exercise pushing on a string in slow motion. we've almost gotten to a point where people hear inflation hawks, they write guys like that off. some day it will. we've got to run. >> thank you for joining us today. >> have a great weekend. we'll see you monday. right now it's time for "squawk on the street." ♪ what goes up must come down ♪ spinning wheel ♪ gotta go round >> isn't that the truth? good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber on the new york stock exchange. futures made an effort at recovery. we were negative for much of the morning. slightly positive on the dow. europe still watching up to our action yesterday. the dax in germany down, up 3.5%. well into correction territory now. crude oil, fair to say in freefall. closing in on $83.61 after dropping below $85 for the first

time in two years. our road map goes like this. the down draft, can it be reversed after the dow suffered the worst day yesterday? a critical u.s. open and pivotal european close. >> costco unveils the all-wheel drive and auto pilot. see the new features and reaction. >> family dollar missing estimates. >> and microsoft ceo nadella apologizes on gender and pay. reactions later on "squawk alley." >> the final day of the week that has seen the dow move more than 200 points. big duce decline, wednesday's rally, sell-off thursday of 335 points. stocks down 2% in yesterday's session. oil keeps falling down to $83.67. jim, last night you said this is not a dip, it's a wholesale ongoing readjustment too difficult to buy into. >> you want to buy clorox and

pepsico. you want to put your money in cvs, make a stand on bristol-meyers. i understand that. if you are in the industrial cohort you are in there with hedge funds. the hedge funds are imploding here. that's what you are seeing. they are in the wrong stocks. i had magellan on. they are the largest transport of oil in this country. i asked the ceo, terrific guy. i said are we in a glut? it was like what do you think? we are swimming in oil in this country. iran has come back online because the sanctions receded. there is no place to put the stuff. we wonder why oil goes down. he did not think it would go into the '70s. >> the fall in oil, one of the reasons cited for the recent volatility.

so many other things have been cited. whether it's ebola, the german economy, which may have two quarters of contraction according to more negative economists when it comes to that. whether the rising dollar. i don't know what the real reason is. maybe it's actually back to the old reason which is that the fed is going to stop buying bonds at the end of this month, even though it's still going to use the run-off. it's not reducing its balance sheet. maybe because qe is coming to an end. >> that's true. i think the dovish note, they are cognizant, they are data-dependent. >> you've been propping up passive prices for a long time. >> i'm looking at the spanish ten year thinking what does it matter what the fed does? here is what i think. i think the stock market got too high relative to a couple of things we didn't expect when you were at sochi, that was the absolute apex of happiness. >> we had no idea that ukraine was going to be on the hook.

no one counted on an outbreak to a disease which there is no obvious solution now. >> i had zoes on last night. it's mediterranean. i asked him, are sales down in dallas? the ceo was not like, are you kidding? people are out there spending like crazy. i like the cruise ships. they are not acting well with. theme parks are not acting well. >> i'm reading a note from deutsche bank that can create quite a worrisome sequence of events on ebola. that doesn't mean it's going to happen. >> no. we could create fear, which i think is not our goal. by the way, the market can bounce. >> when you see notes like that, that's already creating fear

among those managing assets to a certain extent and they are going to take risk off. >> i think you had a list of these people taking a decision, including me, saying gasoline is now $2.75 in texas. okay? what do you do with that additional dollar? you go to zoes, chipotle or maybe take a trip, maybe stay at a marriott. today we get a note, marriott, don't worry about the weakness. we are kind of betting on this disease being under control. >> yes. that is a likely scenario in this country. >> the 101st airborne, six military planes on the way, marines on the ground. that's going to be -- "the washington post" has a great piece on the matt behind all this. >> inflation rate. >> that was scary in terms of

the geometric progression of this. >> you are going to need 10,000 people in a treatment center today. in two months, it's going to be 100,000 people. it's moving faster than the bureaucracy is moving. >> i'll give you the kind of what's happening. if we went to google today, people are googling black plague how many people died in europe with the bubonic plague? >> many. >> 60%. people are like, wait a second. this is ludicrous. >> yes. >> i'm sure google, the most research is what happened in the 1300s. >> how about levels? everyone is saying, all right. you've got to get back to a 200-day moving average on the s&p. it's going to take you to 1909, 1905. people want to see another day 10-1 down volume. >> yes.

i keep thinking about that 10-1 down. you want to see, you get back-to-back that, it's over done. at the same time, we have a group of stocks that are doing fabulously. that bothers me. it bothers me that allergan, dave pyatte doing an unbelievable job. >> special situations. >> but in general, the consumer products story is not enough to hang your hat on. when i look at stocks like general electric, which made a very big push into oil, which was right three months ago. when i look at what's going on with boeing and i think if aerospace is going to go -- there are no declines in boeing. amr is back to 31. >> these are short-term concerns. six months to a year. >> this is a technically-driven market. you break down from these levels

and hedge funds do some panicking. if you're an s&p fund, i have my 401(k) and my plan. yesterday is. first day i called my guy. i said you know what? when we get down more, i don't want to wait till year end. i want to commit. why? >> you're buying? >> you are locking in for the year? >> no, i'm buying. i usually try to do it every month. i do it in december, but i want to firm on it if we go down below where we started the year -- >> your point is long-term prospects are good. >> you are getting cash-ready. >> right. there are two things i like about what you said. one is, yes. i like the long term that you're thinking 59. i have a double positive i'm getting from you. the answer is i'm ready.

i'm looking at deploying it now rather than waiting till year-end. you are getting a lot of volatility, a lot of people scared. i would rather move my 401(k) out of cash into stocks. >> that does not mark a shift in your thinking europe's troubled, right? that you don't want to be exposed to companies highly leveraged to russia. >> yeah. you go through these industrials. we had something last night. microchip. they cited weakness in china orders. do not read that press release if you want to have any hope about china coming back. it basically says, we did poorly because in september china is usually great and it was bad. it didn't read well. the release about crane's end food service didn't read well. we are getting the preannouncements we haven't gotten in a long time. >> for the multinationals. for an economy 2/3 about the consumer with oil prices coming

down, prices at the pump coming down. extremely low interest rates continuing. though you can't save a dime. >> it could be age of costco and walmart. i am book-ended by the two guys whose stocks are going higher here. >> two very handsome guys. >> thank you, carl. >> one quick point on the credit markets. i don't want to say it's analogous to '07/'08, multinationals, given the higher dollar, spreads are coming in a bit. borrowing costs may rise a slight bit. credit markets last week or so have become a little more difficult.

on the corporate side. >> i heard someone talk about kazakhstan bonds. >> are you a buyer? are you in there? what's the yield? >> i don't know. given me the stalingrad bonds. >> before we go to break, tesla unveils its design. all-wheel drive version of the model s. it's about to untime to unveil the "d" and something else. last night the "d" refers to dual motor. 275 miles on a single charge. 0 to 60 in three seconds. they shaved a full second off that. it's going to cost you $120,000. >> mind if i buy an audi. >> i won't throw your head back

the way that thing will. >> i was shocked i was going 80 on the jersey turnpike and wasn't picked up immediately. the thing was flying. i didn't have the pedal to the ground because i was afraid i'd run out of charge. >> it flies. >> the thing does fly. at the same time, before the release came out, i said disappointing. disappointing and where is mobile eye in the release? where is that feature which allows you to not hit anybody going 80 miles per hour with the full charge thing? where is the mobile eye? >> b of a said fails to impress. a addmon.com called him the boy to cries wolf. >> you are saying my skepticism is wrong? >> yes. no. i would never say skepticism is wrong. cynicism, perhaps. skepticism is good. >> how about sardonic? >> i would couple that with

acknowledging he's doing things that others have not. >> so it has four-wheel drive. i've got four-wheel drive. what does he have chains? how about chains? >> cup holders are next, that is your point? >> how about in "mad men" when they had the drink cups in the glove box. >> turning on poor eli. >> i am pro-eli and anti-eli. i think he'll have a big game. >> we'll talk about that. microsoft's nad ella apologizing for controversial comments about the pay gap. >> dave and buster's going public. and what europe is doing. an attempt here at stability. in a world that's changing faster than ever, we believe outshining the competition tomorrow

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nard ella asked what advice he would give women not comfortable asking for a raise. he said it's knowing and having faith that the system would give you the right raises as you go

along. that might be one of the additional superpowers that quite frankly women who don't ask for a raise might have. a few hours later nardella an apology saying i asked that question completely wrong. i whole-heartedly support programs that bring more women into technology and close the pay gap. he tweeted he was inarticulate. man, is he paying for that this morning. >> i would call the fabulous ceo and say what do i do here? tell me to who give raises to and i would pay amy hood more than i pay him. >> that would be a good move. that was inarticulate there. >> some are saying it was quite articulate, it was wrong.

this is the wrong view. it was quite a thought process to get there. >> i believe women are repeatedly shafted. i had women bosses and always felt they were paid less. >> we know where we stand on it. >> right side of history. i wanted meg whitman to split

hewlett-packard. i've been calling for this xbox split. >> would you split microsoft beyond that? >> see how important the mountain dew tie-in is with gaming. you'll be blown away. a lot of the upside was from mountain dew gaming tie-ins. they get all their knowledge from call of duty. >> you can read that? >> they must learn something. >> we'll have more on the media stocks. >> online is where all the ad dollars go.

>> they had a good run. >> initially the game was 24-0. j.j. watts. >> they nearly made it happen. >> we met j.j. watt. he loves our network. he got criticized what do rich people do? rich people watch this show. andrew luck watches us constantly. >> yes, he does. cramer's mad dash as we count down to the opening bell this friday.

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it is friday. we are staring at an interesting session ahead. let's get to the mad dash seven minutes before the opening bell. >> it's only fair to this market the stock that will be up the most today involves fecal matter. exact sciences. it's the way you test fecal matter to find out whether you, instead of having a colonoscopy. people don't like them. i don't know why. you get to drink five gallons of stuff, two enmas.

>> then you get to be put out. >> right. especially during the day when you're watching the market go down. medicare approved this test. the stock was at $11 a few years ago. he was saying given the fact people aren't willing to do the colonoscopy, what a great thing to have the test. >> not going to replace them? >> no. it doesn't have the 100% hit rate, but has a good hit rate. those resisting this, i had my last one, i showed it on "mad money." it was a ratings bonanza. >> i bet it was. >> the fecal matter is much more -- let's just say it's more private. >> great. okay. that was a nice conversation. >> stock is up the most. that's why i focused on it. i didn't do it because i thought i was the late george carlin, i

miss him every day. >> every now they tweet his lines. >> he loved "mad money." blackstone is up. >> spinning off its advisory business, about a $380 million revenue business into a public company that is going to be run by my friend paul talbin. worked at morgan stanley until he left there, went out, started his own firm, hired a handful of people. now his firm is merging with what is blackstone. mostly restructuring. most of that $83 million in revenue is restructuring. he is a force to be reckoned with. >> really well-run company. great yield. this is fantastic news.

the market is in such a funk, they don't recognize it. >> blackstone's real business is real estate, private equity. it's goodman's group over there. >> a lot of smart people, very good yield. people don't like it right now. that's a mistake. we'll look back and wish we bought some of the stocks. >> you create yet another publically traded. >> do you think there is a peak there? >> i don't know. we've got so much to look ahead to this morning. are we going to rally or are we going to potentially cycle through those losses in europe over here again?

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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. . you are watching cnbc "squawk on the street." the opening bell in a few seconds. crazy week. 200 points move on the dow. worst day of the year on the

dow. worst day on the s&p. actually, the worst day was the day yellen was sworn in in february. >> that is a great stat. >> opening bell and a look at the s&p at the top of your screen. at the big board, diplomat pharmacy. independent speciality pharmacy celebrating its ipo. at the nasdaq also celebrating its ipo. dave & buster's. 70 dining and entertainment venues in north america. we'll talk to the ceo later on "squawk alley." what is the game plan? >> i think if they rally big, which is possible, you get another chance to lighten up a little and take it. we are just not in a good mode right now. we have too many preannouncements. this microchip, do not overlook that. that's the big complex of semiconductors. they are going to be down. industrials, i don't care for. i don't like the oils. if they rally, you get a good chance to get out of those.

you can't go by kroger. you can't own kroger, white wave, hain, costco. >> you can forgive people if they are listening to you and confused. i think it's important to indicate, all right, short term i feel this way. you also said you are making room to buy things for the longer term. >> if we could roll back the gains we had for this year, i think that would be a terrific opportunity. a lot of stocks have already done that. there's a lot of higher-yielding stocks people are giving up. i think those yields are good if it's not that commodity-oriented. yes, longer term, i'm getting -- i would be ready. getting ready for a breakdown here. short term, i'm saying, look, if i say be complacent here, we're fine. that would not be in sync with what i'm seeing with the preannouncements. longer term, yeah. i think there aybar gains.

>> the "times" mass an article that merkel is evolving in her thinking whether or not it's time to start stimulating growth, although the finance minister said we are not writing checks here. >> merkel switches, if putin and kiev come to the table, if we could get ebola off the front pages, i will make a great long-term decision to commit capital. i would like to see some of that happen. >> kla tencor, broadcom, all the bottom of the list today. >> those have been terrific stocks just getting crushed. >> micron. >> that's been a source of great strength. are they going to come back and decide the travel and leisure stocks are okay? i think they want to see how things go over the weekend. oil can bounce. the oil futures indicate we are

going to stop the decline between $81 and $83. that's important. i think a lot of people are freaking out about oil thinking how bad the economy is. and they should be thinking about the supply side. >> that's an amazing move down in a short amount of time. >> i'm thinking at a certain point, i calculated how much we are going to be producing in this continent. we'll be producing 18 million barrels a day in this continent. >> when? >> next year. >> 18 million barrels? >> 18.5 million. >> there you go. >> continental energy. we have to export. our refining capacity is the wrong refining capacity. we were supposed to be continental independent in 2020. we will be continental independent in 18 months. permion basin is producing 18

million barrels a day. technology is making it so it's not that expensive. is there a story about how most of the oil companies don't make money unless $80. that's just wrong. they managed to reduce the price of drilling dramatically in the country. >> i did want to get to darden. darden holds its annual meeting this morning. activist investor starboard and darden itself. it started back when they were calling for capital allocation that made sense. doing something with red lobster. darden did something they didn't want to do. it looks like all 12 of starboard's directors have been elected. >> it halted right now. >> yes. it's been halted for some time this morning. it looks like a sweep. >> that month of olive garden didn't matter. >> these were preliminary results that were announced at

the meeting. all 12 store directors have been elected. darden put up four existing directors, four new ones, four of starbirds, but not enough. the red lobster transaction really ticked off a lot of shareholders. coming as it did without shareholder approval and moving ahead, at least if you listen to jeff smith at starbird, the man who runs that firm, not having done shareholders right. >> wouldn't it be nice to turn it around. and the after-tax proceeds being so small in what ended up being a real estate transaction. >> it was a terrible deal. i felt that. i like the fact trends are looking better at darden. i like olive garden could be positive. the capital grill, the higher end is doing well. red lobster i thought was fixable. a lot of people told me it wasn't fixable.

i would have expected them to get more for it. >> that is quite a win. we'll see what it means for the company itself. jeff smith did make remarks at the darden meeting. he says, i love olive garden unlimited bread sticks. i love unlimited soup and salad. we fully understand the core offerings. what sets us apart and we need to accentuate our core. the "we" not enforced. he will be one of those board members. they are independent directors, but he picked them. >> good yield. we are seeing the same thing. consumer package good stocks are doing well. utilities. i'm seeing good dividend boost there. banks doing well because they love the volatility. jimmy lee was on yesterday. volatility good for jpmorgan. you've got these stocks that are going to rally today. they will rally. they are oversold. i think at a certain point, how much do i want to pay?

>> getting headlines out of map. map pharmaceuticals saying they are taking new steps to increase production of the ebola treatment. >> this morning they said they couldn't. >> it's very difficult. they have to do it in tobacco plants. they are working with the gates foundation along with others. that is a big story over the next three to four weeks. >> you get ebola controlled, get merkel following through with the article today that she goes soft, you get some sort of retreat in kiev on eastern side of the ukraine, then why was i shorting the market? that's what you are going to hear. you have three things that could go right. just stealing from my lead tonight on my show. that's okay. >> you've got lots of time to come up with a new lead. >> do i? if i lead with that never-ending salad bowl darden. >> nothing wrong with that. >> you can never get into olive garden? s ever notice? i tried to use the pool.

they don't watch cable. i tried to jump the line there. >> really? >> no such thing. >> you didn't pull a, "do you know who i am?" >> i tend not to do that. i happen to like olive garden. i like pasta. >> who doesn't? >> true. >> i'll tell how likes pasta. bob pisani. >> i successfully cut that down about two years ago. once a week now on past eapasta. that was the hardest thing i've done is cut that out. we are moving up in positive territory. let's look at the s&p. we are at a two-month low. about 4% below historic highs. only three weeks ago we were there. global slowdown. take a look overseas. hang seng down. korea down 1%. germany, that is a 52-week low. maybe we are a few points away from that. france is not that far from the

52-week low. global growth worries, you heard it yesterday. german stats were terrible this week. italian gdp is likely negative now. christine lagarde was down, 1-3 chance of a euro recession. there is a lot of concern china gdp growth this quarter may be down around 7.2 from 7.5 in the prior quarter. i'm not convinced we are headed for a significant correction. the u.s. economy is still strong. we've still got the central banks behind everybody, it seems to me. pepsi was great. pepsi was at historic high briefly yesterday. alcoa's numbers were excellent, as well. i agree about your comments on microchip technology. a lot of people consider that a real bellwether. you can see it's down 11%, dragging some of the semiconductors down. they talk about softer china sales. they get about 60% of their revenues from asia. a lot of people think because of the diversity of the kind of

chips they offer, they are a leading indicator. we haven't heard negative comments from the semiconductors. a whole bunch of analysts put out comments. here is a typical one. mchp's preannouncement leads us with little doubt that an industry correction is upon us. it's that talking from analysts that you've got competitors down en masse. we'll see if it's industry specific or not. i'm less concerned with juniper. they tend to preload their buying into the first half of the year. juniper has been diving a long time now. there's been talk about expectations of lower numbers for them. as for oil today, we've been talking about the shale plays. i want to note even the biggest names had a very ugly two weeks.

total, statoil, chevron, all these names are down 4% to maybe 9% just this month alone. it's not just shale plays down double digits. the biggest oil companies in the world are notably weak here. we are getting ipo pain. i mentioned yesterday, mol global. had a terrible ipo yesterday. down over 60%. it's one of the worst debuts we've seen in many years. this is getting a lot of pushback. dave & buster's priced at the low end, $16. it's a small deal behind me and that's diplomat. speciality drug distributor. they priced 13 million shares at $13. that was below the range. $14 to $16 was price talk.

i see indications of $14 to $16. we are clearly getting pushed back on prices. you don't want things happening like mol yesterday. you don't want pricing at the range and opening below that and staying there. push back on prices is a good sign for right now. the dow is up 44 points. back to you. >> thank you, bob pisani. some brief signs of life in what has otherwise been a group staggered lately in terms of the hits it's taken. additional providers of video content. broadcast networks or cable networks. they have been getting hurt in the stock market. during the summer, the battle, the brief but furious battle over time warner and the

increase in value that stock saw as a result of fox's interest in buying it may have obscured what were otherwise signs that were not that good for the overall health of that industry. namely, an upfront that did not go particularly well. since then, these stocks have moved down. at issue is this key question. is there a secular change in the way people view content? is that going to result in a continued decline in ratings and advertising for the providers through traditional means? by that i mean the traditional bundle you buy from your cable provider. or are we seeing a real change people will pursue over the top options where you can group

together what you want, whether it be netflix espn and news networks to create your own? obviously leave out many that rely on both their subfees and their advertising fees. take a look at the stocks. whether it's discovery, cbs, 20th century or viacom. even time warn er after fox sai we are no longer going to pursue it. we don't know the answer. >> we look at it all over the world. we look at viewership on cable all around the world. in a number of markets it's growing. in some it's coming down. here in the u.s. it's down for

the last few months. the question is, is that real and is it the beginning of an issue or just something that happened for a short period of time? >> fortunately, david didn't say way thinks is the actual answer. richard greenfield, in terms of looking at what is a robust advertising market because of the money facebook is taking, he says, tv executives continue to say everything will be fine. it will scatter later this year. don't worry. with q-3 conference calls coming, we wonder whether management teams will once again talk down secular change concerns. >> we're there. >> i don't know. >> i think some of the bigger consumer packages going up 25%,

30% social media. it's amazing. they are building up their lifestyle brand. the big beverage companies using social media. pepsico was a good quarter. you'll see domino's. they are going that way. >> these are important changes and being very closely monitored by those who invest in these companies. it's not that the content doesn't have value. you are talking about a reordering of an echo system in place for decades. >> yes. i think it's really happening. they want to reach younger people. >> quickly on darden. just want to mention. i believe that stock has opened. we can look at it.

it's a rare thing an activist shareholder wins all 12 board seats. not two, not four, not a majority. all 12. jeffrey smith has been using this to his advantage. relational shutting down. money coming out of there. why not up your profile as much as you can when there is money to be had to manage? that is quite a victory there. >> it's the right day for it, too. >> i'm getting confusing numbers here on it. i think it's still halted though up briefly. >> one-year chart of the five year, yes, we are still at yields coming back to august. the five year is the winner on

the week, down 15 basis points. stabilization is the equities. didn't get the baton from europe. we want to monitor that. last time the ten year was visiting these areas. if we look at the 30-year. this goes back to may 2013 last time. 30-year was down here. it's down seven, eight basis points on the week. basically, intraday we had several sessions challenging the historic low yield from early september. even though today is not in the baguette, it doesn't look like we will challenge that.

we are getting very close. the dax is at a one-year low. well under 9,000. cac visiting levels it hasn't seen since christmas. the big question is how much of that translates into a pattern correlation like with u.s. equities. 110 was a breaker for the appreciation of the greenback versus the yen. >> thank you, rich santelli. we are on ipo watch waiting for dave & buster's waiting to open for trading.

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time for cramer and stop trading. >> watch disney. disney has been punished because of fears of ebola. if you don't get negative news about ebola this week, you see the stock bounce. i'm mentioning disney because i talked long term. i am saying long term disney franchise is terrific. espn can't be dvr. if you're thinking about not the next 72 hours but the next 72 years, there. there's my long-term because my friend david has said at 59, i'm

allowed to think long term. >> absolutely. >> what is on "mad" tonight. >> this is another place people can go. isis pharma on. they've got a breakthrough drug i want to talk about. biotech is the solution for ebola. you don't hear the big pharma companies are doing it. you hear about the little companies. >> we'll see you tonight. good luck against the giants sunday night. the dow up 57.

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♪ baby you're a firework ♪ come and let your colors burst ♪ >> "squawk on the street" with the worst day on the dow. we are going to close out this roller coaster week in the markets. >> elon musk unveiling the d-260. all-wheel drive, can run on auto

pilot. why is the stock down sharply? >> the months powerful woman in banking. an exclusive interview with beth loony on the health of the economy and business in this country. >> and expect fewer bread sticks and well-salted pasta water. starboard won control over olive garden. >> markets front and sent they are morning after we fell over 300 points yesterday on the dow. we have bounced back. that bounce is beginning to lose some of its strength. we are up now 36 points in the dow. let's bring in dan morris, global investment strategist with taii cref. gentlemen, good morning. is this a buying opportunity? >> if you look at earnings, it's basic positive for equity markets. we have volatility around that. i think people need to see this as a buying opportunity. equities are going to trend

higher. >> jim, do you agree? >> i do agree longer term. i think that this one might have a little farther to go on the down side yet. it's going to remain volatile. i think we've got a further full correction before this bottoms out. i agree that over the next few years the equity market has more up side potential. at some point this will represent a good buying opportunity. >> it says in the notes here you think that the s&p could fall to 1800. that would be a 7% further decline from where we are now. how do you come to that figure? >> there is nothing real scientific about that. i just think that we build up some complacency here. we had a big sea change in valuations going from 12 to 18 times earnings. i think we are going to need enough of a direction to get people to stop buying on the dips. in other words, i think that might take a full 10%

correction. what i'm worried about is at this point we are thinking the correction's coming because of weaker global growth. ultimately we'll find out the u.s. economy is staying very strong and it's going to necessity the fed moving up their exit window. that will be a further corrective force here that's yet to come. >> a lot of talk is how the strong u.s. dollar is deflationary and on an inflation argument, the fed can wait an awful lot longer to raise rates. isn't that the message? >> sure. you do have conflicting forces on one hand, ultimately. the increase in rates will reflect better u.s. economic growth. the first clear signal rates are going up from the fed.

it reflects stronger growth. if you look historically when the feds raised interest rates, that has not posed a problem except when the fed was doing that to fight inflation. >> what has changed in the last in the last week? we knew china wasn't going to grow as fast. we knew the russian sanctions would have an impact on europe and europe has been sluggish and inflation too low. what is the trigger? >> if it's been a surprise, it's the numbers out of europe. we did know the sanctions on russia were going to impact germany, impact europe. it's been worse than expected. and what the ecb looks like it would deliver. now maybe they have to set expectations lower. >> at what point do you buy and

where do you buy if you have cash? >> it's like to see the ten-year yield 3% or more before i'm going to come back in and think the correction is over. at some point there will be a whale of a great buy on small cap stocks, u.s. stocks, on cyclicals, but i think it will come from lower levels. if i'm allocated capital somewhere, i would be looking at europe right now. with the white night coming to the rescue while we pull away. >> i want to pick up what you were saying. you were saying you would wait till interest rates go to 3%. we are going in the opposite direction we are at 2.3 on the

ten year. what does that ten-year yield mean to you? >> i don't know it's been that dramatic. we've been in this range a fuel year now. we went up to three. three weeks ago we were at 260. i think it's been more of a flat yield market than a collapse. back to where we were. i think the bigger catalyst for this sell-off is not so much europe and global slowdown as it is fear that the fed's exit window is moving up. we get bombarded every day. ism in upper sifts. unemployment falling 5.9. the equity market is losing faith that the fed is not going to get ahead of this. it's falling behind the curve. >> it's good to see you both.

>> move on to really a significant moment in activism, yet perhaps another sign of the power of activists and the shadow they are going to continue to cast on boards of directors. talking about darden. given that its shareholders have elected 12 new directors for that company, throwing out every single director of darden and agreeing with or going with the full slate of 12 directors proposed by activist investor starboard, which has been a long running battle. that battle including the decision by clarence otis, the long-time ceo to step down. that battle also including and perhaps this becoming a most important component as to why shareholders voted the way they did. the decision to sell off its red lobster chain.

it was in may they sold it for 2.1 billion. to golden gate. golden gate signed an agreement to sell red lobster's real estate to american realty capital for $1.5 billion. the purchase price for red lobster $600 million. at the time starboard said they believe the net proceeds to darden were about 100 million. that seems to have galvanized shareholders to say we are getting richard all the directors here and it has happened. what happens for now for darden, that remains to be seen. you have a new board. they will go about the process finding a new ceo to lead this company. it is certainly a significant victory for starboard. and again shows the power of activists here. one could argue we've been seeing them in terms of their

power being specific to a proxy fight or even some of the moves made by companies where there was no prospect of an activist. for example, the decision by hewlett-packard earlier this week to split into two. darden shares were opened then halted again. maybe they are now trading. a new future for darden with a new board of directors. you don't see that new often. >> maybe an entirely new recipe for pasta. maybe that was it. >> what did he have a 300-page presentation, mr. smith, never at a loss for slides or words. a lot of unlimited bread sticks to come for people in their future. >> let's send it over to dom dom

chou. >> this is for housing of oil field companies. green light capital upped its stake to 10%, a 9.99% stake in the company and urging for the ouster of its ceo and wants civeo. david einhorn taking a large stake in oil services, barracks and housing maker civeo. >> gas prices continue to fall across the nation. are those cheaper fuel costs changing how consumer feels and spends? courtney reagan is at the nymex with more on that story. >> good morning, sara. prices at the pump are down about 11% year over year. aaa expects the national average for the price of a regular unleaded gallon of gasoline to fall below $3.10 before year

end. that will be the lowest level in about four years. according to retail sector leader at detroit allison paul, she said the average house haeld last year spent about $2,018 on average. if these prices continue, the average household could be saving $260 this year. if you add to the labor market improvement, the stock market gains, that psychological wealth effect becomes stronger. that serves up confidence, potentially releasing some of this pent-up demand just in time for the holiday season. jc penney ceo telling analysts he expects lower gas prices to help retail sales. walmart historically says lower prices at the pump put money back in their consumers' pockets. the cfo of costco said earlier that the lower gas prices is putting money back in their consumers' pockets. plus helping them make money because they have gas bumps.

a note to investors, lower gas prices could disproportionately benefit value-oriented consumers. she points to old navy owned by gap as a beneficiary. aaa says actually 61% of the year, gas prices have been lower than they were the same day a year prior. the national average has been lower 87 straight days. it does take consumers a bit of time to adjust, to realize prices are lower at the pump and divert that savings elsewhere. retailers are hoping to divert it in time for the holiday season. back to you. >> thank you so much. when we come back, elon musk unveils the "d." adam jonas will join us next. dow lost all its gains for the morning. the dax remains close to session lows. lly has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that?

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elon musk unveiling the latest tesla model last night. joining us morgan stanley lead auto analyst adam jonas who has a buy on tesla. are you as unimpressed as the market with this new car? >> no.

we are impressed, actually. i think the share price reaction is just a bit of a catch-up. the whole broader market has been crushed here. tesla was held up because of the excitement around the announcement. if you look at the substance of the announcement itself, there are astonishing things going on. >> let's talk about that. maybe it's buy the rumor, sell the facts. 0-60 in 3.2 seconds. what is in here that gets you excited. is there anything that competitors don't have? tesla make really exciting vehicles. in terms of performance, handling, machine learning, autonomous features. tesla went from last place to first place in terms of autonomous driving features like this park pilot where you can get out of the car and it parks itself while you are standing on the side watching. some pretty innovative stuff. it's just the beginning as these

cars have the ability to learn and make over the air he corrections. >> what is the demand for this stuff? >> demand will be wealthy people that like to have a good time. >> you obviously don't drive. how many cars go to 60 miles in three seconds? is it 60 or 100? >> 0-60. >> is that super fast? >> this car has almost 700 horsepower. yeah. 700 horsepower. probably the most advanced four-wheel drive system on the market. i would encourage you to -- i do drive, actually. >> i think he was talking about me. >> talking about sara. it escapes her what an acceleration like that feels. >> don't italian cars, ferraris do that? >> the skepticism is coming from people who argue this was the next logical thing for musk to do. there is nothing truly surprising about this

announcement. how do you respond to that? can make instantaneous updates to make the car faster and safer the way noo auto company is way to do. the rest of the industry is on its heels. they may not want to admit it on your program, but they are pretty nervous about what tesla is doing to the auto industry. >> others speculate the reason they are not following musk down this path is they don't have lodge-term faith the ev model is going to be the one. we are big believers. evs by themselves, not good

enough. that's why elon is building a company that does more than evs in terms of safety and tech. the other thing, the biggest thing out of this whole event is the pr power this company wields. elon's infectious enthusiasm, for free, it's free advertising. gets the internet into this frenzy. auto companies spend billions of dollars for the fraction of impact elon gets for free. >> does $3 a gallon gasoline impact this at all? >> no. anyone buying a tesla is not buying this some save money. they are niche manufacturer having less than 1% of the global auto industry in 15 years and still that justifies the $325 fair value. we are underweight for it in gm.

this is the first time we spoke to you since you offered a profit warning. do you want to elaborate why you think there is more trouble at gm? >> gm like ford makes a disproportionate amount from its american market. we have a cautious view of u.s. auto sales due to extremely fast growth and capacity which is bad for pricing and deflation. we think the yen at almost $110 is probably the number one issue affecting ceos in the auto industry. i hardly ever get asked about it, but the auto companies are worried about it. the conversation at the dealer level is starting to get the stench that the quality of the buyer entering the market, it's just starting to smell bad. the data itself doesn't show it. we are concerned. >> another reason people are concerned, you've written about this, the cheap credit we've seen in the auto industry and the loans and the fact we've seen subprime loans in this

category. >> i want to correct some perception here. we are not worried about subprime. subprime has a lot of momentum left in it. the quality of subprime changed substantially over the last four years. our team in the finance credit side elaborated on that. we are concerned about the duration of loans going to 70, 80, 90 months. we are concerned about leasing penetration achieving record highs. there are other tricks we are concerned about. >> adam, thanks for joining us. auto analyst at morgan stanley. coming up, how does it feel to take your company public in these volatile markets? dave & buster's doing that at the nasdaq. the ceo will join squawk alley later this morning. >> as we close out a rocky week. the dow is now negative after yesterday's big fall. art cashin will join us next. how much money do you have in your pocket right now?

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art cashin, i said do you like weeks like this? you said it keeps weeks interesting. who's got the baton, europe or us? >> it seems to be over here. nasdaq is getting crushed. we've taken out the 1925 double bottom. that means the next logical target is probably the 200 moving average down around 1905, 1900 in that area. >> which was around the august lows. >> it will be important if they can get there and hold. they held at the other bottom, that's good. >> the dax is going to finish the week down 4%. broke ,09,000. how important is that? >> psychologically important. we've discussed briefly you are starting to see the push of deflation coming across aspects

of europe. we might get some backlash here from the strong dollar. it may spread deflation around. growth is slowing in china and policy makers don't have a lot of bullets left to do anything about it. >> absolutely not. carl and i discussed yesterday here that if there is a negative event pops up, there is not much left in the tool box, as you said. so what can the fed do when they are already at zero interest rates? >> they could embark qe again. let me ask you. what is characterized this week as the german pushback. three said qe isn't right for us. you don't understand what is going on in the german economy. we are not going into recession, we are still positive. this is about the ukraine and russian sanctions.

it's not about generally slowing economic growth qe could sort out. do you have some sympathy with that, art? do you understand the distinction germans are making? >> i understand the distinction they are making. i think we'll see more of that come home to roost as the temperature begins to go down. that will -- >> so you think they're wrong? >> i think they are ultimately wrong. there are signs that some of that is important right now. the sanctions are still there. as the temperature begins to go down, mr. putin's hand will be strengthened. he may be able to talk people out of sanks. certainly on that side of the pond, not this side of the pond. >> dave & buster's has opened for trade. the chain of arcades. i played a lot of pool at dave & buster's over the years. priced at $16, bottom of the range.

one more question about ebola. how does that remove a bid that might otherwise have been there? >> i think it is a background worry that inhibits risk taking. people have to wait and see. for now it doesn't look as if it's quite as contagious. you don't catch it as easily. it's not airborne transmission. people see a sell-off like yesterday. they might be tempted to enhance a position and say, wait a minute. if this thing turns out to be in north america, if it turns out to be in the western hemisphere, that will put negative pressure. it inhibits. >> like a sentiment. >> yes. >> that will be with us for a while. >> yes. unfortunately, it will be with us as in the same way problems with the islamic state and whether it comes at baghdad or not. >> art, we'll talk to you soon. >> okay. >> ice cubes don't have a shot this week.

>> coming up on "squawk on the street," 66, the number of corporate spin-offs we have seen this year. the most since the dot-com crash. with "the new york times" jim stewart next.nd bag right here. have a nice flight! traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the most on-time flights are nothing if we can't get your things there too. it's no wonder more people choose delta than any other airline. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go.

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a volatile week in the markets.

dom chu with the least worst. >> we'll look at the bigger picture here. you take a look at this. talking about names like health care. talking about consumer staples. you can see they are also again some of these utilities companies. the safety trade, dividend trade. the ones that pay you to wait stood out. utilities are positive. there was actually one winner in that whole group check out these ones. they are all deal related. cigna aldrich. carefusion, becton dickinson and allergan. outside the deal space, there is an interesting theme developing among a lot of these stocks. that is something i know you can appreciate. the consumer theme. check out shares of coca-cola or

altria. altria first. you can see both stocks up since the 19th. one of the best performers outside the ones that have done deals has been nike. the athletic apparel and foot wear maker has gotten off to a good start here in this quarter. specifically, just since those market peaks. even though we've seen this rollover, this 4.5% drop in the s&p 500, nike, altria, coca-cola, a lot of these consumer names are weathering the storm better than some of the other stocks in the s&p. back to you. >> that dividend doesn't hurt. >> low rates. >> the dow had its best day of the year wednesday. its worst day yesterday. all three indices erasing early gains. back in negative territory. vix back above 20. joining us now "new york times" columnist jim stuart. what do you make of this week? >> i've been saying do you want it sooner or later?

stocks do not go straight up in a calm, ordinarily fashion forever. the higher they get, the bigger the correction, the more volatility. the volatility doesn't surprise me. the fact it's pulling back a little, i think that's fine. the fundamentals are not that bad. this is not like 2011 where we had europe falling apart. there are no real fundamental issues here. there's static and worries. >> growth is slowing, right? germany may be in a mild recession already. >> sox look ahead this. may be the catalyst to get a little injection of kinsian economics. falling oil and gas prices, higher employment, a strong dollar. yes there is the ebola scare out there, but if that passes, it doesn't get better than this. >> we just went up in a straight

line, presumably because of what the medicine was doing and massive liquidity injections. bad news is bad news. >> absolutely. this is not going to be this kind of artificial thing that's all based on fed interest rates. it's healthy. there is greater risk in stocks. that's why there's greater return. you take the risk out of stocks and we are going to be at bond yields. >> i wonder what's happening to sentiment. there was hard to find bears out there. >> you see the rising vix numbers. i think this is sort of healthy. what is that old staying stocks climb the wall of worry? when everybody is bullish, in theory, they plowed their money in and how do you go up? >> this weekend you write about

hp. >> yes. and splits in general. >> moves like that -- first off, tell us what your take is on that. are these companies grasping at the last final straw? >> splits clearly work. a lot of research that shows that. the question is, is hp going to be another mobility that did really well or delphi which went into bankruptcy? hp doesn't really fit the classic example where you've got a fast growing entrepreneurial unit inside a sluggish, slower, predictable company. unfortunately for hp, they have two slow-growing units. pcs are supposed to be the stodgy one, they are growing faster than enterprise businesses. bottom line is hp has the lowest pe, forward pe of any tech company in the s&p 500. how much worse can it get? maybe this will help? maybe it's a hail mary pass. i don't see it hurting. they needed to try something. my basic feeling is give it a

try. let's cross our fingers, best of luck to them. >> it's not just hp. this idea of splitting in search of growth and focus is trendy right now. that strategy next to, i mean a lot of the consumer staple stocks, food and beverage are doing the opposite. they are searching for growth. they are adding these companies, buying companies to drive topline growth. which strategy ultimately works or is it a matter of an industry? >> you see the pendulum swinging wildly back and forth. i think it's swung too far to the split side. you lose economies of scale. if there are economies of scale, you break it up, you are going to lose them. that's why in these consumer areas, you are seeing economies of scale. hp had big scale in purchasing components. they are the biggest purchaser of d-rams and all this other stuff. they are going to lose some of that now. that's going to hit them on the bottom line. can they make it up with these animal spirits being unleashed?

in some cases it works. there are so many going on, it's not going to work in every case. >> people wonder about activists. icahn moved the share of apple yesterday. there is hp, darden. do you think the bully and cry for change is losing its oomph? >> it's going to. everybody has piled on to this split thing. the activists have taken this on. pretty soon they are going to be some that don't work. then we'll see the pendulum go the other way. when you get record numbers, you've got to begin to wonder, too many people piled into this strategy. >> can't wait to read your piece tomorrow. see you toon. jim stewart from "the new york times." just want to mention what's happening to semiconductors. nasdaq is down the best part of 1.5% as a lot of these plays get hit badly. semiconductor index is below its 200 day moving average. we'll return to the

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we are now down 18 points on the dow in a very volatile market. joining us now is keycorp ceo beth mooney. recently named the most powerful woman in banking in this country. good morning. >> good morning. >> what does it feel like in the heart of the midwest at the moment. how do you feel about these markets? >> it's interesting. this volatility, i think, we will have plenty of monday morning quartering about what were the drivers this week. i think the core economy is stronger. if you look at sentiment,

manufacturing, vehicle sales, there are lots of things that indicate this is a much more stable and stronger economy than market sentiment would indicate. >> you are betting down the acquisition pacific crest with investment banking, within technology. more broadly, how do you grow the business? how do you grow profitability? what are we at 2.3% today? that's tough for your margins, isn't it? >> it is. lower interest rates, while accommodative to economic stability and overall economic growth are certainly pressuring bank earnings, when so much of our income is driven by spread on deposits, this is not an environment giving banking any tail wind. you have to have good core strategies. pacific crest gave us an opportunity to add capabilities. >> if interest rates were to rise and your profits on loans were to rise, would we see more loans being granted around the

country? is the answer perversely because of behavioral science, to raise interest rates? >> i would tell you we would lend anyway because we are so liquid. one of the things the banking system has right now is so much level of liquidity and deposits. the biggest overhang is deposits. i think if there was an urgency to borrow because rates are going up, it would have a positive outcome on growth. >> we just had a week where the former chairman of the fed says he can't get a refi. we had a supplier to apple go from a $1.5 billion market cap to chapter 11. are credit conditions getting worse or better? >> at this point in time, i would tell you we are still at one of the best points in the credit cycle. everything we are looking at shows stability in credit, but i also think we have gotten so accustomed to things getting better, something goes amiss or bump in the night are starting

to grab headlines and could precede that perhaps is there a little weakening. i don't see it in what i'm watching yet. >> i have to ask you as the most powerful banker, female banker in america about comments that we got this week from the new ceo of microsoft talking about this issue whether women should ask for a raise. here is the direct quote. it was very strange. "that might be one of the initial superpowers that quite frankly women who don't ask for a raise have. it's good karma. it will come back." >> i would tell you if we lived in a perfect world, no one would ever need to tell somebody what they want or expect. learning to ask for a raise, learning to share your career aspirations is good career management, whether male or female. i don't run my career on karma. i think you need to know how to square your shoulders and ask for what you want.

>> completely tone deaf? >> depends whether you are working in a tech monopoly. it may be a different environment. i want to ask about the jpmorgan hack. now is there a report 13 other financial firms were involved. were you targeted in that process? >> we obviously haven't had an indication that we were. i would tell you that there's lots of phishing going on. we've seen lots about cyber security in retailers and banking systems. we need to have resilient systems. we believe our clients are safe. >> the potential for what is going on here is so massive. obama is getting briefed on this as often as he gets briefed on islamic state. the fear is they will wipe the records of a major bank. do we have the technology to prevent that at the moment? do we need to -- how do we solve the problem? >> it is very sophisticated.

the commentary is these are nation states. this is what people are doing for a living, not kids in a basement any more. we are all in the industry upping our game in terms of technology, detection, business-to-business, business-to-government. i think it's going to have the policy component. it has a technology component. i think the sophistication requires all of us to up our game and really work to protect data privacy, security and records. it's critically important. >> good to see you, beth mooney, ceo of keycorp. coming up on job creation and consumer spending, the ceo of ck restaurants. then you won't want to miss kara swisher on "squawk alley" sounding off on the comments of microsoft ceo about women asking for a raise. lly has no hidden fees on savings accounts? that's right. it's just that i'm worried about you know "hidden things..." ok, why's that?

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could mean less waiting for things like security backups and file downloads you'd take that test, right? what are you waiting for? you could literally be done with the test by now. now you could have done it twice. this is awkward. go to comcastbusiness.com/ checkyourspeed. if we can't offer faster speeds or save you money we'll give you $150. comcast business. built for business. welcome back to squawk on the street. among the hardest hit industries in today's trade is the transportation stocks. every member of the dow jones transportation average, all twenty, are lower on the day. these are economic worries, weighing heavily on this particular group. the transportation average is

heading for it's worst weekly loss in more than three years. close to but not quite yet in correction territory. remember carl as we know and a lot of our viewers do this is seen by many as a leading indicator for the overall economy. >> in the meantime, take look at the nasdaq that remains a hot spot today. semi conductors taking a bite of of news on the microchip. and the s&p down 18. not quite the 200 day. >> and semi conductors are also regarded as a lead in indicator in addition to transports but in a different way. >> and rick santelli here this morning. >> good morning carl. i'd like to welcome andy, thanks for taking the time. i had a relative coming years renewed the driving license,

both the written and the driving. >> poor guy. >> when it comes to assessing things like minimum wage. and i'll not saying all but many. when it comes to running the show, minimum wage and jobs, the real people at the er end of this is it is an sfermt a chapter in books you deal with this why real time. you deal with this and franchise owners they deal with this firsthand. tell me why you don't think it is a good idea to give america a raise in the president's words regarding minimum wage. >> well the raise they are talking about is 40%. it's a 40% increase in the minimum wage. that is going to have a devastating impact on the small businesses. the jobs where the wages being raised don't produce enough economic value to off set the increase in the wage. so you have small business people out there trying to raise prices in an economy where food

costs are up, healthcare costs are up, energy costs are up. you can't raise prices to cover everything. and a minimum wage increase of this size is not going to be able to off set it. so you reduce jobs. and particularly for teenagers. and about 50% are under 24. a third are teenagers. and only 15 percent are supporting a the family. and we should help them. let's make the distinction. and put them in areas that are suffering. san francisco could take a minimum wage increase. in stockton it's 10.3 and they are in bankruptcy. so high risk city, they will lose the job. they will try and use labor sparingly. and you hurt growth. if you want to help people increase wages look at south

dakota. -- north dakota. 2.8% unemployment because of the energy boom, fracking. there is a lot of jobs and the economy is booming and allows people o off set wage increases with price increases. we paid crew level people in north dakota 12 to 15 dl torus start and the minimum wage is 7.25. there are right ways and political ways to do. >> your point is well made t in the last minute we have left. here the irony i don't understand. when we talk about young people of voting age, which is part of the subset you are describing, they predominantly vote center left. and the people that benefit from the people they vote for and their activities benefit the center right. it's ironic this keeps going on. when it comes to jobs, what would you say to young people in terms of how they should vote to create better opportunity so entry levels don't need to be looked at from a long-term

perspective of supporting a family. it is an entry level first rung of the ladder. what do you tell young people? >> i would say first of all, as soon as you can take a economics or civics course. i think the education system has gotten so bad that in high school you get bad history, no sievicsi sievicsics, and no economics and then expect people to vote on big issues like this. this is why when young kids start and they support those left and left center positions and as they get older they move to other positions. you have to look at reality. and you want a job and entry level position and need to understand how business works you need that job. don't price yourself out of the market. it is not worth it. >> thank you andy with the election about a month ago. i hope young people consider the future and look through the rear view mirror and try to understand that sometimes what looks like to easiest way to prosperity is anything but.

>> coming up we're just about half hour from markets closing in europe which has been a 30 minute inflection point often times for how wall street trades as arguably some europeans seek to raise cash here to satisfy glan demands there. >> with volatility as an 8 month high there are still some trying to brave the waters of an ipo. dave and busters at the nasdaq is one of them. and we'll talk to the crow at t -- ceo at the top of the hour. and last night, tesla unveil, shiela will take the cover off. and satya nadella's remarks on women asking for raises. we'll have a former microsoft executive as well as kara fisher walk us through how damaging

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♪ and welcome to squawk alley. joining us kayla, john fort is off today. he picked a nice day to do it too. a volatile day for the markets. markets are mixed. dow is up about 17. s&p is still negative by about 6 points. nasdaq off the lows but by far the biggest loser of the week. down more than 3%. on track for the worst week since may 2012.