tv Squawk on the Street CNBC October 3, 2014 9:00am-11:01am EDT
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of next year. >> okay. >> guys, thank you for being here on this friday. >> thank you very much. >> smartest voices. >> buffet, greenspan, kudlow, stern? doesn't get better. >> have a great weekend, everybody. "squawk on the street" joins us right now. ♪ this is how we do it >> good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. 248,000, the headline on the jobs number. good revisions. unemployment at 5.9%, the first five handle in more than six years. pre-market likes it. we'll cover it from top to bottom. our road map begins where else? with the jobs number. 248,000 in september, above estimates. unemployment to 5.9%. previous months revised upwards. dow up almost triple digits.
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>> jm morgan victim to one of the largest cyber security hacks ever. 76 million households and 7 million businesses affected. >> new clashes in hong kong as protests take a violent turn. counterprotests storming the heart of the sit-in. >> bob iger till the middle of 2016. disney extends his contract. >> september nonfarm payrolls jumping 248,000, above forecast of 215,000. private sector added 236,000 jobs. august payrolls revised upward. unemployment rate down 0 .2 to that six-year low of 5.9%. labor force participation rate did fall slightly. earnings were a goose egg. if you're looking to quibble here, might be service is made up of almost everything. hard to find high-paying manufacturing jobs. >> i think this number did one thing which said those who think
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that the economy peaked over the summer in employment are wrong. i think that is really important. that had become a consensus of late given the fact that the last employment number was so bad, and given the fact we hear about peak oil. you've got to take the real negative scenario off the table. this number is too strong for me to believe that hiring peaked in this country. that's been the theme behind a lot of the declines in industrials that have largely been based in this country. doesn't impact the negative case about industrials based here that are really global. >> you have said, watch crude prices and oil companies that may not be hiring as aggressively if it falls below $90, which it's back above today. >> there are 13 states directly impacted with the price of oil and gas. you can relate one for one their employment, percent employment.
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if you see oil crack $80, you are going to see a very big slowdown in hiring as projects have to be pulled back. they have to be. there's a lot of budgets that include oil going to $100, $110. this is a saudi issue. the saudis decided to cut price. they are not trying to -- people say they are trying to take share. they are trying to wipe out our industry. they did it before. they are doing it again. they're our pricing umbrella. if they want oil to go down to $80, they can shut down our industry. you say, wow, why would they do that? look at what they did in the '80s. look at other times when oil went up a lot and we started drilling a lot. >> oftentimes oil went down, they cut production. >> right. >> in this case they're not. why aren't they? >> they aren't. they aren't cutting production because they know it's $70, $80. the big projects come in question. the peripheral product,
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colorado, montana, new mexico, those become in question. some of the californias come in question. >> they want to do that? they want to force us not to develop more oil as we go on our way to becoming the largest oil producer in the world. potentially at some point and exporter. >> i'm embarrassed the coverage doesn't say that because that's the truth. >> jobs number. average hourly earnings. 2% year over year. unchanged this month. >> you see wages go higher, the part of the market that is domestic would be other than this new ebola factor would be hard to contain. we would be going up so much. you would start seeing the great bifercation of oil waiting. the rest of the world has to send money here, not in our bonds, but stocks. >> we are 224,000 jobs now for three-month average. 220,000 for the year. that is above last year's
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193,000. we are at 5. the first time unemployment rate falling below 6% six years. janet yellen, the fed. come on, man. this has got to be it, doesn't it? isn't somebody ringing bell? >> there is no wage growth. >> they've already given you a plan. they are stepping back. it won't matter. >> there is a little bit of wage growth, isn't there? >> 2% is keeping pace with a 1.7 cpi. >> most people are playing for dinner in this country. we have good jobs and paychecks. >> they've been focused on the unemployment rate. qe's over. >> then bernanke can't get the mortgage. people are going to say that is anecdotal. frankly, the fico scores, you have to have plus 700 to get it. there are reasons we haven't turned on the jets in this country. i think the idea that the fed has to do anything other than what it's been doing.
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larry kudlow, with be a unbelievable analysis how janet yellen talks dovish -- >> but will be more hawkish. that was interesting. >> there are things larry kudlow knows better than anyone else. i worked with larry for many years. when he speaks about the fed, it is not idle or anecdotal. >> we both noted it. >> it's brilliant analysis. >> if it ends up being true, we'll find out soon, right? >> i never bet against larry kudlow when it comes to fed. anything he says about the fed. he knows too much. >> now that the jobs number is out, did you nail the number? this week we asked you to tweet us your predictions for september payrolls. the lucky winner will receive this shark tank t-shirt autographed by the "squawk on the street" team. we'll announce the winner later in our show. later, we'll get white house reaction to the jobs number from jason fuhrman, chairman of the president's council of economic
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advisors. >> jpmorgan chase exposing a data breach compromised customer information pertaining to 76 million households and 7 million small businesses. the bank says there is no evidence account information for affected customers was compromised during the cyber attack. adding it hasn't seen unusual customer fraud related to the incident. as seems so often the case with these breaches, we only learn the facts later. they almost always tend to be much more than we were led to believe initially. in the case of jpmorgan, differentiating it from home depot. this is an incredibly large financial institution holding my money and your money. i don't know about yours, carl. >> different bank. i feel for you guys. >> does anybody think about taking their money out of this bank as a result of this? >> i told you i have someone
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look at every single activity. >> people are agreeing. your focus on reconciliation in your accounts is important. >> it wasn't something i dreamed up. it's from mark maclaughlin, ceo of palo alto networks, a stock i've been behind. told me, how often do you check your account? i get my statement. he said, how many times a week? well, now i pay someone to check. i don't have the time to check every single piece of activity. i have someone who does. it didn't matter what bank. one of the things he is talking about, he said they have the most sophisticated, there isn't anyone i know who disagrees they have the most sophisticated stock. they have 500 million revenues. think about that. how much little is spent by banks? >> and how much more is going to have to be spent? >> are there any bank one systems being used? >> i think there may be, yes. we talked a great deal about
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technology platforms and the change over time. i don't know is the answer. do you know the answer? >> i just know that everything i understand about the underspend throughout the country is amazing to me. >> in this case, of course, no money has yet, no accounts have been compromised, according to jpmorgan, nor social security numbers, at least that is what they are telling us. >> passwords and social security numbers, they may have gotten phones, addresses, e-mails. raised questions why they can't do more damage. >> unless they want to come back. they were able to go through a lot of the different networks and servers and underpinnings of technology to a certain extent. it doesn't mean they haven't learned a great deal for the next attack. >> right. mark maclaughlin said something interesting. i said how much is there? he said you only hear about the ones that aren't very good.
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you never hear about the highly sophisticated attacks. why? they are the ones going on right now. you only hear about the guys who don't know how to do it well. there is a lot of cyber theft going on every day under the radar, and it is a very big business. he is saying that the banks aren't necessarily as quick to recognize it. >> they have to spend a lot more money. >> right. >> this is a board level issue. it has been for quite some time. if i'm one the boards, how much are we spending and how much more to make sure our customer base is confident? >> palo alto says it's total board level. they've got technology where they've been able to find the threat from 28 minutes down to 15 minutes. we have $500 million in revenues. it should be 500 million in revenues from every major bank. i'm saying how underinvested people are in this, is my take
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away. he is saying you only hear about the hacks that are stupid. the hacks that are smart, obviously, we haven't caught them. >> halfway around the world, hong kong protest leaders calling on their government to immediately appropriate organized attacks against pro-democracy demonstrators who have been clashing with beijing supporters. susan li is in hong kong with the latest after a rough few days. >> that's right. has been a rough week. let me show you the latest on this friday. it looks like the city has gone back to business with negotiations set to take place with the government and protesters. what is important heading into this weekend into a new week is whether or not the protesters hold this stretch of road which is the main artery that heads to the central business districts. the barricades are still up. protesters still hold the streets. there have been squirmishes between the pro-beijing camp and
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pro-hong kong camp. not just taking place here but in the other protest sites in hong kong. the protest leader is calling for a convergence to this main protest site. he says let's make this the main battleground. as for the city of hong kong itself, it did get back to business today. we had bank branches reopening after being shut down after the violence early on monday morning. then we also have the stock market opening, as well. after an initial blip downward, we had a sell-off. the markets did maintain some gains. we did have a slap on the wrist from beijing. they stopped issuing these travel permits for chinese mainland tour groups ahead to hong kong. we saw that impact casino shares and retailers, as well. back to you in new york. >> thank you very much, susan li in hong kong.
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the robert iger era in disney is far from over. chairman and ceo signing a contract extension again. we'll explore what that means for the company and its shareholders. white house economic advisor jason fuhrman on the stronger than expected jobs numbers in september. 248,000 and jobless rate at 5.9%. charlie, the demand on this network, it is increasing by the second. it's crazy, huh? and people are relying on it more than ever. we cover more than 99% of all americans. i know, i can't imagine living without it. it's a place where people can come share knowledge and ideas. it's beautiful. that's deep charlie. my selfie just hit a hundred likes...(gasps) a hundred! at&t is building you a better network.
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the jobs number leading to gains in the premarket. yesterday the biggest reversal in the russell in eight months after dipping into correction territory. s&p is about 3.6% below its all-time high. it did invert by the narrowest of margins that four-day losing streak. we still have not had one this year. >> disney announcing it extended the contract of chairman and ceo bob iger by two years through june 2018, calling him the architect of the company's current success. the 63-year-old iger was expected to retire in 2016. shares have more than tripled during his tenure as ceo which began in 2005. 300% plus versus 92% for the s&p. >> he's been stellar. there is no other way around it. not that anybody doubts it, i think. if i'm that board of directors, i want him to stay as long as he wants to stay. i obviously want to be focused
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on succession. the cfo, tom stags, who if either one with another three years almost to go? excuse me, 3 1/2 years to go. maybe i start looking within the organization at younger folks. maybe those guys think it's not going to be my job. the key for investors is iger is staying. a couple of guys yesterday were buying the stock based on that. >> i was going to say it's a reason to buy. i'm so glad you pointed that out. this has been my strongest recommendation since the start of the show. this is the stock you buy for your kids. buy disney for your kids. soon as your kid is born, buy disney. a lot based on the fact iger reinvented this company in a way it does have -- we talk about this 100-year view some people have? bob iger has created a multiple franchise, not unlike procter and gamble, where you have many
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billion dollar franchises. the parks. he made it so they are the most efficient, fabulous places to go. he has thought about -- >> and spent a lot of money doing it. >> yes. he thought far in advance having people take many different jobs. i remember it wasn't that long ago somebody was saying is he overpaid? >> remember, all the skepticism over pixar and marvell and lucas films. >> just ridiculous. he is the most bankable ceo in america today. >> he is 63. >> he looks 50. that bothers me. >> there is no mandatory retirement age for ceos at disney. is it unthinkable he goes beyond 18? >> i hope they have the foresight to recognize the guy is going to look 55 in 201. he probably wouldn't do that. he probably feels, i've got to give someone else a chance. he's that kind of guy. >> speaking of which, he is expected to name a coo in 2015, which according to some would
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lend visibility to this succession plan. >> i would hope he would come back to new york and run for mayor. apparently that's not going to happen. >> he is the most admired guy people talk about. >> i do want to get to news that came out on medtronic. with the change in rules related to inversions we got from treasury, if you recall, last week? some questions there. they announced they intend to use approximately $16 billion in external financing to complete the acquisition of covidien. all terms and conditions reached between the two companies in june remain unchanged. there had been a concern, if you remember, the merger agroemt itself had some provisions based on changes and legislation
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related to inversions that led some to believable you could see this deal, a, recut or, b, canceled as a result of the change in the inversion rules from treasury. that was not legislative in nature. that is not going to be the case. medtronic intends to utilize new financing expected to be in place by the closing of transaction. they say upon completion, each outstanding ordinary share of covidien converts to $19 in cash. originally they were going to use the cash overseas. now they will finance it separately because that was impacted by the change at treasury in terms of their ability to access that cash. again, they are talking about it being strategically motivated, hence, nothing changes. that is a sigh of relief you're seeing. the spread closing in the deal. now they say they'll finance the
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$16 billion elsewhere. >> abbey shire? >> they did not have any provision in the merger agreement. to change it under uk takeover laws, many believe that will remain as-is, without any change in financing. >> salix? >> salix as i reported yesterday is done with cosmo. they are citing inversion. the question is what salix chooses to do. talks with allergan cooled. i reported first on activist having some interest. we'll see how that progresses. >> excellent reporting. >> thank you. when we come back, cramer's mad dash as we count down to the opening bell. we'll look at the premarket. all the things we haven't talked about yet. the dollar on another tear. gold has gone negative for the year. and that jobs number at 248,000. .
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you are going for "usa today." >> i want to talk first. you have to take a deep breath before you talk about this topic ebola. it is so easy to scare people and that is not what i want to do. that's why i refer to someone else. ebola upsets exxon drilling plan is the "usa today" story. this is not about nigeria. what i'm pointing out here is oil today is down again. it did bounce off $89. it's coming down again. this is amazing. why? there are 3 million barrels a day that come out of nigeria. nigeria is not that far from
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this area. if you can imagine a situation where 3 million were to come offline because of ebola, you would think something would move the price of oil up. what is incredible is there must be so many hedge funds who are long oil. i'm not kidding. it seems to be this liquidation trade every day because the news is so incredibly bad about supply, the rest of the world, not our country. saudi production was trimmed by 300,000 barrels. i'm saying if you took nigeria offline, the worst case -- >> that is not going to happen. >> no. i'm saying you would think someone would be more worried about getting oil. in other words, oil is kind of still in a bit of a freefall. the number of areas, russia, biggest, exxon not drilling there. we know the middle east total turmoil. west africa, another big producer. all the areas we are used to
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seeing a lot of oil coming from, venezuela, they are all in jeopardy. oil should be at $110. but the world is slowing away from the united states. i think hedge funds own it. >> oil is down. gold below $1,200 the first time in some time. that dollar very strong. how about the stock market? we'll find out. it's a fresh approach on education-- superintendent of public instruction tom torlakson's blueprint for great schools. torlakson's blueprint outlines
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how investing in our schools will reduce class sizes, bring back music and art, and provide a well-rounded education. and torlakson's plan calls for more parental involvement. spending decisions about our education dollars should be made by parents and teachers, not by politicians. tell tom torlakson to keep fighting for a plan that invests in our public schools.
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see how startup-ny can help your business grow at startup.ny.gov you are watching cnbc "squawk on the street." the opening bell in about 60 seconds. if you are just waking up, the jobs number not bad. 248,000, well above expectations. jobless rate has a five handle the first time since july 2008. 5.9%. the premarket likes that. the dollar likes that. gold oil and a bunch of other currencies don't. >> copper is up 3 cents. trying to grasp. commodity liquidation story is one of the most amazing stories. iron ore. look at clx. if you are in that business right now, your return on a
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dollar is a negative return. >> we'll talk about some of the stocks you say are viable. some include those that are buyers of commodities. >> there's the s&p at the top of your screen. the final opening bell of the week here at the big board. celebrating its ipo today, paramount santol. over at the nasdaq, yodlee, also celebrating its ipo today. you might want to keep your eye on the ten-year. back to 2.46. back to 2.39 wednesday? >> we are the safest place on earth. >> compared to spain or italy, we are a bargain. >> we are a bargain. i think there are people who continue to call for federate hikes. i worry about those people.
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they don't understand we have disinflation. we don't have wage growth. a lot of henl funds tell me how could you not call for 4% fed funds rate? we should not have 29% unemployment here. you create recession, make a lot of money for few people short bonds, then there are 313 million other people out of luck. i don't think that's a good trade. >> no. although that said, one could argue rates should start heading higher, begin the fed is poised to raise them at some point, the next six to nine months. >> they should be a seller of bonds, not a buyer of bonds. treasury of the united states should take advantage of this one in a million situation. >> stop it already. they are not going to do it. they don't listen to you. geithner didn't listen to you. >> i said jack lew, stop it. he said no. then he did it.
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brief me. i say it here, it doesn't necessarily come out there. >> not that i disagree with you. >> they don't do it. >> it costs them a short-term hit. >> they did go ahead with rules on the inversion. i'm not just speaking in some dark closet. >> if you are spain, you're selling ten-year money at 2.12. who is buying that? >> i've been on boards where i have to run funds. it's like, i got on treasuries. . >> a look at some of the leaders this morning. some of the airlines bouncing back. some of the banks, too. i think people are beginning to think what if rates start to climb back. did you not remini of those last night. >> rates still aren't going up
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enough to make it so in two weeks when we hear from the banks, they will say the right things. i'm listening to what i think i'm hearing on the conference calls. at 2.5 we don't make enough. you can buy the banks here. if the rates don't go to 2.67% and you are going to hear everything you don't want to hear. i'm trying to make it so you're not juked. you are in, you're out. >> you named several companies you thought are buyable. these are domestics, not hurt by a stronger dollar, that can't be hurt by rising rates. >> there's plenty of companies like that. >> darden, jack, domino's, tyson, macy's, cost, kohls, google, under armour. >> how did you get that list? yes. celgene. i divide them in secular growth
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mode. they are gigantic fires on commodity. darden is doing well, and i like jack. all these companies depend on one thing. i've got to put it out there i hate to do it. you want ebola contained. why do i say this? i go on twitter, my thesis and people from dallas are saying, jim, come down to dallas and you'll know you are not going to see that store traffic you think. that to me smacks of panic. that's the only wild card. otherwise this employment number fits perfectly with my thesis. you have to be long domestic. i am going to say that ebola is going to be under control. >> i think and hope that you are right.
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>> let's get back to this medtronic story. the stock is up sharply. medtronic up 4%. take a look at shares of covidien. the company put out a press release under which medtronic is changing its source of cash for the deal. originally, it was planning on using its overseas cash, $16 billion, to pay for part of the consideration in a deal that calls for it to pay $35.19 in cash and 0.96 of those shares for each share of covidien. it's not changing the deal in consideration. it is still going to be inverted. it will become an irish company after it completes the deal to buy covidien. not completed until next year. they are still waiting for anti-trust approval in china. that takes quite some time these days. importantly, the transaction they are saying still expected to be accretive to medtronic's
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cash earnings in fiscal year 2016. that is the first full fiscal year that the two companies will be together and what they call significantly accretive thereafter, everything is generates thereafter, it will be able to use in any way it chooses to and not have it be taxed in the u.s. it was the ability, the change by treasury and ability of these companies to use their offshore cash to finance the deal that forced them to change the way they are going about financing the deal. most importantly, investors are relieved, those who were betting on it or perhaps worrying it might break apart are now saying, okay, here we go. i have more certainty, hence the spread closing dramatically. medtronic just going up. >> we don't focus on holders. the people who own fannie mae that day was a bad day. fannie mae blew up a lot of hedge funds. >> you were right. that was a bad, bad day. >> that was hedge fund
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liquidation you felt the rest of the market finish yesterday. this is going to make it so hedge funds in panic on these issues will feel emboldened. when buyers are not under liquidation strain, you are going to see a better market. we underestimated the power of a couple of big hits to hedge funds who are just like levered to the gills. >> i agree. you said it the other day. i said really? the market caps? >> natural gas. there is a hot money and a bunch of different trades. it's just blowing up, iron ore, that gas, hot money. see you later. >> let's get back to the jobs number this morning. the rebound, of course, in large part due to that. the jobs number for september well above estimates. 248,000 jobs added. unemployment rate down below 6% the first time since the middle of '08. let's get the first reaction of the white house. jason furman, chairman of the
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president's council with economic advisors. great to have you back. welcome. >> good to be here. >> it's a good number. the market likes it. a lot of reasons to be encouraged. what do you make about the lack of any evidence that wages are on the rise? >> first of all, i want to take a moment on the fact that, if you asked me, i wasn't sure we would ever see an unemployment rate with a 5 in front of it during the obama administration. you look last year, most forecasters were saying we had to wait till 2017 to see this. this unemployment coming down at nearly the fastest pace in 30 years is really good news. there is still a challenge translating those gains for people. wages are that biggest challenge. they bounce around from month to month over the last year for production in nonsupervisory. it's grown more quickly than the year before that and more quickly than the year before that. you are seeing a trend affirming
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wages we need more wage growth, no doubt about it. >> services, obviously, making up the lion's share of the jobs created. manufacturing really hasn't done much since july. what's going to change that? . >> you see manufacturing hours at the highest since world war ii. july was very strong. august and september. overall, manufacturing has been a big source of job growth in this recovery. >> jason, i hate to conflate these two talking about money and illness. at the white house in meetings, ebola must come up. what are you doing to explain say what sars did to economies in the southeast, and trying to get a sense of what the threat assessment is to the labor picture. >> right. it certainly comes up. it's something my colleagues are extremely focused on and have
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been from the president on down, made a major effort to deal with. in terms of the u.s. economy, i don't see it having a meaningful impact on our economy. i think it's a real public health issue for the world, for the united states. but not economic problem we face. >> we see these protests in hong kong. our government stands uniquely around the world for free speech and freedom. that's the american way forever. do we have to worry sanctions might have to be put on the chinese that they do something violent to shut down these protests for freedom in hong kong? >> i don't want to start making policy here on your show. it's important for people to be able to express themselves. >> are you concerned about the rise in the dollar ostensibly in
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some ways a positive sign, but makes things harder for exporters. and could have an impact on the economy. >> i'll leave commenting on the currency to the treasury secretary. i will note that this morning we got the trade numbers and they improved for, i think, the fourth straight month. exports were very strong in august. they continue to represent a disproportionate part of our economic growth. i would hope and expect that to continue. >> manufacturing, not that big a part of the surge here. we've been thinking, given our costs, for example, of energy and what natural gas has meant in that area, that we would start to see a lot more. why haven't we? >> i think it bounces around from month to month. you saw july unusually strong in manufacturing. the broader pace as we've seen 700,000 jobs added there. the workweek is one of the untold stories in manufacturing. it's nearly the highest on record and recently was the
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highest on record since world war ii. those gains are in a variety of industries. actually manufacturing has been a bright spot in our economy. >> finally, participation rate lowest since '78. are we going to see that month after month from here into eternity? >> i think there are two big things going on, demography. that will pull us down for quite a time to come. that is being offset as people come back into the labor force, but just the fact we have an older population, more people of retirement age, that just means we are not going to get participation rates back way up from where they are now. they are likely to be roughly stable for some time and start declining after that. >> jason, thanks for your time. an important jobs number. jason furman joining us from washington, council of economic
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advisors. bob pisani is on the floor with the dow up 85. >> great start to the morning. nonfarm payrolls report moved everything up. let me show you the major sectors. when you see financials leading, industrials leading, consumer discretionary, materials leading, that is a risk-on kind of day. dollar index did spike up on the nonfarm report. that usually puts pressure on commodities. not completely today. it's been an ugly week in commodities. brent at a two-year low. i've been watching the base metals, aluminum, nickel, zinc. brent down about 5%. nickel down 4%. copper 1%, gold down about 1% on the week. you see the laggards reflecting the issues we've been talking about. biggest decliner, oil and gas
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stocks, the xop. china weak, steel stocks weak. china is closed today. hotels and airlines are down on ebola concerns. there was primarily one day we saw that. the stock market reflecting the overall issues. still, today is pretty good. you want to see my indicator of risk on, it's in high yield. high yield securities, big move to the down side, stabilized yesterday and up today. there is the metric people are using for risk on, risk off these days in the short term. we have an ipo today which is in a very interesting business. take a look at fmsa. this is the second biggest provider of frac sand used in drilling. they priced 25 million shares. they were going to price 44 million.
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priced at $16. price talk was $21 to $24. this deal has been practically cut in half to get it done. this is a tough time to come into the fracking business and frac sand because of the price of oil coming down so much. if you look at their competitors, hi-crush, u.s. silica, they work in this frac sand area. it's been an ugly week. when you see oil prices dipping lower, it may make some wells less feasible. good news is the pricing right now, the indications are at $16 to $18. it looks like this is going to open above that initial price. still, a very tough time. it shows how very much dependent ipos are on market timing. this is one of the toughest weeks to have a frac sand company go public. we are up now 122 points on the dow at the highs. >> let's get to the bond pits in
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chicago. check those out with rick santelli. >> good morning. we are obviously seeing higher yields on the better than expected data before the election. if we look at tens at 2.46. they are up three. look at five versus 30. that is a drop of five basis points. that is large which puts the fives to 30 at the flattest level since january '09. what is that speaking to the marketplace? most likely, tightening should be occurring, is what it's saying. let's look at the parts. look at an intraday five. look at it in deference to its unchanged line. look at the 30. see the difference? if we go back to that 10-year, technically shows a build of yesterday even before the data came out. many traders were talking about
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that today. if you want to see what's going on in 10, don't look farther than starting on september 1st. you can clearly see the left and right imbalance there in terms of where we bounced from. a lot of significance to that 2.44% area. euro versus the dollar had a big drop on the data. a fresh low going back to august 2012. if we want to look how that impacted the dollar index, step back two more years. basically, go from august '12 on the euro com. the dollar index does include the yen, back to the summer june 2012. back to you. >> thank you very much. when we come back, a lot more on the jobs number and the state of the recovery. we'll hear with jan hatzius has to say about that.
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all in the green as the index is up 146 points trying to undo the damage. still one of the worst weeks for stocks since may. that's better than yesterday when we were on pace the worse week in two years. >> yesterday at 11:43, europe closes, sellers dry up. i looked at all the news flow between 10:30 and 11:30, there
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was nothing. just a liquidation that ended from europe. no news to talk about the pivot. the pivot lasted. market's been higher. >> a lot of speculation about a beta chase in the fourth quarter. tom lee today saying when the fourth quarter begins with a 1% drop, it's up for the quarter 92% of the time. >> you want beta chase, gm super cruise. this is a terrific note from citi. global eye is the number one name, gopro, too.
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time for cramer and stop trading. >> the name my charitable trust has been buying and is tough to own is walgreen. they had numbers september same-store sales. 7.9%. potential was 5.3%. pharmacy same-store sales 8%. this is the first real beat they had in a long time. there is good news about generic
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head winds dying down. this stock has been, maybe when you compare it versus cvs one of the worse performers. i point out this is the good news that the bulls of walgreen were looking for after a flood of bad news. >> stock down 14%. >> when they didn't do what the hedge funds wanted, a lot of pull. >> they had operational difficulties. >> oh, did they ever. they overestimated what they would do by $1 billion. cfo out. a lot of reasons not to like the stock. >> what's on tonight? >> a story amazing. hector hoyos is about identification and your atm. gary evans is at the fulcrum of a lot of different issues. magnum hunter. they have one of the largest wells in west virginia.
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who is the largest holder? relational. we have relational, one of the largest holders pulling back because of the problems at that fund that are now well known. we've got a guy who delivers. we've got one of the worse oil and gas markets ever. this stock has been headed down, down, down. should it be up, up, up? >> great story. >> one stock emcompasses so much. >> that will be fun. good weekend to you. jim cramer and "mad money" at 6:00 p.m. >> when we come back, jan hatzius. stion: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach.
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solidly above 50. back to you. >> thank you very much. for more on that number and the jobs number earlier today beings let's bring in our senior economics reporter steve liesman who has been working hard on squawk today. >> these are good news this ism services number. did tick down but remains at a high level. new orders still above $60 at $61. employment picking up to 58.5. prices ticking down. exports up big which is interesting given what's happening with the dollar. imports up, as well. inventories sentiment up also. this is a good number for services. it's the bigger part of the economy. i'm getting a lot of unusual, call it amusing giddiness on the commentary by economists. maybe it reflects relief at that number. was a smart bounceback from last month's big disappointment with the upward revisions taking the sting out of the august number.
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bank of tokyo saying, yeah, baby. okay. let's stop spinning the tale of he would and dread over the economy's prospects in the months ahead. over at bmo, saying, that's more like it. strong rebound in hiring suggests the retains good momentum. here are the numbers, 2.48, better than expectations. revised july and august almost 70,000. unemployment lower than expectations, 5.9%. that is the low end of the fed's range. average hourly wages is standing out as being unchanged. still no sign of acceleration in wages, which is what janet yellen is basing her forecast n on. here is where the jobs are. retail up 35.
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leisure, hospitality, strong place for job growth. construction up 16,000. government, up 12,000. the fed is going to note the strong job growth with the lack of wage growth. they say at some point the fed may have to conclude the unemployment rate is a reasonably accurate measure of the amount of slack. most economists reiterating their call for a mid 2015 rate hike. a few more reports like this and that could change. this will keep us on track for mid 2015, especially what we are seeing with the wage data not accelerating. back to you. >> at least a change in the language next time around. let's get more reaction to this morning's jobs data. joining us, david kelly, chief global strategist with jpmorgan funds and jason westbury, chief
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economist with first trust advisors. >> this is a strong report, broadening of the labor demand. what is your take away? >> exactly that. i think the economy is doing okay. we have about 3% real growth for the rest of the 2014. these numbers fit right within that. real quick, lots of people look at these wage data. wages up 2% from last year. i'm not saying that's strong. the workweek, the hours that people are working are up about 2.5%. when you put both those together, that's the income people are earning. that's up about 4.5% from a year ago. that says consumption should stay pretty strong. should be 2.5%, 3.5% growth the rest of this year. >> david, you've been suggesting the economy was stronger than people thought for a long time. before we get sidetracked into conversations about the fed and dollar, what does this report
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tell us about sectors likely to do well moving forward? it's interesting the greatest jobs growth is coming from professional and business services at a time when we also have news that the services sector, services and industrials are increasing their dividends at 16.5% this year, faster than tech, faster than the broader market. does that win going forward, is this an indication that is where the growth is and where investments should be made for people sitting at home? >> not necessarily. that is where the growth is right now. construction industry is still being held back a little bit by various -- by the lack of mortgage availability. broader point is this labor market is tightening. this is about structural versus structural debate. we are seeing labor force come down. number of discouraged workers come down. number of people part-time for economic reasons come down.
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the unemployment rate for someone with a college degree are in the united states today is 2.9%. we are running out of skilled workers. >> i noticed that. >> initial unemployment claims now have been below 300,000 for seven out of the last 11 weeks. they are only 0.2% of all people employed. we are at that frictional bottom. this is about the lowest initial claims we will see. that tells me wages are going to start to rise. there is going to be some wage pressure here in the next 12 months. >> with that set-up from both of you, it seems we are at an infliction point where positives outweigh the negatives. it's not a perfect report, but how does the fed justify 0% interest rate if we are below 6% unemployment rate? last time was 2008 with 2% interest rate. >> i think the members of the fomc are gradually adjusting
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their forecasts. i wouldn't be surprised to see a rate hike starting as early as march. the real question is wage growth. what is happening here, this is almost a stealth recovery in the labor market where workers haven't recognized this nor have employers recognized how tight things are getting. the next percentage point down, everyone will realize you can find good workers easily and will see a significant pick-up in wages in the next 12 months as that comes home to workers and employers. i think this is a tightening labor market and will push the fed to tighten. >> i don't understand why small caps are not a screaming buy. the russell has been pounded this year. we know that against the s&p 0 500. small caps are not exposed to a stronger dollar. they are exposed to growth in this economy. the fact they've not rallied leads me to this question. is what we are seeing today in
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the market the strong economy, basically baked into the rallies we have last year and the year before? >> no. i don't think so. if you look at the behavior of small caps in the business cycle, they tend to jump out of the gate fast. once you know recession is over or ending, then there is a big sigh of relief in small cap land. these companies could have been wiped out by recession. small caps have been leading the charge up to this point. i think this is just a normalization where large caps that were cheaper historically relative to small caps are doing a bit of a catch-up here. >> big day for the markets here. situation in hong kong escalating. protests shut down big parts of the city. cnbc susan li has more on the situation in hong kong. >> as you can see, the streets of hong kong are a little bit
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emptier this friday. what is important for this movement to maintain its traction heading into this weekend and new week is for the protesters to hold this main stretch of road. this is the main artery that heads into the business district here in hong kong. the protesters still pain tan control. the barricades are still up. we heard from the occupy central protest leader himself calling for other protesters dotted across other parts of the city of hong kong to come right here and make this the main battleground for this movement into a new week. i should highlight there have been isolated clashes taking place in the city between pro-beijing crowd and pro-hong kong crowd. these are isolated incidents. nothing on a mass scale whatsoever. we did see a tick back to business with banks reopening
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and the stock market, as well. beijing stopping issuing travel permits for chinese groups to the city. >> susan li in clock. when we come back, another american sickened with the ebola virus. this is an nbc cameraman in liberia. family members violated an official request not to leave home. a live report from texas. dad,thank you mom for said this oftprotecting my future.you. thank you for being my hero and my dad. military families are uniquely thankful for many things, the legacy of usaa auto insurance could be one of them.
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gold miners dropping in today's trade as gold features continue to fall. the gold index having its worst day since september 27th. >> as the dollar soars, the u.s. ebola patient's family is under quarantine in dallas as he faces criminal charges in liberia as an nbc cameraman covering the outbreak in liberia tested positive for the virus. meg is live in dallas with the latest. >> good morning. we'll start with our colleague the nbc cameraman who tested positive for ebola in liberia. that was ashoka mukpo hired tuesday to work with dr. nancy
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sneiderman who was in liberia covering the story. we hear the cameraman will be evacuated back in the u.s. to receive care here. dr. sneiderman and her crew will return to the u.s. and place themselves under quarantine for 21 days. she spoke this morning. >> we shared work space, vehicles, we shared equipment. everyone here is hyperalert. we have not been in close proximity, no one shakes hands. there is no hugging. i do believe our team, while we are being hypervigilant, we are at very, very low risk. >> mukpo is the fifth american to have been infected in west africa and flown back to the united states for treatment. liberia is the hardest-hit country in west africa with this epidemic. moving on to dallas where the first u.s. patient with ebola is being treated, we are waiting to hear more details on his status.
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he is in serious condition. officials are monitoring all his contacts. there could have been as many as 100. they identified a handful who may have had close contact. they are keeping four people at home under an order to stay in that home and not leave or receive guests. we hope to hear more today in a cdc press briefing later. >> meg, do you have an idea what time that briefing might be? >> yesterday was midday about 1:00 p.m. eastern. we have not heard yet if that's when it will be today. we'll hope to hear more and update you guys. >> thank you very much. meg terrell live from dallas. fed chairman ben bernanke's real-life financial problem that was mistaken for a joke. later, jan hatzius will join us live on the economy. for trading never stops.une
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stocks in rally mode after today's jobs report came out better than predicted. let's bring in art cashin. so much to talk about with higher yields, stronger dollar and stronger stock. those 100-point swings for the dow are back. >> i would say 50% of this is relief about europe and the other 50% is about the jobs data. the wage portion of jobs data wasn't all that good. it is raising questions about has the fed begun to fall behind the curve? that's, i think, why you are seeing yields move up. >> why do you say relief about europe? >> yesterday was absolutely horrendous. italy was down the equivalent of 660 points on the dow.
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>> more than 3%. so you had real carnage. then you get some relief yesterday afternoon. i think some of the selling wasn't just influenced by europe. i think some came from europe. those markets became so illiquid people were forced to sell on the american markets. even before the jobs data came out, you were up basically the equivalent of 70, 80 points from the dow. then with the jobs data, you had icing on the cake. >> i do want to ask about the dollar. that is the exciting story right now. new four-year highs for the dollar index. across the board for emerging markets. what about u.s. equities can rally along with the dollar if this strong dollar mode is here to stay? >> i think initially there is that symbiotic benefit. what you are going to see is if it continues, you are going to
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get pressure in things like the s&p because of the multinationals. when are they going to be able to convert? >> i don't get it. this is the economy finally really delivering. we've got the fastest pace of growth we had now for ten years since the height of the last boom. yet the market isn't rallying on that. it's rallying on concern more -- it's a fed conversation. whether they are going to raise interest rates in the summer of next year. that seems wrong to me. why wouldn't the economy deliver as it's delivering, do we not rally gung-ho through the session? >> the concern is if, as i just said, if the perception grows that the fed is behind the curve, the fed has to move sooner or the market may seize control from the fed. you are going to see rates rise quicker. so there is some anxiety that the unintended consequence of prosperity breaking out might be yields moving up faster and sooner than anybody thought.
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>> are you seeing these historical numbers that have 1% down day to start october means good things for the quarter almost all the time? >> remember also, a big down day on october 1st was almost always followed by a big rebound on october 2nd. we didn't quite get that. a lot of seasonals and other things are being strained by the mix of the markets here in europe. >> you mentioned the curve. yields are jumping at the short end. the two year. the ten year, but we are still 2.47. so behind what curve? it's still a very low interest rate story. >> it is a low interest rate story. take a look at europe. there are bonds of much lower quality that are selling at lower yields than here. somehow at this juncture is going to, i think, wear on the
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market. >> the reason they've been driven so low because draghi has again and again hinted we'll get sovereign qe. do you think yesterday was a turning point, that he won't be able to deliver that and the market will realize that over the next year? >> i said here, i don't think he would ever do qe. >> that's why the yields have been driven so low. the rest of the market does believe there is sovereign qe. >> he has to do something. >> i know he has to try to do something. you can't use sovereign debt. as you well know, they don't have a bond structure over there that's conducive to doing fed style qe. >> so where does this story end then? >> it ends? in experimentation with the abs. he'll find different asset-backed securities. they will play. he will not have as level a playing field as the fed had. this story will play out with surprises. >> i'm sorry. if he can't deliver on sovereign qe, does that automatically mean
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there is a bubble in these huge sovereign debt markets in europe? should that worry investors here? if he can't draw the line in the sand he promised? >> i wouldn't call it a full-fledged bubble, but i think they are vulnerable here, yes. >> thanks for dropping by with all your thoughts. financials and consumer discretionary very strong. good sign for the economy in the s&p. former fed chairman ben bernanke having personal finance problems, specifically with the refinancing of his home. diana olick is live in d.c. >> former fed chairman ben bernanke speaking at a conference says he recently tried to refi his mortgage and was unsuccessful. he said bernanke was making the point lenders have gotten too tight. how is this possible? he's got a pricey book contract, charges top dollar for speeches, and he just got a job as a distinguished fellow at the brookings institution. let's start right there, shall we?
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number one, he recently changed employment. red flag. most of his money comes from speeches and the book. he is self-employed and has to disclose anything he may not have wanted to disclose all his assets. he is a private guy. finally, he may have gotten a bad appraisal. >> sometimes you just putnams into the system and they come out that you're not approved. that is one anecdote. we hear lots of anecdotes. it is not data. data shows us it's easier to get mortgages approved. >> the appraisal is a huge problem for both refis and home sales today. i've got a great job. been here over ten years. great credit. tons of equity in my house. last spring when i tried to get a home equity line to redo my kitchen, my house appraised for less than i bought it for 11 years ago. that tanked the loan. the bank had done a drive-by
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appraisal. somebody north of baltimore looked at my d.c. house, old records and made a call. he had half the stats on the house wrong. bedrooms and bathrooms. we had to redo it, insist on an in home appraiser and the value comes in 20% higher. there's my loan. me, ben, ben, me, same boat. we are like besties. >> when i think bernanke, i think olick. >> don't you think at 60, 61, he hasn't paid off his mortgage. >> central bankers are people like us. >> they are. i'm all about the 15-year fix. pay it off fast. >> thanks, diana olick. $10 a month is too high. that is apple's view as the company is asking music labels for a price cut to lower the cost of its streaming music. all part of a revamped version of the beat service. should note deutsche downgraded
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apple last night from buy to hold saying they had likely few surprises left. supply constraints through year end. they don't expect a significant introduction on par with what happened in september regarding the ipad. their price target remains $102. >> from $105. i think that's a lot of people. investors fear after their blowout launch and the numbers come in in the millions in china, that it's going to be hard for app toll pull another surprise out of its hat. >> every time we had heavy sell, you see apple turning up as one of the selling the most heavy. after a phenomenal run. >> when we come back, chief economist at goldman jan hatzius will talk about the jobs number.
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back to the news of the morning. that is the september jobs number. nice surprise to the upside. joining us exclusively here is jan hatzius. >> it's a good report. it's more than pretty good. i think it's a strong report. certainly in the establishment survey. payroll number was good. upward revision was good. the household survey was pretty strong. i think not quite as strong because the decline in the unemployment rate benefited from rounding and driven in part.
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what was weak was wage growth. >> people said this was more of a wage report than a jobs report. we need to see that now, right? >> i think it is both. the messages are, one, that there's been not been a slowdown in the improvement in the labor market. if you looked at the last report, you could say it looks like things are slowing down. that clearly didn't happen. that's encouraging. resolves a little bit of the puzzle. on the other hand, the report also says that even with the decline in the unemployment rate to a five handle and decline through 11.8%, you are not generating wage pressure. >> part of the reason people say is the quality of jobs isn't quite there. manufacturing only added 4,000 jobs. it's been weak over the last few months. is that permanent and therefore, a reason to worry about wage growth ever coming back? do you expect that quality to shift? >> i do think manufacturing was
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a little weaker than i would have expected. especially because the last number in august was clearly held down by some special factors, basically seasonal adjustment noise in the auto industry. so it's true manufacturing wasn't that great. otherwise though, there were also some areas that actually are fairly high wage areas that added jobs, professional and business services, for example. and health and education also decent in that respect. >> you're not too worried about that? >> i wouldn't be too worried about the mix of jobs. i don't think it was that special in this report. >> ubs suggested this country has a divided labor market with little mobil between two distinct sectors. one that has tight conditions and one that has loose conditions. you can break this labor market down in various ways. let me do it as the pls does in its third paragraph. unemployment rate for asians
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1.5%. twice that for african-americans and four times that for teenagers at 20%. when janet yellen looks at that, who is she setting monetary policy, teenagers, african-americans, or whites and asians? >> these differences which are large between different demographics. the question for monetary policy is whether they are unusual by historical standards. whether the degree of polarization in terms of unemployment rates or employment and population ratios, between different population groups is at an unusual level. i don't think that's the case. >> they look like a structural problem. you can't switch across. it's going to remain that way. they are blowing out different directions, aren't they? >> that's true. a lot of these long-standing
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differences, of course, you would say are structural and they are. in each one of these groups, it generally, we still have slack. you take college graduates or higher killed workers, they have much lower unemployment rates, but they always have much lower unemployment rates. we are not seeing a big acceleration in wage growth even in the areas where people generally do better. it still seems the overall message coming from these types of numbers is consistent with the idea there is still a significant amount of slack. >> let's go broader. we've seen some on the street argue we are at a peak. we are at some peak hiring, peak auto sales, peak gdp. others say gdp is poised to break out in the next couple of quarters. are you in one camp or the other right now? >> no. i'm neither camp.
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steady growth at a rate of something like 3%, maybe more than 3% is the most likely outcome here. on auto sales, it's possible we've seen the peak. you look at some of the last couple of numbers, not the september number. those were very, very high. maybe we'll get above that. i don't think there is a whole lot of upside there. in general, there is room for above trend growth. what we call the foreseeable future. >> you are positive on the economy. pretty optimistic about the jobs market. when do you have to bring forward your forecast for interest rate hikes again? >> i think we would have to bring it forward if we found that the strength in the economy is translating into higher inflation numbers and higher wage growth numbers. we are finding the opposite. >> third quarter 2015? >> yes. >> staying there? >> yes. >> you need to see wage growth. >> the jobs numbers are definitely important.
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pace of labor market improvement is important. a report like today's on those measures is something that makes you think a little harder about an earlier hike when you look at the unemployment rate or look at the payroll numbers. you also have to look at the other side of the ledger. you have to look at what the last few inflation numbers were and what the wage number was. that pushes you in the other direction. i don't think this really changes the outlook for monetary policy dramatically. >> let's blow some bubbles. >> great seeing you, jan. >> that is a much longer discussion. >> jan hatzius joining us from goldman today. john fortt joins us with interesting news out of google. >> this is from dow jones. mary lou jeppson apparently at google working under google on display technology. the idea here is modular displays. legos. imagine little tvs you could hook together to make a larger,
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seamless display big enough to fill a living room wall. google talked about a number of google x problems, driverless cars, drones, contact lenses that could read your blood sugar. this is one they have not talked openly about. microsoft worked on large displays. the biggest display mmaker in t world is samsung. they arguably made much more money off android than google has. apparently google doing hardware research in an area that samsung's bread and butter. not clear what google plans to do with this. advanced technology work in display. back to you. >> an interesting future. up next, jpmorgan saying about 76 million households have been affected by that cyber attack earlier this summer. is any financial institution
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safe? we'll talk to a former fbi assistant director and former global head of security of bank of america about that. this is holly. her long day of outdoor adventure starts with knee pain. and a choice. take 6 tylenol in a day or just 2 aleve for all day relief. onward! your customers, our financing. your aspirations, our analytics. your goals, our technology. introducing synchrony financial, bringing new meaning to the word partnership.
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banking. loyalty. analytics. synchrony financial. enagage with us. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need.
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new details about that massive data breach at jpmorgan. the bank warning that 76 million households and 7 million small businesses may have had personal data exposed in the cyber attack. it says no evidence account information was compromised. joining us on the phone, former fbi director chris swecker. thanks for calling in. >> my pleasure. >> you are the perfect to talk to about this. 76 million households. the numbers keep growing. what is more alarming, this is not a retailer. this is the nation's largest bank. why should that be a whole other layer and much more alarming? >> it's scary.
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this represents a good 80% of the deposits from the u.s. or at least depositors in the u.s. it's not their internet security is bad. it's just that the bad guys' skills are so good. they can do this from russia, romania. eastern european hacking groups are prolific and very good at what they do. >> the account information, we don't know whether it was hacked. they said no evidence of that. that's somewhat reassuring. what else is inside those bank computers? what sensitive information is in the jpmorgan computer system? >> the personally identifiable information is name, address, e-mail and particulars like that. they didn't get social security numbers, didn't get dates of birth and other more sensitive information involving accounts. this he can do a lot with this information. they'll do that to engineer fishing e-mails to these customers. the customer is the weaker link
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here. >> this was a deep attack. this was on 90 servers as we now learned. let's assume jpmorgan has been totally transparent and told the truth about an attack that happened in june or july this year. three months down the line they were suggesting only 1 million people were affected. now in a regulatory filing they say 76 million. it's a product of logic to assume, therefore, at any point in time, we have no idea what is happening to the servers of wall street or any major financial institution at a given time. jpmorgan didn't know how deep the attack was three months after it occurred. >> in these situations, unfortunately, there is a tendency to understate the problem. of course, they are concerned about the reputational hit. i think i.t. professionals, i.t.
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security people tend to understate how much control they have over internet security. nothing that touches the internet is secured. end of story. it's game over in that regard. this is a major intrusion when you get into that many servers and they can do quite a bit of damage. >> shouldn't banks be more protected than a home depot or target? >> absolutely. they should be. >> are they? >> they are probably one of the stronger industries when it comes to i.t. security, but still, it's almost impossible to keep the bad guys out. >> aren't we being naive here? what do we do with this story? we say, okay, they haven't used any of the information. they haven't taken anything away. no money has been transferred in accounts, be let's move on. or do we say, what have they left behind in the servers of jpmorgan and does that threaten the stability of the financial system as we know it? >> that's the relevant question.
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this he do leave things, artifacts behind. they live malware behind that can hide effectively inside the system. where this needs to go is this industry needs how to protect data. their perimeter security is always going to get breached. they need to understand their crown jewel data and wrap that in stronger security. they spend way too much time trying to protect their perimeter with fire walls when they know they will be able to get through that. >> what is the big fear here? what if this escalates and intensifies? what could they have access to and what could they do with it? >> the big fear is that they are going to take that personal information and then shoot out e-mails using that personal information, socially engineer their way into the online banking relationship and take over accounts. business accounts and personal accounts by compromising
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individuals at their home laptops and home computers. that's the worst nightmare for a business and customer. because they are not that sophisticated, giving them access to online banking is like giving the keys to a ferrari to a 15-year-old. >> if we change our passwords, are we okay if we are clients of this bank or is it more than that? >> yes. it's a good idea to change passwords. it's also a good idea to be very aware of incoming e-mails with links from the customer perspective. they are going to use those e-mail addresses and shoot out a huge volume of phishing e-mails to get key loggers on computers then see every key stroke. when you sign on to online banking, they'll see those strokes, pose as you and take over your account. >> thank you, chris, for that valuable perspective. chris swecker, former fbi
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on this jobs day, rick santelli with the santelli exchange. >> hi, sarah. i would like to welcome our guest. thanks forfriday. >> thanks rick. >> you saw the data. give me your opinion quickly. the highlights and low lights if there are any. >> the number was good but it comes after a month that was only so so. a three month average was basically in line wot the 12 month average of 220. if you take the last two months it is more a trend line rather than a sign of acceleration. it is good but i don't think get carried away saying this is the beginning of the something more. >> did you see anything in wages? labor force participation rate hit a fresh new low and a lot of people talking about tbt demographics. every bit of research i'd read hoes me demographics counts about half.
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and what are you thoughts. >> absolutely. and part of the participation rate drop is 25 to 54-year-old who is should be working. >> exactly. >> and that is the problem. the lot of people lost their jobs and now gets very generous social service payments of a variety of things aren't necessarily enticed to come back to the labor market. theres a structural change, not cyclical. so i think the fed can throw out the window all the slack that is out there and acknowledge the fact that the labor market is getting tighter and wage increases for some areas will happen. for others will not. but in the aggregate wage pressure should start to increase. >> if i was to give a friday prize out today peter it would actually go to simon hobbs and his conversation with goldman. he really brought it up. no matter how you slice this, education and skills make a huge difference. the unemployment rate for highly educated and skilled workers is way less than everybody else.
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tell me how keeping zero interest rate policy longer than we should is going to to fix that. >> it will not. the fed can print higher asset prices. they can't print job creation and unfortunately they haven't learned that lesson yaet yet. >> i guess the last area to pay attention to is with regard to the fed and the outlook. many people on our channel today, and it is common wisdom out there for many, is that the fed is going slowly because they just don't want to challenge the quota. they don't want to put us in recession. listen, raising 25 or 50 will send an important message. will it really send the economy into a recession? your final answer and thoughts. >> no and it's something that has to happen. even if the fed raised the short rate to 1%. is the economy that fragile that it can't even handle that? >> i agree. that's perfect place to end it. and whatever the answer to that is, i think we are going to find
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out over the next year. simon hobbs, good job this morning. that was a great interview with yan back to you sir. >> you have made my week. any time. and it's 8 minutes until we launch squawk alley. let's send it over to john and find out what they are preparing. >> we got a great show. talking about the bob uygur over at disney. a amazing run tripling the market cap since he's therein and an contract extension. and beats and apple wants the music labels to give them a mooulz at the lower price. and it's jobs friday. this shirt signed by the whole squawk alley and it is also going to be signed by the shark himself. >> proud to be doing this. mr. wonderful, that is what this one is getting.
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a prize up for grabs today. the shark tank tee shirt. and joining us on the phone is the winner of that nail the number competition. charles moeser. where are you calling from? >>. >> caller: oceanside california. >> the actual figure was a gain of 247,000 on the month. how dclose did you come? >> 248. >> tell us your strategy. >> how did you come to that number? >> caller: i was with everybody else. i would have rather gone lower
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but i just took a shot and went up a bit. and 248 was the number i came up with. >> well you are the man. you got closer than the chief economist at goldmans. this of course now is your prize. the shark tank tee shirt signed by the entire team and indeed of course one of the sharks himself, kevin o'leary within the last few minutes. what are you going to do with it? >> caller: i'm going to put it right on the wall. definitely. >> he's going to treasure it. we like to hear it. thanks chic. >> you too be a winner next month. >> the markets is a duane of 127 on the dow. that is good figure. you might have thought a stronger rally than that. we can move on fed comment that much. >> the nasdaq composite sets up for 1% gain. we'll see how it goes the rest
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of the day. big news in the u.s. dollar at the four year high against other major currencies. everybody watching the euro. would break 125. weak euro and strong u.s. dollar. and how that plays out and whether it will weigh on the markets, the u.s. companies that do a lot of business overseas. we should also note that carl cantonia nailed had number. he guessed right on the number. >> i'm thinking he saw a tweet. >> i'll go with sarah's version. >> and next month do it live on television. >> good morning guys. almost 8:00 a.m. at google headquarters. 11:00 a.m. here on wall street. squawk alley is live. ♪
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and welcome to squawk alley for friday. joining us this morning is kevin o'leary. great to have you as always. john forth also with us. kayla is out today. let's start with the markets. dow is trying to get back what it lost yesterday. up 125 points. and the russell's biggest reversal yesterday in about eight months. some of the nasdaq seeing good gains. shaping up to the best week in several months for the nasdaq. some of the big winners there. they call it
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