive in terms of the investment that you need there's a lot of, call it competition between companies today, so companies that are in some sense competing very directly, also do cooperate. a good example is maybe qualcomm

and samsung and samsung in general. samsung makes chips for themselves, they also make chips for other people they act as a foundry. and they sell smart phones samsung, they compete with their customers and their customers' customers, and their customers' customers' customers this is not a new thing. but we're seeing more of these kinds of conflicts now, when you have the argument between direct vertical integration and wider-scale deployment we'll probably be seeing more of it >> so in light of all of this, i'm wondering which of the names you are more bullish on right now and see you see this question of whether or not the growth we've seen is a pull forward orreally a sustainable trend? >> so let's step back. i started out this year when covid hit looking, you know, at this like sort of through the lens of the financial crisis, kind of applying that. and i don't know what this has been, but it has not been the financial crisis

semis have been amazingly resilient. and i think there are some concerns like at some point has there been pull forward, especially in some of the work-from-home stuff i think those are legitimate concerns but i will say in general i think i'm emerging from this more positive on the industry than i was going in. at a minimum, i think we pulled forward a lot of the digitization and this whole thing has sort of shown as its heart the importance of technology and so within that, we like a few things i like stories where i do think the market opportunity is extremely big and that we're early. in my coverage i would put nvidia and qualcomm into that bucket the other category might be things that are maybe more cyclical, but also much cheaper, where there's less exposure to some of the work from home and more exposures to things that got hit worse, but are coming back stronger.

>> so tell me kind of philosophically where the value is in this era for semis is it in manufacturing is it in design? is it in the tools or architecting the whole solution the way we're seeing increasingly some players try to >> i think all of that is important, and certainly like manufacturing is becoming this bottleneck and we're seeing that with intel and with a number of nam names. there are other broader implications around geopolitics and how important is it for nations to keep control of this. i think that whole controversy is becoming increasingly important. everything else you mentioned like architecture and software has always been important, but i think as manufacturing becomes tougher, that stuff becomes even a bigger piece of the whole. and you talk about solutions this is, i think, the key. no semiconductor company at the end of the day, they should be selling the chips off, you

really want to be selling the hardware, plus the software, and ideally the ecosystem on top of that that's how you create value. there are very few semiconductor companies that do this well. it used to be they would give it away and wouldn't get paid for it companies that are building on that set of solution space now, and i would say nvidia is probably at the top of the list and they've architected from silicone all the way up. apple is coming from the other direction, but they sort of own the entire ecosystem qualcomm has certainly been doing more and more of this. this is something where i think intel has to build their own capabilities up, because they were so reliant on manufacturing for so long. now that they're slipping there, these other elements, whether it's the software stack and security and architecture, these are things they're kind of scrambling now to put into place to try to deploy as manufacturing on their end >> solutions, and then

manufacturing. you're giving investors a great lens to look at that thank you. >> thank you as we head to break, check out shares of discovery ahead of its unveiling of its streaming service that's coming up at the top of the hour. sources telling david faber that the company is launching discovery plus in january of 2021 that service will start at $4.99 per month. the company is also partnering with verizon, which will give 55 million customers up to 12 months of discovery plus for wel rhtacee 'lbeig bk. stay with us

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markets are close to erasing their losses of the morning as we get the vaccine enthusiasm in the uk and now some updated guidelines from the cdc. meg terrell has that meg? >> carl, so this just coming out of a cdc briefing now and it was expected the cdc is now issuing new guidelines for how long people need to quarantine after possible exposure to covid-19.

they still recommend 14 days as the absolute safest way to ensure that you're not going to spread covid-19, but they are now saying if people don't have symptoms, after ten days they could end their quarantine, or if they get a negative test and they have no symptoms, they could end the quarantine after seven days so this is updated guidance and really the goal is to try to help more people be able to quarantine for at least some period of time they have done the modelling on this and found that the risk is low at these time periods. they said after ten days the residual risk of being able to pass this along is about 1%. so the risk is not zero and they are still recommending 14 days if people can do it, but if ten or seven is preferable, getting a test at seven will allow you to end your quarantine early if it is negative the cdc also discussing the upcoming holiday season, recommending against holiday travel just as they did for thanksgiving they did note that there was a lot of travel around

thanksgiving they said if people do decide to travel for the holidays, here is what they recommend doing. getting tested one to three days before travel, then again three to five days after travel, and then they recommend reducing nonessential activities for a full seven days after travel they do point out that testing does not guarantee you are not going to spread covid-19 it just tells you that you are negative in that moment. now, separately, cdc director dr. robert redfield is speaking in another event this morning and really raising the alarm clearly about the spread of covid-19 we're seeing in this country right now, noting that both the trajectory, the increase in cases we're seeing is steeper than we've seen ever before and the peak is prolonged past what we've seen before the pandemic he said, quote, december, january and february are going to be tough times. he said i believe they're going to be the most difficult in the public health history of our nation as we head toward getting the first approvals of covid-19 vaccines in the country, we

first have to get through this incredibly difficult period ahead of us when there won't be enough vaccines to protect most people. >> meg, do you expect that state guidelines will adjust to reflect the cdc guidelines is that what we've seen up to this point and also, it seems to me that this adjustment matters most for workplaces, perhaps, that have testing capacity and are trying to set the standards for employees. >> yeah, so the cdc is an incredibly important source of recommendations and often states do take the recommendations from the cdc and implement them and employers do so as well. the hope is that this will allow people who are afraid of losing their jobs or losing pay for a full 14 days perhaps to give them another option of a shorter quarantine period that still is safe based on the data to end that quarantine. it will be interesting to see how states take this guidance. different states have all kinds

of different guidelines for what you need to do if you travel into the state and things like that so we will see how the states adopt this but it is based on the most updated data and we've seen other countries take these shorter quarantine periods already. so the cdc now updating based on the best available data. >> meg terrell, thank you with that important update from the cdc. meanwhile, hewlett-packard enterprise ceo antonio neri in an exclusive aer ts eafthibrk. we're back in two. what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

welcome back, everybody. i'm sue herera here is your cnbc news update. in boston, firefighters rescuing a woman and two children from a fire in a three-story apartment building all three were taken to the hospital their condition is not yet clear. more blackouts could be on the way in southern california local utilities there say they may have to cut power to more than 300,000 customers as dry, gusty weather raises the risk of wildfires. in turkey, empty streets as that country begins a nightly curfew to try and slow the spread of covid-19 the government has also ordered weekend lockdowns starting friday night at 9:00 p.m. and lasting through early monday morning. and iran's president is opposing a bill that would step

up enrichment of uranium the country's parliament passed the measure yesterday but he says the bill would be harmful to efforts aimed at easing u.s. sanctions against iran you are up to date jon, i'll send it back to you. >> thank you now hewlett-packard enterprise posting better than expected quarterly results as revenues returned to pre-pandemic levels. but perhaps the bigger news is the company is moving its headquarters from silicon valley to houston, texas. joining us now in a cnbc exclusive is ceo antonio neri. welcome. i didn't mean to say that the earnings news is not big news. of course it is. but i do want to start with this headquarters news. it's interesting, you say there's going to be no jobs impact in california, executives will have the choice on where they're going to be. you were already building in houston, it was already a place where you have a large workforce. what is really changing besides the taxes and are you going to

be spending more time in houston? >> good morning. thank you for having me today. we continue to assess what are our business needs, the future of work, and obviously the pandemic has changed a lot and the ability to continue to attract and retain talent and also the footprint and we decided we're going to create two major hubs for high school hewlett-packard. one is the site that we opened last year where we will bring all our silicon valley offices to the site, including our intelligent edge, our store edge and then in houston we are creating a second largest hub which has been already our largest u.s. hub for many, many years, where we will host the corporate functions and also some technical talent, particularly in the context of the compute business

and from the footprint perspective, from the edge to office kind of work experience, we decided that the best location to host the corporate functions is houston, texas, also because it's the most diverse city in the united states and it's a great place to attract and retain talent. in the end we end up with the best of both worlds and that's a good strategy for us, and honestly allows us also to rationalize our real estate footprint. >> where are you going to spend most of your time and what are employees telling you about where they're going to be? >> i will be based in houston, texas, and so many of my executive team for the employees that we identified that their job can be hosted in houston, texas, is totally voluntary to move to houston, texas, realizing that a lot of our employees are going to work from home anyway and then from the footprint here in silicon valley, there are no layoffs associated with the move i'm excited because we're

bringing together all the business under one roof to continue to accelerate innovation, particularly as we deliver on the cloud platform as a service company. >> antonio, you said you think some of your employees will continue to work from home what percentage of your workforce do you expect to continue to be remote or to be going back and forth between in office and home? and what does this move say about the next us of technology moving out of silicon valley >> we were already doing a lot pre-pandemic evaluating where people want to work, the flexibility they needed and the ability to attract and retain talent and then through the pandemic, obviously, we saw the productivity levels, we saw the behaviors, and obviously accelerating the digital transformation, which is happening with all our customers. and we always said that we believe probably more than 50% of our employees would be much

more productive working from an edge location, but all of them can come to the office to collaborate and innovate and connect with people. the reality, you don't have to be in the actual office to do your regular job for many of the job functions. so i think, as we said many times, the pandemic has taught us a lot of things and those changes are going to be permanent lasting, but for us it's all about driving performance and getting the flexibility that we need >> that's a perfect segue to the quarter itself, antonio, because not only are you and your workforce trying to figure out where employees will be spending their time, but all of corporate america is doing the same thing, and small business do you see anything changing in terms of tailwind once a vaccine is available and people can go to the office if they want >> well, i would say, carl, first of all, we finished the year very, very strong

i'm very praoud of what we have done if you recall, at the beginning of the pandemic, it was the lowest quarter since that time we added $1.2 billion of revenue and we doubled our operating profit contribution and more interesting, we laid a clear strategy, which is to transform and stabilize the core business, which is storage and compute, accelerate growth in the areas where we see the future, which is intelligent edge, which obviously plays a huge role in the way we're going to work going forward. and that performance now is pre-pandemic level our revenue returned to pre-pandemic levels, and the growth businesses have phenomenal performances and we're going to gain share across multiple segments of the market. going forward, obviously the vaccine will bring -- i hope, peace of mind and stabilization, but, listen, we enter q1 with a very strong momentum our orders were up in all

businesses, and that's why we felt confident to raise the guidance for fiscal 2021. >> put a finer point on this for us tell us how it looks on premise, versus cloud technology acquisition by the enterprise, because we have heard just tough times from your competitors, particularly for on-prem technology purchases during this pandemic >> yeah, jon so as you think about the market itself, the current on-premises market is growing in excess of 40% and will be consumed as a service more and more. that's the reality the on-premise as a service, that's the transition we are going through. that's why we have a strategy, which obviously the world is hybrid we heard yesterday that the world is hybrid and they have even a plan to come on prem with edge, which is something we've said for three years so we have a clear strategy,

we'll bring the cloud to you for all your apps and data, wherever they live. you see the momentum just to give a data point so you understand the momentum, our annualized revenue rate is up 30% and 70% of the business customer channel, the channel is growing twice as fast as the numbers we posted. the activation of partners has grown 70% year over year so we believe we have the right strategy it's all about the experience, but ultimately it's about the flexibility you bring from the edge to the cloud in an integrated experience. >> all right, antonio neri, high scho school high schothe outlook for thank you. >> thank you the dow has gone green briefly. we'll get headlines from hoyer, saying he has spoken to mcconnell and there's a mutual

understanding about trying to get a deal in place by the weekend so that that could pave the way to passage of wednesday and thursday next week he adds that's optimistic, i know stocks are green we'rba ia nue ckn mite

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such a way where you don't kill the innovation there is an unprecedented amount of innovation happening right now in the world the last ten years has had so much more innovation than you saw the prior ten years and i think the next ten years has the chance to have even more innovation you just want to make sure that you don't kill that innovation or one country doesn't make it hard for them to compete globally. >> that was the ceo of aws julia, i asked him about the public sector business, and specifically about what needs to happen in 2021, whether you're an incoming biden administration, whether you're a state and local government as they look at cloud technology, artificial intelligence, and how to use it to better serve constituents, and how to grow. >> such a fascinating interview, jon. you covered so much ground with him. i think what he said about the fine line, the balance between innovation and regulation, this is something that really impacts the whole tech sector.

we hear about it a lot from the tech giants, from google, from facebook, this idea that you really need to have a light hand in regulation in order to let the next generation of start-ups grow so great stuff there, jon. >> thanks. and just a quick programming note as we head into break tomorrow at 2:00 p.m. eastern, don't miss cnbc's live stream event. i'll be speaking with spotify's chief content officer. to register, go to cnbcevents.com/livestream. [ whispering ]

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couple of headlines from our friend, elon musk. named "fortune magazine" business person of the year. and second he said if tesla asked for a merger, he would have that conversation also said he's highly confident spacex will land humans on mars by 2026. a lot to unpack from "fortune's business person of the year" he said that if they don't control costs, that the stock would immediately get crushed like a souffle under a sledgehammer, saying that this business is a game of pennies. >> i think if you were going to crush a souffle, a cardboard box would do better than a

sledgehammer if you're going to be on mars in about six years, you have to leave sooner than you might expect, because it takes a long time to get there. i imagine the travelers are going to have to go through a whole lot of prep. julia, this is elon musk at a new height remember a couple of years ago he was talking about the worst year of his life we're pretty far from that now. >> no, absolutely. elon musk is surprising. always comes out with something surprising if you just take a look at the tesla chart, so much volatility, especially in the past couple of months since september but such massive gains for the year and i think it's really interesting, carl, as you look at the entirety of everything that elon musk has innovated, whether it's the solar panel technology that we rarely even talk about, to his leading role in the ev cars and the fact that there's now this whole industry trying to chase tesla, you never know what's going to comeout o his mouth.

and i have to say that we have to remember, he has talked about getting people on mars for many years now. i remember years ago he said he was going to have people on mars in 2020 and then 2024. he keeps on pushing it out 2026 is not so far away. >> yeah, it's going to be interesting. i think, jon, the factthink, th on cost does speak to the fact that 35 ev models are slated to come out from a bunch of different companies next year. so, the competitive picture is going to change dramatically for tesla in the next 12 months. >> he knows how to pull that cost lever when he was pushing out the time to pay suppliers and doing all sorts of things like that. so, yeah, elon musk, overnight success more than 20 years in the making as we head to break, dow jones reporting that u.p.s. has imposed limits on some retailers like nike to manage a surge in e-commerce traffic it is working with its largest customers to manage capacity no surprise if you've been listening to frank holland over

'lha tst few days. wel vehe latest on the holiday shopping and shipping season it's been a tough year. and now with q4 wrapping up,

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holiday sales are booming with cyber monday setting a record for the biggest single day of online sales ever and social media scrolling is the new browsing it's driving e-commerce this year more than ever before over thanksgiving weekend social media drove one out of ten visits to retailer websites, that's a 17% increase from last year, according to adobe, and more than a quarter respondents to a new deloit survey plan to use social media to shop this year pintere pinterest, snap, are making it easier to make purchases on their platform snap uses ar to let customers see furniture as if it's part of their room facebook, which launched shop tabs this week announced it's

buying startup kustomer. and pinterest users, they are spending 85% more time engaging with shopping between march and september. and all three of those companies, along with tiktok, are partnered with shopify to make it easier to buy from influencers large and small on their platforms. as more people shop online during the pandemic, retailers are bracing for an explosion in return volumes this holiday season joining us now isthe ceo of gotrg which hands return, refurbishment. tell us exactly how your business works and what is your relationship with big brands that are your customers. >> good day. thank you for having me. we are a returns management solution, global returns management solution, that

provides end-to-end solution we provide in-store solution in order to mitigate returns. we provide online solutions in order to mitigate returns, which means we actually make the disposition decision for the store, whether they want to destroy the item, recycle the item, restock the item or whatever it is that they're interested in doing with the returns item we also provide the facility across north america, so there's about 15 facilities that we handle returns of the logistics piece of it. and we provide the websites and the capability to restock, resell the product into the secondary market >> what. are you seeing in terms of return trends this year compared to prior products? and what are people choosing to return and what's your anticipation for the rest of the holiday season >> this year has been particularly different because of covid people have switched to buying product online more than ever. holiday sales are up 20% returns are up 10%

that return trend is higher simply because people were used to buying product online and returning it in the store. now people have changed those hakts out of fear, out of stores being closed, and they stopped returning those products in store and started returning it through the mail system. when you're purchasing product online, you're doing something called bracketing, which means you're bringing the product into your home, buying multiple of the same item, maybe multiple sizes, maybe multiple colors you're trying it on and using your living room as a change room or whatever and then you're returning the remaining part this creates a massive influx of returns that have to be dealt with, this year more than ever because of covid. >> we're just talking about you u.p.s. dealing with these major logistical problems, kind of throttling customers like gap and nike the bigger and heavier these packages are, the more expensive they are for companies to do these returns. what is it you do to allow customers to take costs out of

that process and to monetize better in this return cycle? >> we provide software for stores that makes that disposition so that integrates into point of sale or e-commerce site during the return process, as it's initiated by the customer, it makes the best decision for that product in terms of cost and, of course, in terms of the environment, and relative to the correct place. about $450 billion of product gets returned a year out of that $450 billion, only 14% gets recovered financially the rest dissipates into thin air. our company's mission is to make sure that the product doesn't end up in landfills and we can recover as much for the retailers as possible on the bottom line, retailers and manufacturers, of course >> that's amazing how much that product is not resold. fascinating times. i'm sure i'll be returning plenty of stuff myself this holiday season sender shamiss, thank you for

joini ining us during this time. >> thank you for having me. in the short time we have left this hour, we want to check in with steve liesman, monitoring the treasury secretary talking about yellen. >> he just said he had a conversation with president-elect joe biden's pick for treasury secretary, janet yellen, and he's cooperating with the transition. i believe he's one of the highest cabinet members to acknowledge he's, indeed, cooperateding with the transition, carl >> we'll keep that in our sights, steve. as we also get headlines this morning from new york governor cuomo saying that new york expects its first vaccine delivery from pfizer by december 15th, about 170,000 doses, which would be very important. of course, steve, although adp was a bit of a miss this morning, we'll get claims

tomorrow, the jobs number on friday we have seen some moderately weaker points of data, the ism employment index going back into contraction, some softer readings on credit card, from the likes of visa and jpmorgan, adding into the picture the market has to absorb a lot to get to this afternoon let's get to wapner and "the half". >> appreciate. welcome to "the halftime report." front and center, a critical question, is wall street ignoring a growing number of risks? are stocks vulnerable into a pullback at the end of the year? joining me are joe, tiffany, joe. let's begin by going to the wall and take a look at where we stand. s&p creeping, albeit, so slightly into the green. nasdaq dow