no sign yet of dennis rodman. it's tuesday, october 14th, 2014. "squawk box" begins right now. >> we're on screen for that. good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. ready or not, here comes earnings season. citigroup, wells fargo and jpmorgan. speaking of jpmorgan, jp morgan cha chase, we think there is an apparent early earnings release. according to documents posted online on a third party window website, the bank posted profits of $1 is.36 a share. if that is the case, that would be two cents below what the street was expecting, although revenue is above consensus. this is not on the jpmorgan website.

the company doesn't yet have any comment, hasn't been responding to calls or e-mails. that third party website was shareholder.com. guys, we've been looking through the numbers. if you check things out, it was a fairley thorough release. they look at net interest income of $11.1 billion. noninterest revenue of 13.14 billion versus the street count numbers at 12.80 billion. they dig down, you can go all the way through each of the segments. net revenue was down 2% for the corporate and investment bank, also down 2% for commercial banking, down 1% for consumer and community banking. we have not been able to confirm with the companyist, but these are the numbers. >> you have the numbers being compared. necessary are different than the estimates. >> so when people were putting it together with jpmorgan --

it's probably fairley complex the way that -- >> yeah. >> and i think he goes, i've got it all in here, now let me just say this. you know, is there a difference between save and send? >> things happen. >> this happens again and again and again. >> how did it -- >> somebody outside got it? >> this is an outside site. what happens is i assume somebody -- >> somebody pressed the button early, though. >> you send your documents to the outside company like business wiring, shareholder.com thing. and i think somebody -- >> right, yeah. >> and then they have it. >> then they have it. >> high deaf f is -- >> i was telling michelle, most of our -- most of our people are okay. we take great efforts to make sure every hair is in place. but, you know, we have a lot of guests on.

and i was watching this yesterday and every once in a while, i was in for kind of a shock. and i was thinking, you know, phoners, there's something to those. something to be said for having a really good picture of the person and having them -- >> look, i have to admit, i took a little more time this morning because of that. i saw someone who shared and didn't have a collar on their neck and you could see every place that was cut along the way. >> our executive producer, you check every nose hair, every ear hair, every blemish, every black head -- >> i wonder the first time i get a pimple that i'm trying to cover up on air. it happens. >> we've seen a couple of the guests. one hair can do it. mahaney, he's a good looking guy. but just on one side -- >> they're coming in close on you now. >> that's okay. i'm ready, all right? and if i do look a little

disheveled, that adds to a rugged indiana -- you know, that's -- >> it's something we've been watching. >> yesterday was the first day, right? >> yeah. because we went to hd recently. >> no, no, this is the new beginning. i remember when "60 minutes" went to high def. it was like, whoa. >> get it straight. >> whoa. wow. who is the group we play now? >> we've got hg -- what was the twitter or the tweet yesterday? woibs to the '90s. here we are. >> the backdrop for earnings season is a challenging one for the bulls. stocks selling off once again. the s&p breaching a key technical level closing the door with 200-day moving average for the first time in nearly two years. half of the ten main s&p 500 sectorses are now lower for the year.

the sdou on its worst three-day losing streak since november 2011. it closed yesterday's session at a six-month low. dow transports, listen up for anybody who gets into the transports, the dow theory on this, the dow transports falling another 2% and they are officially entering correction period. that index is down more than 11% from its record high set weeks ago. they are down sharply once again yesterday on the airlines. you have to think ebola plays a role there. >> there's always an offset about what causes that. you're balancing slower economic growth which is important for the transports with the low oil produces. but you throw obama in there and you can imagine if it wasn't just west africa, if it was located somewhere else, there would be people who aren't traveling.

initially, that just is an economic thing. it's not necessarily a pandemic or the black plague. but people start doing less economically and then that's -- >> andrew, you've got your column on this today looking at the economic potential that wall street is modeling today. >> $32.6 billion is the world bank estimate of total losses over the next 18 months. >> for ebola. >> that's not assuming a pandemic. that's assuming that their 200,000 cases of ebola and what the economic impacts of that is the result of. we're only at like 6,000, right? >> 32.62 billion. 32.63 billion? you don't have anything greater? >> these are the guys with the temperature models for climate change? >> however, i put it in place view in the column.

$32.6 billion is less than apple makes in a quarter. >> but that is more. >> but 200,000 people, that is the headline. >> 200,000 people and their model -- >> for 32 billion is 30% more than you would save if you outlawed inversion over a ten-year period. >> it's not just the dow we were talking about and the dow transports. it is off about 9% from a september high. as for today's session, let's take a look and see how the futures are shaping up. so far, it looks like it's going to be a little bit of a mixed bag. actually, things look like they're positive at this point. dow futures up by about 34 points above fair value. s&p futures up by 4 points and the nasdaq up by 13. >> we have a big global story this morning, north korea trying

to end speculation that something is wrong with its leader. >> when he made the visit, he needs to hold up like the new york post with a current cover. >> before today, the last time that kim had been seen was at a concert on september 3rd. you know, i don't even know what to say. i guess i care whether he's -- >> but i want to -- you talked with us about this when it first came out. he's back and what does that tell us at this point? not a lot? >> not a lot. >> i think there was some -- there was some speculation. remember, there was all kinds of speculation. there was some speculation that perhaps he was trying to test loyalty among the population and the military, etcetera. to see what comes out of the woodwork, etcetera.

>> and anyone who is disclose would no longer be there, right? >> exactly. >> the whole thing is -- >> do you want me to -- >> yeah. michelle is actually here not just talking to us about kim jong un. she does have more on germany's struggling economy. >> so i'm going to tell you news about a german economic indicator that we rarely talk about on this show, except that germany is now appear to go be the ground zero of the problems in europe. the zew is out this morning. this is a survey of analysts in germany and it fell sharply today. if you see europe, you would cover this number like a very big deal. today, the number was very negative. down 3.6%. it's the worst reading in nearly two years. now the zew can't rule out a contraction for the third quarter in germany. and if you run through some of

the screens so i can show you the euro, the session now has moved to a low within the day. the german dax -- i thought it moved lower earlier on. let's show you what's going on with the german ten-year yield, as well. we expect germany to put out official forecasts for growth. they're expected to cut to 1% when they have been close to 2%. what's the problem, joe? >> 0.85, ten-year? >> yeah. >> where is italy. >> that's a very good question. i don't know if we have time to bring up the italian chart, but what we have seen is where german rates go up but problematic economies start to get up. that would suggest to you that mario draghi can't keep talking about the low rates, they have

to do something. at the imf meeting, it is very clear that there is a huge divergence between what europe wants and what all of germany wants. germany still refuses to act weess the idea that printing money and spending is a good idea. >> i'm not sure there's anything that would get them on board because there's two ways to get inflation, right.? a good way, which is your colleagues doing great, high productivity, people are getting better wages. there's quick money and budget deficit spending. ebola right now, venezuela has lots of inflation, we know how to do it, but you don't want to necessarily do it that way. that's the german opinion, right? if you just inflate that way, you're going to inflate on the currency, but it's a lot less.

and they could set a control, too. >> absolutely. that is the whole issue of uncontrolled inflation very much fits with the german population is one of the reasons why. and they also feel like they're going to make it through. >> michelle, thank you very much. we'll talk a little bit more about the markets and what's been happening here. joining us right now is joseph quinlin. right here on set with us, we have jeremy veeren from ubs. jeremy, what do you think is happening? >> i think we've seen the pullback, obviously, and it's not what we've seen over the past 21 months when we've had the bull market setbacks anywhere from 4% to 8%. i think investors need to cope in perspective the u.s. economy is actually in pretty good shape.

so it's very easy to get caught up on global points, we heard from microchip last week that had a negative afounsment. but in aggregate, corporate profits wk are going to grow high digits this quarter. from that perspective, we remain bullish on the u.s. equity markets. are you more bullish? >> certainly the defeat of the decline on thursday has been a little alarming. but that said, each time we go through one of these episodes of the vix spiking through 1.20, nothing is pulling back, it feels bad. it feels like this time is different. each sometime what has driven markets higher is the strength

of the u.s. economy and corporates continue to be strong. this has reverted back to below 14 within a month each and every time. >> why do people think 10% corrections are so normal when, you know, we get 6%, we really do think -- i mean, you know, we're pulling our hair out. why does that -- if it's so normal to do 10%, why can't we calmly watch a 10% correction without panicking? >> we have had a low volume timt market to some degree. people get accustom to it remaining low corporate volatility. >> if you don't get to 10, you can't get to 20. >> of course. even the rally we've seen, people are nervous because they're up so much from the bottom.

i also think valuations where higher. there was less downside risk because you had that valuation buffer. now valuation has pulled up. we've pulled back now. >> 14 times seven forward consensus earnings. that's the cheapest we've been since the january/february 6% decline we had earlier. >> when it doms goes down fast and sharply, people hear about it. the people that aren't really committed to the position sell to the other people that are going to hold. the beginning of something more extended usually doesn't telegraph itself as clearly, does it? that is the good thing about corrections. they're usually in bull markets, not the beginning of something worse. >> this.

>> what do you think? >> i think joe is right. remember the scares out of europe in 2010, 2011? you raised the issue what would it take germany to move. i think when the unemployment in germany goes above 5%, that will get their attention. they'll be more aggressive. i think this is another growth scare, courtesy of europe. this time the economy is much stronger relative to 2010, 2011. i wonder about some of these companies thinking they're going to export their way out of this problem. i wouldn't say screaming by, but we feel like information technology, energy has a lot of value in it right now. it could go lower because oil prices are signaling.

so we'll work our way through this. but, really, at the end of the day, financials will do well. i have to throw that out there. this is a growth scare courtesy of europe. we've seen this movie. i do think the economy is a lot stronger than it has been in the last couple of years. >> joe, this is not an ebola, it's sort of a pull on the market based on that or -- and should it be? it will never be a factor in the market, ebola, or you just don't know? >> joe, i really don't know. they've done a good job. if nigeria can contain ebola, i think the united states and spain can, too. not ready. i do think this will be contained. airline stocks, some of these good names are being punished

for that. to me, i think this will pass. it's a learning experience. it's very emblem attic of globalization. we're all connected. >> jeremy, let me ask you, what would you say? would you be telling people to buy on this? you both sound like you're convinced this is a one-off situation to power through this and come out the other side. >> i think that's right. i don't think necessarily markets are going to decline this week. but i think there is a good opportunity for investors. i think it's important to keep in mind, we're having a global growth scare and corporate profits in the u.s. are very healthy. even the early reporters so far in this earnings season, 70% of them are beating on the top line. >> jeremy, thanks for coming in today. joe, it was great talking to

you. >> thank you. >> thank you. up next, a midterm battle that could determine the power structure inside the halls of congress. jaul john harwood making a special instudio appearance. and everyone is watching and tweeting about the walking dead. find out just how many of you -- did you see it last night? >> no. don't tell me. >> find out -- >> the kids who are aware of what's going on at this point. >> don't. >> sorry. find out just how many viewers turned in to see if rick and the gang get out of termis. squawk returns in just a moment. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company.

ing u.s. is now voya. changing the way you think of retirement.

♪ "the walking dead" scored the series highest ratings ever.

i wanted most people to watch the nfl game on nbc. but 17.3 million people tuned into a cable show for the season premier. 11 million adults between 18 and 49. can you imagine? previous record for the walking dead was 16.1 million viewers for the season for a premier. and it outperformed everything else on tv in this demo, 18 to 49. a total of 1.32 million tweets, making the walking dead the number one new season drama for premier in 2014 in terms of tweets. talking dead also had its highest ratings ever with nearly 7 million viewers. congratulations to chris and -- >> conan o'brien, right? >> he was really good and they have on nick atero and scott

symbol. scott a really thoughtful, smart guy. >> you cannot talk too much about this. i still haven't seen it. i know you're tempted. you keep throwing out small hints along the way. if you ruin it for me, i will ruin it for you. >> did you ever watch baseball? have you seen what a good baseball swing looks like? >> that is another hint for me. i am going to destroy you when you miss it later this season. >> i'm not going to go back to the trough and talk about it. >> more than "squawk box"? >> slightly. >> we're not measured effectively by nelson. >> our numbers theoretically could be bigger. they don't have a way of measuring or numbers. john harwood is here. doesn't anybody who is important see ow "squawk box"? >>. >> in multiple continents. >> a major midterm battle between mitch mcconnell and his

democratic opponent allison grimes had their only tv debate last night drawing pretty huge national attention. i don't know if it's more than squawking dead or -- talking dead. john harwood making a special appearance here this morning. so what the heck happened? >> guys, this was a really good debate. allison grimes is in her mid 30s, hasn't been on a stage like this before. she performed very well. mitch mcconnell was the best mitch mcconnell he can be. took some of the things about his persona that don't always come across on television. this was major league baseball. they mostly stuck to the familiar points that they've been making. he was casting her as a tool of obama and the anti-forces pushing a climate change agenda. she pushed him as a tool of big business, the coke brothers,

opposed to the minimum wage, things that -- >> as a tool she pushed him. >> yes. >> they were on their game. we've got sound from both. first here is grams neimes near open of the debate talking about what mcconnell presents. >> it's gridlock, it's obstruction, extreme partisanship that cost this nation a 16-day government shutdown, $127 million. we can't afford to go in that direction. my record speaks for itself. i'm an independent thinker that does what's right for the people of kentucky, not partisan politics. >> now, the independent thinker part that she mentioned, that's because she's trying to establish distance from herself as a democrat with the top democrat in the country. that's obama. she would not say this has become a theme. >> she still won't say whether she voted for him or not. >> that's the one. >> it's been a theme that's been going on for years. >> she did say in another

interview that she voted for hillary clinton in 2008. she just won't say -- >> i don't think you can blame her for not voting for obama. >> look, she was a delegate to the convention. we know how she voted. but here is mitch mcconnell coming back. oh, by the way, before we go to allison, the key phrase that she used in there was 30-year record. she's trying to tie him to washington gridlock. here is how he came back against her. >> the whole campaign has been designed to deceive people into thinking she's something she isn't. it's previous obvious, given where her support comes from, all the anti-coal activists in the country, that she's going to do their bidding. >> so he says it's deceit, you're trying to hide. it's not a bad argument in certain respects.

and we've got a very close race and two candidates performing at a high level. it's fun to watch. the moderator was also good, kentucky. allison grimes pollster, who was accurate for harry reed and heidi heidcamp had her ahead by a couple of points. we'll see whether that holds up. but i think functionally, it is a very close tie race, one or two points on either side and, you know, we've got turnout battles and huge attempts to mobilize voters. it's a conservative state. betting on mcconnell. barack obama lost big time, but she's got a shot. >> is there going to be any type of november surprise? are you predicting anything? >> i think there will be a bunch

of november surprises. you've got a lot of volatile races. >> i mean anything that the democrats trying to do to pull out of those -- >> oh, oh, no. you mean wag the dog, something like that? >> no. just something that benefits. people -- i've seen a lot of pooej people talking about whether they -- they tried that with gitmo. >> look, the president has been doing a series of things to try to motivate and mobilize if democratic base. >> without actually showing up at any of the states? >> well, they're going to benefit from a significant latino vote, even though they delayed the immigration executive order. they want to calibrate that. >> give me your number, 52/48? >> if forced to bet, i would say that we end up in a 51/49 republican position, but i don't -- >> took one away from me, you couldn't just say yes? >> but i'm not confident in that at all and democrats could hold. >> john, thank you.

still to come this morning, the blue chip guide to survival. how big businesses need to adapt in change if they are going to make it for the long haul. and the airline sector has seen better days. those stocks getting crushed this month. does this have all to do with the threat of ebola? that's discussion is coming up in the next half an hour. ing u.s. is now voya. changing the way you think of retirement.

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it's in this spirit that ingu u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement. good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. our top story this morning, the global markets that yesterday was a third pretty tough session

in a row. three-day major sell-off for most of the averages. we are up about 27 points this morning, which i'm sure that will hold throughout the session. hopefully that holds and maybe we -- >> for a half an hour. >> no, hopefully we -- >> it won't look like it does right now. >> unsettling headline risk is here for a while. the latest was 70 people. we're caring for the -- >> for the patients. >> the ebola patients. and, you know, now you're just tearing a lot more about droplets, aerosol -- >> they still haven't figure it out. >> talking about protocol. >> the only answer is they're saying it was operator error. >> but they're talking about whether you even need to we more careful, given that we're underestimate today ability. >> can i make a -- for one

second? >> no. >> 48 people who apparently came in contact with him, including his family members who were in the same room with him -- >> but -- >> i know it's not 21 days, but i'm just suggesting to you that there is a view in the medical community that would mistake it 12 days, the chances of them getting it are much lower than it is in the earlier period. >> i think i would be very concerned if i was on the front line if i was a health kafr worker. >> absolutely. plus $32 billion with the lives lost. but the true economic impact is -- >> you can't overstate this enough. the fear has spread a lot faster than the virus. we're talking about two people here in this country and only one transition at this point. but, you know, something about making movies about things like this, you know, outbreaks. and, you know, apocalyptic premonitions, we think we're beyond this now in the modern world. hopefully we are. and we should be able to quick

ly mobilize our scientific basic research. we know a lot more than anyone has ever known in the past. there should be a way of approaching either a cure of a vaccine. >> and this time, i think those cures and vaccines will be pursued. in the past, it's dropped off when the threat has disappeared. because you've seen it in multiple countries, because you've seen it in western nations, the only good news in any of this is they will pursue any of those potential cures in vax ev vaccines. >> now we have someone to blame. bush and the sequester republicans. >> for ebola? >> oh, yeah. cuts, cuts in research. you didn't even know your people did that? >> i didn't even know my people did that. >> thank you, democrats.

history is no guarantee that it is going to be around for a hundred years or even a decade more. the only way big business will survive is to ablth like start-ups. joining us now, great to have you, a huge singulairty fan. just in terms of us not understanding, really, what an exponential chart or graph looks like, in terms of weather or whether it's happening right now, anything that we talk about, we need to talk about what that's going to do for productivity and the way it looks? >> sure. our world has been evolved from a linear and local perspective. but now we operate in a global and exponential of wealth. if i take 30 linear steps, i get to the back of the room. if i take 30 doubling

exponential steps, i'm at a billion. i'm 26 times around the world. it's hard to gauge. our solutions to it are linear today. we need to resolve more. >> the book that you read, andrew? >> i've got it right here. >> vana white. you know about selling books. this is not related to what you were just talking about. this is related to a corporate strategy and how to move forward. >> it is. but more important corporate strategy, the volatility in the economy is accelerating. most of the fortunes, most of the s&p 500 won't be around in 15 or 20 years. it used to be the life span was 67 years for a fortune 500 company. now it's down to 15.

soon it will be down to 12. essentially what we're seeing is a new breed of organization enabled with accelerating technologies can do things that only large corporations could do in the past. so the book is what are these new characteristics? one of the cycles of what we call the exponential corporations, how do you jex ta pose this? how do you deal with this? >> yeah. the time it takes to disrupt an entire industry, that's contracting, as well. how long can you say i'm going to be in this position? >> exactly. very difficult time. we optimize around managing costs and demands. the internet for the first time has helped drop the cost of demand exponentially.

and if you've got a viral loop going, your cost of acquisition goes totally to zero. amazing. >> but what these new organizations are figuring out how to do is to help dropping the supply exponentially. so you are seeing this new breed of organization today that has almost no cost of supply and no cost of demand. that's why we're exploding out of the gate. if you're a big company, how do you deal with the start-up? >> are you a believer in the curve wall singulairty? >> in the little s perspective. >> small s from the singularity we have those all passing at the same time. ebola has shook up the world. all of our management structures

and leadership structures are about scaling predictable and a manageable environment. we're not managing a much more disruptive environment. >> do you know yet whether machines will end up depreciating what we created, then, looking to destroy us completely or being ambivalent, can you tell me? >> yes. the hollywood scenario is that the machines come over and take over the world like the matrix or the sky net or something like that. we're seeping these using technology. >> i hope you're right. did you see what watson did to that ken guy? >> totally amazing. >> without any emotion or feeling whatsoever. >> buried him. now if you're a doctor and you have ta kind of augmented ability to dying 2340es something better, imagine watson hitting an ebola patient and saying, there's an ebola patient. >> imagine machines talking in the future. >> they don't need us. we've got flash and --

>> personally responsible for this, they have cars that drive themselves, essentially. >> do you think it's -- >> oh, now ee long musk says it so now you believe it. unbelievable. >> what's wrong with elon musk. >> yop. what you said about the maid rix, i happen to be there for the next 500 years. then i want to run around with -- you're mixing your movies. up next, airline stocks have been getting absolutely crushed as crude oil has been plunging over 13% this month. how is that possible? what do you attribute it to? is it the ebola stories? this is leading the dow transports into correction territory. as we head to a break, check out the airline index over the last month. we're going to see the pain when it comes up.

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welcome back. it is time now for the squawk planner. the world's biggest banks are getting ready to report, including citibank and wells fargo. you're not going to want to miss it. at 7:30 a.m., small businesses will be releasing their latest report. after the beg, intel is expected to roll out results. that is today's squawk planner. >> delta is down close to 4%.

united suffering about the same amount. southwest falling almost 15% and american down almost 20%. the back drop is in crude prices, which should be really good news for jet fuel. how much of this pain whats to be, number one, the global economy slowing down and number two, a fear about e-mail? last night, the headline, the most severe health emergency in modern times. that's from the w.h.o., a direct quote. joining us now, bob crandall. in the past, i think you may have something similar to this.

you saw some effects for air travel, didn't you? >> yes. whenever people get frightened, to some extent, they respond. the fact that the w. hmp o. now thinks this is the most serious health threat in modern times, obviously, is going to frighten a lot of people the opinion and the movement of the airline equities is astonishing, given the fact that you have favorite prices on one hand. all on a sudden you've got this tremendous minus, which i am inclined to think is a relatively short-term phenome n phenomenon. the level of fright associated with ebola isn't going to last terribly long. >> the market as a predictor of

the future surprises you, at other times there's a lot of false surprises. i don't know what would be more worrisome. i guess an ebola epidemic would be awful, but the airlines might also be discounting a global slowdown that was telegraphed by germany and china and that's not really that great for overall financial markets, either, right? >> you're quite right. >> well, i -- to be honest, it depends, you see. in both cases, you've got a lot of fright. on one hand, people don't want to get a deadly disease from which you can't recover. on the other hand, people would just assume not lose a lot of money, as well. and the consequences that i suspect the concern about a slowly economy in particularly and a deeply slowing economy in europe is at least as much responsible for the decline in

align equities. in the near term as the ebola scare is. >> i did some work on this yesterday. when the worries or epidemics happen, asian airlines werethou hit at all. when you look at the u.s. airlines that are being hit on this news, to the extent that there were going to be any losses attributed to ebola, how would you even begin to try to measure it? >> i wouldn't. in terms of the impact on u.s. carriers, i think at this point it's got to be terribly modest. and the consequence is as i say, i would attribute a lot more of the near term price concerns to the concerns about slowing worldwide economy than i would to ebola. now, who knows what happens tomorrow. as you guys were talking about a few minutes ago, you've got some indication that in the united

states that there has been some modest infection. but it's very modest. and it's a very limited number of people. >> we got to unare, but i've got to throw run other thing at you. i saw this news and it infuriated me. did you see the flight attendants unions are trying to change the rules again so that you can't use your phone on the tarmac. did anybody see this news yesterday? >> why did it infuriate you? >> they're suing. because they're the ones who want to keep people from using their devices. it's not actually the airlines. bob, did you see this? >> i did not. and i can't imagine. what is it that they -- what is it they are alleging? >> that people aren't going to pay attention to them when they're doing the safety demonstration and they're worried if there's turbulence, these are going to fly out of their hands. >> what about the screaming little brats that are bothering me on a plane? can we just ban children from planes too bob? that's my question.

if they're not mine, i hate them. and i just think they're brats and useless. right? >> joe, you're just trying to build up your worldwide popularity. >> exactly. i'm channelling andrew again. >> that is not my view. but i think you should be able to use your phone. >> it's a little doiflt imagine. >> really? when you're calling sources or what -- >> you sound a little like alec baldwin. i'm playing a very important game of words with friends. >> he's much more conservative than you. thank you, bob. >> very nice. >> my pleasure, guys. as we head to break right now, check out jpmorgan. shares trading it looks at this point a little higher after a mixed quarter.

up next, a breakdown of jpmorgan's results. the first to report. how will the numbers impact the numbers? that will be coming up next on "squawk box." a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement.

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welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin with joe kernen and becky quick. if you're just waking up, look at the futures. this is the dow trying to bounce back from its worst three-day losing streak since november of 2011. an often talked about stock of the day. but check this out. for yesterday's selloff spiral, the s&p 500 closing below it's average for the first time in nearly two years. >> this morning's focus for the markets, the start of earnings season. after an inadvertent earnings release --

>> it is. with shareholder.com. it was an inadvertent release of some information. >> either way, the quarterly results are are out. two cents below expectations. $1.36. the stock not really reacting very much. revenue did beat consensus forecasts. joining us on the "squawk" newsline, marty mosby. marty, if you were -- let's say you were a journalist and you had to write a headline. what would it be? >> well, the headline would have to be that revenues are relatively flat. you are picking up at least some net interest income. but we really still in the third quarter had subdued capital market activities. the big story will be when they get on the conference call. it does look like there was a pickup in september. better than expected, but will that momentum carry in to the fourth quarter will be the big story after we come off the

conference call. >> will any of what we're seeing in that the fed is dealing with that the ecb is dealing with and that is the recent growth fears around the world, what l that be seen in the outlook for jpmorgan? >> really what we're seeing is a consistent, modest, yet positive growth. if you're looking at loan growth, it's still 1% sequential loan growth. which is what we've seen for the last year to two years. so just kind of keep moving forward at a slow pace but making progress. the other fee income lines are still moving higher. so you're seeing administration fees, all those other activities are still slowly but surely making some growth as you go through the year. >> well, then you're telling me it's more of a domestic story and if what happens in europe or china, if it affects the global economy, at least in the sense that it hurts the u.s., then it

might hurt jpmorgan. at this point it has nothing to do with the outlook for u.s. banks. >> at this point it's not kind of bleeding over into like you're saying the domestic economy or the balance sheets we're seeing here. now, what is happening, again, is the capital markets activities are swinging back and forth. they've been subdued because volatility in the market has been so low. but what we saw in september and in october is that volatility kick back in. so what we're looking for in the fourth quarter, will management be talking about what's happening here with the momentum building and some capital markets activities brokerage activities and revenues being better in the fourth quarter than what we would have seen through the second and third quarters of the year. there was about a billion dollars worth of legal expenses. so that's whether or not that's normal or abnormal at this point, who knows. but that was about 26 cents.

and if you take that out, their operating expenses were down almost half a million dollars. so a little bit of efficiency built in here as well. >> i know it's hard to tell, but are we through much of that headline risk? the other big banks as well. in terms of regulatory fines and action? >> i'd say we're not finished. we're not past the final tick of the clock. but what we are at is the fourth quarter in which most of these now are just what i would call a nuisance or unusual item that comes through and creates noise. they're not holding back from jpmorgan. still grew book value over 10%. so they are seeing and paying for those with quarterly earnings. but it's not really stopping the progress. as we move into 2015, we do think that will finally come to a period where that won't be significant anymore. >> we don't -- do we even look

at credit worthiness at this point? what can you tell about those people? >> what we're seeing is that the cost of credit is still at historical low levels. we didn't see any pickup in provisioning this quarter. and we expect that to continue. the banks were so constrained on their lending activities that they didn't really put any new incremental loans out to risky customers for the past several years. there's no losses in these portfolios. that's going to enable them to see low credit costs for the foreseeable future. >> thanks. we have a great picture of you. you're the one that said you don't look good with high def. you'd be fine. we said that earlier. we said we were going to do more phoners because of some of our guests. but that was not -- >> it's not the guests themselves. it's we don't send any makeup. they don't get the same lighting

we get. it's not our guests' fault. >> i watched guests yesterday that was pretty scary. >> that's an advertisement for coming into the studio. >> but marty, you are not one of the people i was talking about. >> i appreciate that. let's get you some of the other headlines at this hour. it is a big morning for earnings. we'll also get the latest numbers from citigroup and wells fargo. then dow component intel. it will be out with csx. u.s. government is reviewing hilton worldwide's sale of wal door-astor-astoria. it is a popular place for diplomats. >> do you think president obama should still stay at the waldorf? >> you know, i hadn't thought of it until this story came up. it was not something that occurred to me when they first announced the purchase. are you worried about safety and security? you think they'll be bugging every room now?

>> no, it's just not owned -- there are other all american hotels. >> seems like a lot of money to pay. i looked over at it the other day. needs a facelift. >> it does need a facelift. but that's part of the plan. >> they're going to sell -- i bet you they're going to sell apartments in there. >> condos like the ritz? >> yeah. then they can make a fortune. >> we should also tell you google is expanding its express delivery service to more cities and same day overnight delivery for a fee of $95 a year. that service lets customers place orders online and from brick and mortar stores and it's competing with amazon. >> yeah. because a billion dollars split up like that isn't really that much is it? people pay $40 million for a stupid apartment in new york. >> my point is you sell -- >> is that 20 of them $800 million. you are savvy. >> i use my noggin. not often.

but occasionally. >> the volatility index spiking. start of the month up over 35%. highest level since june of 2012. and with the semiconductor index and the nasdaq down more than 10%, investors find the opportunity right now. joining us right now is tim freeman and jeff mortimer dir. t >> big move in the vix. going back down now or going higher? >> it is a big move. i think we stay in or around these levels. maybe around 20% or so. but we've been writing for some time that we are going to see a systemic shift involving volatility. in and around 20 is where we're

going migrate over extended periods of time as we look at the investor concerns. right now people are concerned about inflation in europe. specifically germany has them very concerned. china has them very concerned from a growth perspective. when you look at valuations, you know, high 14s, low 15s, you can't make a huge argument we're supposed to have a large correction, but i could see equity softness here when you look to put volatility in dollar context. you know, you could sell those for in and around a hundred dollars. so your break evens are in the ballpark of 1775 on the downside. that seems excessive to me. i think volatility is a bit overdone here given the continued central bank action that we'll see. but the market is very concerned about those. >> the lack of volatility you would attribute to the fed that we saw for a year or so. let me ask you just a throw away

question. where is the vix? >> 24. >> all right. so could you say that one point is attributed to ebola? two points? zero points? >> you know, i think you can attribute the, you know, reactions of ebola are going to be in the airlines, the transportations, and the hotels. >> so it's there. it's not zero. >> the only client conversations i've had regarding ebola are very stock or industry specific. nobody is talking about it to the overall market. >> why is the overall market down? what's the real change? we knew about europe, china. >> this weakness we've seen in germany has been a game changer in most people's eyes. the people are starting to talk more about chinese weakness. but what really has investors very concerned is germany and the spiral we're seeing there. that has large ramifications for

the peripheral. which is what's going to cause real issues. that's where we'll see the vix. but that's what really has investors concerned. >> jeff, what do you -- just listening to tim, you agree? disagree? what's your thinking on this? >> would agree with what we've heard. we are in the throes of a growth scare. the effortless climb of the s&p seems to be over for the time being and we've entered sort of the rollestrollest coaster phas. the january/february near correction we had in the s&p, you had sentiment indicators. we saw that through our clients as well. a lot of complacency over the summer. it was interesting as you started the summer. the vix was at levels down around 12 and ended the summer

at the same level as the markets enjoyed that upward climb. i think this is chinese and german slowness. and this is the market trying to filter whether or not we're going to go into how deep a recession or if a recession is coming or not. and that is what markets are wrestling with. i must also point out that corrections, 10% corrections are normal within market phases. and we're long overdue. and they happen about once every two and a half years or so. going back to the early 1970s. so i'm not down playing this. we are aware of slowing growth. but again, want investors to understand this is part of a bull market phase. >> can i ask both of you, it sounds to me everyone we've talked to today has had the same message. that this is a temporary thing. but everyone sounds a little more cautious today. >> the sentiment has absolutely changed. and if you were to ask them

right now, i think somewhere in the ballpark of 1800 to 1850 is where the market is. so arguably we're not talking about a large move to the downside, but i would say -- >> should we be worried that people are not worried enough? meaning, i don't think we've had too many people come here and say that this isn't a temporary blip along the way. to a higher -- >> i think people are plenty worried enough. i think right now the higher levels of volatility are going to force equity managers to reduce. when we look at the pile of money that's going to be invested on a daily money, it has to find a home. the things you need to consider are with that long/short equity universe, their risk has gone up because volatility has gone up. right? so by natural function they will reduce risk. they're less of a bid in the market place and they're going to watch it. that doesn't bode for the market being down 10% here. but i wouldn't be surprised to

see us leak lower. then we're going to look fine from the valuation relative to the rest of the world. we'll see how earnings come in. and then they'll come in and maybe we run it into the end of the year. >> jeff, isn't the fed -- isn't this the last month for qe? >> that's right. they will be done -- >> coincidence? >> yes. >> i don't think so. but we don't talk about that. this is the last month. this is when they go to zero on qe. >> but they've been taking 10 billion out now for months. >> they're going to let it roll over forever. okay. >> right. >> all right, gentlemen. i was watching a competing not business network but overall network. a network that tends to blame president obama far lot of things. and one of the guys said -- so not msnbc. but one of the guys said we are now seeing a worldwide --

possibility of a worldwide plague and roving hordes. the president has effectively brought us back to the middle ages. >> that's a bit of a stretch. >> but you put isis together with ebola and we haven't seen this -- it's a stretch to blame it on him. but i thought it was funny. roving hordes. when was the last time atilla and those guys were spreading out in europe and the middle east. >> well, actually we had movement like this after world war ii. you redesign borders like that. and you do have movements like this. isis, no. but this is redrawing the map. this a global problem right now. >> i'm talking about the way these guys are -- yeah. i mean, they are the savagery. and we haven't worried about a global -- mask of the red death. >> well, there was the influence of 1917. >> we did with sars. >> we did, but it never sort of made it here.

okay. anyway, thank you. coming up when we return, a possible cyber attack at drop box. and then it's all about time for the super rich. unveiling a mysterious piece of arm candy along with its megaprice tag. a price tag so big it sent a security guard over here to keep an eye on the merchandise so joe doesn't take it home with him. "squawk" returns in just a moment with that piece of arm candy.

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welcome back to "squawk box," everyone. in our headlines this morning, google and other investors are planning to invest about $500 million in hardware and software developer magic leap. the company has been secretive but is said to be working on a more realistic 3d experience. hundreds of alleged drop box user names and passwords have been published on a website. they are asking for bitcoin donations. drop box, though, says it has not been hacked. >> i'm a drop box guy. love drop box.

but double up. also a new survey by mercer gives the u.s. pension system a "c" grade. that matches france, poland, and south africa. the award for the best pension system goes to denmark. when we come back this morning, wells fargo and citigroup are on deck. and there has been a kim jong-un sighting. he appears live and well, at least we think. also later we'll be talking to icon turned entrepreneur. do you know how many thigh masters suzanne sommers has sold? "squawk box" will be right back. ♪

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welcome back to "squawk box." making headlines outside the world of business, president obama's going to meet with military leaders from about 20 countries today. they're going to discuss plans to fight isis. the cdc says there is an

exceedingly low ebola risk in passengers that were pulled from a flight from dubai that landed at boston's logan airport yesterday. scary watching it unfold. emergency crews removed five passengers with flulike symptoms. strong storms swept across the midwest last night. these are pictures from central illinois. trees snapped in half, twisted metal, even some roofs ripped off of homes. at least 13 tornadoes were reported from texas to alabama. and two people were confirmed dead. thousands left without power. a system is now headed towards florida, georgia, and the carolinas. in north korea, trying to end speculation something is wrong with its leader, media there -- >> that is going to be difficult. >> -- releasing photos of kim jong-un. this shows him supporting himself with a cane as he toured a new housing project. >> i don't think it's possible

to prove -- >> there were reports about why he made the visit. rodman could have helped us here. before today, the last time he had been seen was at a concert on september 3rd. >> the animal torture as a child. some type of prob. >> what kind of concert do you think he was at? >> i have no idea. >> you come up with britney spears and justin bieber. come up with something yourself. go ahead. coming up next, trying to attract ipos to help tech companies go public. here he is, duncan niedermayer has a new gig and he's going to tell us about it on "squawk box" when we come right back. guys! you're not gonna believe this! >>watch this. sam always gives you the good news in person, en the bad news on email. good news-fedex has flat rate shipping.

it's called fedex one rate ®. and it's affordable. >>sounds great. (cell phone typing) (typing continues) (woosh) (cell phones buzz, chirp) >>and we have to work the weekend... great. more good news-it's friday! woo! ship a pak via fedex express saver® for as low as $7.50. 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. if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. big day? ah, the usual. moved some new cars.

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welcome back to "squawk box," everyone. we've been watching a lot of

news. let's tell you what's front and center right now. cargo traffic through the panama canal raising 2% in the latest fiscal year. aerosays it is seeking a multi-channel programming distributor classification from the fcc. and a mixed quarter for jpmorgan. earnings falling two cents short but revenues beating street expectations. right now it's fluctuated back and forth. right now down by about 16 cents. >> we should say shareholder.com which released those earnings, called this an operational error. i don't know if that means a fat finger. >> we're not sure what time. it must have been before 6:00 a.m. yeah. >> 4:00 or 5:00. what's an operational error? >> i don't know. >> guy hit enter too soon?

>> either they did it on purpose or it was an error. if they didn't do it on purpose, we assume it was an operational error. it's like the failed protocol in dallas. she was covered. but something failed. got to say something. oh! let's get to steve leisman, excuse me, with a news alert from -- where is he? >> i'm over here, joe. >> news alert from the -- this is bill -- >> yeah this is his report. and it fell 0.8 to 95.3. it's well below the pre-recession average of around a hundred. and under the wall street estimate well. six of ten were negative. plans for capex. the earnings trend down two. but good time to expand, that was up four.

the average number of workers did take a jump and all the inflation numbers also took a step downward. and wage increases. but the wage numbers still among the better ones we've seen since the recession despite the job numbers overall. the overall small business not feeling it in september. andrew, i was thinking what a great number this is. at 95 we're ten away from the worst ever and five points from average. 2/3 of the way from the worst, 1/3 from the best. >> we're going to a talk to our friend duncan niedermayer. today he's using his public market prowess in the pre-ipo market saying this is the next frontier. here to explain his role in the market is duncan, managing director of battery east. good morning.

>> good morning, guys. >> what the heck is this? for years you've been selling us on this idea companies have to go public. now you're light forget about it. we have this other thing on the side. >> i think the media is making it a little binary. >> explain to the audiences what we're talking about. >> batteries is a small company i'm giving involved in with three other partners. san francisco-based. we're trying to address what we see as a confluence of issues that private companies are dealing with. here's the combination of factor. number one, you've got -- the companies want to keep control of their shareholder base. that's number one. number two, the employees sometimes as companies are taking time to go public, they'd like pre-ipo liquidity. and also traditional market investors. so to address those three issues

together which are not being addressed today, that's why we created battery east. we think we can help the companies keep control of their base. sell their stock if they'd like to. big public investors. >> this is a little bit, though, it takes some of the thunder away from the i. rks o. the big ipo and people who feel like they can't get in early in the premarket before all this happens feel like they're the ones who are going to be left holding the back. is that a fair assumption? >> i think that's probably right. but if you go back two or three years ago when you had twitter, linkedin, all ready to go public. they were waiting to sell stock to anyone who would buy it, dlrp some markets set up but they weren't transparent. and the buyer had no information. what we're trying to do is say if the companies want to stay private longer which is totally

sensible. maybe they choose to stay private longer, can we give everybody what they're looking for and include some of those people you're talking about too? it doesn't have to be all big mutual fund investors if others want to move downstream. let's try to address everyone's needs. >> the business that silver traded. >> second market shares posts, a couple others came up. i think they were pretty opaque. i think there was a lot of information, asymmetry. i think as the companies that they were focused on went public, you've seen that sort of almost disappear. so what we're trying to create is a simple intermediary business where we've become a trust trust trusted intermediary. >> why isn't this one of a portfolio of various exchanges, if you will, that your former company owns? >> it's funny you should say that because i did toy with this idea for a time.

you can go to the company and say -- have a monthly auction, if you will. i still think that can happen at some point. we don't see any doing that in the near term. >> what is it due to the retention of really talented people? the people who get in -- to me i'm thinking that fifth employee, tenth employee that you want to keep, if you can cash him or her out early or partially out early, they might say i'm going on the next adventure. >> yes and no. but you're hitting on a good point. what's happening is some of the employees maybe just because of a life event. they want to buy a home or they're having children. and they need some liquidity. they don't want to cash out, but they need some liktty. they go to the bank and they say it's great you have this stock on paper, but you can't pledge it. then they go back to the company and say can i take some off the

table. what we're saying to the cfos is there's a way for everyone to get what they want here. you'd like to retain the employee but you want to keep control of your shareholder base too. >> you want to be more transparent about it. the disclosure. if you let moms and pops go fully downstream to your -- how much disclosure are you really providing about these companies? >> there's going to have to be a lot more information provided by the company and part of what we're trying to achieve here is you want to eliminate that on the asymmetry side. to be buying shares from someone who works at the company. >> isn't the whole purpose of still being private not releasing all of this information, isn't that part of the -- >> i think that's right, but if the companies are going to want to do some almost private placements if you want to call it that, i think they're going to have to be willing to give more of the information. and their alternative is simply not to. but you want to be sure that everyone's got the opportunity to make an informed decision on both the sell and buy side.

>> we still treat ipos like the jack ma ipo we just had, we still treat this like a major event. five years from now, do you think that's still the case? >> i think it still will be because think of the ones that we've seen the last few years that were also big events. what we just talked about the last few minutes was going on before the ipo. and all we're trying to do is just organize it a little more. we're not going to be competing with the banks. these are going to be small transactions. with everybody trying to move downstream and the companies wrestling with these issues, we thought there was an opportunity. fwl one of the several things we'll be doing. >> did you close the alibaba deal? >> i was there -- i went to hong kong a couple of times to help win it. i promised the company i would be there for the ipo. other than ringing the bell with my mother in late august, her 90th birthday, i was behind the post for the alibaba ipo with jack and joe and everybody.

>> so you're announcing your title at battery east but you suggest there are other things in the portfolio. >> that's nice of you to ask. this is about battery east, not me. but i'll be doing a handful of things, including the battery east assignment. >> all right. well come back with the next piece of the portfolio. >> nice to be here. thanks for not doing it on the phone, joe. i appreciate it. >> you waited -- i think you're a guy who can wait until high def is mainstream to come on. otherwise it doesn't do you justice. it's amazing. thank you. because you can see the slightest thing wrong. >> he's a very handsome man. >> thank you. >> duncan, thank you for being here. time warner ready to meet with analysts. plus an upgrade for netflix. tom lee, founder of fundstrat global is going to be here. take a look at futures right

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welcome back to "squawk box." let's take a look at some of the morning stocks to watch. both lowes and home depot were downgraded. a near term risk of correction based on tepid earnings of renovation-based suppliers. so we'll see whether that plays out. dominos earnings beating estimates. revenue also topping consensus. and costco announcing it plans to enter the china e-commerce market. it's going to open an online store on the alibaba site. wolverine worldwide earnings beat estimates but revenues fell short. and the maker of hush puppies and other shoe brands lowered its revenue outlook for the year. i haven't seen updated hush puppies. i used to wear them when i was a

kid. don't own any now. would you know them if you saw them? >> i would know. >> have you seen them around? >> no. i haven't seen the dog anywhere either in any of the kid's stores. but i would know them if i saw them. maybe they've changed or updated. >> while you guys check that out, we're going to talk about time warner. they're meeting with analysts and holding an investor meeting tomorrow. on the phone right now rich greenfield. he's the media analyst at btig. upgraded netflix last night. we'll have more on that in just a moment. >> on the phone. >> he's on the phone. and he looks great on the phone, we want to say. got this time warner meeting. let's start with what you expect to hear this afternoon, rich, and then tomorrow. >> i think time warner's got to explain why its strategy beyond cost cutting actually makes

sense versus -- i think you broke the news of the interest of merging the two companies. i think they have a lot of explaining to do in terms of why he's so confident in the outlook. we're seeing a lot of cross cutting across their divisions. i doubt cost cutting to drive earnings is the answer investors are looking for. what is the growth strategy of these assets over the next few years? >> and so do you see a light at the end of this tunnel. is there a way to make on the revenue side not just through cost cutting? >> i think you've got to go out and there's a lot of chatter about hbo going direct. is hbo really prepared to go direct? look at how well netflix works with nearly 40 million people streaming in the u.s. alone let alone how many people are using it outside of the u.s. hbo as you can tell, look at when "game of thrones" launched.

the question is how well is this company prepared for a future where they clearly want to go more direct to consumers. >> do the math for us. for example, hbo right now, how much money does hbo or time warner collect for each subscriber and how much could they collect if they went over the top? >> right now they collect $9 to $10 per month out of the $15 you pay your company every month. they have roughly 30 million subscribers in the u.s. they charge the full $15 directly to you and is their content offering broad enough to charge that, but let's say they got even $10 the same that they charge right now or get, the question is how much would they have to spend on customer care, marketing. again, the biggest one is how much would they have to spend to

actually handle 5, 10, 15, 20 million-plus people streaming every single day the way they stream netflix. netflix spends hundreds and hundreds of millions of dollars. is hbo really willing to commit that type of capital to make a great direct to consumer offering? i think that's a big question for jeff. rather than cost cutting and driving earnings, shouldn't they be reinvesting not just in programming for assets like turner, but to make their infrastructure second to none. >> real quick i want to go to netflix. are you buying or selling shares of time warner? >> right now we're watching. we don't have a rating on time warner. we're trying to figure what to do with it here. >> netflix, you do like it. you're saying buy it. you're expecting 100 million subscribers worldwide. how do you get to that number and put it in the context of hbo, can they get to that number? >> hbo is already at that number across the world. hbo means very different things. it's joint ventures in latin america. if you go to the kingdom it's --

netflix is clearly trying to be n netflix is the same wherever you go. it's all about international. i mean, we believe that they'll be roughly 50/50 domestic and international by the time you get to 2017. so that assumes tremendous growth. each of the next several years overseas. that's huge growth overseas. and it assumed not just success in markets like france and germany, but going to things like spain and expands into asia whether that be japan or south korea or a joint venture in china down the road. >> okay. rich, thanks for your council on all of this. we will see what i'm warner has to say later this afternoon and tomorrow. >> thanks for having me. >> thanks. up next, take a look at a watch that costs so much money

that it actually comes with a guard. they're not going to leave this in our hands alone. we will show you this one and an even more expensive one after the break. plus we are minutes away from citi's and wells fargo's earnings. right now as we head to a break, the profit is back. here's a clip of tonight's premiere episode. >> today i'm headed back to g greenwich to see how it's laid out. i feel like i'm in a flea market. this will now become a blueprint for the existing store and now stores. we're going to take this out. >> wait, what? >> what do you mean? >> we're going to be closed for a period of time. probably about a month. >> what. >> hold on. what's going to happen with this merchandise? >> we're going to liquidate it. >> designing for the five pillars is going to be expensive. i need to liquidate the bad

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johnson & johnson reporting $1.50 a nickel ahead of expectations on 18.5 billion in revenue which is a little bit above the 18.377 estimate. and then they forecast 592 to

597 which is brackets of 593. the street's at 593. i got the stock at this point indicated -- i don't know whether that's the actual quote from this morning or yesterday. what do you have? >> i have a 99-97. >> i don't even have one. >> but they are saying they are increasing their own earnings and revenue growth guidance for the year based on strong pharmaceuticals. >> i have 101 to 108. >> crazy. all right. you don't need to be a watch collector to know the world premiere of a seven figure mega watch is a big deal. the only place you'll see it is here on cnbc. compliments of the most

exclusive watch brand on the planet. >> i'm about to do the michael jackson moonwalk or we have a very expensive watch. we went to the headquarters where the president terry stern gave us the first look at their most expensive watch ever. as they say on facebook, it's complicated. take a look. this is the most expensive and most complicated wristwatch ever created by high-end watch maker petech philippe. it's called this grand master chime. it's packed with over 1,300 parts. >> every part has been finished by hand. >> it took seven years to create and it includes one feature that will literally make the tech collectors flip. >> we have six patents on it. and you can also flip the watch. >> this is the first of only seven pieces that will be produced and collectors have to

apply to buy one. if you're deemed worthy of owning it, the price tag? $2.6 million. and what's amazing about this, even if you have the $2.6 million and you want buy it, you have to go and apply and they have to accept. >> do you have a write an essay like getting in college? >> no you have to prove you built a collection and they understand them. they get ten times the number of applications than they accept for these high-end watches. >> wow. >> nothing exciting customers more than saying no. >> when i got a maltipoo they wanted to know all about us. but that's so i was nice to the dog. do i need to be nice to the watch? you need to be a good owner? michael jackson only wore one glove. you would not be michael jackson if you did that. >> that's true. >> explain why you have the gloves. >> right.

so we couldn't bring you the $2.6 million watch. but we could bring you something almost as good. they shared with us and it did come with an armed security guard this morning. >> security is right over there. >> yes. he's watching very closely. >> and he's arm snd. >> i can't comment on that. so this watch, this is one of their greatest time pieces. how much do you think this watch costs? $63,000? $750,000? or $1.3 million? >> i flow because i heard you say it. >> $750,000. >> for a quartz watch? >> it's not a quartz watch. you have gloves. >> what do you wear? what kind of watch do you wear? >> swatch watch. >> he won't admit he has a rolex on. i have a rolex on. >> very lovery watch.

>> it's one of the parts of the economy despite all the turmoil -- >> you can keep it. i don't know if i want to touch it. i'm nervous. what if i drop it? >> it comes in the goody bag. this is very nice. >> to me the big question is with this whole smart watch things, what happens to the high end market? it's different. like when people say it comes out with an lcd, it doesn't affect the market. different clientele. but these watch prices are going through the roof. >> i had it upside down. >> and you never actually own a patech. >> well, here you go. they brought goody bags for us? >> i think we have to give it back to them. >> okay. thank you. at the top of the hour, citigroup and wells fargo numbers, we're going to look at them. quarterly results. former jpmorgan strategist and

founder of fundstrat tom lee is going to break down markets right after the break. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement. (receptionist) gunderman group is growing. getting in a groove. growth is gratifying. goal is to grow. gotta get greater growth.

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welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. >> and citigroup is now reporting the estimate. first let me give you the number and it's adjusted. $1.15. that's the first number the company reported was $1.07. with a revenue number of $19.6 billion. which is above estimates. so that would be above on both counts. there is some talk now that the

plan at citi as well. do we know about that already, andrew? >> which piece? >> there's a divesiture plan. within the news release, they're talking about divesting. i'm not aware of what they're talking about. also disclosing the results of the investigation into the security unit in mexico. >> let me tell you. wells fargo also hitting now. it came in line with expectations coming in with $1.02 a share. that's what analysts expected. the revenue coming in at $21.21 billion. also talking a bit about their third quarter net charge. their efficiency ratio, 57.7%.

that's up 140 basis points. >> i have a citi trading higher now. do you have that? >> a slight issue with one of the computers out here today. indicating higher today. $31.42 after closing at $50.20. >> okay, good. i'm going to -- >> those divestitures for citigroup, looks like it's closing in countries including japan and korea. trimming of global operations. it is planning on keeping its institutional business in these areas and expects to sell some of those units by the end of 2015. >> okay. the s&p, let's get to tom. the s&p closing below its 200 day average.

the nasdaq down more than 8%. the transports which is seen as a good indicator of economic growth slipping 2.2% yesterday. but a lot of that was with the airlines. and you can attribute that to whatever you want. but it is in correction territory. and the same story for the russell 2000. here to break down the recent volatility, getting an update from tom lee. founder and head of research at fundstrat. we've come to you quite a few times. you've stayed bullish through thick and thin. your confidence been shaken at all in the last month or so? >> well, i mean with it's been pretty scary out there because we've had some big technical breakdowns, some faults rally. and i think our sense from clients, they're getting very uneasy. the last couple weeks have been tough on them on top of what's been a tough year for fund

managers. blue the key here is how much has changed. i don't think much has changed. we still have a u.s. recovery underway. we've got a tail wind coming from lower oil. the weaker inflation. there's still a lot of capital on the sidelines. companies have a lot of cash. so, you know, i'd say that we're going to get through this rough patch and i think we're still going to have a strong finish to the end of the year. >> and if you were to -- the thing that has sort of shaken the confidence in equity investor the most over the past six weeks has been -- >> well, i think what's scared people is there's been an underlying sort of sense global growth is at risk. china's been weak. and the feeling of the last two weeks has been, well, maybe the weight of all these concerns is too much. and then it's been tough to sort of try to buy a dip because volatility spiked. we've had the rallies that failed. i think in general people are pretty scared. as you know, that's usually a very good setup.

i think at e oend they have day we're going to look back at this volatility and realize the spike in the vix, the selloff are all presenting excellent entries. we just don't know maybe when to capitulate. >> we were watching every twitch and move from the fed. we've been watching it for a long time. and qe's ending this month. and they sort of gave us an all clear by saying we realize there is some slowdown in growth. some of them talking about inflation being quiet. they said all the right things and it didn't help this time around. is that europe? is there any portion of this that is the uncertainty of a possible pandemic that -- i mean, the markets get scary sometimes for irrational reasons. do you see any of it with that? markets don't like uncertainty. none of us know how this is going to play out.

>> so i guess i really should have mentioned i think there is a lot of anxiety about, hey, the last two times qe ended, look what happened to the market. >> not ebola though. >> it was temporary. >> yeah. sorry. i wasn't sure which one you meant. >> what about ebola? i mean, the airline stocks yesterday. what happened? >> i mean, yes. i think it's a human -- it's a real human tragedy. it's a scary disease. it's sad so many people have been afflicted. but, you know, should this be something that should weigh on the multiple or slow global growth? >> in short, no. nigeria is a -- that should give us all hope. because the very first -- they talk about the rickety health care system and it's been almost 45 days. almost clear. w.h.o. needs what, 47 days? >> is it 47? >> i just read it. but a certain amount of time. they're close to being out of

the woods. so hopefully that works. for me, i don't know. i can deal with ending qe. i wish they would have ended it a long time ago. for me i point to isis or something that would give me just wondering about everything we thought about the world. now i'm not sure about anymore. >> well, you never know. there could be some other data point that emerges that make us realize growth is fine. and we're go toing put this all behind us. >> what would that take? is that an indication europe is not as bad as we thought? china's not as bad? >> i think it could be any of those. one thing that should give us comfort that global growth isn't as bad as we think is the financials have been acting well. you'd really think if we're about to have a downturned economy, the financials should take it on the chin. the earnings we've seen have been much better than expected. >> but you can also put this in the context of citigroup pulling

back in. they're pulling back on that front. >> in the one way, i'd say that's true. banks are becoming more blue chip. they're playing to their strengths. strengthening their franchises, that should be good for multiples long-term but there's a lot of uncertainty. >> let's continue -- hang out right there for one second. we're going to talk a little bit more about citigroup because they did come out we the qe results. calling now with reaction to the results is anthony polini. your headline? >> eps beat on expenses and revenue. very pleased with the quarter. >> pleessed with the quarter. what did you make of what seems to be a larger pullback in temsl of global ambition with the company. >> obviously a refocus on

profitability rather than growth. so we're looking for, you know, various low balance sheet growth over the next year. then look at single digit balance sheet growth going forward. this is about operating leverage, not growth. >> we're looking at a stock right now trading up about $50 right now. what do you think it should be? >> i think it should be a $70 stock. i think that's the easy hurdle for citi. once they provide more visibility on $7 per share on earnings power. >> so what has to happen? let's break that down a little bit. what has to happen to get you to $70? >> more restructuring. start to see some balance sheet growth. and citi also is very positively levered to higher interest rates. >> all those things you just discussed, you suggest are effectively baked into the cake. not necessarily into e the markets but what they're doing operationally? >> yeah, they are one of the few

banks that is less dependent on a better interest rate environment for earnings growth. and that's one reason why we have a strong buy on them. you know, we can get earnings growth with a 218 10-year with or banks that are more reliant really on the external environment. it's going to be difficult to get earnings growth next year without -- >> talk about citi in the context of the toer banks. we just had wells fargo out with their news. it's a question i ask. if you had a dollar and could invest in any bank these days, where would you put that? >> we've been pounding the table on citi and jp. wells has more on higher interest rates. trading obviously was the big positive surprise for citi and jf. the jp numbers are better than they looked with 26 cents a share in legal expenses. you know at least half of that's gone away over the near term. so jp really did beat in essence

when you're looking at forward modeling. all three companies did great. and the citi story shines more on valuation. >> okay. we're go toing leave the conversation there. anthony, thank you for that. you allowed to talk jpmorgan post being a jpmorgan man? >> i can. i may not be the best guy to dissect numbers. but in general, you know -- >> you own shares still? >> yes. >> okay. we'll talk more about that when we return. and the street's reaction to some of the numbers we got as well. and later, from actress to entrepreneur. suzanne somers is knocking on the "squawk" door. she's here to talk business, her book, and much, much more. we think of this as three's company, but not really. a look at the futures right now. we're back in just a moment. dow looking to open up higher about 60 points. how do you beat the number one seed?

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capital markets. paul, we've now talked about jpmorgan a little bit this morning. we've talked about citi. where do you land on wells? >> i think wells probably did pretty good relative to everybody else out there. it's a big institution. it's hard to move the needle. but they posted a buck two. they had solid loan growth. i think the one necktive if people want to point to it, is it did drop nine basis points. but that's more their deposit growth and putting that money to work quickly. >> so the big question is would you buy the stock at $49.70? >> a lot of people feel it's fairly valued. i think relative to where we are in the world, i would still be buying wells fargo. this morning we're looking at a 10-year 220. i don't know if banking stocks are going to go up in that head wind. but if we get a rise in rates again, yes i'd buy wells. >> our previous guest put a --

does that make sense to you? >> i know citi has a lot of different moving parts out there. i do cover jpmorgan. i'm in the camp the the bigger banks are not getting the credit they deserve. relative to regional banks, i'd buy the big bank bs all day long. >> so that's where i was going to go. among the biggest bank wells is still your top pick? >> yes, it is. >> i was trying to go to you before we went to a break. do you have views on these particular banks, tom? >> i mean, in general i like the financials. i mean -- >> you like bigger banks over the regionals? >> yes, i mean, in some ways. if you think about where the opportunity is going to be, it's going to be in loan growth, capital markets. you know, if the fed tightens we do get some benefit from them. but, yeah. i think just in general when we

think about franchises and blue chip businesses, these big businesses have become much better businesses over the past few years. >> how do you even view a citigroup? >> they're just big complex businesses. there's a place for all these companies. there's plenty of market share, pricing power. you know, i used to work at citigroup. i think it's a great business. >> okay. what is going on over here. you guys are still working on numbers? >> trying to make sure we -- we look at these things to figure where the stock price is going. >> i was trying to do the interview. >> it looks this morning we've been watching citigroup. just looking through some of the other earnings and seeing where they're trading as well. >> okay. why don't we thank paul. >> focus. >> excuse me? >> focused. >> it's hard to focus with all of these numbers. >> a lot of breaking news and keeps us busy on mornings like this. want to thank you paul for his time. tom is staying here. but we have other stocks we're

watching this morning including gopro. shares getting slammed yesterday after saying michael schumacher's injuries in a ski accident last year might have been caused be agopro camera wearing on his head. the gentleman came out later db i think the schumaker cam came out and said that was not the case. but on that initial report, there was a huge drop. also johnson & johnson earnings beating by a nickel. sales were helped by strong results for the company's new hepatitis c drug. also raising its forecast earnings for the year. look at where that stock's been trading. joe, i'd ask for your help but don't know if i trust your machine at this point. looks like it's up. $100.60. after closing at $99.12 yesterday. when we return this morning, she helped sell more than 10 million thigh masters. the one and only suzanne sommers joins us on the set just minutes

from now. and as we head to a break, take a look at shares of wells fargo and cy tooe. that's what's been hang over the last year. "squawk box" will be right back.

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that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. welcome back. futures at this hour are improving from where they were when we first started talking about it. so we've been doing something right here. we've been very calm and we've

been talking to smart people. >> it has been universal with everyone we've been talking to this morning. >> that's scary. >> that that say this as something we'll work our way through. tom, you admit you don't know how far we fall before we hit the bottom. >> there are some things telling us we're probably near the bottom. there's a lot of signs of, i don't know, what you call capitulation or the big fear out there. >> look at that. 2.19 i just saw. what do you call that? >> i think that's a fear trade, right? >> it is. >> and to unwind a lot of other things. >> 2% for ten years. man. better than a half a percent. >> makes a 2% dividend look like a bargain. >> if inflation is zero, i guess it's okay. jpmorgan is meanwhile holding a

media call. kayla tausche was on that call. she joins us now with the highlights. kayla? >> hey, joe. this is of course the call every quarter we get to walk through the highlights from the earnings as well as hot topics and current events for the company. i'll jump right in. we did see profits across the board that were less than expected at jpmorgan. a lot coming from the corporate and investment bank due to a $1 billion legal charge. i asked them to clarify what that was. while they couldn't provide much of an explanation, they did note part of that was related to foreign exchange and some of the currency settlements that could be forthcoming. i asked about global volatility as well. jamie dimon saying while the global situation may slow down american growth, it won't hurt the consumer recovery where broad based spending is improving there. and he said that some of jpmorgan's businesses, the commercial lending business should be insulated from that

when it does continue. they couldn't predict how long it would last. lake, the cfo of jpmorgan said fixed income trading would continue to be choppier in the fourth quarter. finally, we did get some comments from dimon on his health. he says the prognosis is ramping up. of course he was diagnosed with throat cancer earlier this summer. he has just completed treatment. he also commented on cyber securities saying they did lose a battle. but it wasn't a damaging one. they do continue coordination to help ramp up some of the security efforts going forward. that's the latest from the jpmorgan. we'll have more headlines throughout the morning. back to you. >> thank you very much. good to hear that jamie dimon is on that call talking about these things too. when we come back this morning, crude's slippery slide. about to hit a four-year low. duting estimates on oil demand. we're going to be talking about oil's next move after the break.

and as we head to that break right now, take a quick look at the equity futures. wow. things have picked up more over the last few minutes. dow futures looking up about 84 points. s&p futures higher as well. up by close to 12 points. and the nasdaq up by about 30 points. stick around. "squawk box" will be right back.

welcome back to "squawk box" this morning. among the stories front and center right now, small business optimism falling last month. more owners say they expect a slowdown of profits and sales. also costco announcing plans to enter the china e-commerce market opening an online store on the alibaba site. and hundreds of alleged dropbox use names and passwords allegedly taken. the user claims to have hacked 7 million accounts. and is asking for bitcoins to fund his operation. dropbox says it has not been hacked. so hopefully i'm not on that

list. >> costco and china belong -- i mean, it's big. big box. they got lots of stuff. >> and lots of people. >> and china's got a lot of people. costco and china seem like -- >> perfect together. >> using that noggin again. >> like when dunkin' donuts said why don't we sell donuts in california. it is the golden state, is it not? certain things i could have come up with. another failed rally to start this week on wall street. the major averages so far managing to avoid a correction with the s&p closing below its 200-day average. and the nasdaq down more than 8% from its high this year. meantime, the broader banking indexes only risen a little over 7% in the past year. here to break it all down for us. he's founder and head of research at fundstrat local advisers. and you have a lot of things i think in your tool box.

something you were mentioning off camera. which i don't know whether it's the most important thing, but how do you -- what do you use for sentiment. do you use personal anecdotes dpop you use put call as many do you use bearish or bullish? and where are we? because it seems like a bit of a change in the past week. >> there's a lot of fast-moving measures. the vix is a good one. we do rely on a lot of anecdotes. when we hear from people, it gives an idea what people are really fixated on. i think over the past week we've really seen some true damage. you know, that people's positions and relative performance suddenly -- >> confidence was shaken. and a lot of times it's with people weak hands rather than strong hands. we always talk about that. they're the ones that sell early and regret it. >> yes. and we've been hearing from the stead jer hands in the past especially weekend. people who had really been

unfazed by market volatility. we're close to a turning point here where the technical damage has really scared people. it's gotten their eye off the fundamentals. and as we look back, you know, whenever you look at periods like that. those are really just buying opportunities. they're not changes in the direction of the market. i don't think the bull market's over. >> we always point out that if you believe deep down that we're in a bull market which will see higher in one year, two years, you should be so lucky to get a 10% discount on stock prices. and if we're going higher, normally the market won't let you have a good deal. it'll make you not buy down 4%, 5%, 6%. it will run away from you typically. >> i think for most people it's hard to time the bottom. meaning i don't think it makes sense to say the market is going to go down another three. >> i want to wait until 10% and buy. >> yeah.

what happens is you get paralyzed and the market's up five. then you're chasing it higher. i think it makes sense to say where do i want to be a year from now? i think you made an interesting point. at the 10-year where it is, there's a lot of stocks in the s&p 500. and even the russell paying bigger dividends. >> financial conditions don't seem -- it doesn't seem like there's a lot of stress in the system anymore. i think we can thank the fed and central bankers around the world probably. >> that's right. if you look back and say what's the difference between now and the last time qe ended? there was financial stresses building, so you had to be nervous about could the market take a tumble. there's very little evidence the financial conditions are weakening. it's more nervousness across maybe there's a lot of leverage. >> and a big tail wind from oil prices. that filters through all parts of the economy. all input cost events have become lower. >> it only hurts the oil companies which most people are

happy. >> consumers spent $328 billion a year in gasoline. it's 15% of their discretionary income. just the drop as of last week in gasoline was a $10 billion dividends in the second half of this year. so you can imagine if oil continues to fall what kind of dividend it's going to pay to consume consumers. >> it's just the beheadings every couple of weeks and ebola. those two things -- i mean, those are not a great backdrop for anyone not just in financial markets but in general. >> just confidence. >> it's very unsettling. what year is it? 2014? >> it is. >> thank you. very unsettling. >> it can be scary, yes. >> because we think we've got it licked and we don't. >> but again, a year from now we may have a new worry we're going to put these behind us. and what should it really have done to the stock market. really shouldn't have done much. >> maybe germany should be our

biggest concern. they've been holding up the entire eurozone so long. if they're not there, you wonder. >> i think europe has been in people's radar. but, you know, i do think in the short-term, the weakening of the euro is going to be a short-term tail wind. you may see growth pick up in that region. >> okay, tom. you have two first names. tom and lee. >> and it always gets mixed up. >> we're going to carl larry now. so what did we decide about guys with two first names? >> they rock. >> okay. thank you. >> she's so polite. >> isn't she? she makes up for a lot of stuff i say. oil falling to below $85 a barrel. could cut output, shore up prices. that's fading this morning. carl larry is president of oil outlook and opinions. she joins us now with more. good morning, larry -- i mean, good morning, carl. good morning, carl larry. >> good morning, joe. >> carl, i don't remember me thinking that you were crazy

about oil recently. like people that have told me that oil is great, it's going back up, i've wondered. because so much global tension and it's been unable to hold 95, unable to hold 90. where are you now? is 84 as low as we're expecting to see or could it go below 80? >> i don't think it's going to go below 80. right around the 80 area. 82, 83 is about right. the funny thing about oil, this is what young was talking about. i think this is what the fed is watching. this is disinflation. it has nothing to do with the u.s. our demand is at a record level. we're seeing the lowest supply cushion we've seen in ten years. we've drawn down 33 million barrels of crude over the last six months. there's not an issue with crude supply here. we need it. and we're producing almost 9 million barrels a day. so it's great. it's the rest of the world that's really having an issue. you have people like opec and they're in this price war. but it's not a price war with

us. it's with them. saudis did it the week before. so it's like you're playing chicken here with oil prices. they need to cut production. we'll see where it goes from here, but it's not the u.s. >> and they're not cutting. they've got bills to pay. and they're going to -- just yesterday the analysis was that a lot of these guys are going to try to maintain market share and they're going to do that from producing the same amount for less. >> right. i'll tell you a wild card here, what we might see. if anybody's going to cut production, it might be russia. they're throwing so much mustn't to defend the ruble right now. they might have to cut production and that's where we might see the price supported here. >> they definitely can't cut right now, can they? >> i don't know -- >> if we go below 80 i'm going

to have to come back and tell you you're wrong. >> if it goes below 80, does that change? >> nobody said we're going in three months dropping $20. >> no, they didn't. but we were here in 2011-2012. we bounced right back. it was 2011 and a year later we were back above $100. it happens. just right now it -- this is deflation. this is what's going on right now. prices shouldn't be this low, but it's fine. >> and he's in houston. >> yeah. >> so he knows what he's talking about, andrew. right? you're in texas. >> oil is here. >> carl, thank you. >> thank you. >> tom and lee as well. thanking all four of you. >> tom, thanks for coming in. up next, suzanne somers is here. we're going to talk thigh masters, business, success.

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to be a better investor. live now at times square right there. welcome back to "squawk box." look how the market is setting itself up for the day. things are looking up. dow looks like it would open up

higher. the nasdaq looking like it would open up about 27.5 points higher. let's get to other headlines. burberry shares getting hit. spooking investors with a weak revenue outlook. we're going to be watching u.s. luxury retailers including michael kors, tiffany, and ralph lauren. >> all right. well, we've been waiting for this guest all morning long. we have someone very exciting sitting with us right now. i'm stretching a little bit because i don't want you to see what they're doing with the microphone. >> i said they brought the other imposters in and they never recovered. >> took some extreme measures that didn't quite work out. >> are people still talking about this? >> you're not sick of it, are you? >> of course not. you know, last year. hello, everyone. >> hello. >> suzanne sommers. >> last year i'm lying in bed and i'm watching "saturday night

live" and i went, i woke my husband up. look at this! it was lady gaga playing chrissy snowe with justin timberlake and somebody else probably really famous, apologies to whoever that was. and they were doing a takeoff on three's company. if it's three way, then it ain't gay. anyway, what i saw by watching this was clearly that show had an iconic effect. i was lying in bed saying to allen, good thing they fired me. >> you know what? they thought they could do that. and put any blond in there and it didn't. i remember when it happened. >> it hurt the show. >> it didn't work. >> what did they lose overall? >> it was in the way, way, way in the millions, maybe billions. but probably close to $1 billion. >> it was trend setting in terms

of our attitudes towards sexuality and everything. it was ahead of its time. who does not love -- i mean, i miss john ritter. >> i miss john ritter. >> what a great actor he was. >> he really was. and i came in very green and announced that to everybody in year one. i was going to be a chef and this is not really the direction i was going in and so i'm just like a sponge. and year one, i had a mentor, one of the producers. and he really took me under his wing. and then one day halfway through year two, i'm watching john ritter and i went, oh! it's musical. comedy is musical. set up beat. and from that moment on, it all made sense and john ritter and i became the sparring partners where it was just such a delicious chemistry. >> it was. >> that was what was so perfect. was -- >> joyce was good too. >> she's an excellent

technician. and they always had an iso camera on john and i so if something happened with the audience we didn't expect we would go with it. >> how many seasons all in? >> i -- >> we lost the mic. >> that's okay. we'll get the microphone back. for those who don't know it, what happened was you were making substantially less than john ritter. you wanted -- >> than all the men in television. when my contract was up, i went to the network and i said why are all the men being paid ten times more than me and i'm on the show with the highest demographics of all women in television? but what they wanted to do was make an example of the woman on the number one show, the highest demographics to no other woman would have the audacity to ask for parity. i believe in the end that i won. i lost, but i think i won. because my career went on.

but women now get paid commensurate to the amount of tickets that they sell and that's what it should be about. do you sell tickets? >> what happened from that, though, we all watched very publicly your transformation to a businesswoman and entrepreneur. thigh master. how many millions of those sold? >> ten years ago it hit 10 million. it's still being sold in 163 countries and we're coming out with a new version this year. see, that's the gratitude i have for "three's company." that firing, that controversy kept me out there. and after i got over the shock of being fired, it then allowed me to rethink and reinvent. >> what led to this thigh master? >> that's such a girl thing. i had bought a pair of blanac

shoes. they made my legs look good. but they're $565. at that time that would be like $2500 now. i thought my husband is going to think i'm so stupid for paying almost $600 for a pair of shoes that are just nude shoes. so i'm standing there in my underwear and i came out of my dressing room and said how do you like my new shoes? and he said great legs. i said, my gosh. that's the commercial. it starts on those shoes which i was then able to write off. and they panned up my legs while my husband is saying great legs. history was made. so it's fun. we're entrepreneurs and we're having a lot of fun with it. and now i write books on the lecture circuit, feel like i have a purpose in life. >> i guess it's a the biggest question we have. the transformation to the entrepreneur wasn't the path you planned to take.

but where you go from here. >> you have to always use it like judo. rather than sit and feel sorry for myself which i did for almost a year. but then i heard a voice. i hear voices like the movie. and the voice said why are you focused on what you don't have? why don't you focus on what you do have? i thought what do i have? and i heard again, you have enormous visibility. right. everybody knows my name. so i said to my husband, you know, i sing. i'd like to do is vegas act. so he went to vegas and went from hotel until hotel until he could get me a two-year deal at the mgm grand. at the time running it said why do you want a two-year deal? he said because if she doesn't quite hit the mark first time out, i know her. she will. it just might take a little while to figure it out. in tnthe meantime, the curiosit factor will bring people in. which it did. we sold out from the night i opened. i did 20 years as a headliner in las vegas. in 1987 i walked on stage with

frank sinatra and he was entertainer of the year and i was female entertainer of the year and that was really something. and he called me baby. you haven't lived until frank sinatra says, hello baby. >> we want to thank you for joining us. we've all watched your career. >> there's so much more to talk about. >> there's so much. more and here's my next product. i know it looks like nothing, but it's a three way poncho. so if i was being demure. i would wear it as a cowl neck. or take it done. or bring the hood up. that was fun, wasn't it? >> where do you sell them? >> any large retail is store or three way mon choe.com. and let's hope lady gaga wants to to do another parody on it. thank you, you're a great group. up next, a big recap of the

financials we got this morning. "squawk box" will be right back. the conference call.

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he'll get a base salary of $1.3 million, a one-time signing bonus of $4.1 million, and will be eligible to receive an annual bonus of up to 150% of his salary. there you go. let's get to dominick. he's been tracking the earnings of the morning, dom joins us. >> how about the banks first. kala is always over jpmorgan. i want to read you more headlines coming out of citi and wells fargo. first of all, we do know that citigroup shares are up about 2.5% right now. $51.10, thereabouts, so far in trading, on about 451,000 shares in volume. that's how the pre-market trade is working there. we went through all the numbers and know it's an earnings beat. one of the interesting things to highlight here again is they are exiting those consumer operations in 11 markets here. although, it was pointed out here that they are not exiting completely the korean or the south korean consumer market fully, just the consumer finance

portion, so we want to make that clear. also, it's going to maintain an institutional presence in all those markets. the one other thing i wanted to point out is that tangible book value has been on a steady rise and has been for a number of quarters right now. citi is going to report its tangible book value being about $57.53 a share. so folks like joe, who at one point in their life maybe valued banks upon how they traded based upon the multiple to book value may find that interesting, because citigroup still trades at a discount to its book value. maybe that changes in the future. also on wells fargo, net interest margins, 3.06%, that's lower than it was last quarter when it was 3.15% and even lower than it was last year at 3.39%. so net interest margin margins, measure of a bank's profitability, as interest rates stay low, these rates are going to contribute to those shrinking profit margins at a lending business for a company like wells fargo, but they do see improving credit quality as did

citigroup. a couple of interesting notes to bring in there. we'll be all over those conference calls when they start up. citi's will be at 11:30 and wells will be at 10:30. >> so it's dominick, but the prompter said dom. anybody would be confused by that. >> you can call me -- >> to see dom, it just -- right there! anyway, let's get down to the new york stock exchange. james, jim cramer, how are you? have we talked to you since that great win? were you floating? >> no, that was a beat down. that was impressive, but look, i think so the giants go to dallas and dallas is going to be the number one team in the nfl. just -- >> do you have a problem with that? i like that? >> well, i mean, i guess it's been a long time. i happen to like their coach. i think he's a nice guy, really a very bright guy, but day do seem real. because unless seattle has had a major step down, i really think that dallas -- it's a great win

for dallas. >> i thought so, too, jim. you know, when dallas -- it's been a while since they've done well. and some people hate them, some people like them. >> we spent some time with romo. and he just said, i'm going to make you like me. and after like 15 minutes, he was like, geez, that guy's a likable guy. i don't want his back to hurt or legs broken. it's an incredible conversion. >> jim, is the market in trouble? >> i think a lot of the market's in trouble, yeah. i think when you have citi being the best and citi is the best, wells coming down, jpmorgan, just an example. yeah, i think the market's in trouble, frankly. because if you get -- i don't want to scaremonger ebola, but the you get another case of ebola in the middle of the day, you go down. if kabul falls, you go down. people are talking about that. if baghdad, if you have to put in marines, you go down. if you continue to have germany weakness, it goes down. what drives it up? great upside in wells and jpmorgan, it would be a different conversation. yeah, i don't like the market.

>> you know, europe and germany are one thing, but you get a beheading and another case of ebola and the market just doesn't like a world in 2014 where we have those types of headlines. >> right. becky said something so great this morning with my friend, timmy freeman, where basically saying, hey, listen, everyone this is it's a dip. what if that's not, that's the total consensus. and i said, yeah, that is the consensus of everybody coming on. and i've been saying on "mad money" that this is not a dip to buy, it's just not. >> we'll watch tonight, jim, and see you in a few minutes. >> timmy friedman on the '82 national winner team, alabama. i played football against timmy in some backyard scrum. this is a clone of me. he's the greatest football player known to man. >> i didn't know that. >> he played in hailey's backyard, had a game every year, turkey bowl, and he put me down so hard. just breathed on me and would knock me over.

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cme group: how the world advances. 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. welcome back. the zombie apocalypse returning to amc, bigger than ever.

garnered about 5.3 million viewers. goes to show you "the walking dead" lives on. the chose has already been up for -- the last month. >> all right. guys, we've been watching what's been happening with the markets today, and obviously, after the big declines yesterday that put some of these indices at their lowest levels in months and months, we've been watching to see what happens this morning. you are seeing some green arrows. in fact, the dow futures are up about 61 points above fair value. the s&p futures up just over 8.5, and the nasdaq futures up by about 27 points. what's also interesting, if you take a look at what's been happening with the ten-year note, this is a huge one we've been watching. at some points, you saw the ten-year yield dipping below 2.2%, 2.199, we've seen it at several points throughout the morning. >> i'm glad we got the banks out of the way. >> well, the financials out of the way and the financials came through without many problems along the way. that'set