out of it, and then hope for growth because we're not going to solve it just from raising taxes. i don't think that's -- it's going to be a combination. >> you need to raise taxes and cut spendings. that's not what the political parties are laying out >> it's going to be solved through growth i think there's a reason, andrew is right, france is at 52% we'll never be france, andrew. i love france, but in terms of entrepreneurialship and everything we do so well here, make sure you join us tomorrow "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. david cramer is at the passive summit event in new york ten-year yield briefly piercing 4.20 q3 earnings rolling in

got raised guidance out of ge and others our road map begins with the earnings blitz we'll hit the numbers including verizon as well and ge aerospace. nvidia inching closer to apple's market cap, aiming to claim the crown as the world's most valuable company and later, faber is going to sit down with jeff smith to talk about his latest moves including those involving kenview and pfizer let's begin with this morning's barrage of earnings. is the headline gm or not? >> i think it might be ge. i will take the other side larry koch delivered once again. people don't understand, if there's any slowdown at all, there was one bit, because of boeing, there's some issues, but i think i see right through them defense was not as strong as i like down 11, come on this is like an insult to what larry has built here i want to take the other side and trade on that one.

verizon, no. verizon is just too hard for me. i don't know this has now become a serial let's just sell it, whatever they say it is hard to find anything that's really glorious today other than 3m. which really bill brown is energizing that company like you can't believe. beautiful, beautiful quarter and rtx, i like the rtx defense and the aerospace. we have a mixed bag as opposed to the futures which just indicate we have a bad bag >> which has a lot to do with what bonds have done >> yes, it does, and interest rates coming down. there's these apple -- i mean, oh, my god, the guide up, the guide down, enough, enough let's let the quarter happen already. and then sherwin williams was the absolute bad i want to take the other side of these negatives and to honor david, jen-hsun huang speaking in india on the 24th that's going to be the first time it's very, very big.

don't sell nvidia even after that run >> nvidia now i think 36 times bigger than intel. >> well, i mean, they had a better year. >> yes david, some thoughts i know you have been trying to keep an eye on the earnings as well >> i have been trying to keep an eye on the earnings, on the presentation from jeff smith that you mentioned earlier, of course, given the press attention that's been accorded for him for the positioned starboard has in kenview and pfizer which we'll be discussing with him and you know, jim, i'm sitting here now in part of the show and also listening to you kind of as an audience. what happened to sherwin williams >> i have been trying to figure out exactly what happened. i will tell you the rap, which is this is why we need a rate cut. this is what it's about. i'll buy that. i think sherwin williams kind of peaked, same-store sales weren't that good. maybe we need a little better

rate cut i referenced this, this is a ubs evidence lab they're saying home depot, they did their suva 51% of responders report an intention to perform a home improvement project during the upcoming three months. i'm saying sherwin williams might want to buy off the idea that this evidence lab says you have to go to home depot i like that call so i'm not nearly as negative. david, the one i want to know, people are taking up kenview price target on what's about to occur there. isn't that a little aggressive >> well, it went up yesterday, of course, on the reports of starboard owning a stake there i think the sense you want to get certainly is what is the real case for activism sometimes you can make an investment obviously over a long period of time because you think something is undervalued in this case, the argument that starboard seems to be making is simply the portfolio of products is the strongest amongst any of

its peer group and that peer group includes the likes of whether it's kimberly clark or colgate palmolive or clorox or on and on from there and yet trades at a lower multiple and has had a stock price i think that's been roughly 15% since the ipo, or since it was spun from j&j. so we'll get into it with jeff smith and discuss exactly what it is they want to try to see there. as for pfizer, even larger market value, of course. you know, there it's going to be questions, it seems to be, about its historical internal r&d efficiency, its capital allocation, forecasting and budget and expected future returns on r&d. so these are two names, jim, that we're going to be spending some time on and hopefully get a little more insight from mr. smith in terms of what exactly their approach is going to be

interestingly, he began his presentation this morning with a reference to salesforce. which if you recall, and i'm sure you do, it was two years ago during the same conference that he introduced salesforce as an idea. he and i sat down, devoted most of our interview that morning to salesforce, and of course, mr. smith was then followed into the stock by a series of other activists. and it's gone well jim, it's gone quite well during that period of time in terms of getting margins up substantially. he wants them to pursue these so-called rule of 50, meaning that your revenue growth and your adjusted operating margin added together are above the number 50. that's where he thinks they can get by fiscal year '28 >> i wish it was just gross profit margin and not adjusted because that's the best way i measure the rule of 40-plus. after jeff smith took that position with salesforce and of

course elliott took the position with salesforce, they called me, they're like, these guys are the greatest guys. jeff smith is a great guy. the exact opposite of what you typically hear he said i learned so much. i think one of the reasons why the stock is where it is, he sat down with the activists and said i think you guys are really smart, then he did it, it wasn't for show now, will he sit down? i don't know we have to find out exactly what happened obviously with ian reed, like what happened they were in favor of smith, then - >> i'll try to find out, for sure we'll see if we can get an answer on it >> david, i want to know why kenview doesn't have an unbelievable relationship with amazon where all their stuff is delivered same day that's the missing piece of the puzzle new world, you don't want to sell at walgreens and cvs. you want to sell through amazon. ask about whether his online strategy is where it should be i bet he says it isn't

>> yeah, i mean, i'm looking here again at the presentation 18 times is where kenview trades in terms of a multiple on calendar year '25 earnings, and that's toward the lowest multiple p&g, you go on from there, colgate palmolive, all of them support higher multiples in part because the growth hadn't been there in the way there was an anticipation it might be after the spin i would point out one other thing -- >> they're missing kimberly. >> there's an entire industry that is employed on wall street to help companies combat activists, keeps a lot of people employed one of the arguments that's been made that needs to be dropped, i think, is they're short term nothing about this is short term and nothing about any of the ones i have been following lately is short term look at salesforce they still own it. it's two years later so there are certainly plenty of arguments perhaps that can be made to combat a certain activist in a certain stock at a

certain time i'm not sure the one they are short term in nature has a lot of resonance at this point >>ia know i think jeff smith is terrific and i have seen him get involved in situations and see him win over the other side and then have some of the other side people join smith in the next one he does. and a lot of it is because contactually what you said they're so not quick draw. if anything, what they are, can we please sit side by side and make a lot of money together i think that's terrific. >> listen, as for expertise in health care or consumer products in the health care industry, unclear to me whether they have any real expertise there we'll find out >> well, david, how about cheesecake factory and darden? somebody took 2% stake and suddenly i have to know who they are. >> never heard of them, i'm not discussing it. sorry you brought it up. >> is that like the panthers >> how about we get back to ge

>> $210 billion market value i had to remind our executive producer this morning. >> it's back to where if you take a look, back to where ge was 40 when you add all the pieces up. you're now whole on it if you kept your rsus down ten >> they have expired they expired well, well long ago. management did get reupped at $3 a share. so good for management that was very nice of ge to do that to us none of us, jim, got anything. all of ours expired. >> i got rsus. i guess that was because jeff loves me maybe not. maybe not. >> but your point is a good one. when you add up all the spin-offs, what was the number >> 41. i have a cfo, she gave me the add-up and it comes to $41 a share. >> not bad >> which is right back -- not bad, no. you know how many people -

>> how many people did not do well >> right how many people, i remember being at 30 rock, i shared this many times, when that stock was on its knees and so many people wondering about their retirement and everything else. it was pretty painful. >> yeah. well, that's what medicare is for. >> that was cold >> carl, i'm going to hand you the ball just not unlike the ravens which i think are the best team in the nfl, handled the ball. >> we have sound from larry culp speaking of ge i think this is regarding supply chain issues take a listen. >> on balance, encouraged by what we have seen here in the third quarter. you saw the results of it, i think, more pronounced in new engine deliveries and in spare parts growth than necessarily in our internal shop visits, which were lower sequentially, but on balance, what we need to do in concert with our suppliers is under way. i think we're developing

momentum with them that is what gives us the optimism embedded in the guidance raise for the fourth quarter. >> it is the third guidance raise of the year for ge >> larry is very forthcoming how about the chain, are we beating that problem no, we haven't there's still an issue, but i think they recognize the service revenue is what matters. it gets better and better. boeing is in trouble, they also have airbus, and service revenue has great margins. the stock has been an amazing stock. it has sold off before and you have to buy it, not unlike america's best you have to buy these stocks when they're down because the businesses are so good long term i think ge, look, is rtx better than ge? rtx's bench business is so strong >> got quite a multiple, though, jim. >> david, quite a multiple maybe it deserves it maybe these dwufrb a multiple. >> it may deserve it, but if it

comes anywhere near kind of a possible miss or anything like that, it's going to gehit. it's a rich multiple, in the 40s. >> well, look, you have to look at the forward numbers, david. forward numbers are very good. and you have to be a little more wishful and positive and not your usual kind of downer thing that he just gave me >> wishful about defense spending >> yeah, unfortunately, they pay -- >> it's a downer for you >> defense spending, they pay on time that's what's interesting. you know who the payer is. you. >> speaking of that, we're going to hear what paul tudor jones and larry fink have been saying about the race for the white house, election day, of course, two weeks away already 15 million americans have voted early look at the premarket as we said, got some pressure as the ten-year back above the 200-day moving average dollar up almost 4% in a month best gain since 2022 stay with us

(vo) memory and thinking issues keep piling up? it may seem like normal aging but could be due to a buildup of amyloid plaques in the brain. the sooner you talk to your doctor, the more options you may have. learn more at amyloid.com. >> i had 20 years of experience as an hr professional and i had reached a ceiling, so i enrolled in umgc. i would not be the person that i am today had it not been for the partnership with umgc. i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises).

hand over the air guitar. i've got another one.

what if your mobile network wasn't just built to work out here... ...but was designed differently to also give you blazing fast wifi where you are most of the time? reliable 5g, plus wifi speeds up to a gig where you need it most. xfinity mobile. now xfinity internet customers can buy one line of unlimited and get one free for a year.

lower this morning, adding to yesterday's losses the pullback comes with two weeks to go before election day. earlier on "squawk box," paul tudor jones weighed in on the expiration of the trump tax cuts >> i think under trump the deficit goes up by $500 billion per year under harris' plan, it goes up an additional $600 billion plan per year i have a feeling all those are pipe dreams. i think the chances of any of those being enacted -- >> you mean the tax cuts they're putting on the table during the campaign >> those are zero chance of being enacted in my mind i think the markets -- the debt markets for sure, the treasury market won't tolerate it >> sobering discussion, almost sort of a liz truss moment forecast >> totally, which is why i like

the wells fargo piece this morning that says the election could be a sell the news situation. you get kind of bullish stuff from the candidates then you get the election, and not so good. i think a contested election could hurt the market. >> kris harvey goes into a tied electoral college and then what happens next where the house picks the president and the senate picks the veep. >> if this happens, i think there would be a chaotic time against that, i think you could have a mary daly situation they would be cutting and we would be less concerned about politics, more concerned about will the fed stick with the plan to cut overtime, and i think we'll be okay. i think there will be momentarily, not a 2016 situation where it's like, let's take it up i think what could happen is as paul tudor jones said, these numbers just don't make any sense.

but it is true that you can wave a wand and change tariffs. you can change the mexican tariff a lot of people are worried about it i had one of the top three banks of mexico, it's a big issue. because mexico is really doing very well, and it would be a big blow for mexico. larry fink, by the way, follows mexico closely it's really questionable whether you want to raise taxes, if you want to include the tariff as a tax, the american people would be poor. which is true. >> interesting to hear fink this week argue that over the long term, election cycles really don't mean much to markets >> i have learned if you bet against larry fink you're a sucker you really shouldn't he's a dodger fan, by the way, good for him i do think that larry has been true north so i'm just going to say i'm going with larry i don't think there's anything wrong with doing that. when you see someone smarter than you and knows more than you, it's okay to say, yeah,

just say shut up i don't need to, like, rethink this >> meantime, the goldman desk today looks at implied moves on the election, 2%, which they're saying is maybe a little too low. >> well, i don't know. look, i think that in the end, i think that it's a very exciting race, but no one can really do anything, unless you get a full sweep. if you get a sweep, we have to start focusing if they're split, it's much ado about nothing. >> looking at demsweep, gop sweep, divided, and what that means for the deficit. morgan stanley's view means a republican sweep scenario will raise the deficit more than other outcomes >> i know this is like the new refrain that trump would raise the deficit big, and look, i know democrats are not going to be any friendlier. they can raise the deficit too

from morgan stanley, the idea that maybe apple's numbers, the estimates are too high i always remember morgan stanley, katie huberty, apple, very close i think morgan stanley has a beat on the apple news look, i care about the deficit, but the deficit is one of these things it's so ephemeral. i don't know okay, what do we do? then you get, like yesterday, i thought interest rates, wow, it's all over. i come in today, and rates are down the stock futures are down somebody is wrong. i bet that the stock futures are wrong. >> you're never a fan of the stock futures. >> they're so idiotic. i got up at 3:15 and the futures were down. i went to go back to bed, but why? >> the drama king. >> call me at 3:00 when you get numbers like that, i don't want to wait until 6:00. >> we will get cramer's mad dash in countdown to this morning's

bell by the way, tomorrow, don't miss an exclusive with boeing's new chief, kelly ortberg >> very, very big. >> on everything from earnings to this new tentative with the iam. >> if everything comes together for boeing, that's going to be one of those moments where you say, i can't believe we got a chance to buy it on the secondary at say $152. that's what i want >> you can't miss that one more look at the premarket speaking of a soft open, we'll get the opening bell in eight minutes. don't go anywhere. the bootmaker. yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate

cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. it's odd how in an instant things can transform. slipping out of balance into freefall.

(the stock market is now down 23%). this is happening people. where there are so few certainties... (laughing) look around you. you deserve to know. as we navigate a future unknown. i'm glad i found stability amidst it all. gold. standing the test of time.

going to be speaking with jeff smith, the man behind starboard. significant stakes in pfizer and kenvue pres around both of those in recent weeks 'lbe discussing why and what next for starboard in both of those companies when he joins me just a few minutes from now.

the all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo

dash >> very constructive piece out of morgan stanley about disney it's a club holding for me investment year ahead, fiscal year which starts, the october fiscal year. then he says, inflection reiterate overweight, and that's, part of that is cruise

ships are coming one of the things that's incredible, no matter what day you have, we had royal caribbean raising price target it's been up the cruises, to help disney. i have to go to david on this. i haven't hurt you opine on what the change of ceo means, and particularly i'm talking about gorman being chairman, which does feel like a howard schultz moment for iger, is that what's happening? >> actually, i got to ask you, what do you mean by a howard schultz moment >> it iger gone? because if gorman is the chairman, that would mean iger gone i don't know if i don't want iger at least kind of giving his thoughts to the new ceo. i don't want iger gone that would be a mistake. >> i have every reason to believe, as i understand it, that bob iger will be the ceo of this company two years from now, winding down his second stint as

ceo as 2026 comes to an end with his successor having been anointed months earlier. jim, that's the scenario i'm following at this point. now, gorman may continue as chairman after that time but that's what i'm expecting will happen. >> all right i mean, to me, i want things to calm down. david, i don't want any more controversy at disney. the stock goes higher if there's no controversy and they can just focus on business. >> let's get the cnbc realtime exchange at the big board. airlines celebrating its recent relisting at the nasdaq specialty finance company chicago atlantic bdc watching brent fill in you mentioned the wells note, the idea we're front running a post election bounce >> i think everyone is trying to

position themselves for something that is probably not going to happen. we're going to be doing election night coverage i think it's going to be unfortunately inconclusive if one of the candidates doesn't win that night here i'm speaking, of course, of former president trump, which then makes it so it's not like a long night but like a long year. and i'm not kidding about that unless it's a blowout for vice president harris, i think it's going to be contested because that's what it's set up to be. that's going to make it an uncomfortable situation. >> and goldman has more charts looking at volatility in the days following election day. and it comes off, but not all the way. >> no. but again -- >> they're calling it the discovery period, is their point. >> again, remember, we're in a rate cut cycle and rate cut cycles will trump any even an election cycle, hence i go back to larry fink. we bought blackrock stock for the trust after listening to larry. the stock never comes in we had that clarity moment

i think that it's just a very special situation to own blackrock because the money in is extraordinary here. s&p money coming in, etf money coming in. they're the big beneficiary of the money flooding in. it's not stepping out. that's why i'm not so worried about the election >> that's why it was interesting to hear daly yesterday, he was very much for 50, and sees no reason why to stop now >> she made me feel, wait a second, interest rates, i thought she would back off i felt very good when she talked david, i know where you are right now at the conference. and i kind of am struck that the companies that people -- look, at least jeff smith is going after, are really companies that are household names, that are very interesting, that have kind of fallen behind the market. is it indicative of anything that he's going after these big cap health care drug names

because that is typically not been a place to focus on >> no, it hasn't i mean, typically, it's been more akin to technology names, salesforce, for example, and things of that nature. you're right i don't know if it's a sign. maybe it's simply where some of the weakness in the market overall is we have the s&p up over 22%. perhaps it's hard to find certain areas that are lagging, jim. guys, before i go off and get ready to have jeff join me, i did want to hit verizon and apple. get your reaction. jim, the equipment sales at verizon were down a bit. that does seem to be pressuring apple slightly as well because perhaps that number came in a bit less, lower than had been anticipating in terms of again this upgrade cycle that as you pointed out today and yesterday, so much focus on, and every day you're sort of whipsawed in terms of one analyst saying something

positive and the next negative this is not necessarily a positive as you look at apple's market cap slightly above that of nvidia, but verizon numbers overall also not getting well received. a bit perhaps below what had been anticipated i continue to look at fixed wireless net additions 363,000. that's both consumer and business customers they are becoming a real competitor when it comes to fixed wireless presenting a broadband solution for the customer at home or in business, and it's interesting to watch, of course, as we see the cable companies, our company comcast, charter, move into wireless. and wireless move into broadband in a very significant way. >> yeah. you're right that plus starlink, real challenge to cable i come back and say hahns vestberg once again, i don't mean to be -- let's just say he's a really nice guy super nice he's like super nice like laughing on the inside super nice i think mike sievert, if he were

here right now, would say you know why they didn't have good numbers? because we're taking their customers with our apple deal. i wish that vestberg would come on and say it wasn't that good of a quarter, but no, it's always transformative, always unbelievable, amazing. it's simply fantastic. i love you, you love me. we went to that yesterday. i'm just down on the idea of saying a great quarter when it's not that great a quarter, okay okay >> i heard you and i heard you loud and clear, being the jim cramer expert i am, i heard the use of nice guy and i know that is a very bad sign for a ceo >> you know who -- >> that said, he's been in the job -- >> jeff smith thinks he's very nice >> vestberg has been in the job a long time. i haven't done an interview with him in a while and he's a very nice guy, by the way. >> you killed him on that interview. >> the it is, and you get five

years, you want to go back 20 years, it doesn't look great either so it's a good point, jim. >> you want to flip that chart you could just flip it >> we'll look at t-mobile. this is a share take game. and mike sievert is just obliterating verizon you know what, while vestberg is saying everything, you're getting these texts and emails from people who work at t-mobile who remind you, well, one of the reasons verizon isn't doing as well is t-mobile is doing so well at&t, by the way, should be a little better than verizon >> jim, we have a break-out on gm this price will take you back to early '22. as they grew u.s. retail share above average pricing. below average incentives they are on track, they say, for their ev production profitability targets. >> you know, when will mary

barra get the respect she deserves the stock was actually down at one point. i'm looking, let me reopen the chapter here what am i missing? i'm going line by line every single line is better. and the stock is being sold off. this is kind of what i mean, carl who is selling it? the people who are selling it, they're the pathetic parody of the human mind mara barra is just money she's the ravens >> ejusted ebit up 15. north america up 12. >> how about ev? she should be losing money hand over fist, hand over fist, but no, because she's a fantastic financial person she knows how to make cars and trucks it was a true blowout there, much more profitable than we thought. i cannot believe the revenue is so much better, and yet, the stock is down. she's the opposite of hans vestberg she really is. although she's nice.

i don't know what to make of that she is a nice person >> you mentioned 3m at the top of the hour. that's another nice breakout over consolidating levels lately >> bill brown has turned that company around look, i still think mike gave them a better hand than people realize. it's still cheap on an earnings basis and bill brown is going to continue, now the stock was up 5, let it come in if you want to buy it the futures clowns will take it down they're kind of like it, remember it? like pennywise >> you'll float down here. >> those guys are pennywise the clown, who was really scary. i have had nightmares about pennywise, about three months ago. i love steven king he's the best. our charles dickens. >> not every story is stellar. you mentioned sherwin, and then polaris today is down almost 6% here >> logitech.

i happen to like what they're doing, but i do see that you have gotten this peripheral not doing well that does matter, by the way i think that we're all waiting for a pc cycle it's so far not happening, which is a harbinger for a lot of company not doing as well as we think. >> how about kimberly? sort of an echo? >> i was bummed by that. i think -- >> following proctor on friday >> yeah, i think -- i don't know what to say. i thought this was going to be a breakout quarter for them. it's not a breakout quarter. the revenues were not that good. right now, health and beauty for proctor, but here it's kind of -- >> they affirmed the full year profit but they do guide below on full year organic street at 4.25 >> we look at these for organic revenue to see if there's any life and this was -- i remember, this stock has been up. that whole group is struggling

except for clorox and, you know, colgate. and clark's is hanging in there very well, but i think once again we're going back to looking for a company like a boeing that could have just a special situation up or like a 3m which is a special situation up but i remain a believer that the gm pattern, where people sell and then they reconsider is far more likely than a lot of these patterns we're seeing. >> really quick, double beat, but it's hard to fight this movement in bonds, yeah? >> yeah, i think they can come back these guys, wow, that's way more down than it should be down seven come on. yeah, okay, it is rates. it is rates. and everyone is looking at rates and extrapolating. i come back and say don't forget, rates are self fulfilling mortgage rates go higher, they still get their margin i remain faithful to toll brothers as being a great way. but toll brothers is terrific

because it's a million dollar homes that are not going down in value, and that's a great stock here again, 22 points from its high i'm sorry, just 12 points from its high, but a really good stock. they keep buying back stock, buying back stock. doug would rather buy back stock than build homes, and he's right. doug yearly is very smart and also the uncle of kevin, who writes with me >> let's get back to david at active passive david. >> all right, joined by the man we have been promising, jeff smith, ceo of starboard. been busy lately man, you have been busy. in fact, let's start there you just presented you started off with salesforce, which we discussed two years agoat at the same conference, and then you went on to kenvue and pfizer those are two very large companies. why at the same time for starboard? do you have even have the resources to actually devote to either one of these should they actually get nasty

>> well, it's good to be here. nice to be with you again. >> good to be with you, too, jeff >> yeah, we have the resources there's a great team at starboard, it's not just me. we have a great team smart people work really hard and we have had about the same number of investments in our portfolio since the beginning. we have been doing this for over 20 years, so it's not a problem. but i'm not sure why any of them need to be nasty we like to work with everybody >> i know you do and you have in the past, of course, as well actually when was your last proxy fight? >> well, we have a solicitation going on now for separating potentially separating the dual class structure at newscorp. >> so it's been a while since you have undertaken a true proxy fight to get board seats >> we haven't had to really do it most companies have been willing to work with us or want to work

with us. you know, salesforce is a great example. we presented it two years ago. i talked about it again today. we have a terrific relationship with salesforce. they have been doing a great job executing and proving their margins, moving up in the rule of 40 or rule of 50 for their industry and we think there's a lot more to go, but it's not going to hurt us at all >> what's going to happen then with pfizer? let's start there and try to get into a bit of what you presented this morning and why you feel that it's undervalued and that you have an opportunity here to perhaps work with management to make its stock go higher >> pfizer is a great company great american company and we have an opportunity to be able to buy into the company at ten times earnings, almost a 6% dividend yield and so you have to ask yourself, why is it so cheap and of course, everybody remembers pfizer right now, it's

most known for the great job pfizer did during the pandemic we're here without masks talking to each other in person because of in part because of the great job they did during that period of time, you know, their revenue jumped it went from $40 billion to $100 billion. their cash flow jumped from roughly $10 billion to let's call it $40 billion. there was huge growth and huge cash flow generation but something is not working because the stock has gone from 41 to 29 during that period of time >> what's not working? >> well, when we dug into it, there's a few components, but the biggest one is their return on invested capital. so for any company, for any company, public, private, anything, you have to have the right return on invested capital. you're responsible for managing the investments, the shareholders' investments and get the right return on that for a pharma company in particular, it's incredibly

important, they're investing large sums of money in r&d as well as in acquisitions which is really outsourced r&d, and the way you should boo measuring those returns is in the expected growth that they're going to produce. and when we look at it, the growth they're producing from their investments is worst in class. that doesn't make any sense. this is pfizer so if they create -- if they get a drug approved, they're best in class if not near best in class in manufacturing, marketing, distribution, so they should get the revenue side the challenge is making sure in their pipeline they're spending money on the right projects and getting those to fruition. >> prior to covid, i could recall there were similar concerns to a certain extent about pfizer so i wonder, then they obviously used a lot of that covid free cash flow that you mentioned to go out and buy things. but isn't it a bit early to try to be judging whether they're

ultimately going to get a return for example from something like c-gen, which was a $40 billion deal why are you in a position to question at this point whether they ulmltly will get the return they thought they would from that deal? >> well, look. people can look at our slide deck it's up on our website at starboardvalue.com what we have done is gone back and taken a look at how they have performed versus their own expectations and how they're expected to perform according to wall street consensus analysts now, for sure, those aren't right. so could they do better? of course. but part of the challenge here is in credibility. so they're either not going to produce or investors and research analysts don't believe they're going to produce what they hoped to produce. so let's use the acquisition as an example and not just c-again, and i said this at the conference there's nobody more excited and more bullish who would be

happier if all of this produces amazing results. we're not anti-anything they bought we're not anti anything in the pipeline we're excited about what's there. we bought the stock. we get to buy it at this price because we think the future will be better than people think. i hope it is enormously successful that's being said, they paid $70 billion for the several acquisitions they did right after covid. c-gen being the largest at $43 billion. they came out at that time and they said those acquisitions were going to produce at least $20 billion in revenue in 2030 so as a good analyst, we put multiples on everything. so $70 billion divided by $20 billion. they paid 3.3 times. we looked at other pharma companies that have bought anything for over a billion dollars, and most of them pay closer to 2.4 times. so they paid more. fine >> may have overpaid it doesn't mean they don't get

the return >> right, and presumably they overpaid because they think it's going to do over $20 billion the problem is the $20 billion they said they were going to get in 2030, wall street consensus believes is going to be $13 billion. it's not more than $20, right now, the consensus estimates for the revenue from those acquisitions is $13 billion, which really means they paid five times that, not 3.3 times that again, that value destruction by overpaying for something and not getting the results, that in the past i'm not actually worried about that >> i know, so as an activist investor, what is it that you believe you can do to improve the potential return from things that are already going on in the pipeline that are already kind of baked, so to speak? >> well, everything gets approved in the pipeline and baked every day. they're making new decisions today. and tomorrow, for the future the company's value is based on

shareholders' expectation of future results for the company i can't do anything about what happened in the past, but i can use the past to inform current decisions. and something inside pfizer isn't working right in their discipline around the investment spend they're making and i think it has something to do with not putting the right value component on making those decisions. but i don't know for sure. i'm not inside the company, but something is clearly not working right. so what do i want? what have i asked? i have asked for the company to make changes to that what can those changes be? i don't know there's a whole host of things - >> if you're asking, you must be asking for something >> i'm asking for something different. i'm asking for them to massively improve the discipline around capital allocation inside the company so that they can put more dollars to projects that they have a higher degree of confidence and fewer dollars - >> sure.

>> it seems like motherhood and apple pie. >> do they need a new ceo, a new cfo, a new upper management team >> i don't know. i don't know i mean, any combination of many things can work. and have worked at different companies. so in similar situations where a company has at ceo. it wouldn't be -- it wouldn't be unheard of it wouldn't be strange, it could make sense. >> you seem to be encouraging them to do that. i don't want to put words in your mouth. >> in other situations where we've been involved, just to be fair, we've been involved with companies that haven't done well and then we come around and management understands that things need to be different and they change, and they change dramatically and perform much better we never know which of those is the right answer what we'd like do is work with management and work with the board and try and figure out what's the best answer and how they're going to vote, but i will say something materiel

needs to change. they can't close their eyes and assume it will bet better because you said what can i do about what they've done in the past i can't do anything about what they've done in the past, but today is tomorrow's past >> understood. conceivably, it takes a long time these are not changes that you see the results of overnight >> yeah. of course. of course, but again, a company's valued based on future cash flows and people's expectations of the future cash flows. >> by the way, you had the presence, i believe you this frank demiglio somehow associated with your effort. why with this weird statement, i think it was from guggenheim, withdraw from helping you? >> yeah. just to be clear ian and frank are great. they're great people and they care deeply about pfizer, about the company, about its employees and about its shareholders

they've been involved with pfizer for a very long time and feel an emotional -- as many executives do, an emotional attachment to the company. we reached out to them we had a prior relationship with frank. we didn't with ian and we reached out to them and we shared our concerns and they shared their concerns and agreed that it would be -- they would be willing to be helpful, but that was undefined in terms of what that meant. >> and then it ended >> yeah. it was strange, david. it was strange because it end -- and ended is a strong word, too. we weren't really asking frank and ian to do anything they were just offering to help in whatever way might be helpful for the company. so -- yes, they put out a quote that said that they're supportive of management okay, but i would still say that i don't know -- i haven't spoken to them since then, but if

management or the board approached them and said we want to help, i'm sure they'd be willing to help. they just want to help a great company perform better. >> from the brief time we have left and i'm looking here and it's very brief. you did present on ken view as well and pfizer is taking up a lot of our time for obvious reasons. can you succinctly describe what you see in kenviue and it is quite a product portfolio when you look at your slides, for example, but what is your hope and expectation there? >> look, kenvue, some of the best brands in consumer products i mean, these are unbelievable, tylenol, motrin, band-aid -- i mean, it's unbelievable, and like many companies that are very well positioned that aren't performing as well as they could be performing and this was a spin from j & j and since the spin it has massively

underperformed mostly it's due to its skin, health and beauty segment which is neutrogena and aveeno and that makes sense and while the spin makes sense these products inside j & j are very different. j & j is also a pharma company. >> yeah. it makes sense to be separate. many people thought it made sense at the time of the spin, and to the extent that you are correct or it had unreasonable expectations for the return, what's the issue at kenvue in terms of, i guess, their underperformance versus some of their peers? >> i think, just to be clear, i think they may be starting to do it so i don't want to make this overly critical. we're having conversations with them and there are signs that kenvue is already going in the right direction, but what they need to do is to continue their shift to be a marketing-first

company. a other marketing-driven company with consumer products and think about consumer first and marketing first, more innovative, more marketing especially in digital and omni channel and you're seeing some signs of that. there are the other brands that they compete with in health, skin and beauty. the other two segments are performing unbelievably well, so let's just focus on skin, health and beauty if they can get that right there's huge potential in terms of growth. >> and you've referenced conversations so at least they're talking about this and they're receptive, fair to say >> i think they're receptive and i think we're possibly more aligned to start with and it's just about where we are in the execution journey. so i think kenvue knows that they're starting to do this or they've gone further than doing this so what we're talking about is getting from here to just do it better, faster. >> which is similar to sales

fors, right? and then on the pfizer side i'm not sure they know that they have this capital allocation discipline problem we have to first get them to recognize the problem and then they can identify a solution so they're slightly different. >> jeff, out of time could talk forever, but certainly always appreciate our annual interview here at active passive. thank you. >> you're welcome. >> jeff smith from starboard carl, over to you. >> i like both those stories, when you look at pfizer you have a 5% yield and i think there's upside to kenvue i think he's premature in saying what they would do, and i would sit down with them in a nanosecond i have logitech which is down, and we have pro logic, the recipe for making money in the market is to buy the stocks that are down very badly that are good companies and we'll see much of them today and you don't have to buy them today.

>> that's been your general take is that there is a floor given the way money is stacked right now. given s&p money coming in and you've got the fed on your side. i just think that let sellers sell because they are uninformed on these really good situations whether it be ge aerospace or 3m i mean, come on. look, there rr always carolina panthers there are always new york giants and i'm not going to stand there and buy those. i'm talking about ravens i'm talking about buying niners and mccaffrey. >> is mccaffrey coming >> yeah, week 10 thefter will give me the high five on that one. >> and deebo. >> jim, busy week. we'll continue to chip away. the dow is down 70 and the s&p ldg 30 n't go anywhere.

♪ ♪ good tuesday morning welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla live at the new york stock exchange along with david faber at the conference. taking a look, we are starting weaker down 0.4% of the s&p 500, staples, energy, communication services and real estate though not offsetting some of the weakness for instance in industrialses down 1.3% and materials down 3% and sharper declines in the cyclical groups and financials are weaker and so is technology and that's yet nasdaq composite is down .25% of 1% one thing people are looking at is treasury yields which are backing up higher yields. there's the ten-year almost at 4.2. the two-year is also higher and goes above 4%. we are three big movers we're

watching and 3m shares under pressure despite a beat. the stock though down almost 2%. ge aerospace also moving lower despite a beat and the guidance raise, as well that said, shares have been a huge outperformer on the year up around 80% since january and then watch the defense names fresh numbers out of lockheed martin and rtx this morning sending shares in opposite directions but, guys, we've got to start with a big news from the imf some new forecasts for global growth they still call global growth sluggish they don't change the view on 2024 they still say it will be 3.2%, but good news for the u.s. they upgraded the u.s. growth forecast by .2%. that's good. now it looks like we'll have 2.8% why? thank you to the u.s. consumer better consumption fueled by rising wages and asset prices and this is the story in the market it gets a nod from the imf which

has the good granulated data from different countries and it looks like we're going do better i also want to mention a few other countries that had change e china, everyone is focused on that and what happened with the economy. they cut china's rate to 4.8% and below the official china 5% growth target that they have so that was interesting. they also 2024 say 4.5% however they don't factor the stimulus impact because as we all are, they're trying to figure out what the stimulus plans are especially on the fiscal front best economy in the world in terms of growth? >> and pulling ahead >> do you know who it is >> in terms of growth. >> highest growth number u.s. is good, we have an upgrade, but the best is india, 7%. >> i just can't get over i don't know if you built the table of gross fixed capital formation among the g7

we're questioning it no one is even close. >> we're doing really well >> janet yellen will be speaking this hour to kick off the world bank meetings which is happening now. it will be a victory lap and here are some of the excerpts that i pulled from what she will say. from day one we rejected isolationism that made america and the world worse off. that was a thinly-veiled criticism of president trump because there is protectionism, of tariffs we know the imf has been sounding the alarm on those type of growth hits, and they don't directly address the u.s. elections. they try not to be very political, carl, but clearly that's in the backdrop as they say there's been good news on inflation and almost declared victory on what's happened with higher inflation rates >> meantime, j.p. morgan does today, looks at last week's retail sales atlanta up 4% since august

j.p. morgan looks at the increased forecast for not just u.s. gdp, but china, put them together and their forecast for global gdp growth is up 0.7. >> the china thing is a question mark, but if you add it together and just the u.s. alone, the if being going higher has been a big part of the story with treasury yields backing up basically since the last fed meeting we have seen treasurys sell off and yields up and it got super charged by that really strong jobs report that we have, and it's changed expectation for how many rate cuts we're going to get i keep saying the market doesn't seem that upset about it because it's happening for the right reasons. better growth. you don't need as many rate cuts and there's a chart going around this morning showing, so this is how many rate cuts are expected and see the big spike up before the jobs report. this is going to end of january. the market expected more than four rate cuts before the end of january. now it's between two and three will we get a pause in november? will we get a pause in december?

the market doesn't think so. we still have 50% odds for both, but there are some questions. >> i think it's 11% odds of no cut in november. >> right even higher no cut in december now. so the thinking is maybe they'll go in november, pause in december or maybe they'll go both i guess it depends on how the data comes out we can glean something from some of the commentary that we've gotten it's earnings season now so we're hearing from all sorts companies and you see where the strength is and where the weakness is. for instance, it's still tough going for homes. if you look at what sherwin william said for instance, the painter. they're still talking about a challenging environment and sales decline driven by continued softness in the north american do it yourself mark also, if you look at kimberly-clark, they mentioned discreet headwinds creating pressures on growth in the near-term as service levels improve and lower demand and private label businesses and

weaker than anticipated demand in north american professional channels in pockets of deceleration in asia and and latin america. and pulsy gfulty group, the int rates declined through august and september, however, we experienced a noticeable pickup in overall activity. in fact, of the three months in the quarter we generated the highest net new orders and absorbed some prices in the month of september so things improving as the fall went on, and i'll end quickly with gm's ceo, we've been able to grow the market with pricing and well-managed inventories and below-average inis nottives and also a bullish nod >> speaking of gm, stocks at the highest level since early '22. one of the big movers of the day along with ge aerospace. let's go to phil lebeau tracking both this morning. >> they're moving in opposite directions let's start with general motors.

the reason the stock is up, what 8% it's because of a huge beat on the top and bottom line. look at the numbers. the street was expecting 2.43 and well above the expectation of 44.6 billion. as sara mentioned north america is really the profit driver for general motors right now they are killing it when it comes to internal combustion engine vehicles, solid sales and it was up 13% compared to last year china remains a challenge. they lost $137 million right there. they'll restructure that business and they will have meetings in china and the chinese automaker and that will happen in the next few weeks and they'll structure operations the bottom of it as well as the profit guidance. the bottom of it, as well as they continue to believe that what you're seeing right now from general motors will

continue into '25. a far different story with general electric not in terms of the results because it beat in terms of the bottom line, earning what 115 a share, a penny better than the street expectations. revenue did miss, but not by a lot coming in at 8.94 billion, just shy of the 9.02 billion when you look at ge aerospace, but the operating margins and the numbers within the numbers, these are strong there is no one i've talked to on wall street who said i don't like these numbers free cash flow up 28% compared to q3 of '23 and they are raising their guidance both eps as well as the operating profit guy i spoke to polk, guys. i love where the company is and where it's heading and that's where the will cha efrjes have been and they've gone to their critical suppliers and increased

deliveries from q2 to q3 by 18%. he believes they're making steady progress there. so while the stock is down 8%, i think some of this may be because you've had such a huge run-up over the last year. >> yeah. phil, it's david i think that is certainly part of the reason there. i pointed out earlier. trades at a very high multiple historically for ge and very different from the first company you mentioned, of course, gm which still trades at that single digit, if i'm not incorrect. >> yeah. i think it is five or six. >> it is an opportunity to buy back stock, i guess. anything on that front >> they will continue doing that, david. there was a question put to paul jacobson, i think that they have, in the last year, and this may not be an exact percentage, something like 19% of their shares they bought back, and so yeah that's also giving some juice to shares moving higher they'll continue doing this. it's a smart move, david i mean, when your shares are

that undervalued relative to the rest of the market in terms of multiple, why wouldn't you buy it back and they're not starving rest of the business and and mary are abouta said if you continue to not give us this tomorrow, kelly or burke, and you do not want to miss this exclusive and not only talking about where they are coming out of q3 and the latest contract offer and restructuring the company. cutbacks, 10% of the staff will be cut and a lot of things that kelly ortberg has on his plate and we'll talk to him about it >> that will be newsy. thank you for that phil lebeau. the dow is coming off its biggest drop in two weeks. as it kicks into high gear, our income guest says that while early reports for broader markets are promising the rotation trade

joining us is lori cabesina. welcome, lori. what is this rotation trade? >> looking at the mag 7 and the maga cap growth and we run screens with the s&p moving from the bigger, safer, growthier stuff into the s&p and the russell 2000, kind of anything else, frankly. >> what is the latest evidence that you have that bodes well for that >> so, one stat that we watch really closely is the rate of upward revisions between the top names and the rest of the s&p. we've basically been seeing for the past year more upward revisions and we're seeing the gap is closing so the rest of the market is start tock gain on the top ten cohort if i get more discreet and more finite, when we look at growth rate expectations for 2024 and 2025 i am starting to see sectors like move upon we are seeing it move out pretty

sharply. if i look ahead to 2025 it's areas like industrials other materials and healthcare we'll see if industrials stays there. after this week we're starting to get a lot of reports and health care is an area that we'll see good upward revision trends, as well. >> how impressed were you by the financial part of earnings season and do you think industrials can repeat >> i'll tell you on industrials. i'm neutral. i'm overweight financials. i just can't get past the sticker shock. the median p-e on the s&p 500 industrial sector on both an absolute basis so versus its new history is more than the long-term average dating back. >> maybe that explains lockheed's 5% drop. >> to give you context that's where the tech sector was. it's not just a couple of names in industrials that are generating the froth it's very widespread and i can't find a single group other than airlines that has attractive

valuations. >> you don't think it's necessarily a tale about the sector, the business more about positioning >> i don't know if it's positioning, per se, but it definitely feels it skis from a valuation perspective. kind of going back to the financials, we've had very good healthy revision trends there. banks, if you go to svb they hit typical recession-type lows where each way through a recovery there they are above average on the multiple and everything s&p is starting on look that way. >> were you running a post-election boins, and i see hints, if you look at small caps which is my old coverage area from way back in the day, the cftc data is almost back to 2016, 2017, 2018 highs those peaks that we saw in 2018, the first one was generated

around trump winning economic excitement and the second was the 2017 tax cuts and the third was the china trade war when everyone was dumping money into the u.s. early in the year we've seen them cut sucked into the political vortex in the past and once we got past that fed meeting, everyone agreed the election was the next big thing and i don't think they were doing it a ton of trading, but i'm seeing it in the data. >> the rate picture is much different than '16 and '17. >> i think that's fair hedge funds have been kind of jerking them around, i apologize for the language, but they've been moving them up whenever they get excited about fed dovishness and when they hit the dovishness too far they pull them back down small cap his a pretty big downward move and i'm not sure if it was the swing state polling or that we're talking about a november skip, and maybe

it's a combination of the two and i see hints in banks and they're starting to become realigned with the betting marks. >> the small caps are down 2% for the week and itsa only tuesday. >> lori calvasina. as we head to break, here's the rest of the hour nike's ceo elliott hill will talk about the company's directions and we'll share those headlines. >> speaking about mega-cap tech fueling the arms race in a.i dominion's ceo will talk about this new deal with amazon as shares hover near record highs and david is at active passive in new york city talking with top investors. lauren taylor wolf, co-founder of impactiv capital as "squawk on the street" continues

>> at university of maryland global campus, getting a bachelor's degree doesn't have to mean starting from scratch. here you can earn up to 90 undergraduate credits for relevant experience. what will your next success be?

san francisco is in crisis and we need real experienced leadership. we need mark farrell. our interim mayor who got things done. who showed we can clear tent encampments, fight crime, and address the drug crisis. who will make the tough choices for our city's future. "i'm mark farrell. i'm running for mayor because san francisco deserves better." "i'm ready to deliver that change on day one." mark farrell. a proven leader with the experience we need.

welcome back to "squawk on the street." i'm david faber at the active passive summit actually is what they call it, and i'm here with impactive capital lauren taylor wolf who joined me a couple of years ago, as well nice to have you. >> nice to be here >> small and midcap activism, fair description to a certain extent for our viewers to understand what you're doing what is the opportunity space like in small and midcap particularly given the long underperformance versus the large cap that we talk about so often on cnbc? >> yes sure so the past couple of years since the rapid rate hike

started in the second half of 2022 has been difficult for small caps and that's because they have a larger percentage, 40% of the debt of corporate balance sheets on small caps is 50% for large-cap peers. the ebitda to interest coverage ratio was much lower so the rate hike cycle really extracted out of small caps more so than large caps, but if you double click to where impact focus is we're focused on small cap value companies that have strong balance sheets that generate cash flow through those cycles, what you see the highest quintile of companies and they're high generators they're trading to the largest spread to the free cash flow generating peers and t the likes that we haven't seen since the '70s and the dotcom bubble so we think, we're not market timers, but we do think that it's bound to revert

reversion is a pattern that we see in every market cycle and we wouldn't expect otherwise today. >> i do wonder from a market structure perspective, there have been a lot of changes and far fewer companies these days do you worry about a lack of sponsorship in the marketplace you might do your discovery and find something, but if someone doesn't come to you and the stock won't go up anyway is that a concern? >> so we've had companies, like, take asbury or sallie mae, companies that we've been working with behind the scenes for many, many years both of those companies over the past four years they haven't had any multiple expansion which is what you're alluding to, but they compounded earnings asbury has tripled its earnings and sallie mae has doubled earnings and the stock has followed suit without a multiple expansion. there's also been a dearth of m and a activity and in 2023 and 2024 m & a activity is about 30% below the ten-year average that and the ipo markets which

have been fairly lackluster, right? very muted once the markets start opening up, once there's certainty around the rate environment and once boardrooms have more confidence and the private conversations we're having is that there needs to be more confidence bold decisions and when there's more clarity in the environment, i think we'll start to see more and more activity which creates a lot of opportunities for small caps, and i think, you know, maybe it's after november -- >> more clarity in the environment? i've been doing this for a long time and you can say that at any point. >> i don't think that there could be any less clarity, but in our conversations with boards and we speak to almost every one of our portfolio company boards, they want to go on offense their balance sheets are strong and generating a ton of cash and the question is oh, should we retire shares because they're trading on earnings? >> what do you tell them >> it depends. >> why not buy back a bunch of

tock and shrink the float. >> we've done that with sallie mae. we purchased on on we urged them to mitigate the impact of this accounting change and they have freed up $2.5 million of capital for the company. over the past years they repurchased the company and the stock has doubled and performed well however, we pursue a different flavor of activism, right? we are not looking for -- we're not telling companies to sell themselves and we're trying to work with companies to be their best selves. we're looking to make doubles and triples over a long period of time, and as we know, you know, the market rewards patients the market is a device for transferring money and return from the in-patient to the patient and the returns are never linear or rarely linear. what we can do with ucompanies are irrelevant, and we can come

to the table to help them opportunity miesz returns. >> one of those tools given that you're not threatening to throw management out and you're sort of saying don't do -- you know, big things we're just looking to be a long-term shareholder, right >> exactly >> with asbury -- >> the sponsorship of the large cap and mid-cap companies. >> in asbury we supported a back the company in the pandemic when they were generating significant amounts of free cash flow. they did three accretive acquisitions they more than tripled the profitability of the company and now maybe it's time while the shares have quadrupled so they've done quite well. there might be the m and a arbitrage and the private market may not still be there and maybe it's time to purchase shares with wex the stock was 140. we worked with them and they were doing a lot of m and a and hold on a second, your multiple has come down so much. should we be buying companies at ten times ebidta maybe we should buy at seven

times ebitda the stock was at 140 >> not bad 48% you'll take that, right? >> 3 billionio under knowledge inment is that a nice size? will that enable you to do what you want to do >> if you look at it our average market cap is 10 billion we have ten companies and we're working with them over a three to five year period. we like where we are >> lauren, we'll catch up in a couple of years. thank you for joining us >> thank you >> lauren taylor wolfe from impactiv nike's ceo speaks on the record we'll have the detlsexai nt. cus in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy.

some news on nike reviewing the wnba for ten years making it the biggest merchandise marketing and content partner. the contract with the nba was reportedly worth $1 billion and while it is unclear how big the contract is a person familiar with the matter tells cnbc it is

deal is, quote, much bigger. interestingly, nike's ceo elliott hill speaking for the first time since taking over at this big event in new york last night. here's what he said about the company's direction. >> for the last 50 years, 50+ years nike's been very much about putting the athlete at the center of the conversation and that helps drive innovation around product and storytelling and et cetera. so we'll continue to do that nike's always been about growth and growing sport around the world and we do that we grow the industry we make the industry bigger and we'll continue to do that. >> just a reminder, guys this is not someone new coming into nike. this is a 32-year veteran that started as an intern and worked his way up to ceo replacing john donohoe, something analysts and investors increasingly say the company needs right now because it needs to get back to what makes nike cool, and that's, you

know, putting it very simply, but what they've last a little bit in the last few quarters and the last few years, and you can just see evidence of that. last week adidas reporte results, 7% increase in revenue without the easy hang over and it would have been 18% and they're having tremendous success with the old school shoes like the sambas, and we've seen with the world in terms of the financial performance taking market share now nike needs to get back to the roots and you heard hill a little bit we didn't get much from him. this was a big nba event, but talk about putting the athlete at the center. we haven't seen any big sponsorships from nike in the past year and partly because they have a lot of the big athletes already, but it is interesting. the street is excited and hopeful about what about hill will do about engineering the core product. >> decent round with arc kid as over the last few weeks. most people we talk to say

there's a ton of i that can be put to work if they can figure out the models. >> he downgraded niek oat way down and now he's helpful and likes it and has a buy on the stock and the '97 price target and says just go to the cutting ram floor because now the morale is better under hill and he is well liked throughout the organization the designers are there. they have the designs. he says they have what it takes. so that's going to be one question is how quickly that can happen >> right >> meantime, after the break big tech, as you know, betting on nuclear with a slew of tech giants announcing new deals including amazon partnering with dominion the ceo of dominion will join us about his company. you can catch "squawk on the street" any time anywhere and just follow the "squawk on the street" podcast on spotify, apple music and more difference. at humana, we know that's especially

true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's your free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money and pay some of the costs medicare doesn't. depending on the medicare supplement plan you select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care and more. you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus, you can get medical care anywhere in the country, even when you're traveling! with humana, you get a competitive monthly

premium, and personalized service, from a healthcare partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you money! so how do you find the plan that's right for you. one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free. and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer.

let's go boys. the way that i approach work, post fatherhood, has really been trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families, like my own. connectivity is a big part of my boys' lives. it brings people together in meaningful ways. ♪ ♪ welcome back i'm sylvana henao with your cnbc

news update. the ceo of abercrombie any fitch is facing trafficking and prostitution charges police arrested him in palm beach, florida he served as ceo of the brand from 1992 to 2014. two of his associates were also arrested more details about the charges are expected at a press conference today at noon secretary of state antony blifr blinken is in israel today to restart negotiations for a ceasefire in gaza. an israeli official told nbc news today the security cabinet discussed an egyptian proposal for a two-week truce that would be aimed at building momentum for a larger deal. it calls for an initial release of just six hostages and a new federal trade commission rule banning fake online reviews has gone into effect that includes any reviews generated by a.i. or written by people who haven't purchased the

product or service or who are misrepresenting their experience violators could face fines and can be reported directly to the ftc, sara. i'll send it back to you >> okay. sylvana, thank you we've been covering this growing trend for hyperscalers for microsoft, amazon and google new energy deals that they're signing that are in turn bringing new power to the grid our pippa stevens is here with the stocks that could benefit. we highlighted aclo last week. that's been a double since the spac >> sara, a lot of attention and byop or bring your own power could be the new acronym to watch. tech companies are racing to secure power for their data centers and one option is to go directly to the source amazon and google have signed agreements to help fund small, modular reactors that will power their data centers while microsoft has teamed up with constellation energy to bring 3 mile island back online. hyperscaler is adding new sources of power to the grid

could be a trend we see more of giving concerns around their vast power needs and raising prices for everyone else including consumers and regulators are already weighing in the chairman of the public utilities commission of texas says, quote, we are telling data center developers they need to supply their own power adding that i can afford to fund construction of new power plants, but small, modular reactors ari next-decade story leading morgan stanley saying we could see an uptick in the gas demand, boosting shares of companies including eqt, antero. >> thank you, pippa stevens. one of those ceos that has struck a deal, robert blue is from dominion and his company partnered with amazon. we have been all over this to the degree that we've been able. i wonder, can you give us a little color on how the

conversations began with amazon and what you envision? >> sure, carl. thanks for having me we look at this as a partnership between one of company's most innovative companies with amazon and one of the most reliable with dominion energy. we've been providing power plants for more than 50 years so as we thought about the demand that's coming on our system from data centers, from electrification of the economy from population growth, it made a lot of sense to us to try to work with a company like amazon and figure out a way to provide exactly what our customers want. reliable, carbon 3 electricity and in a way that benefits not just amazon and not just dominion energy, but all of our customers. so that's the way this frgz can has evolved so far >> do you get the sense that regulators understand the urgency? do you get the sense that they will not fight this in a way that maybe past chaftepters of

public perception would suggest? >> there is support for nuclear power. we were at an event with amazon with the governor and our two united states senators earlier this year we did an announcement about our station with the governor with state and local officials. so there is a substantial amount of support for nuclear remember, virginia is home to the nuclear navy and we've been operating our units in virginia for a long time, safely and reliably so. we think that there's a definite support. there's work to do, but we've got support from leaders who understand the importance this resource, as we add a substantial amount of demand in the coming years >> how much capacity do you have, and are you able to sign deals like this with other big tech players >> we're certainly looking at that opportunity we've had a great partnership with amazon over the years, but

we've parter inned with other companies and we've done deals with amazon and my alma mater, university of virginia so we are open to working with a variety of potential partners. we actually have a request for proposals out for technology and for financing structures we expect to wrap that up early next year and we'll be able to advance the ball for that. >> robert, put in perspective how much power is going to be needed over the next ten to 15 years for our viewers because i know it differs from the last 15 years. >> that's absolutely right we will see demand growth like we haven't seen since the end of world war ii so we forecast in virginia, for example, we just filed our long-range plan, that's our 15-year plan and we forecast or actually our regional grid operator pjm forecast 50% increase in demand growth over

the course of the next 15 years. that's a lot of electricity that we're going to need to provide, being able to work with a partner like amazon to look at opportunities in a way that we can do this that is protective of our customers going forward we think is a very smart idea. >> we talked a lot about the modular reactors, but it will be a weil and while they're not completely carbon free, you will need a lot of natural gas until these things are up and running years from now >> we're going to need a lot of all of the above, and when we say all of the above at dominion energy, we mean it it's the wind farm which is the large of the koivent country, and as we've been discussing it potentially in the future. we we gen benefited from the

actual gas, and it allows us to add renewables and keep the grid reliable and we'll continue to think about that going forward we're focused on reliay liabili and it will take all of the above to get there. >> what about the small modular reactors in do you have confidence given it's a relatively new technology that this is going to be successful >> i think it's important to keep in mind that small modular reactors exist today they just happen to be on nuclear submarines and aircraft carriers and we happen to serve the largest naval base in the world here in virginia, but they haven't been used in a commercial setting before and that's what we're looking at going forward with amazon and other partners if we can make the technology work and we can figure out a way to ensure that our customers are not taking cost risk and that our company's balance sheet can handle this appropriately, we'll move forward there's more to explore, but we're excited about the

opportunities. >> finally, robert, sometimes when we have this discussion a devil's advocate will speak up and remind us of a time that there were warnings with the advent of the internet with the world wide web was going to break the grid in telling people that engineers would find a way to uncover efficiencies. is there any reason to think that the demand picture is being overstated >> i don't think so. certainly in the areas where we operate in virginia and in south carolina we've been working with data centers in virginia for some years. loudoun county, virginia is the largest data centers in the world given them combined. we've known about history and we've known for a long time and certainly in the places that we serve was real and we never knewed advent would break the grid we can do it we know we can do it and that's

what we do at dominion energy. >> are regulators onboard? federal and local? >> well, it's early on whether regulators will be onboard for small, modular reactors and that's work that we have to do, but as i mentioned earlier there's a lot of political support in virginia for this program if we can work out the cost issues that i just described and make sure the technology is going to work. >> robert, huge story. our viewers are very interested. we hope you'll keep us posted as we chip away at this one good to see you. thank you. >> thank you appreciate it. >> small modular reactors, smr having a year. quick programming note, less than a month away from the annual delivering alpha investor summit here in new york city happening on november 13th, the street's top investors and leaders will be convening to provide insight and analysis to help you deliver meaningful returns. i'll be speaking with nelson peltz and we have big investors, david einhorn, as well you can still register,

cnbc.com/deliveringalpha or scan the qr code on the screen. we're back after this.

>> it's a huge read for corporate reports for one of the best well-known companies in the market and could the better trade be with some of the smaller rivals and that answer might be found in a mix of technical and fundamental analysis tune into the market navigator segment to find where bigger gains might be found in smaller packages at power lunch, 2 p.m. eastern time yeehaw [narrator] but many do have something in common. we all trust schwab with our wealth. [narrator] thanks to our award-winning service, low costs and transparent advice. every day, over a million multi-millionares trust schwab with more than two trillion dollars of their wealth.

welcome back to "squawk on the street." i'm david faber from the active passive summit and it brings a lot of activist investors including starboard's jeff smith, and he has been very active taking significant positions in kenvue and pfizer both of which he presented on here this morning. when i sat down with mr. smith a little earlier in our program he

wanted to focus on what he believes is a lack of investment discipline at pfizer take a listen. >> something inside pfizer isn't working right in their discipline around the investment spend that they're making, and i -- i think it has something to do with not putting the right value component on making those decisions, but i don't know for sure i'm not inside the company, but something is clearly not working right. so what do i want? what have i asked? i've asked for the company to make changes to that what can those changes be? i don't know there's a whole host of things -- >> if you're asking, you must be asking for something i'm asking for something different. i'm asking for them to massively improve the discipline around capital allocation in the company so that they can put more dollars to projects tha they have the higher degree of confidence and fewer dollars -- >> sure. >> it seems like apple pie.

>> do they need a new ceo? a new cfo? a new upper management team? >> i don't know. >> you don't >> i don't know. any combination of many things can work, and have worked at different companies. so in similar situations where a company has underperformed like this, you may see a board make a change at ceo. it wouldn't be unheard of. it wouldn't be strange it could make sense. >> you seem to be encouraging them to consider doing that. i don't want to put words in your mouth. >> well, but in other situations where we've been involved just to be fair, we've been involved with companies that haven't been performing all that well, ask we've come along and management understands that things need to be different and they change, and they change dramatically and they perform much better we don't know which of those -- we never know which of those is the right answer what we'd like to do is work with management and work with the board and try and figure out what's the best answer, but what

i will say, something materiel needs to change. they can't just close their eyes and assume it will get better because you said what can i do about what they've did in the past i can't do anything about what they've done in the past, but today is tomorrow's past >> you know, we also spoke a bit about kenvue and spent time on pfizer as you heard. i would say judging from the conversation that they're going to be more active to the extent that that's possible in pfizer than perhaps in kenvue where, sara, was there a feeling that it is undervalued, but the company is starting to make some of the moves that at least starboard would like to see them in terms of marketing in a particular area of their product portfolio. >> i noticed on kenvue, i don't want to be too critical because they do appear to be moving in the right direction. he didn't say that about pfizer. i guess the question, when it comes to david, pfizer is whether management is onboard with what he views as the

problem, the discipline problem, is that still going to determine how far they fight to see whether they can get new management >> again, echoing him, i don't know, sara it certainly seems to be where a lot of the focus will be, and i think to be fair, you can make assumptions about how productive a particular drug and a particular portfolio of a company you're buying will be and be wrong it's not an exact science, you know, oftentimes, but to the point he was making overall. there was an enormous windfall from covid in terms of free cash flow generation at the company they use much of it on acquisitions and mr. smith's point is those acquisitions have yet to show at least based on the estimates of the many estimates who follow the company is they'll deliver on the promises of the time. >> good stuff, david plenty more to come, of course, including the earnings movers you might have miss. a quick reminder, tune in for

special coverage on election night at the nyse giinbenng at 7:00 p.m. eastern time we are back in a moment. what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

>> a lot of big earnings movers this morning

dom chu is tracking them at hq >> yes, sara let's start with shares of verizon. dow component, a big name, that stock is slipping 4% after missing estimates on revenues and beating on the third quarter earnings per share ceo hans vesper has touted frontier communications as setting verizon up for growth. verizon shares up there. and philip morris up in the third quarter, up 8% now the tobacco giant's combustible division, for example, cigarettes bringing in slightly lower revenue than expected and smoke-free revenues coming in higher than expected and seeing higher volume in nicotine pouch products and those zin products. genuine parts plunging 18% after posting a big earnings miss in the auto industrial parts maker said it saw continued weakness in europe and its industrial business and revenue for the quarter was roughly in line with estimates and a big mover and

18% for parts and nucor is up after its third quarter sales beat estimates, but fell from the same time last year. the average sale price dropped by 15% and the company says it expects headwinds to continue into the following quarter see those nucor shares is down 7.5% carl, i will send things back to you guys >> dom, thank you very much. slightly off the session lows and the dow is off to 110. money movers after this.

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

♪♪ data science can help address some of the biggest challenges in financial markets. if we focus on the mortgage market and follow the life of a loan from origination right through its pricing in the capital markets, our data science capabilities can provide a deep level of insight. at ice we have extensive data sets, especially around three pillars. the property, the mortgage and mortgage performance. this trifecta of data and its history is a bit of a data scientist's holy grail. ♪♪

♪ ♪ good tuesday morning welcome to "money movers." i'm sara eisen with carl quintanilla live from the new york stock exchange program today, profit and tech, how to think about the recent rally and the outlook for new highs. >> parent company of fiserv is with us. the stock is a big winner this year, up almost 50%. plus philip morris topping after raising guidance and helping to lead the s&p break out of the quarter with the company's ceo this hour. >> it's been a very busy morning with corporate earnings and rising yields although right now the markets are limiting their losses to narrow ranges. the dow is