down almost 173 points. but here we go again. u.s. futures are doing this morning opinion. and shares of netflix taking a big hit after subscribers numbers came in a little bit light. don't look now, but hbo is getting right into your backyard. is sate here. i guess they meet netflix's. it's october 16th, thursday, 2014. the world is still spinning, at least for now, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. this is coming as we learn more details about the second flas dallas nurse to be infected by the deadly virus.

first, let's get you caught up to speed on the markets this morning. if you thought the wild ride was over, think again. futures are selling off sharply this morning. right now, dow futures close to 200 points below fair value. the s&p 500 futures down by another 30 points. this is not something that's been constant through the morning. at one point this morning, futures were in positive territory. you can get we will continue to see wild swings up and down. a lot of volatility. in fact, if you add up all of yesterday's swings, the dow moved by about 1300 points during the session. it was down 460 points at the low. the blue chip index eventually closing off by about 1%. the this was the heaviest volume we've seen in nearly three years. if you were watching the yield on the ten year, it dropped below the 2% before coming back.

this morning, it is below 2% again, 1.995%. asia following wall street's leadover night. you can see the nikkei closed down by close to 2.25%. the shanghai down by 0.7%. and this morning, the early trade in europe has been very choppy, as well. right now, greece do you know another 2.5%. san francisco down by 2.7%. the ftse down by 1.7%. a lot of this sparked by oil prices, as well. right now, down 1.35 for wti, sitting right at 8043. this is the one we've been watching incredibly close, too. that story hasn't played out in stocks at least to this point. right now, 8334. that is more than 20% below the three-year average that we've seen for brent crude. that in itself has some people just trying to figure out what the gain would be in terms of

additional money going into consumers pockets. about $1.8 billion a day. >> we've been looking for what the inflexion point would be. >> it shows what we're keying off of. the more i thought of everything, the one thing we had going for us all along was that valuations aren't ought of control. earn person that comes in here says there's no recession on the horizon and no condition that can cause a recession on the horizon until you throw in the ebola wild card. there is that expression what are the four great questions in the universe of what is the speared made, of what is worth roading for and what is worth dying for.

it's not systemic. the one word that answers all of our questions is ebola. i don't know whether it's justified at this point or not, if it's still body fluids and you have to rub it all over yourself to get it, it's one thing. do we worry about that plane? i don't know. >> i don't know, but the cdc is not doing itself any favors in terms of credible. >> they threw the nursing industry under the bus. >> they weren't trained, they weren't given proper exposure. if you look at the nurses in dallas, it was 48 hours that they were treeding him before the actual booel diagnosis. >> and they said yes, look, training does not stud -- if you give us a website at the cdc and tell us to look at that, that does not count as us being trained with ebola. >> i think if you're a nurse and you think you have a marginal fever, even if you -- it makes me crazy to think -- i understand all that. we're going to talk to meg about

this. >> you're blaming the nurse again. >> i would absolutely blame the cdc, but i also think given your exposure to the situation, to be contemplating -- >> she's getting married. life goes on. she asked the cdc. you'll do anything to try to defend a government agency. >> that is so not true. >> let's talk about it. the cdc is expanding the health care training. this comes as the agency is coming under a lot of fire. fear of the disease growing among americans. this is -- this is the daily news, for god sake, get a grip. and then you have this, the new york post, air ebola, frantic hunt for 132 passengers. >> and the times points out the

psychiatric logical is what is spreading rapidly. >> they flew on the plane. you can blame the cdc, the nurse, you can blake@of people. meg has been cover this story for us from the beginning. she joins us from washington, d.c. this morning. meg. >> good morning. the president again canceled travel to remain in washington and focus on ebola. now details are emerging for the second health care worker who tested positive for ebola in dallas. we know three contacts of hers are currently being monitored. the cdc said in a briefing yesterday 50 people entered the room of thomas eric duncan during his tremeduring his trea officials warn we could see more cases in the coming days. we know ms. vincent took a flight from cleveland to dallas on monday. and although the risk is low,

the cdc is now asking the 132 pass enners on that flight to call in to be interviewed. the cdc director said vincent should not have gotten on the plane, given she was being monitored and had an elevated temperature, but not higher than the 104 degrees fever threshold. this is where communications appear to have broken down. the cdc didn't tell the hospital to instruct staff involved in treating mr. duncan not to travel. what's more, ms. vincent did check in with the cdc before getting on the plane when she called to report her tur and she wasn't told not to travel. overall u.s. preparedness efforts, travel into the u.s. from infected countries and work to contain the outbreak in west africa are expected to be discussed. >> meg, i think one of the huge questions is just how prepared we are. we have seen breakdowns along the way.

the cdc officials told us on this program that this was a learning experience. clearly the protocols have not been put in place properly. it raises questions about our overall health care system. are we prepared if more cases developed? >> the white house acknowledged that. they wish that they had put a team on the ground in dallas immediately, like the one they sent there now and like the one that they've prepared this ebola response team that they're prepared to roll out within 24 hours but all the questions are being raced, why didn't they do that before. >> when she called and told them what was happening, the idea that someone inside the cdc would not tell her not to get on the plane, the idea that that was not clearly communicated boggles the mind. this is an organization that has spend a lot of time telling people that everything is safe, we are prepared and don't worry about it. their own house is not in order.

>> it seems like there was a mix-up, that because she didn't hit that fever threshold, she wasn't told that she couldn't get on the plane. >> when she said she called the cdc, who did she call? is there an 8el 00 number? i just -- i want to understand what actually happens in practice. >> yeah. it doesn't sound like she was talking to somebody high up, at least, on the level of dr. frieden and his team. it sounds like somebody is monitoring those health care workers, calling in and looking at their occur is looking, we have this dur, she's not past the threshold, okay, she can travel. we're not going to tell you not to travel. >> she could have kuld me and i would have told her not to travel. >> bur you're going to call and, what, hey, can i speak to dr. frieden? i'm sure he has 15 layers between him and a nurse calling up to ask. >> the point i'm trying to make is when he was in a press

conference yesterday, he's saying loud and clear she should not have gotten on that plane. >> they also say the she first patient, that there was a protocol breakdown when we now know for two days there was no protocol and they had no protection for two days. that was not true, saying that they knew what they were supposed to do and they didn't do it. >> that is my concern, the idea that they are saying things that lead us to believe -- >> confidence when it comes to telling us the real story and, again, this is not a crisis that we think everything is going to get ebola around the corner. but this is a crisis in believing the information we are being told. >> and who is on the front lines? >> the poor nurses. >> the cdc bureau crasses are down there? >> even the idea that there were 50 people who came in the room, those nurses were treating other parents on the floor. that was never communicated to this point where we know that there are two people who

contracted it there. >> right. i got a lot of questions from being saying, did you say 55-0, fifty people went into the room? we can talk more about that, but -- >> it's negating the point that there were people who were -- of the nurse's union saying there were no protocols in place, they're saying they did isolate mr. duncan right away. >> how did they go the 50 people in the room? >> think don't address that. that's not one of the things they say was a fall down in handling this. >> so it leads up to the point that we are going to see this system today in washington by the head of the cdc. how do you think that plays out? >> there will be a lot of calls from congress. whether that will pick up, we

don't know. the administration is showing its support for him right now saying that, you know, he has experience with this and we need someone who knows what he's doing in charge. he's definitely going to get a grilling. we're going to hear about drug develop and from the department of homeland security and from an official from a hospital in texas. so it's going to be very interesting to hear all of those questions and all of the answers. >> okay. and just one other question on the airlines situation. just what is the latest state of play in terms of finding the other 132 people on the plane, how will they be making contact? have they? >> the airline knows exactly who was on the plane, don't they? >> yeah. we don't have a count yet as to how many folks have called in. it does sound like they're taking the plane out of service. we're hearing a lot of reports from cleveland about checking in

there. people are being asked to stay at home for 21 days. >> if it's not airborne, that's another thing. >> that's different than, you know, someone sneezing on the plane. >> that raises questions about the other things. >> but in general, if we can believe it's close contact with bodily fluids, most likely no one on the plane, even if they were with her, would have contracted a virus. that is what we should assume. >> right. >> we should be allayed somewhat by that unless we don't know for sure. >> we still haven't had any reports from family members. what day are we on with the family? >> sunday was the two week mark.

>> meg, thank you for joining us. we'll be talking to you throughout the rest of the program and the day. >> those fears about ebola, obviously, playing into what happened yesterday with investors making even more nervous. i think it's at least more than 50% ebola from the markets. everything sort of goes there. >> margin. >> once you start going down, margin calls, everything else, let's check on the markets again. you said yesterday you don't like seeing down 130 in the morning because that means we're going down. once it opens and it gets going, 2:45 is even worse. there have been times in the past where we see futures like this in the morning. >> yeah. it was during the financial crisis. >> and back in 1987, too, after that happened. there were 400 points down, but we were in 2010. it was a lot skaeer when you're at 2700 being down 4 let you know than when you're at 16,000 down. but still, very disconcerting. we showed you europe earlier on.

pretty much office, especially in france, down 3%. and in greece, our chief international correspondent michelle caruso cabrera is with us on set to talk the international angle to all this. michelle. >> joe, let's talk about europe, which has been suggestly. it's been tough in the united states if you're a u.s. investor. if you've been in europe, it's been even worse in the last month. here in the united states, we're down roughly 6%. germany is down 13%. france is down 13%. italy is down 15%. remember, the big fear over there is deflation. not just inflation, but deflation. will prices go up? i want to point out that italy now has twice, over two months, printed negatively on inflation year over year. so italy has -- on deflation. there's two take aways i want you to see that's happens in the last 24 hours when it comes to the european markets. the german yield yesterday acted just like the u.s. yield, right? it went down. people sought safety in the german ten-year. so the german bonds rallied and

the ten-year yield came down sdpp and we're going to show that any second. after that, what we're going to show you is the italian ten-year has done just the opposite. there's the german ten-year yield going down, record lows. there's the italian ten year. so what did we see for the last couple of years in europe? >> all of the yields were going down together. right? everybody believes in mario draghi's ability to do something about this. in the last 24, 48 hours, we now see a decoupling. >> spain, too. >> yeah, spain, too. >> does that mean we're questioning the sanctity of the european union again? >> i don't think we're there yet when it comes to the major european economies. we are there with greece, believe it or not. the worst market of all has been greece. let's show you the yields in greece up about 8%, as i

checked. then when you look at the greek stock, it's hammered by more than 20% in the last month. what is going on there? who things. greece would very much like to exit the bailout program. they're on the verge of doing so. the current government would love to be able to say look, we've gotten out of the bailout. that way they can win re-election, right? the yields in the market are telling you, we're nervous about you leaving the training wheels and not having a back stop when it comes to potentially issues with the european economy. one. the second thing that is happening is this guy, our favorite extreme leftist from greece is once again rising in the polls. if he were to have an election today, he would likely win. it is possible, but not probable, that he could be prime minister within the next year. and if that were to happen, he has all these conditions about staying in the euro which suggests they may not stay in the euro, right? my second take away, though, is greece is not nearly as fearful,

not nearly as big of a problem for the european union as it used to be because most of that dead has been shifted down to the german taxpayers. and if greece leaves the field, eventually? i'm mott sure that we're worried about the rets rest of the european union. >> we have worried an awful lot about what a slow yoin, what a recession means for us. ian had a note out this morning that pointed out, look, i don't understand why we're so worried about something that is really only about 13% of our trade exports, something like 1.3%, 1.4% of gdp. are there other reasons or other ways that we should look at it? >> well, the collective european economy is larger than the united states. that's one issue. american investors have held a lot of money into europe and the belief that things were finally turning around. >> so you're going to see an impact. if you've invested in the dollar, you've gotten hit twice.

>> the dollar has been down a little bit lately, but lately, even in the long-term, you've lost money twice on the stock going down and also on the dollar ridesing and the euro going down. >> and when you add that together with all the other headlines we're faying, what's happening potentially in china, it tends to snowball and head downhill, too. >> and deflation, we've talked about this. why would you buy a car today if you know it's going to be cheaper in a month? right? >> dangerous psychology. >> terrible psychology. japan for the last 20 years. >> michelle, thank you. we will see you again in just a little bit. >> so the w.h.o. has been -- no, this is an even bigger. the w.h.o. has had their funding cut significantly. >> but on wednesday, the w.h.o., yesterday, at least did warn about the threat of a global plague which can cause vomiting, hypo calcemia, in rare cases death. ebola? no. yesterday that was about energy drinks and if you consume too many energy drinks.

so that warning went out yesterday. the day after the turn yips are good -- >> we've got our eye on the ball. >> yeah, we've got our eye right on the ball. the w.h.o., isn't that -- that takes bureaucracy. that's the u.n. they're even more bureaucratic than -- >> i read a book recently by the new york guy who has been doing ebola. they had small pox vaccines, something like 2 million doses of them pep they ended up destroying all of them because they didn't want to pay $25,000 a year to pay for freezers to store them. it will now cost billions of dollars to replace that stock. now with us, boris. these moves in oil are hard to get your hands around. what happens here? what potentially could we see if we're sitting right at $80? >> i think, you know, a lot of oil analysts made the case that we're probably getting as close

to a bottom as possible at this point. >> because of that 88 -- >> yeah, 5 -- >> they've been calling it -- >> why do we care what they say? >> i guess they're going to eventually be right. oil went to, what, almost 45 during the 2008 recession? i don't think we're in that case, but it's clearly two factors. one, you have a lack of -- a huge amount of supply, contraction and demand. also i think the fear trade. 2 market is discounting global growth, a lot of that. contention on -- >> contraction and demand growth? >> i think it's contraction and demand growth and contraction and perception. i think oil is -- >> you said contraction and demand. is that the not what you meant? >> i meant perception. perception is reality in the market. you were talking about ebola as a big fear factor. in reality, ebola is not a problem for any of us in this case. but what the market is

anticipating, is the great fear that it becomes airborne. and i know scientists have been warning it's a very, very rare situation where it's going to mutate. but the fact that it's condensed in all of these urban areas in west africa, it increases that bigger risk. that's certainly what you see. and the market is freaking out in many ways over the prospect that it turns airborne. >> joe says he thinks the market is 50% ebola. is that correct? >> i think in some ways, yes. let's imagine if it does become a much more serious problem. then if you use the sars analog, which was in many ways a much smaller case, something like $40 billion in 2002 was taken out of the global economy. but ebola could be ten times that if anybody starts -- >> you think it was -- in 2008 inspect oh, my gosh. the atm machines might not work. if you can't leave your house because there's a pandemic, that's going to make -- maybe it's a 0.0001% chance.

it's a black swan. >> yeah, but if that happens, why do you worry about that scenario because none of this is going to matter at that point. >> the one -- >> you tell me not to buy lottery tickets. >> right. but there's a much bigger chance of this happening than the lottery. >> it is a much higher chance. >> because the world only ends once. people are way premature and they forecast that many more times than it actually happens. >> you know the famous saying, the market has predicted the last 10 out of the last four recessions. that's really what's happening in many ways right now. but there is a very real risk here. >> jim cramer made a very convincing case last night, laying out how a lot of this is the fast money, these margin calls that came out. we've heard this from a few people, but jim laid it out elegantly. is that what you think is happening here? if that's the case, what do you do is stand back and wait for

things to run their course? >> well, i think you do have to sit and wait a lot of this through. fundamentally, yes, there are some areas you can develop that say ebola is going to have a huge impact. but i think the far more likely scenario is that it's going to be contained both in terms of the disease itself and in terms of its market impact. and then you fall back on what's really happening in the world. you know, the markets is partly ebola, but if you look at the way that spreads have widened across the credit universe at the rate of certain sectors and equities have served worse than others, there is concern growth is slowing and that is going to have an impact on the markets overall. >> ebola doesn't have to become a pan dim demic for growth to be affected significantly by ebola. >> no, but you can -- >> you might not go out. you might not go to a sporting event. you might not fly.

you might not do a lot of things based on ebola. so it's not that it has to turn into a pandemic where everybody is worried about it as a contagion. at the margins, it adds to what's already weak globally, growth. >> i think at the margin what is happening is that the media are fanning the fuels of ebola far out of proportions from what's likely to happen. so we'll see what happens over time. yes, that is one scenario. >> you might be really long. >> i guess the difference when it comes to oil contracts, look, if you're in the stock market, you can old that for forever. oil contracts expire. >> right. >> so you've got a shorter trm. so you have to figure out where you're going. >> you see that everything else. basically, the market only cares about what's happening tomorrow. they're not looking out for the nkts ten years and thinking everything is going to be much more tranquil. .i think that's the key. joe's point is really well made, perception is reality now. the market is discounting this. >> the futures are different than us. you can just roll your futures. the options are contrary. futures are just where -- you

can roll them to the next. >> but i mean, all markets right now are very short-term. they're just focused on the headline story. >> you know, i don't -- i wouldn't -- you've got to stay what you told me in makeup. >> it was the best line of the whole morning by a mile. >> i missed it. >> it's not a coincidence that this happened in texas where they have no government. >> they have no government. >> they're anti-government. >> i go, you know, you love the government, you love the obama administration, i go, really, you thinkite a coincidence this was happening in texas -- >> i guarantee you this would have never happened in boston where you have great hospitals. >> clap. >> boris, thank you for coming in. michael, thanks for joining us. >> thank you. >> netflix is about to come out with a new show for -- as the new black and blue. the stock crashes in late trading after giving the street bad news. how long will the pain last? we're going to talk to analysts after the break.

but first, dow component united health beating the streets this morning. revenues roughly in line. we're watching futures pointing to another sell-off at the open when "squawk box" returns right after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

a single ember that escapes from a wildfire can travel more than a mile. that single ember can ignite and destroy your home or even your community you can't control where that ember will land only what happens when it does get fire adapted now at fireadapted.org welcome back to "squawk

box." reed hastings says about the future of internet tv, he spoke with julia boorstin exclusively after the results were released. >> we added 3 million subskrooip scribers in the quarter. we were expecting to add 4 million in q4. so the big picture, about people moving to internet tv, it's as strong as ever. and you heard that with some of the great and interesting moves from hbo. >> now, with us now, jan ersk. at hudson square research. >> down 26%. >> they were supposed to come in with 3.7 million subscribers, they showed up with 3 million subscribers. >> you're looking for a save haven from ebola? stay home, watch tv, you'll get more subscribers. >> or hbo, but that doesn't come until next year. so in 2004, ten years ago, the stock was down 70% from july to october because the threat of amazon starting to shift dvds by

mail, which they never did. three years ago, they did the quickster debacle and lost subscribers. stock went down 70%. it was down 26%. >> it's a volatile stock. >> the stock is -- >> 4,000% over that other ten-year period. >> what should the price be? >> listen, i mean, i'm not going to pound the table today during a market meltdown when they -- you know, they actually missed subscribers, subscriber growth is the key to the story. but they're going to be fine. they're up 33% year over year. >> you don't want to in the context of hbo news to compete with netflix. netflix says one of their problems is they were charging too much. they raised the price by $ and they think that that is one of the reasons why they didn't get the growth that they expected. which means 899 is a little too much money to get the growth. what can hbo charge to be competitive without getting thrown off the cable networks,

because the cable guys are looking at $16. so hbo can't charge $8 or $9. that doesn't work, either. how much grow growth is that for hbo and how much does that recht a competitive threat for netflix? >> at $16 a month, it's going to be less competitive for netflix. >> and to offer the same service. they're going to have to offer reduced service if they're going to offer a produced price or they're going to lose their contracts. but still, $16 plus $8 for netflix, it's a good bundle of video. hbo doesn't have the breadth of content that netflix does. they have much better premium content, but they don't have the same breadth. you can view netflix as a stand alone service. you have original, you have movies. you can say, oh, you could have the two of them together and still be cheaper than $100 a month they're paying for, you know, cable. so, you know, it will be okay. this, too, shall pass.

but today is not on the table. >> we're going to thank you for coming in. it's a market day. we would love to have you back to talk more about this. i think the whole hbo future thing is going to be a big deal and it impacts the tv landscape and the poll stuff and even some of the deal merger stuff. >> i thought about it last night. you would need a lot more than just hbo to get it over -- how do they charge for it, getting it over the internet? >> the same way. >> what are you talking about? >> hbo in 2015. >> they're going to charge you a subscription fee. >> to get it through the internet, they charge it directly to you. >> but wouldn't get just hbo, obviously. >> but there's a lot of people that -- getting the cable side of the business at all. so you're paying -- >> and now they can get -- >> knneutrality because -- >> it's easier just to stay with x1, my friend. yes, it's the finest -- >> parent company.

>> yes. up next, everything is synchronized. stocks go down, oil goes down, the yield goes down, when everything starts coming.back, oil goes back up, the yield goes back up above 2%. markets come back. it's really weird to watch. there's the european markets which have improved. no two, as you can see. our own futures were down 250. i think they're down now 150. making a stand, come on, guys. stay with us. it's going to deshaping up to another another wild ride. but this is america.

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. need to keep an eye there aon my health.s why i we won... that's why i take meta biotic. a daily probiotic. with 70% of your immune system in your gut, new multi health meta biotic with bio-active 12 helps maintain digestive balance. and is proven to help

support a healthy immune system. i take care of myself, so i can take care of them. experience the meta effect with our new multi-health wellness line, and see how one small change can lead to good things. [♪] great rates and safety working in harmony. open an optimizer +plus account from synchrony bank. visit myoptimizerplus.com to open an account. service. security. savings. synchrony bank engage with us.

another major sell-off. if you thought these were over,

you will be wrong. this morning, futures were indicated positive. that means they would open higher if the markets were to open right here. but then things took a turn for the worst. dow futures down by more than 250 points bloef fair value. right now, we are down about 190 points. s&p futures off by 278 points below fair value. nasdaq futures down by 68 points. again, this wild ride looks like it is going to be continuing. you don't see morning like this very often. when you do, this harkening back to things you saw during the financial crisis. joe, this is a much smaller move that go than anything we saw in either of those situations. but there is a lot of volatility. >> this gets people's attention. biggest volume in, what, three years? in this fine, fine paper here, you showed all the other ones. anyway, steep sell-off. to the biggest experts they could find -- >> who is that, joe kernen? >> after him. don't be ridiculous. i think what is good about today is it finally felt scary, said

james w. paulson, our guest host at 7:00 p.m. so the times went to the source of all the -- >> at 7:00 a.m. >> yeah. did you see p.m.? >> yeah. a.m. jim paulson will be here. jim said i think what is good is it finally felt scary today. prior to today was that this was a refreshing pause. it's the 10%. and then we resume our climb higher. while this was the day where people said holy crap, i'm calling my broker. and that is characteristic of the bottom making process as opposed to a bottom picking process which that doesn't help anyone. >> let's take a quick look at what's happening with the ten-year note.

we're going to keep watching oil prices. >> it dropped below 80. >> this morning? >> yes. >> not that i saw. >> $80.20. >> we'll talk about that when we come back. next.a market watcher who called the drop in the ten-year yield before many others. that's next right here on squawk. they're still after me. get to the terminal across town. are all the green lights you? no. it's called grid iq. the 4:51 is leaving at 4:51. ♪ they cut the power. it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable.

on. european markets, greece is down a lot more earlier today, too. i think it's interesting that, you know, i -- normally i think

we ought to do germany, france and the ftse. and then separate for greece. >> one of these is not like the other. >> the declines are down. >> it's 10 to 20. you saw that incredible -- it's not monolithic over in europe any more. mark might have something like that. i don't know how many points down we have to hit before we hit a high. that is something that michelle

pointed out. suddenly, they're not in quite as good of shape. now there is a flight to quality in germany and obviously in our bond market. does that signify anything? >> yes. i think michelle made a great point this morning. it has to do with the mess that is taking place on the continent, both the political mess and the economic mess. basically, joe, you've got one corner refusing to let the ecb do any kind of quantitative easing, objective strenuously to the asset buying back program. you have spain, perhaps, italy totally in another corner demanding it. they're getting to the point where there's going to be a showdown. and it's beginning to reflect the problems. >> here, where we keep that 2% number on our ten-year, we keep

going above and below it. we've already talked about where it's supposed to be in terms of gdp. it's supposed to be nominal gdp. it's a match, right? so i don't know what it's indicating now. is it indicating inflation is going to zero or is it indicating growth is going to zero or both? >> joe, i think that's too strong. i don't think that's indicating zero, but i will tell you that i need to call 2 1/2 at the beginning of the year. when i was on with you -- >> on the ten year? >> on the ten-year. becky looked at me like i lost my mind. >> all right. stop. we're sick of it. tell me what that means about gdp. >> okay. 50i78 going to tell you. >> okay. >> so the world is no longer -- you can't look at the world with that economic model any longer would be my view. >> okay. >> you have to look at the world as it's dominated by the central banks, the interest rate world. you know, the american ten-year

is 270% higher than the german ten-year and we are going to go down even further from this level and interest rates are going to go down. that will help the equity market eventually, but for right now, i'd be taking significant money off the table in the equity markets. >> okay. now, let me see if i understand you, then. the old relationship between gdp, inflation and the ten-year no longer, that's broken down. is it broken down because the central bankers have fixed the prices or is it broken down because we're global now and europe is much lower than us? >> you know, that's a very interesting question. and i think that answer is from both. i think america has tended to be myopic looking at our own market and thinking that somehow we were not affected by the rest of the world. he said this morning in my commentary, there may be an

ocean between us and europe, but our financial markets are connected by nano seconds. we're in a very low global interest rate market and it affects us. to the lack of inflation is euro start reported 0.3% for europe this morning year other year. i think it's going to affect this significantly. and the other issue, as you just asked the question, is the central banks. the central banks are in the buy markets in a meaningful way which affects the equity markets. and there are two sides to that story, but we're affected by them. don't kid yourself. >> mark, can i ask real quickly, you said beld be taken money off the table in equities. that's a new call for you. why would you be putting that money, keep it in cash? >> no, i would not. i don't do, becky, end of the world today. i'd be putting it in the bond markets i think especially we've had a sell-off, which is

affecting the market. run in commodities, certainly with oil which affects our own deflation number, given the make up of cpi. but i think high yield bonds and corporate bonds have widened versus treasuries as treasuries came down significantly. so i would be putting money back in the bond markets and being happy giving you coupon and -- >> mark, if you're happy to get your coupon, i get that. but my question, how far do equities have to fall before you would actually think that there was a shot again? in making more money in the equity market than the bond market? >> it's not going to be for a while, i think. because the -- it's such a mess in europe. oil i think will have an impact on the rates for consumers. it's terrible for our own inflation numbers. i think we've seen with the strengthening of the dollar, that's a big component of this, it's going to hold earnings and a lot of companies. you saw walmart out yesterday,

lowering their expectations of growth. and i think we're going to see substantial amount of that. you know, the last time i was on, and i want to tell you this, joe asked me, what was my biggest concern? i said my biggest concern is leverage, i said the debt and the equity -- bond markets to support these big calls that interest rates were going up. i think that's going to exacerbate the move down. >> you're right. and i think that is a huge amount of what happened yesterday, mark. >> i agree. i think huge amount. >> so will we -- in your view, what are the chances the 10-year goes under 1% in this country in terms of yield? >> well, my next call down which i said i would make this morning, so i'm glad you're giving me that opportunity. i think the 10-year is going to the average of the four largest

economies in europe. which is the 1.62%. i don't make armageddon calls. >> that's because the world only ends once. it's not good a bet on it. >> i don't bet on the end of the world. >> no. it can only happen once. and you could be early. who wants to wait long enough for that to finally happen. thanks, mark. >> thank you. >> 1.62. you're welcome. see you later. coming up, the driving forces behind this week's major selling voices. jim paulsen joining us when "squawk box" returns in just a moment. (receptionist) gunderman group. gunderman group is growing. getting in a groove. growth is gratifying. goal is to grow. gotta get greater growth.

i just talked to ups. they got expert advise, special discounts, new technologies. like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

. this morning's top story continues to be the global market selloff. futures have been volatile this morning. dow futures down by about 224 points. this comes after the wild ride we saw yesterday. s&p futures now down by 33 points. nasdaq down by 80. if you are just waking up, this has not been the picture all morning. things started on as positive note early this morning. when we come back, ebola worries especially after the cdc gave the nurse the okay to travel after caring for eric

thomas duncan last week. "squawk box" will be right back. an unprecedented program arting busithat partners businesses with universities across the state. for better access to talent, cutting edge research, and state of the art facilities. and you pay no taxes for ten years. from biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo... startup-ny has new businesses popping up across the state.

see how startup-ny can help your business grow at startup.ny.gov

thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business.

good morning, everyone. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross zircon. if you're just waking up, you're missing a lot in the markets. you've got a number of wild swings just over the last 90 minutes. but now dow futures down by 229

points. and nasdaq down by 80 points. volatility the name of the game. we're not just talking about stocks here. treasuries. at this point the yield at 2.19%. we did see it below 2% early this morning. commodities swinging wildly. asia also following wall street's lead overnight. the nikkei down by 2.25%. the early trading in the european markets also choppy this morning. at this hour you see the cac down by 2%. dax down by 1.5%. greece only down by .5%. but these markets have been moving rapidly too. if you check out oil prices at this at this point, wti sitting just above $80. it's down another 1.9% today. >> i think people want to see a

seven just so see it. i think we'll see that today. >> it's pretty close. 20 cents away. the cdc is expanding health screenings to four more airports today to stop the deadly virus from coming into the united states. as the agency is under a bit of fire for its handling. meg tirrell has been covering the story from the beginning. she joins us today. >> hey, joe. we're in washington today ahead of a congressional hearing. we've had a glimpse of tom frieden's testimony. where he spends a significant portion in west africa. he says is the most effective step we can take to the united states. he'll tell the committee, quote, it will take meticulous work and we cannot take shortcuts. it's like fighting a forest fire leaving behind one burning ember, one case undetected and the epidemic could reignite. of course the cdc is taking strong steps to protect

americans at home. while they don't know how the health care workers' infections occurred in dallas, they need to strengthen the procedures for infection control. frieden is facing criticism including two republican lawmakers calling on him to resign. and there's about to be word about traveling into the united states. something frieden has said would be counterproductive to fight the outbreak at its source. you guys? >> all right. who called for his resignation at this point? >> two republican lawmakers. >> two republicans. okay. >> yeah. >> all right. we'll see whether -- what's wrong? we'll just see. we'll see whether -- and i've seen some people, mostly republicans, talking about closing off the air travel out of west africa too. i think even boehner said that. >> yeah. he's come out and said we should restrict travel. a lot of people saying we should not be giving out visas in west

africa. it's about a hundred people coming into the united states per day from those countries. at the screening at the airports are designed to screen 94% of them. >> i didn't see the cabinet meeting. the president did not actually say heck of a job to frieden, did he? >> i did not hear those words. >> the screening of 94% of them. >> yeah. >> why is that? >> 94% of the travelers go to those -- >> where are the rest coming from. >> 94% go through those five airports. 6% presumably go to some other airport in the united states. >> of the airports we're screening. i think all of them get screened before they leave west africa, right? and then here we are checking again once they arrived. none of that would have mattered for thomas duncan. >> right. >> 150 people a day. i'm getting close tore you on this, joe. >> oh, god. >> i am on. the restricting of travel.

>> what's going to happen during flu season? >> what do you mean? >> everybody goes to the hospital saying they have a fever and 99.9% are flu. but how do you -- we need a better test. instantaneous test. we can't wait for people -- >> you have not gotten your flu shot yet. >> no. i don't. >> you should this year. >> yeah, do it. i'm doing it. >> you haven't gotten yours yet? >> no. i told you i want to do it on the air. there's a new company it's like uber. you do it on your app and they come to you like your office or home and shoot you in the arm. >> why don't you do it right now. order it on your phone. >> i thought it would be a fun thing to do on the show. let's talk about the major averages. they are moving into negative territory for the year. but are they in correction mode officially? dominic chu joins us now. >> first of all, if joe and you are both starting to agree on what's happening with the

market, that might be -- >> not the market. the airplanes. >> well, just overall. if there's that kind of shared concern, that might be one reason why you see investors getting a little more skittish. >> i'm the dog. if it's dogs and cats. that goes without saying. >> let's talk about the markets. this is the reason why you guys are at least a little concerned about what's happening. all the items including ebola are leading to this market. this is the stock index that is now in correction territory. it's off 11.5% from its highs. so the russell 2000 already there. we'll see if it holds today. if you look at one of the other -- we'll call it weaker indices so far. this is the nasdaq composite. 8.5% off its highs.

it did enter at one point yesterday. managed to get some of those losses back. we'll call it a percent and a half away. the s&p 500 is the one that many professionals watch. the broader indicator for what's happening with the overall markets. the s&p just down by about we'll call it .8% yesterday. it got back a lot of those losses. that miens we're 7.8% away. a big down day today and we could enter correction territory for the s&p. 1817. that's the level you want to watch. if it goes below that, we're in technical correction level. and the dow jones, the blue chip index lost a percent yesterday. still 7% off the highs. we would need a massive down day today to put this into correction territory. that's not to say anything is going to or not going to happen, but it gives you some perspective about how big these market swings are and how big they have to be to get these

major indices into correction. >> it would be big in the s&p too. >> it would be huge. >> to get to 1817 from 1862, that's a pretty horrific day. >> although there were points yesterday where we were down by more than 2.5%. >> thanks, dominic. and andrew, people hate washington because of gridlock. right? if we can -- >> come together on the airplanes. >> here's my thing. people saying they don't just come from west africa. but start with west africa. so no direct flights come from there. then do all you can to try to look at the connections from people in that part of the world. you could get to probably 98% of people from that region probably wouldn't be coming. now, is that something you think we should do at this point? >> i'm possibly on board with that. i am. and i wasn't there a couple days ago. >> i don't know what i'm possibly on board with that

means. it sounds like you want to do it but you're too politically correct to say so. >> kind of sort of. >> if 2% were still coming through, those would be the ones coming to get treatment. if you were desperate to get here. >> but wouldn't 98% be a good start? all right, all right. >> and then those that are going to lie -- >> they're going to do it now. but if you could do 98%. let's get to our guest host richard bernstein. also joining us jim paulsen. chief investment strategy at wells capital management. so this person called you from "the new york times," jim, and did you know you were going to be like the expert that "the new york times" went to for advice? you're on "the new york times" front page. is this you james w. paul is en? doesn't say john paulsen. >> that's probably me. >> you're so modest.

what you told "the times" supposedly is it finally got scary yesterday. it got to a point where people were actually worried and that's a good sign in your view is what you said. >> right. i think so far until yesterday this corrective process has been looked at more as a good thing, a healthy refreshing pause, refreshing values for the long-term. and that's certainly not how we feel this morning. i think that's -- it gives you a sense that we're getting close tore the bottom here. i still think this thing is going to get a little scarier yet. i do think we might end up in a full blown correction. maybe we break below 1800. but i think we're -- you know, i think we're getting close. maybe 5% within the lows. and i think it's time to start thinking on the other side of the equation that we get through this. and think about where we might be a year or 18 months from now.

you can get pretty excited about the prospects here. but i do think we've got a little more carnage and a little more scare ahead of us the next few weeks. >> he's being right saying below 1800 on the s&p. but you've been right. you said at the beginning of the year we're not going to make much. we're going to probably have a test and then at the end of the year go higher. that's what you said. so the market went higher than you thought initially. >> yeah. well, you know, it wasn't -- it didn't exactly come down for the reasons i thought. >> you never know. >> i thought it would be fear in rate structures. it turned out to be other thing. >> what do you think? you were not quoted in "the new york times" we care about your opinion anyways. >> thank you. the keyword is it has gotten scary. that means people are getting more emotional.

if they're getting more emotional, that means they're not looking at fundamentals. there's plenty of opportunities out there. that's what we're doing. i'm not smart enough to tell you, you know, andrew asked me on another show the other day how much lower are we going to go. i don't have a clue. >> he was great on that show. >> are you trying to get rid of him? >> no. he can do both. but he knows a lot about technology, right? you do. you use all the applications. >> let's talk markets. >> so my point is i don't have a clue. right? is there another 2%? 5%? i honestly do not know. it's not what i do for a living. but i will tell you when emotions take over, it's fantastic for us. >> fear and greed. >> but you're not buying the major averages. you are looking for fundamentals in specific sectors? >> we're looking for pockets. i mean, yesterday you saw for a minute second yesterday you were

seeing some rationality creeping back in. you saw that in small caps. i would argue the ecb is the cause of this milestone. people wonder how could policy makers be so stupid in 1930. look in europe. that's what they were doing in the 1930s. so if you look at that, not exactly of course. but if you look at that and you say europe's the root cause, don't you want to limit your exposure to europe? and yet what was happening was the highest beta stocks were getting shorted the most. that doesn't make sense from a fundamental point of view. so what we're looking for is we're looking for these pockets that are being emotionally shorted by every hedge fund that presents good funt for us. >> i already wore a tie just like that. i didn't think it was purple enough. is that purple? pinkish purple? >> yeah. >> you know it's spirit day. are you wearing it because of that?

do you know what we're talking about? >> i have no clue. >> well, it's lbgt spirit day. >> oh. i didn't know that. >> it looks like you were on board. >> that's scary you are so in sync with what we're doing. >> that's what makes a good investor. >> all right. so these guys -- are you guys staying? you're guest hosting aren't you? who is? bernstein is saying. paulsen, you're gone. the guy quoted in the times is leaving? all right. fine. you guys are the producers. jim, thank you. i feel a little bit better listening to both of you gentlemen. but not about oil prices. coming up on "squawk alley." that was a joke. i thought you would laugh. crude prices down again this morning as the dow decreases. lower oil prices set to get global economies a much-needed boost. and with consumers filling up for less, how much will it help

the nation's retailers this shopping holiday season? "squawk box" returns with all of that and a lot more in just a minute. as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.

welcome back to "squawk box." we've been watching the futures again this morning. things have been volatile once again. you do see red arrows once again.

oil prices also dropping sharply here in the last month. in fact, down more than 15%. probably even more than 20%. if you're watching, brent is down over 20%. wti down about 5% in the last week alone. as you can see this morning, it is setting at 80.02. consumers may be feeling richer, though, with gas prices in free fall. that's the silver lining in all of this. the question is sentiment -- how is sentiment shaping up with global fears taking the spotlight? joining us now, industry veteran the ceo of net worldwide. that's not something the markets seem to be paying attention to. but this is a huge boom for consumers. >> well, yes, it's a huge boom for consumers if gas averages $3.20 or so for november or december. we'll see about 30 billion bucks

of additional spending. if it goes to $2.85, that would just be a huge boom to the consumer. however, the market and consumer spending correlate well. like .83. and the market's not doing us any favors. it's going to be hard to get the consumer sentiment to where we need it to be. and, you know, they could elect to just save it. they could elect to pay down their credit cards or a lot of things besides buy sweaters. i was saying it's going to be the best back half for apparel sales. based on more employment and falling gas prices. that was before i saw the market do the topsy-turvy it's done. and before i saw yesterday that retail sales were down. manufacturing index was down. mortgage applications were down. ppi was down.

you know, nothing looks like it's going the right way for the past two weeks. >> what about ebola? adding that on top of things. >> saying ebola caused the stock market to go down. >> worried for the potential people koing out. is that a real psychological thung at some point? >> people asked is this a boom for amazon. would you rather have somebody come to your door with a box than go to the mall if there's a real outbreak of ebola? probably. it's like if the zombies were at the mall, would you go to the mall? i know joe's a fan. we all worry about that. >> you really don't call them zombies. they're walkers. >> well, if people are carrying ebola to the mall, i'll guarantee you the consumer won't go. >> but we're not at that level. >> no. >> but is it changing behavior? >> do you want to fly this weekend really? >> no. i'm flying in two weeks. i'm going to do it anyway.

>> you probably will. but you thought about it. or sporting events. >> that's the question. are people changing? >> you live in new york. when you go home, you're surrounded. you got to whistle past. >> i would not think about flying right now. >> well you better hope you weren't on the cleveland to dallas flight. >> i talked to people that were both on the plane. they both brought it up. >> planes are filthy anyway. restrooms in airports are filthy. we were flying out of chicago at the time. and they both commented -- >> will people stop going to the gym? there's sweat all over -- >> but i'm wiping down the treadmill beforehand. i always wiped it down after. but you start before. it's flu season too. >> you're the lottery guy though. >> lottery is one in a trillion. this is like one in a hundred. >> it is not one in a hundred. >> not contracting it. but on -- if you look at

exponential, it's a thousand times more likely than winning the lottery. it's still one in a million. you don't know how to flush an airport toilet with your foot? >> but then your foot -- do you take your shoes off when you walk in the door? >> i do that with all toilets if i have to. >> but what about your shoes? jan, ultimately how would you -- >> joe is right. the flu is a high probability, low impact event. ebola is a low probability high impact event. why do people buy lottery tickets? because it's a low probability, high impact event. it won't take many cases of ebola before people won't want to interact with other people. nothing's happening to the mall yet in dallas. there have been no change in shopping habits. nothing's happened so far. >> i even asked an airline analyst yesterday if anything

changing. so far it's not. >> $79 oil and the price is still not going up? >> exactly. >> the airlines have been telling you something. >> jan, thank you for being here. when we come back, we'll continue to talk about what's going on. big stories of the day. the stock of the day. a high flier taking a 25% hit. can you guess what it is? we'll talk about that when "squawk" returns. time now for today's aflac trivia question. what percent of workers in the u.s. get a sense of identity from their job? the answer when cnbc's "squawk box" continues. and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters at aflac.com.

[sfx] duck snoring for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. guysbelieve this!gonna >>watch this. sam always gives you the good news in person, then 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. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

now the answer to today's aflac trivia question. what percent of americans are uninsured? the answer, 13.4%. >> welcome back to "squawk box." shares of netflix, they are in a free fall this morning. the company reporting fewer new subscribers than forecast growth in the u.s. falling substantially. netflix says its $1 price hike to $8.99 a month discouraged new signups.

also blackstone are killing it again. beating the net income coming in at a record $758 million. or 66 cents per share. although that did miss some analys analysts' thoughts. looking to take advantage of asset values. coming up, oil prices at four-year lows. is opec comfortable with prices in the $80 range? or better yet, does -- how does saudi arabia plan to deal before it starts to hurt for them? and looking for results from goldman sachs any moment. if you stick right here on "squawk box."

♪ the all new, head turning cadillac ats coupe. it's irresistible. ♪ 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.

the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voiceedge mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. get the future of phone and the phones are free. comcast business. built for business.

futures down sharply once again this morning. take a look, folks, if you are just waking up. you are going to see that at least at this point the market is indicated down. dow down by 207 points. we've seen it off by over 250

points. but also seen it in positive territory. so anything could happen today. the s&p 500 also indicated down by about 31 points. the nasdaq down by 74 points. and the 10-year note has been yielding at below 2%. right now at 2.01%. the dollar this morning with everyone that's been happening, you can see it is up against the euro. euro at 1.2746. down against the yen and up against the pound. if you've been watching what's happening in the european markets, things volatile there as well. the cac in france down by 2.3%. the dax is down by only 1.6%. i say only because they all looked weaker this morning. in greece, stock market there down by another 1.5%. the swings in the asian markets too.

hang seng was down as well. check out this chart. this is west texas crude in brent over the last three months. it's been a ski slope down pretty much straight down. despite what you might assume, though, markets indicate they have told saudi participates they don't mind $80 oil. why? michelle caruso-cabrera is here with an answer for us. >> it's the break even price for well when it comes to oil, and r rue. >> what does it take to get oil out of the ground, get it where you need it to go. you get a break even price per barrel. let's show you what the cost is in different parts of the world. let's start with north america where we've seen so much new production come online. turner mason in texas has given us a range. every well is different. but what you're going to see here is that north america is very much a high cost producer.

the oil sands of canada, $50 to $100 per barrel in order for their wells to be profitable. down in texas, 40 to 80. alaska still a low cost producer. less than 40. let's show you the rest of the world. venezuela less than 30. brazil, that's deep water so that's expensive. look at saudi arabia. they can absorb a lot of pain and lower price because they're still making so much money per barrel. when you look at the united states, for the lower 48, $75 per barrel is on average what they think is the average number for the wells in the lower 48. this lower price doesn't take current production offline, but it would reduce future investment. that may be why saudi arabia is willing to tolerate such low prices. >> that makes sense.

we'll talk more about that. come over and join us on the set. we'll also bring in nansi nansin salari. he's part of a company that provides advisory services to companies. what michelle just pointed out describes crazy like a thought mentali mentality. why saudi arabia may be doing something like this. who do you think they're specifically targeting? american crude? oil sands in canada? >> well, they're just protecting their market share which is what every business would do under the circumstances. we're going through some very turbulent times. what's been happening other the last six months is primarily a supply-driven scenario developing. and when it comes to this type of a division, the low cost

producers have a terrific advantage. and saudi arabia is just using that advantage right now. >> it makes sense from the long game when you look at it that way. but in reality this is a cyclical play. they are effective in what they are trying to do. that eventually pushes prices back up and that looks more attractive for investment again. how do these cycles play out? how long are we talking about for some of these moves? >> well, in my opinion, i think we're nearing the bottom of what are reasonable, sensible prices. anything below $80, a significant portion of global supplies. when you look at the u.s. which was the primary trigger point of the other-supply globally, i would say anywhere from 30% to

50% of the shale production, the unconditional production would be affected. so any price below $80 is not sustainable in the long run. i'm not saying that prices would not dip below $80. but even if it does, eventually it has to return which is well north of $80. >> the middle east isn't exactly the most stable part of the world. the saudis have always had big kind of welfare programs, fiscal spending. yet inventories are extraordinarily high. how long can this go on for the saudis? do they squeeze their people? what do they do in this kind of unsettled middle east environment? >> well, for one thing, the saudi production is what's

indicated. a significant part of the production is very low cost between $5 to $10. so definitely they can sustain -- >> but what do they need for their budget? >> yeah. you're bringing up a very critical point which has nothing to do with lifting costs or full cycle development costs. it's what are the social needs? 90% of the governmental revenues come from oil revenues. >> okay. got that. >> that's really the primary concern. >> okay. goldman sachs is out and the numbers are significant enough to mention. $4.57 like the old days. $3.21 was the estimate. well above the $3.21 estimate. $7.85 billion was the revenue number. the company up well above on revenue. unless there's -- unless there's

something special in here, it's really clearly above. lloyd says the combination of improving economic conditions in the u.s. along with goldman's strong global franchise are what help the company to this significant outperformance. the company also raised its dividend to 60 cents. that would be $2.40 a year. it's not quite 10% but it was yielding 1.2%. goldman, you know, probably not going to save the world. but "fasit's nice to see the stock -- >> saying while conditions and sentiment can shift quickly, the strength of our backlog indicates our clients' desire to pursue and execute their strategic plans for growth. sounds like it's been promising. >> the question becomes, by the way, all the mergers have worked when there's no volatility.

but when there are, things slow down. >> given that we're kind of in this period where we're all uncertain and all unsettled, now goldman has a good number. in this instance, could it be seen as actually a positive for the country if goldman did well? just with the backdrop of all the other negative things. would you at this point say if a big bank was doing well it may be positive for the country? >> i would suggest it is positive and backward looking. >> okay. but in this case, we don't need to go, oh, those bastards. their profits are so big. we don't say that? >> not today. >> what about your colleagues? could you clue them in? could you send out a to all -- >> just a massive e-mail? >> say please don't hate goldman for one day. >> you just told the world. they're all watching. >> we'll continue to watch goldman and see how that trades this morning.

it does look a little unclear. but nansen, let's get back to this question of what happens with oil prices and the volatility it creates for places like saudi arabia. what about russia, iran? if oil prices sit at these levels, how much more unrest and uncertainty do you expect in those nations? >> well, i think you raise, again, a very crucial point that the prices have significant social consequences. and those consequences are asymmetric. some companies are affected much more. and even within opec, there's a bipolar situation. and definitely the countries that are most affected are venezuela and iran. and the countries that are less affected are saudi arabia and the gulf countries and particularly the emirates.

so the social instability component in the equation is much, much important and definitely will manifest itself in social unrest both in venezuela and iran. >> one of the things that startled me is how the saudis are so willing to stick to it the venezuelans. they have called for an emergency meeting asking to get together to raise the cost. and saudis and kuwaitis are having none of it. i mean, it's a mess. it's a mess. >> right. but even saudis don't think for a second that they wouldn't mind prices at $90 or $100. the fact they're able to

generate lower prices doesn't mean they don't appreciate higher prices. but the market will ultimately determine in my opinion once you fall below the $80, the markets will self-correct. because a significant amount of the expansive production, particularly the u.s. shale component will start tapering off. remember, the unconventionals have unconventional declines. typically shale production drops at an annual rate of anywhere between 50 to 70%. coupled with the fact that you have anywhere from 70 to $90 per barrel equivalent, prices below $80 will have a clear impact in reducing the shale associated production in the u.s. we'll then see a reversal in the

current trend of the prices drifting down. >> all right. nansen, thank you for joining us today. >> thank you. >> it's not trading higher now. it's backward looking. doesn't take into account anything that's happened in -- >> and the statement say things can change quickly. >> it's a big number. but at this point it's indicated down. >> well, volatility keeps out the type of transactions the investment bank requires. >> although maybe the trading desks will see more action. >> right. coming up,er in vow investors. is the selloff a buying opportunity or a reason to run for the had hills? futures right now at this point looking in the red. dow looks like it would open down about 178 points. but better than where we used to be.

"squawk box" will return in a moment. growth is gratifying. goal is to grow. gotta get greater growth. i just talked to ups. they got expert advise, special discounts, new technologies. like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics.

tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*? alriwe need to do somethinguble widifferent. ranch. callahan's? ehh, i mean get away, like, away away. road trip? double wings, extra ranch. feels good to mix it up. the all-new, fuel-efficient volkswagen golf tdi clean diesel. up to 594 miles of adventure in every tank.

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. welcome back to "squawk box" this morning. as we told you just a couple minutes ago, goldman sachs reporting up. beat estimates on both the top and bottom lines. the ceo saying improved economic

conditions in the united states are helping his firm's results. joe and i were joking about -- you weren't joking. we should applaud this on a tough day. >> even the liberals will hope goldman does well. >> yes. i think that's not an unfair thing. >> i don't either. the futures right now -- >> we applaud capitalism in progress. >> when? when it suits you? futures right now rebounding from their session lows. being a buying opportunity for investors. everybody's asking that, bob dahl. he's the chief equity strategist. bob, you look like you're considering things -- in fact, it looks like you're listening to what i'm saying right now. >> that'd be a good thing. if you're going to ask a question, i should be listening. >> you should be. you're listening seriously. normally that's what scares me

that everything is a good buying opportunity. when you believe we're going higher. one of these days there's going to be a time maybe where you should wait awhile before you buy or maybe lighten up. is this one of those times or is this is a time where you go right back in? >> no. i don't know right back in makes sense. yesterday was the first day where we began to see the signs that a bottom is beginning to be formed. we tried to rally friday. it failed. we tried to rally monday and tuesday. it failed. yesterday we got our first whiff of panic give up selling on the opening we had the nice move. we tested and went to a lower level on less volume. that's the beginning of the sign we're going to make a bottom. it's going to take a little bit more time. i don't know that it's going to take a whole lot more price. and so, you know, nibbling away. because you supported goldman sachs. that's a long list of companies

reporting business is okay. a lot of people saying that was the third quarter. wait until you see the fourth corner. we had some weakness yesterday. this will take some type. but i do not believe the bull market is over. >> it's funny. some other markets, we look for capitulation. some people are talking about the 10-year yesterday. that probably needs to stop with the violent moves. i wonder if oil at some point needs to stabilize before you can count on all the markets reversing themselves and making a bottom. both of those are still yields in free fall. >> yes, yes, and yes. small has outperformed big. cyclicals are out for defenses. energy rally yesterday. we need the price of oil to stabilize and set up. move up a little. i'd love to see treasury yields

move up a bit. didn't give me that checklist, it's a long list for christmas. i'll feel a whole lot better when we're at process of making a bottom. you used the words free fall. >> you know our guest. how long have you worked together? >> bob, it's rich bernstein. >> hi, rich. >> we worked together for a long time. >> were you competing with each other? were you always on the other -- huh? >> no. it was a collegiate atmosphere. >> sounds like there was conflict. >> always trying to make trouble. >> no. bob and i are buddies. we're fine. >> argue with him now, will you for for cable tv? >> bob, my question is the markets are basically saying the whole world is turning out to be biden, right? massive global deflation. and that's kind of what we're

seeing. what would you say the odds are that the whole world ends up being japan? >> japan's -- among their problems of course were debt levels much higher than most other places and a massive demographic problem. their population continues to shrink. the growth rate of an kmim has to have help. the rest of the world generally does. the other place a bit like japan is of course europe. that is the focal point here of all the things people worry about. i think europe is the big one. do they have any real -- i think we'll be earthquake o. so in the near term, that's clear. i think that economic growth in the u.s. is going to be okay. if we can grow -- i think we were headed for 3%. earnings will grow and stock markets will be okay. and yields will be higher then

too. >> okay. all right. thanks, bob. goldman is now down $3.50. >> explain that. >> huh? >> explain that. >> just -- it's going to be hard to go up today. >> richard bay has been e-mailing me saying the numbers aren't good. that the revenue is down below what it was in the first quarter. my point is but we knew that. they still beat hef h revenue estimates. the market has been expecting that. but he doesn't believe it's good. he said check out some of these things. my thought is the market knew that walking into this. i think it's more of a reflection of the stock today rather than what it would be back looking. things can change rapidly. >> he did say there was a nice backlog. we're going to talk to an analyst in a moment about this. when we come back, reaction to better than expected presumption of guilts for goldman sachs. and then the cdc under fire

after letting a nurse infected by ebola fly on a frontier airlines plane. are we doing enough to keep people here safe? we'll ask dr. scott gottlieb at the top of the hour. 24/7 it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates. they take us to worlds full of heroes and titans. for respawn, building the best interactive entertainment begins with the cloud. this is "titanfall," the first multi-player game built and run on microsoft azure. empowering gamers around the world to interact in ways they never thought possible. this cloud turns data into excitement. this is the microsoft cloud.

so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates.

goldman sachs out with a quarterly result. here's a look at the stock at this hour. now down 2.25%. joining us with more on the numbers on the news line is

marty mosby. and the earnings per share number was 42% above expectations. but some of the revenue number year over year were also pretty good. is there anything here that you see that's disappointing, marty? or does the selloff -- is it explained by the overall market. >> generally the -- we get pressure from the overall market. and the financial stocks are trading on against really what the interest rates are doing. as rates were falling, everybody's imagining the earning power of the banks are out. goldman sachs is probably the least rates sensitive stock in our group yet the stock is already down twice as much as that. we think this is an over correction given the impact this environment could have.

>> you know, we've had some of the money center banks and some that obviously have some similar activities. but why was goldman so much better than the ones we've already seen? what about their business was better? execution or are they in better markets? >> no, what's going on here with goldman is that in the first a o of the year their compensation ratio was around 41%. we estimated going into this quarter that they would beat by over a dollar. because they would begin to lower their compensation ratio. where you see the big favorable that's coming through. everybody wants to focus on the here and now. they're going to focus on the drop from third, second quarter to third quarter. but over the last year, revenues were up 25%. the bottom line number is up 50%. and the sock price compared to

where we were last year only up 12%. >> yeah. so compensation down to 40%. >> dick bove talks about that as well. >> he talked about the decline sequentially. >> a long history of adjusting against the markets. >> marty, thank you. we'll be right back.

an unprecedented program arting busithat partners businesses

with universities across the state. for better access to talent, cutting edge research, and state of the art facilities. and you pay no taxes for ten years. from biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo... startup-ny has new businesses popping up across the state. see how startup-ny can help your business grow at startup.ny.gov sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

welcome back to "squawk box." 8:00 now. we are cnbc. first in business worldwide. i'm joe kernen along with andrew ross sorkin and becky quick. we are watching the equity markets today. it's about all the markets. down 250. we were up for awhile. now we're down 184. i don't know if you call that stabilizing. we were down 460 so we're still a hundred points above the lows from yesterday. we need to go down about another

3% to be at a 10% correction which we haven't seen in three or four years sfwlp not the s&p. only decline 2.2%. >> futures swinging all over the place in the two hours we've been in the air. we cued the forboding ominous music. no more happy music. at this point, i have lyrics associated. markets going down! oil prices dipping below $80 a few minutes ago for the first time since june of 2012. they've since bounced back. you can hear it can't you? don't those lyrics fit? >> it does fit, strangely. >> market's going down! a number of markets in play. i've been asking for for a couple days. but ebola fears is what is causing it. you're looking at a live picture of washington, d.c. on the left. i assume.

and then i think dallas on the right. ebola and the cdc's handling of the virus are front and center this morning. the second nurse to contract the disease as you probably are aware by now flew to cleveland on a frontier airlines jet. we now learned she was granted permission from the cdc to do that because it was down 104. >> she was guaranteed to fly home. she didn't call to fly out. but there were no restrictions put on anybody. she was not violating restrictions. >> now being treated. the cdc director is going to be grilled on kal tcapitol hill to. we have more from phil coming up. >> the major average is pushing into the neg ty territory for the year. dom anyone chu is here with look at some of the winners and losers. >> if you're looking for the

momentum where the investors have been getting out of, look at several sectors in the market. with the s&p 500, like you said, we were down about .8% yesterday. that means year to date we're just about flat. maybe up a percent. still a very volatile market in the past few weeks here or so. it tells an interesting story. first of all, if you look at the human discretionary stocks. consumer discretionary -- it's a bear market for those stocks. down about 20% since their recent highs. and if you thought that would benefit the consumer, the stock market is not telling that right now. retail stocks are the second worst performing sector to dats. if you look where investors have have been hiding doing into the

past nine months. up about 12%. health care up about 9%. and that trend has played out also the past couple of weeks as well. so those are two sectors you do want to watch. maybe they outperform. or maybe they go up a little bit more given the fact some people are going into these stocks. and two other sectors i want to call your attention to because they were very, very active yesterday during the market selloff. and subsequent recovery. this is the intradate charge of materials. two more cyclical names in the sphere here. you can see in the beginning of the day, a huge drop to the downside just like the markets. then they rallied back. they were positive on the day as the day closed out. we see an immense selloff, energy material selloff. could see a worse selloff. but they do rebound more if there's a dip bought by investors. one thing you're going to want

to watch, energy stocks. outperforming and underperforming at certain times in the market. that may happen again. >> back to you. >> thank you very much. now we're going to focus on ebola again. president obama canceling all travel plans today to meet with advisers to talk about the white house's response to the virus. let's bring in dr. scott gottlieb from the american enterprise institute. scott, we've talked a lot about this. the president yesterday saying we've closed down and shut down ebola in the past. we'll do it again this time. how is this time different and how do we combat it differently? >> this time is very different. in the past we have had ebola outbreaks they've been isolated in africa. we shut it down by closing villages. you can't isolate a country of 4.5 million people and can't isolate davis. we have to confront the virus. it's very different circumstances. >> scott, my frustration i think

is with the cdc at this point. i was stunned to hear that this nurse had traveled coming back knowing she had a fever, knowing she'd been in contact with an ebola victim. i was doubly stunned to find out she had contacted the cdc beforehand and told to travel. it raises a lot of questions about how prepared we are as a nation. with the overall with the cdc. are we ready for this? what are we missing? >> right. there's been some missteps with the cdc. i suspect they're going to correct it. there were missteps in terms of how they handled this not going in initially. they deployed 200 of their best in e west africa. the resources and authorities lie above cdc. what is the assistant sec tir for preparedness doing. what is the president's homeland security advisers doing?

this isn't just the cdc. >> what did you just say? we're not going to be able to quarantine at this time. we have to confront the virus directly. we don't have any tools to confront the virus correctly. all we have a quarantine. >> right. well, we're going have to go in, try to treat people. track and trace here in the u.s. we will see other index cases. the key is going to be trying to keep those small. >> we don't have a vaccine or therapeutic. are you saying we need to develop one within a month to make this latest incident go away? do we need medical science to come up with something now? >> i think we're going to need something in west africa. the outbreak has gotten big enough there that you can't just rovl it with track and trace. we haven't gotten them into the field quickly enough. we need a fresh program to get

those into the field and start testing them. >> you said last time you were on even if we have that crash program, it's three to six months before you actually see anything. >> other peopling are saying nine to 12 months. some of these drugs are well understood. they look active against ebola. there's no reason we can't get them into large simple studies right now in west africa. they're under active investigational new drug applications. there's no framework for doing that right now. they don't understand why. this is something i think the administration should prioritize right now trying to get these products into the field. the west africans want them. the doctors want these products. it goes to the economic impact of all of this. there's clearly the human flt of all of this. but there's a sense of anxiety around this table, it appears in the marks. sort of the larger public

sphere. the question is whether it's well founded or not. just straight up. >> i think the bottom line is to your point while we won't have an epidemic here in the united states. if this continues to happen in west africa, it only takes 20 to 40 paces in a city li-- if this virus continues to spread the way it is and it goes to other countries. if we see it spread in south africa and then goes to india and latin america, then it won't become epidemic in the united states. >> you -- i mean, you've -- what i'm trying to understand is what you described is that a worst case scenario at this point. and how many people are we talking about? what does that mean? there's sort of a sense of panic. and i want to understand whether it is justified or not.

>> well, cdc director said we're at a tipping point in west after wa. i haven't seen anything change the trajectory of this. if we don't get more resources in there and change the rate of continued spread of this virus. >> so, scott, which cells do the ebola virus replicate in in the bot i did? >> a lot of different cells. >> really? >> yeah. >> so it just goes into all of them and takes over that machinery and replicates? >> basically. and it destroys a lot of the membranes. that's why you get sloughing off in the g.i. tract. >> so it's not a specific blood cell or type of cell. it's just able to attach, go in and replicate in any cell. >> in endo filio cells, yeah. >> what andrew was trying to get

at is the idea of panic the cdc has been trying to tamp down. unfortunately in trying to tamp down public concern, i feel like they have been less than straightforward with a lot of the facts that we found out after the fact. now that we've seen additional cases we found out we were not as well prepared as we thought. that was not the message we were getting at the beginning. i wonder how much of the public confidence they have lost in not telling us the full story when it occurred. >> right. i think we have to have a little more humility with a dangerous pathogen we don't fully understand. and we haven't done that today. i think to your point, an earth to reassure the public, they have ruined some of the credibility they need down the road. saying there's zero containment on a bus and say you can't transmit it airborne. there are exceptionsing to these

statements. >> although you walk a fine line. you know, we brought a few people back for therapy and nobody got it when we were treating those people. this came out of nowhere. no one knew this guy had it. and that's the issue of just letting flights from west africa just come into ten different airports in the country. go ahead. >> well, i mean -- look. the flights we're talking about, two airlines, morocco. even if we shut those flights, people will find a way out of that country. >> what could we do to get 95% of the people unable to get into this country from that part of the world? >> i'm sure sure we're going to prevent people from traveling quite frankly. put better tracking on the front end. examine them before they get on the planes. and trace them after they arrive. >> we can't control over there, can we?

>> we can. the problem is if you shut the flights it's not the passenger flights you cut down, that's the cargo flights. and you basically can change all your models because they're going to go up. >> and you can't make that up with charters or humanitarian or anything like that, huh? >> you could dry. the administration would have to be prepared to put in a military transport, transport people in and out. but nay don't seem prepared to do that. but it's an awful big enterprise. >> okay. >> scott, thank you for joining us. it's always good talking to you. >> dead on. from moment one. had. >> concerned we're not doing enough. >> when i said dead on, he talked about the for problems cdc would have making the assurances the way they were. because it was almost impossible to think you could get your hands around it as early as you want. coming up, we're going to

talk about airlines. airline stocks are getting hit hard on the ebola scare. southwest shares dropping nearly 7%. united off almost 7%. delta down 6%. more when "squawk box" returns after this. introducing synchrony financial. bringing new meaning to the word, partnership. banking. loyalty. analytics. synchrony financial. engage with us. there was no question she reminds you every day. but your erectile dysfunction-that could be a question of blood flow. cialis for daily use helps you be ready anytime the moment is right. you can be more confident in your ability to be ready. and the same cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.

do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. thank you.

ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business.

welcome back to "squawk box." president obama canceling all travel plans today to meet with advisers to discuss the response to ebola. cdc director tom frieden heading to the hill today to answer questions from congress. our own meg tirrell is in washington and phil lebeau is in dallas. we're going to start with meg. >> good morning, andrew. that's right. washington is taking a much closer look at the u.s. ebola response today. the white house said yesterday it doesn't consider an ebola czar necessary right now, but will consider it. and president obama addressed the risk to the u.s. in a cabinet meeting. >> i want people to understand that the dangers of you contracting ebola, the dangers of a serious outbreak are extraordinarily low. but we are taking this very seriously at the highest levels of government. >> in a hearing on the hill today, we expect to see a lot of

questions posed to cdc director tom frieden. we'll also hear from the department of homeland security and others. you mentioned the need for a rapid test for ebola. the nih discusses support for a medical corporation to work on ebola diagnostics. we also expect discussion of experimental vaccines and therapeutics. but also likely a lot of discussion about travel into the u.s. from affected countries. >> all right. thank you. let's now get down to dallas. that is where phil lebeau is standing by. phil? >> the reason that we're here is because it was a frontier flight from cleveland to dallas where there was the second health care worker on that flight who was later diagnosed as having the ebola virus. and that has a number of people down here in the dallas area who were also on that flight asking questions whether or not they were exposed.

he's one passenger from flight 1143 and her concerns. >> was she sitting behind me? is there a possibility she sneezed on me? i at this point would like to hear back from cdc. i did what i was told to do. >> and so a number of questions for those passengers. meanwhile, the frontier plane that was flight 1143 was ferried back to the headquarters in denver. it's been removed from service. the seat covers and carpets in the immediate area where that health care worker was sitting have been removed, the filters replaced. and the crew has been placed on paid leave. the ceo wrote a letter to employees saying they are taking extraordinary steps to make sure the plane is clear. he says these extraordinary actions went beyond cdc recommendations. these steps were taken out of concern for the safety of our customers and employees. frontier expects that the aircraft will return to service in a few days. the reason we're here in dallas

is because frontier flights have continued. there's been no indication that other passengers have been put in any kind of danger or risk. but last night when we arrived, we came across one passenger who said you can never be too careful. look at what he's wearing. he also had on rubber gloves. here's his thoughts about being cautious while flying. >> how can they sufficiently regulate something like this? i mean, that's why i'm taking matters in my own hands to protect myself from it. i'm not losing anything by putting on gloves and wearing a mask. so it's just a precaution. a flight attend actually asked to have some gloves because i had extras. >> and he actually gave a pair of those gloves to a flight attendant. that is perhaps the most interesting thing we heard yesterday. look at the airline index. down 13% in the last month. the bottom line is this. when we talked do passengers who were on frontier flights last

night and this morning, nobody has said i think i'm in danger. but they have all said the same thing. duds the cdc have a handle in terms of what's going on with this virus? almost everybody last night said the same thing. how do i know what they know? i'm just going along hoping they know how to control this thing. guys, back to you. >> has frontier said anything about their ticket sales being down or people who had reservations showing up? is there a changed behavior beyond showing up with a mask on your face. >> near as we can tell it has not. last night when we talked to passengers who were coming off the flight that landed here, they all said, look, there wasn't a whole lot of talk about the ebola virus and it being on a frontier flight. it looked like a relatively full plane. the first plight out this morning, it's not even on the board yet. i mean, there are not a lot of departures from here on frontier airlines. generally speaking, we're not seeing panic from people who are

flying. we are seeing people who are saying i have no confidence that the cdc has a handle on this. >> thank you. obviously we've seen it play out in the airline stocks. delta air lines ceo was supposed to be joining us today. we had a lot to talk about. late yesterday he canceled. the company told us that was because of the fast-moving developments that mr. anderson would be unable to join us. >> do you remember tom frieden, the cdc guy, was he at new york? >> beforehand? he was on our show. >> told he was the city's health commissioner and worked for mayor bloomberg and was tapped in 2010 by the obama administration. but the libertarians are in force saying he was the architect of the big gulp ban. "the new york times" report -- >> i like him even more now.

>> and he wanted to attack soda. >> by the way, that's back. >> and right tli so. but he's a big proponent of the soda tax. >> just trying to make him less liked. what to expect from today's trading session. stick around. jobless claims will be out when we are back. lace. my place? uhh... um... hold on. introducing the all-new volkswagen golf. plenty of room for whatever life throws at you.

philosophy is, reynolds? >>no. not exactly. to attain success, one must project success. that's why we use fedex one rate®. >>their flat rate shipping. exactly. it makes us look top-notch but we know it's affordable. (garage door opening) (sighs) honey, haven't i asked you to please use the.... >>we don't have a reception entrance. ship a pak via fedex express saver® for as low as $7.50.

coming up we have breaking economic news that will probably move the market. jobless claims just ahead. we're also watching the futures ahead of those numbers. volatility the name of the day again. we're back in just a moment.

you know how fast you were going? about 55. where you headed at such an appropriate speed? across the country to enhance the nation's most reliable 4g lte network. how's it working for ya? better than ever. how'd you do it? added cell sites. increased capacity. and your point is... so you can download music, games, and directions for the road when you need them. who's this guy? oh that's charlie. hey could you put some pepper spray on my buritto? it's severely underseasonsed. he always like this? just want a little spice, you know? just a little spice. at&t. the nation's most reliable 4g lte network

welcome back, everybody. we do have breaking economic news. we are waiting for the weekly jobless claims. yesterday the markets were incredibly volatile. you saw this whip saw and down. this morning you are looking at those futures for the dow indicated down by another 200 points. s&p futures indicated down by over 27 points. and the nasdaq down 69 points down. obviously it is not just the equities market under concern, under pressure this morning. we've been watching treasuries. at this point only 2.4%. it fell below 2% yesterday and again this morning. >> is oil back up? >> oil at this hour, two cents above 80 at one point.

it's $80.47. >> you can watch the futures. they're moving. and now we're not down 200 anymore. >> we were down 250 at one point. >> 199. that's not 200. >> close. >> it's 199. 198. >> rick santelli is standing by. he has the jobless claims. >> jobless claims moved from 287,000 an unrevised number. then add another 22,000 drop to 264,000. so pretty big drop. and we're getting down to levels we haven't seen in quite a while. the real key is the correlations between how that would figure into jobs, how those figure into good jobs. how that figures into labor force and participation and percentage of population. but or the surface of it, it can't be viewed as bad news. we still have industrial capacity. and there is definitely a huge

correlation between weakness and equities and rising treasury prices pushing yields down. but something unique happened yesterday. you know, i've used the "c" word early in the day. it was picked up by many. capitulation. but i'm using that only in reference to treasuries. not necessarily for the entire chapter of lower yields. but the proof is in the market. here we are at 2.05. we are off our basis point. remember cash markets don't have the exact same levels. some are using 186. but still 16 basis points up. it's at 128. so the point is as that is equity still on the extreme reflection. the treasuries are well off of their extremes. so there is much more of a run to the exits in my opinion by

shorts. whether it's hedge funds or whatever. doesn't really matter to me. usually treasuries don't have a move like that unless it's liquidation driven. that doesn't mean there wasn't more interspersed. because the competition for finding the offers to get out is what drove the market in that 20-minute period yesterday that really was stellar in percentage terms and probably a great reason we never use percentage terms in yields. when you go from 140 down to 110 in a five-year. the five-year was trading in the low 140s. it sends a stark message on many levels. >> how long is your capitulation? that was a good point. a lot of shorts and they finally cover. so they're short bond prices. they finally got nervous and covered. how long is your capitulation good for? a month? three months? you never say ever about going to 1.5 or even further.

how long is your capitulation good for? >> my litmus test is which side of around is 1.28 the five-year closes on for the week. say it closes under for the year then i'd say the chances are that area in the 2s, 5s, 10s yesterday may hold for four to eight weeks. but the probabilities of testing it would be higher. if we start to close above some of those numbers on friday, i would almost say that maybe at least for a fairly significant period of time you're locking in those extreme prices. that doesn't mean on the other hand that they're going to fly to the upside. i think the chances of normal this morning. i heard you talking about the old days. boom. you get your 10-year yield. those relationships in my opinion are a long way off. long way off.

>> rick, there was -- michelle is pointing out there was data out this morning. how bad was it? >> once again just my opinion. but in my humble opinion, the notion of disinflation or deflation being the driving force and policy is central banks throwing any individual country's taxpayers good money after bad money. and i'll tell you why. because i think in the world we live in with all the test tube central banking going on where all the rules are upside down, that you need to aim policy purely for growth and a by-product of good policy that's aimed at growth will yield the right pricing structure on the, you know, inflation side that everybody seems so enamored to get. i don't think it goes in reverse anymore. targeting inflation or lack of

deflation i don't think is the way it's going to happen. >> well, they're doing it. >> oh, of course! and it's a world cry! it's a world cry. people like john hillsen writes stories. it's taken for granted it's a boogeyman and it's a thing like climate change. you can't touch it. you can't explain it. you can't kick the tires. that's why in my opinion some of the key tenants of central banking are flawed. >> someone asked me if i was going into march. i said no. i'm catholic. joining us now is a chief economist at ag. also on stage with us is richard bernstein. richard bernstein does not have a middle name and i'm not giving him one today. lindsey, was it -- i think you just heard rick talking. you know what? there's no way to tell the fed

that inflation, you shouldn't target it. it is being targeted. we're here in 2018. it's going to give these guys cover even if qe doesn't work. they're allowed to stay in because they're not doing any harm. there's no way they're getting out. >> that's exactly right. i think the market was forced to face that lackluster reality that the fed has been pointing to for months, years, at this point. i know there's some that inflation was on the uptick and the economy was stronger with the number coming out in q2 gdp. we've now seen fears reignite. and i didn't do's consumer report shows that consumers are still struggling. that's what it comes down to, the jobs market. we saw this morning's jobless claims are suggesting that people are less concerned about losing their job, but when we talk about high page full-time employment, we are still not

seeing that. and that will keep the fed sidelined. the market was finally forced to recognized that more lackluster reality. >> can i interrupt here? the number that came out this morning is the leading indicator. it's one of the most leading indicator. since like april of 2000. the best number in 14 years from a leading indicator. a lot of the other employment data will follow that and has followed that over the past three, four, five years. that's potentially true. i agree with that. but the markets are going to care whether things are going to get better. and the number this morning indicates things are starting to improve. as we were talking about before, it's for better -- >> the claims number? >> okay. but the number also -- >> this is the first day when the claims number doesn't matter at all. i just said that.

>> that's probably -- ebola i think is outweighing it. >> that's what i mean. >> nothing i can do about that. but let's assume the cdc does what cdc is supposed to do. this is a really good number this morning. >> let's assume the cdc -- >> it is a good number. but remember this is a weekly number. so this is incredibly volatile. we've seen this declining trend for the past several quarters. if this is such a great leader, why haven't we seen it erupt. one data point, a weekly data point is great. but it's hard to focus on one juxtaposed. >> let me bring in who does a lot of fixed income stuff. number one, okay. you look okay. you still got a job? any money left in your firm? can you believe what happened in interest rates since the last time we spoke to you, mark. >> remember what mark said.

pst what you know for sure that just ain't so. and when we talk about interest rates we started the year at 3%. everyone thought they were going up. me too. that just ain't so. right? we said stocks were going to beat bonds. that ain't so. and certainly now we're talking about global growth, u.s. growth. the thing that everyone was so sure of was that the u.s. economy was going to be on a tear, was going to be great for this year. and i think that's what's going on right now. it's trying to figure out whether that ain't so. i'm in the camp of rich. i don't think that that's really the issue. but something i think the markets are testing. >> okay. so all the markets as they are at extremes like this they seem to be linked in moving in tandem. >> absolutely. >> you think we see awe terms low yesterday? >> yesterday's capitulation in the 10-year was amazing when it hit 1.86.

that move was one of the astounding things yesterday. but, i mean, we're early on in this, right? ebola is a big deal for us. i think it could be a tipping point. i'm here in dallas. kind of close to it as far as understanding the impact on psychology. and i was just in asia thinking about the sars epidemic. sars only killed 600 people at the end of the day, but it took a bite out of global economy. our hearts and prayers go to those affected. we're proud of the people on the bottom they're doing. we have to continue to get ahead of this and do well. >> what is the psychology like? on a human level. >> so fear is a tough thing to contain and to understand. there are people that are doing all of the things that you would expect them to do when they're fearful. they're not doing the normal

things, per se. and that's going to take awhile to get through. and i think at the end of the day, hopefully things calm down. and it's back to normal. however, it's early. we're watching this. we should be cautious and thpt what we're doing to protect ourselves specifically. but at the end of the die, these things are impacting the markets, per se. i think that really is the only difference from a lot of the good news and a lot of the bad news we've seen as far as inflation, deflation, rates, et cetera. it's a new thing that's been added onto it. we were talking about oil prices earlier. i think that's been an interesting move. we've gotten from 100 to 80 bucks. >> and airline stocks are down. that's an indication right there that something's amiss. and it's ebola. >> exactly. if you're looking at american airlines and the stock -- oil

goes from 100 to 80, that $20 a worth $1.80 a share in earnings. and i don't know what multiplier you put on it. pe is probably not the one right for these stocks, but say it's ten times, that's $18 a share. the stock's down 14. it tells you fundamentals are getting run over by technicals in here. i think the thing i said in may, sell in maapril trade away in m. i don't think we're ready to make those calls. but preparation is obviously really important. you got to sit here and have some extra cash, have things that are high quality so you can take advantage of some of the trades coming up here. there are a lot of things to buy all of a sudden on fixed income that we like. and that's going to continue. you need to be ready to take advantage. >> thanks, mark. lindsey, mark sort of kritalized a lot of what i've been saying.

i can talk until i'm blue in the face about europe and inflation. but you throw in the "e" word there and it's like a wild card. lindsey, you're not in dallas, but are people in your shop feeling the same way in. >> i think with the fmoc minutes that came out, there was a shift. the fed really pointing out the weakness we've seen in europe. and also extends to what we're seeing in the mid-east. if the company was underlying, it would be strong enough to support these international issues. it goes back to the underlying fundamentals that suggest the u.s. economy is not on as strong of footing as we expected looking at the q2 number alone. >> there's too many "e" words. we need to say ebola. mark, thank you. lindsey, thank you. coming up next, some new

data on this morning's show. deflation in five countries in europe. coming up next we're going to do stock picking with international fare. first look at europe markets right now. we are seeing a lot of red. we're back in just a moment. 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. it's in this spirit that ingu u.s. is becoming a new kind of company.

one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement. i lochecked bag.free with my united mileageplus explorer card. i have saved $75 in checked bag fees. priority boarding is really important to us. you can just get on the plane and relax. i love to travel, no foreign transaction fees means real savings. we can go to any country and spend money the way we would in the us. when i spend money on this card i can see brazil in my future. i use the explorer card to earn miles in order to go visit my family which means a lot to me. ♪

welcome back to "squawk box," everybody. take a look at what's been

happening to shares of goldman sachs this morning. the market obviously under a bit of pressure. gold salesman sax down by 3.8%. that's despite the fact they came in with better than expected quarterly results on both the top and bottom line. the ceo says improved economic conditions in the u.s. are helping his firm's results. but he adds things can change quickly as we've seen over the last few days. while investors fear stocks will plunge into the abyss, our next guest is david herro. what are you thinking this morning broadly? then we'll get into stocks quick. >> frankly what i'm thinking is that price movements have been so much -- so abruptly hit downward versus the fundamental intrinsic value of businesses, this becomes more of an opportunistic value for long-term value investor. >> were you buying yesterday?

>> we're kind of buying every day. in bits and pieces. but yes, as we see the quality businesses deteriorate much faster than our intrinsic value. in most cases it hasn't dropped. all these big picture things, all the political issues. at the end of the day when the business is based on cash flow, the value of these companies has not dropped 10%, 15%, 20%. and that provides an opportunity for long-term investors. >> let's go through a couple of names that you think spell opportunity. one is gucci. the other is samsung. why? >> gucci is actually owned by kerring. so it's part of a larger entity. these consume discretionary stocks especially in the luxury space have been hit quite hard. and they've been hit hard mostly because of fears of an asian

slowdown. so what we are seeing is a cyclical slowdown in asia. our view is this is not structural over the medium and long-term as eight more asian consumers march from the middle class to upper middle class. they'll want to buy these gucci and botega goods. these are down for more cyclical reasons thus providing an opportunity. >> explain. there are concerns about what's going on in europe broadly and they are a bank. >> they are a bank. they're a bank that basically has a very solid residential franchise. extremely low loan losses. recall bnp got hit by the department of justice. and they put the fine behind them. they have not had to cut their dividend. they are extremely well capitalized. in fact, one would argue they're over-capitalized. again, this is something that's

probably dropped 20% in the last, you know, six weeks or so. >> that makes sense. thank you. appreciate it very much coming up, jim cramer an how much more selling we could see before the equity market stabilizes.

let's get down to the new york stock exchange. jimmy cramer joins us. i'm adding the losses from today and yesterday. we are back to the lows. the one thing that keeps coming back in my mind is that the estimate is by december there will be 10,000 new cases of ebola a week. i don't see how this gets quickly resolved, which is something that i think might be necessary to really feel good about putting money to work again. can the market have a sustained rally while still uncertain about how this is resolved? >> i don't think so. you've got that plane that that woman was on. now you've got to wait another three weeks. you know biotech. these things don't develop

overnight. people trying to do various vaccines. look how long it took to get a vaccine for aids. you know this world better than anybody and willing to speak the truth because you are not politically correct. we don't have anything right now. maybe they are working. it just takes a longer time than what people are talking about to develop something. >> we had marco cotter from dallas. if you're in texas, you probably feel differently than people in the rest of the country. it wouldn't take much. i guess they don't have it under control in west africa. that's what scott gottlieb is talking about. it's past the point containing any time soon and could ramp up, which is frightening. it's a humanitarian crisis but also has -- it speaks to how the world economy is going to be a month from now. >> yeah. sa

sars. >> 600 people died. we have 4,000 already. >> that was the epicenter of traffic. what we are trying to do is price that in. delta had a mixed quarter. it shouldn't be down unless you have ebola fears. you have to watch restaurant, travel and leisure. these stocks are trying to get ebola priced in. it seems to have overrun things, it's very difficult to price things in. i've been saying that's the number one thing that has to stabilize. you have bonds. remember people would talk about the federal reserve? that wasn't the one we needed to worry about. cdc has to get ahead of this. >> media or otherwise, irrational fears get exaggerated and blown out of proportion. unfortunately, markets trade on

irrational fears. you can't tell markets you're irrational. it may be totally ridiculous to be talking about any even sort of bad case scenarios. the market discounts those types of things. like it or not, you have to realize that maybe the market's trading on that. >> exactly right. if we had some vaccine glaxosmithkline, i see that stock down badly. obviously, people are saying that thing doesn't work. we had, we are having little companies go up overnight because they have some vaccine that the fda is trying to run through. until we get something that makes us feel like the death rate isn't so high. it may not be the cure, but death rate isn't so high, we are going to come in and talk about this thing. i don't mean to scare anybody. >> i know. the markets are the markets. thanks, jim. see new a couple of minutes. richard bernstein on today's market. he likes those unemployment claims numbers.

get to the terminal across town.

are all the green lights you? no. it's called grid iq. the 4:51 is leaving at 4:51. ♪ they cut the power. it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable. (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here; you better be on the right cloud. today there's a new way to work. and it's made with ibm. guysbelieve this!gonna >>watch this. sam always gives you the good news in person,

then 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. our guest host is rich bernstein. thank you for being here. quick thought for people. >> confusing data. the underlying economy, jobless claims extraordinarily strong.

nobody cares because of ebola. >> could affect jobless claims in the future. probably not. >> we'll see. >> market knee-jerk. >> market is not going to care about jobless claims. >> thank you. that does it for us today. right now it's time for "squawk on the street." good morning and welcome to "squawk on the street," i'm david faber along with jim cramer live from the new york stock exchange. carl is on assignment today. let's give you a look at futures as we are a half hour from the open of trading on another important day. you can see we are set up for a significantly lower open, similar to what we saw yesterday. of course, we did plunge yesterday and then came back a bit. then plunged. then came back a bit. how about that