of the cnbc family and my family, too. he brother brad and his wife nicole are celebrating the birth of parker renee quick. beautiful little girl. >> thank heaven for little girls. i mentioned the admiral and his son david robinson, he is now following me on twitter. i don't think to do anything else today. >> that's great. >> i just followed him back. >> bye-bye. >> join us tomorrow. "squawk on the street" is next. >> watch ginni at 10:00. >> yeah, watch ginni. thanks, guys. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim kr cramer at the new york stock exchange. david faber will be with us later on with gin my rni romett. ibm had a miss. big week of earnings. more than 20% of the s&p concludes this week. including apple tonight.

crude oil will watch, as well, down 6 of the past 7 weeks. as we mentioned, our road map begins withal ibm. a deal to off-load the chip business. markets feeling the impact of that ibm news. the dow has been dragged lower but the s&p holding on. is this a set-up for another volatile week? and as it fprepares to launch after the bell, apple launches a catch. premarket, the dow component reporting $3.68 a share. well below forecast of $4.31. sales fell across several divisions. ibm's chairman and ceo ginni rometty say they're disappointed in the performance and will pay $1.5 billion to take over ibm's chip unit. david will have that interview with rometty an hour from now. what are the key questions we need to ask? >> you know, i think, carl, when we talk about these companies

these days the theme keeps coming up, whether it was ebay, hewlett-packa hewlett-packard, and now ibm. the speed is the overriding theme, having continued to speed up. what is that doing to so many companies in terms of their ability to respond and how are they responding? of course as you well know and jail knows, this is a company that has been repositioning itself over time but perhaps has to do this in an even faster way to keep up with this ever changing market lace. can it do it while still trying to maintain some of the financial goals. clearly the five-year plan, jim, is out the window. >> that is really the devastating theme. i was looking at the analyst meeting from earlier this year and they're talking about $20. at least $20 in 2015. >> this goes back to paul's days. >> yes. i was looking at that, too. and paul, it all started with the prediction he made in 2010 saying that, listen, this is possible to do. may 12th of 2010, he said 12% to

15% earnings growth is in the cards. $20 a share at least in 2015. 24 is tend of that. it's all over. i think a lot of this zirks bm losing to ishsbm. ibm cloud taking business from ibm regular and you just don't make that much money in the cloud. you need to be a sales force.com. david, this is going an important moment because warren buffett has loved this company because he likes the buyback. i see the material deceleration this quarter. i think it's incredible. incredible situation. >> well, as you know, one of the key criticisms over time has been in terms of making the eps number through buyback as opposed to organic revenue growth and significant profit growth. we're going to have ginni rometty about buffettand the shareholder base. the conference call is i believe still going on.

mrs. rometty is on that call. that is not typical for an ibm ceo. many of her predecessors also did not participate in those calls. so that does go at least to the urgency they see of communicating at this critical juncture for the company. >> this is the lowest q3 revenue for big blue in five years. and the spoke says it is not gap down 7 1/2% since 2002. you could be looking at historic price action in big blue today. they talk about this quote, jim. we saw marked slowdown in september and client buying behavior and our results point to the unprecedented pace of change in our industry. when you couple ibm and sap and google and netflix and ebay and ncr, what's going snon. >> september is europe. september, china. these are things that have been plaguing a lot of the industrials. that's why a lot of industrials have come down. i could counter with honeywell having a really good number.

i could easily counter with ppg saying we can handle this slowdown. we will see 3m this week. i would like to hear what they have to say. ibm is making excuses here. >> are you on rometty watch, so to speak? >> i have to be. there's no way you can look at these numbers and -- she either has to throw paul under the busby saying, listen, this is not our model or do something dramatic and keep buying back stock. one thing that's unbelievable with this company is it has chosen not to apply money to making a question situations to give real growth in social, real growth in internet, real growth in mobile. it has just stayed the same. it is a second rate accenture. >> some would say it became a bit later than it should have but a significant deal with them and brought them into the cloud and they have expanded greatly on that.

they would also say and i won't speak for mrs. rometty, but they have made a lot of investment, jim, in these very area where's their own free cash flow which is significant. yeah, you can make that perhaps more acquisitions that could go on. they have been investing, including the business today. >> maybe the hand is just really bad. yes, they've made these -- they've made acquisitions but they spent $11.8 billion and they have very little to show for it other than the allegiance of warren buffett who says he likes companies who buy back stock. is this the case where they please buffett and no one else. is this a tesco? is this a situation where warren buffett said it wasn't that big and i should have stayed away from tech the way i should have sdad away from airlines. i need to know this because he is an unprecedented buyer of the stock who moved the stock from the 120s with this goal in mind

that the earnings were going to be there buecause of buybacks. we want earnings via growth. >> wow. tough call. >> meantime, we'll keep an eye on that. >> jim? >> sorry. >> go ahead, david. >> no, i was just going to say, jim, you know, how important is buffett then over all to the thesis at ibm? >> i think that as long as warren buffett came on "squawk box" and said he's still happy with ibm and be buy back, this is a little more like coca-cola than we thought, a little more like wells fargo than we thought. it's a lot of business here, temporary shortfall. this the quarter that makes me feel this is a company that has been beaten by the changes, the lightning like changes that are happening in technology where you have cloud-based companies

that simply have no legacy, that don't have to worry. plus, i mean, ibm had -- we got to find out about september because china had been so important for them. what is going on in china? david, we know china has just been hammered here. >> yeah, you know, that's a great question, jim, as you point out. we all know about the slowing growth in europe. china had been a bright spot. currently not this quarter. certainly going to focus on that in terms of where the global slowdown is particularly impacting what, again, in the words of the ceo of at ibm are those disappointing numbers for this quarter. and, listen, we'll give mrs. rometty her opportunity to speak and we'll have the questions and see what the answers are. >> you need to know. find out why software was so light. software sales fell. this was the bright light. i thought software was where they were going to make their money. that's what those acquisitions were about. >> brick revenue down 7. that's ex-currency as well. another factor dealing with ibm. >> i wanted them to win because

i love warren buffett and i know buffett is so right so often you don't want to bet against him but the pull back and buyback is extraordinary. that earnings miss weighing on futures as the markets are coming off another volatile week. stocks did finish lower for the week. s&p turning in the first four week losing streaks since august of 2011. how much did friday mean to the bulls, jim? >> look, i think that i know you never want to jinx a health care situation but we left here thinking that this was a critical weekend for ebola. >> and it was. >> and it was. we had a terrific new yorker writer on "squawk box" and he had been a big, i think, very circumspect about what this country was going to be doing with ebola and i think we all feel better. we feel better because there were people in close proximity with the late mr. duncan whom we all thought were going to come down with it.

this is one of the things you keep hoping for the best. the idea we would sit here now three weeks later and -- four weeks later and say, you know what, nobody came down with it? maybe we have so overreacted this this situation. >> hopefully. sunday did mark 21 days for a few dozen people who came in contact with thomas eric duncan. i think they basically gave 43 people the all clear to the extent we know what an all clear means. >> didn't we think that most of these people were going to come down with it and the cdc has been marginalized. listen, the guy is just a politician. he's -- this guy -- those who know him know that those who make excuses will be gone so fast that there is a new sense of urgency by the president. that marked the term was that fireside chat. i think it did market turn. >> and, david, we also have the pentagon. the military engine is beginning to kick in. the pentagon now has assembling this 30-person team. if there's a new case in the u.s. you won't be dealing with the cdc. you will have pentagon-trained officials moving in to establish

essentially the best containment device we can deliver. >> yeah. you know, jim, of course, you and i abubakar shekau last week, carl was out much of the week. was we doesed ebola a great deal and you did discuss it in terms of negative influence on the market. so i do wonder, given at least what seemed to be and certainly a positive sign that all of those people that mr. done can was in contact with do not have seem to have contracted the virus. are we going to see perhaps a positive tone as a result of that? >> well, i think that the hidden negative to this market has been, well, the airlines, we don't know what's going to happen. >> there are still 130 people who did, who were on that flight with them. >> i think there is a sense when you see people who lived with mr. duncan, when you see emergency workers who took him to the hospital, you begin to think we as a country were panicked. maybe we as a country shouldn't have been panicked. maybe the problem is the cdc and the problems.

the protocols were the wrong protocols. i saw disney go from 85 to $79.80 at one point off a downgrade that to me read like ebola. i don't feel like that is a reason to sell stocks right now. i think you want to sell stocks off of international weakness, off of russia, off of europe. david, all week last week was saying to me, jim, be careful, be careful how much you mention ebola because it may not be the factor that is going to drive this economy. i feel now that if the government got ahead of ebola, then the market got down ahead of itself. >> we're going to talk a lot more about that. when we come back, david's live and exclusive interview with the chairman and ceo of ibm. ginni rometty, as it takes a toll on the stock and the markets this morning. apple pay is due to report earnings after the bell. will all of that news gave the tech giant a boost? futures, did take it on the chin

as ibm came out.

look at futures there. apple of course set to report earnings after the bell tonight. launching apple pay today. that payment system will allow iphone users to purchase items at more than 220,000 stores using their smartphone and their fingerprint.

eddie q of internet software and services told josh lipton he's confident consumer will embrace the new technology. >> we design all of our products for the mass market. everyone has to pay every single day multiple times. if we can make that better, fast faster, more secure, more private, i certainly believe everyone is going to use it. >> this is going to be interesting because they signed up so many retailers and card companies. but corporate cards are not there yet? >> no. >> company's prepaid karsds are not there yet. it's not going to be ubiquitous on day one. >> it doesn't have to be. they have the big card companies. i was looking at ncr's reporter today. by the way, in the apple quarter you will not see any of this. this is a 2015 story. apple thinks big. they're not thinking this quarter. and it's going to be one of

these things where actions against apple but they will roll over this industry the way they rolled over music. they're just too big. and when you see the ads this weekend, sprint is trying to give you the phone. everyone is trying to give you the phone. so if you're -- if you were a retailer what you want to do is say, you know what? i'm apple compliant. and retailers are buckle. what are they, retail, bricks and mortars. whatever you say, pal. >> do you foresee what has come to be known as the typical apple beat and then miserable sandbagging guidance? >> the analysts just don't -- the way this quarter works is there's always some analyst who wants to stake out the negative. i understand, sure, they won the game. absolutely. but they're not going to the playoffs. apple's playoff bound. they're playoff bound. they're coming out. >> are we going to see -- what was looking for what the low was in the past couple of weeks here. 97? >> the company is addicted to its buyback. and this is a real buyback.

if you look at this buyback versus the ibm buyback. apple report numbers and we're going to come in here tomorrow and see that blah blah firm has downgraded it and the reason will be some analysis about the number of phones that were sold in the people's republic of china and china mobile not being that good and we're all sitting here saying, wow, that wasn't that good a quarter. and the week later stock will be up and like, wow, you know what, maybe that was a better quarter which is what's been happening with a lot of stocks. >> we mentioned earlier worries of tech. google for instance, last week. >> i kd loo at google. google does not care about wall street. ibm carries passionately about wall street. google cares about google. the key line in that quarter, in the conference call was like, you know what, guys, we spent like drunken sailors because we get the best people in the world. we spent like disciplined sailors. the problem with google is they don't have wall street's

quarterly -- they're doing what we want out of businesses which is thinking multiple year. >> right. >> you know what, one of the things you have to is get around the idea that not everybody wants to beat the quarter. some people want to beat every other company and that's google's strength. >> you said in the past don't trade apple. >> no. own it. >> is it cheap enough to start buying it? >> yeah. it's funny. with this going m quarter, google is now cheaper than apple. it's actually twice as cheap. when you look at growth versus the multiple, google is having tremendous shrinkage. they've got much better growth than apple but apple is still very good. >> with ibm out of the way -- >> ibm is not a factor. the dow should have google in it. ibm is 200 -- $160 billion company. m. we'll get the mad dash as we countdown to the opening bell in a minute. then as we said earlier, david's live and exclusive interview with ginni rometty of ibm is coming up. take one more look at the future as we kick off a very busy earnings week. "squawk on the street" is back in a second. you can bring back a lot of things

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go national. go like a pro. s&p has been down for four straight weeks. hasn't done that since 2011 and ibm does miss for the quarter. we're a few minutes before the opening bell. let's get cramer's mad dash ahead of the market. we'll start with halliburton. >> i think this market has been marching to the tune of actually oil. everything has been following oil. therefore you've got good news in the halliburton call which is going on right now where they are saying that these lower prices are unsustainable. they join schlumberger with saying that and where is their credibility come from? they're blowing out the quarter. i feel like companies that blow out the quarter versus baker

hughes which is much more down beat saying don't give up on oil yet. halliburton is doing a remarkable job. sl i'm not giving up on oil. i think oil holds 79, 80 that is key for the american drilling program. >> a lot written over the weekend argue that production does not get cut as much as some people fear. >> no. putin said it gets cut. that's great. i putin is slashing numbers in america. no, natural gas is not nearly as bad as some of the dire -- we are in a period where if it gets cold natural gas, not a lot of storage in the company. a lot of people claims there's storage and it turns out there isn't. i think southwestern got the better of chesapeake. >> vf corp missed by a penny. timberland. >> i like eric wiseman. i like the dividend boost. i like the fact they guided up. short-term panic because there's a lot of things in the ncr quarter which says that retail

is weaker. retail is case by case. if you can get this thing down here i think you really have a good buy. very good company. >> a dick fisher of the fed is on with liesman during "squawk box" with this morning suggested that maybe this retail sales number was an outlier to the downside. >> interesting. dick fisher quoted yesterday by the cowboys announcers saying that fisher watches the cowboys and uses their stuff in his actual statements. that made fisher first time in a long time with me have a lot of credibility. >> yes. let's see. we'll get the opening bell in a few minutes. don't go anywhere. ♪ decay. it's the opposite of evolution. the absence of improvement. and the enemy of perfection. which is why you can never stop moving forward. never stop inventing. introducing the mercedes-benz gla. a breakthrough in design,

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. we'll get the opening bell in 2 1/2 minutes p the dow has not put two whipping sessions together in over a month. and ibm, that's an amazing stat. ibm is not helping today with their miss. ibm has not delivered an increase in revenue in ten quarters now. and they're -- you know how hard it is to move it down 8 1/2%. >> remember, we've got a situation where the big old tech

companies just don't have the right business models. we could be focused on sap too. adough by is the company you want to be like which moves faster than the cloud and didn't hurt the core business. as per the number we've been down so long, you know what, there's going to come a time where bad earnings are going to be -- not going to be quoted with declines. i i'm a little more optimistic than the market is indicating because the ebola issue, if you back burner that then you may find there's commerce that comes back. september, if putin weren't so harsh, if putin weren't such a bit of off the reservations i think you would see europe come back. if merkel were to blink you would see europe come back. let's not panic here. because people have already panicked. >> just to take us back to july, stanley speak at our conference about ibm and talked about the challenges it faces. here's what he said.

>> ibm is a poster child. they literally face a threat not too dissimilar to what kodak and xerox in terms of a new technology staring them right in the face. nd instead of increasing investment to combat the threat, they've actually borrowed a lot of money to buy back stock. >> and the bears argue this was the quarter where that sort of ran out, where they ran out of leverage to pull, jim. >> i just wish that he had not been dealt -- we're going to hear from david -- this hand of five-year plan. five-year plan in technology. you go to a five-year plan if you're a food company, even if you're a drug company. but you can't do it if you're in a fast-moving tech company unless you're somebody -- mark who has more revenues for cloud than ibm would not do that kind of recklessness of a five-year plan. >> polaroid and kodak, is that where we are with these guys?

>> those are fighting words. i hesitate to those -- those are -- those are demeaning terms. but he got that right. remember, though, he said fed fupds rate should be 4 so not everybody is perfect. >> there is your opening bell and a look at the s&p of your top of your screen. at the big board, nustar, provider in cloud based services celebrating the recently launched .nyc, the official web address of new york city over the nasdaq sify technologies, provider of technology services in india. so the market is going to have to look around the ibm corner today, jim. >> oracle really getting hammered. is that right? i have to tell you that oracle has been -- oracle has been forward in saying, listen, we are not going to be as focused on earnings per share as we are about taking over various parts of the cloud. i mean, talk about some people this morning about ebola. sh this about workday, is this about concurs? no, what it's about is ibm has

not been losing share. they've just been making money, also money per client. they may say, you know what, they are the world has slowed. you've got to be careful because when i spoke with salesforce.com the world had not slowed. and that the that was just last wednesday. >> somebody made the point this morning on "squawk box" that cloud unlike buying hardware you can shift your contract when it's up much more easily. >> oracle will tell you you are stuck but i think that workday which is really the most formidable company in the group would say you're not stuck. sales force would say you're not stuck. it's interesting that oracle is being pummeled here almost as much as ibm because oracle is not a similar company and i don't like oracle stock because oracle is dedicated to trying to win share back in the cloud which means the margins are going to be under pressure. but oracle is more forward than ibm. >> i'm looking at other losers. hp, netapp, red hat, emc. >> look, every one of those companies is challenged.

some are up to the challenge and some are defeated by the challenge. i think druckenmiller was talking about the business. think about ibm, what's their cellphone? well, there isn't really any. what's their mobile strategy? there isn't any. what's their internet strategy? this company reminds me of a company that just kind of put its head in the sand in the period and became a consulting company. you have to have social, mobile, web connectivity. you have to or else you're not a tech company. there's just not a technology company. >> you mentioned getting through the weekend without more bad ebola news. the winners today, delta, carnival, southwest airlines. >> think about where we were four days ago. think about where we were four days ago. there is someone with ebola on a carnival. there are planes that people took. cdc was letting everyone fly who was sick. now let's take it back for a

second. ron is now boss of cdc and i think they could get -- cdc -- who did they put through this weekend? they put other guys out pel military involved. the idea that we're now going to concentrate the ebola people in places that we can really handle them and, you know, you shared -- did you share a towel with duncan? i mean, we would think those people in that house would have all komd down with it. the medical -- think about where we were four days ago and think about what delta. delta had a good quarter but nobody really cared. i say let's be rationale. the ebola discount is now a little bit less. merkel, i think softened her line. >> yes. >> we can all just decide that isis has -- can't be beaten. and i think isis can be beaten. there's a lot of things that happen geopolitical that are better. once these quarters are reported you might say, you know what, some things are better for some guys. i don't want people to give up. if they give up they should have

given up before this earnings period. we're going get through it. i was looking at ppg's quarter. i hate to look at my machine but they reported a good quarter and said that europe was soft but it's fine. the stock went down three almost instantly and now it's coming back up. the average is going to be down badly but we're in better shape than we were four days ago. we are. >> and people pointing out yesterday, of course, the anniversary of the '87 crash which would have been 3600 modern day dow points. >> i traded in the '87 crash. in cash, thank heaven. >> in october and all the treachery, we can do it? >> we were led down by japan. the multiples come down. the bonds, the interest rates, they're stable. people freak out when we get lower rates. oil stable, interest rates stable, get a turn around in europe because they're going to right thing. russia standing down. ebola under control. how can we hate the market as

much as we did ten days ago? we can't. >> hasbro is a pretty good quarter. boys business up 22%. the "star wars" mattel franchise continues to do well. >> wait until "star wars" comes out next year. you're going to think why did i sell disney off of ebola when i shoud have been buying it off of "star wars" which i think is going to be huge. i think it -- you know, hasbro, i still want to buy just ahead of "star wars." i think "star wars" is going to be seismic for disney and you get disney and get it down, don't forget espn, yes, i did go to espn, i love it i play with adam open hand, my partner in fant su but i think that disney, when that went down that was a panic low and if that gets revisited you want to buy disney. >> touch an yahoo! the journal can today saying that marissa mayer is going to announce new cost-cutting measures. acquisitions. >> i think yahoo! -- i mean, the stock has been an unbelievable stock under mayer but the cat

calls are there for her. down big, not are doing well. i wait, some sort of plan to redeploy the capital alibaba. aliba alibaba, you would think that alibaba is going down. this thing has been a horse. alibaba has got internet, got social, it's got retail. so again, there's a lot of reasons to panic. i get that. i like to step back and say, where were we when we went down and the answer is we're better off. i mean, look, this ebola thing. i was with a lot of people in the last ten days who basically wanted to stop shaking hands. >> of course, yeah. >> shop shaking hands h is what dr. bristo says he would do. he runs randall. and i come back and say, if the president got ahead of this, we have to start thinking about next quarter. >> by the way, news in the rail front. canadian pacific saying that exploratory talks with,csx have

ended and no further discussions are planned. >> i don't know why csx didn't go down nibbinitially beyond th. i'm watching the retailers. you would think that vf corp. is the death now. it's bearically down. urban outfitters is an outlier. urban outfitters is to retail if way baker hughes was to oil services. >> micron gets an upgrade. they take it to out perform looking at better pricing. wow, what's happened to chips? >> sandisk wasn't that good. microchip hurt us. amd was just as -- the new ceo, previous ceo was trying to put some lipstick on the pig. intel wasn't that bad. people don't want to go back and intel reports it had the misfortune reporting during a bad time. watch alcoa. alcoa reported a great quarter. that kicked off earning season and kicked off the big decline. alcoa is sneaking back up.

watch the banks. the banks weren't that bad. watch some of the insider buying and takeover names. walgreens and hertz. i think we need to get back out of the complete negative mind set that we were in and accept the knneutral mindset. >> you're not all of of a sudden giddy about the market? >> no, i have to say some things are good and some things are bad but i want to guy weakness. i no longer want to say we're going down big from here. i want to watch oil. every time oil gets near $80 you're going to have to be worried because then you get this kind of over all we're done as a renaissance in this country and i don't think the renaissance is over. that's important because big pharma was down but biotech is up. i expect a decent number. >> dow is down 92 points. let's get to bob pisani on the floor. good morning. >> good morning. dow is down 100 points. now down 92. tech leading the way to the downside. financials though, and industrials, also on the weak

side. let me show you the big tech names. le ibm is the problem here. in fact, ibm is the problem for the dow. 100% of the dow's decline is due to ibm right now. 13 points. that's a huge weighting in the dow industrials. so that's all there. you can see it's weighing on oracle, hewlett-packard and also on the weak side. they made a big deal about divesting their semiconductor manufacturing business to global foundries. that's not the rob pro. they have two cents of charges that are excluding from that here. the problem is the revenue trends are working against them. go ebl tech service, cloud, the outsourcing business, down 3%. global business services, that's the consulting end. that's down 2%. software is down 2%. forget about hardware and the foundry business. all that is besides that. look, the trends are working against them. and they're down by region. americas was down 2%. europe, nidmid east, africa. here's the problem, they have

been projecting increasing earnings for ages now and they got it in 2012 and 2013. 2014 was $17.90. 2015 was $19.78. that was that $20 target they were going for. look at the revenues you see the opposite. you see decreasing revenues. so 2012, $104. then $99. and then the estimate for 2014 is going to be below $97, yesterday's number. and 2015 is going to be flat. something had to give eventually and what did give was they abandoned that $20 price target. that's part of the problem. let me move on and talk about some other things. i'm a little more concerned with ncr's comments. i know you haven't talked about it too much be they came down and basically ratcheted down their expectations for 2014. see the decline of 16% here. they talked about concerns about the retail environment. they said that they talked -- overall retail environment was weaker and, remember, they make

automated teller machines. point of sell terminals. they were saying the retailers environment was weaker. i'm a little more concerned about that kind of comment, particularly when they mention september about whether or not this will be the part of concerns about weaker business in the united states. they also noted data security concerns were causing retailer to ship i.t. priority '. that makes a little bit of sense for me. i do want to mention vf corp. as well. they make lee jeans, wrangler j jeans, nautica. they missed but they raised the guidance for the full year. they had very good numbers. china was up 19%. european sales were up about 8%. so even though they missed, they did raise their numbers overall 2014 and they raised the quarterly dividend by about 22%. they're now at, i believe, 32 cents is the number there for them. that's a fairly decent number to move on the upside. halliburton i want to note here, estimates 9 cents, that's a good

number. beat estimates by nine cents. outstanding one for them as well. right now dow jones is making a comeback, up 75. ibm down 13. that's about 90 points. >> yeah. >> that's important. we're seeing nice comeback. vf corp. is an example of people freaking out at the opening and upon further review -- >> has ibm lost its power as a proxy sdm. >> i think it has. to me ibm feels very old world. look, ibm should never -- if they hadn't made that forecast, if they had just decided to be a little more lucid like sap, saying, we're going to have to readjust. more likeadobe. a lot of people are going to say ncr and ibm are going to remind me of the old bunch, controlled data. 4%. and honeywell. and by the way, honeywell, what a reinvention. honeywell is the survivor of that. ibm is a bunch.

and take h out, i guess it's bunny. >> let's get to the bottom pitts and quhek in with rick santelli. good morning, rick. >> good morning, carl. virtually a parallel shift of slightly lower rates all of the way from 2s out to the 30-year. but as you look at a two-day of tens, friday we couldn't quite make it up to 2.25. we're hovering within friday's range. if you open the chart up month to date, this is enlightening. not many months you see were 28 basis points down. in the month, you know, two thirds of the way over, that's a big move. also notice that those 28 basis points lower in yield from the high to the low on that chart, that i clusds a settlement on wednesday of last week of 214. today's pivot. that puts it in more perspective. look at a month to date of boons. they drop from high to low. much less, about 17 basis points from 92 to 75.

right where they're hovering. things are changing on the southern economies. look at spain, portugal, this is a spain month to date. yes, their ten-year note yields are moving higher but to be fair and still under 3% but it's sm something to pay attention to. month to date of the euro versus dollar and the dollar/yen, the euro is picking up steam. we have to keep in mind the quantitative easing and the surrogate backing. 1.10 was the stopper on the dollar/yen. carl, back to you. >> all right, rick, thank you very much. when we return, ibm's chairman and ceo ginni rometty. and an exclusive nadella, first television interview since becoming m ceo of microsoft. dow is down 64. it's monday,

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it has been 12 years since ibm had it open as rough as this running. gap down more than 7% on that miss. of course, david faber will be speaking live and ebbs cluesively with gin my rometty, moments. in an exclusive interview jon fortt ask edna della if the company thought about spinning off the consumer business. take a listen. >> in an environment where hp is splitting up business and consumer in an environment where ebay is splitting up payments and marketplace and your focus is so much on cloud why not just spin off the consumer business, have a good relationship with it, but focus on one thing. >> one of the things that's really been key to our success, the way even our footprint in the enterprise grew is because

of what i term as dual use. people using windows and office for their personal use and taking it to work. you see that today even. in fact, we have a pretty profit an big consumer windows business and consumer office business. one of the subscriptions in office 365 that's really doing well is the office home premium subscription. so to us the way i characterize it is let's go after the users and their dual use. in fact, i want us to shine and want to be the best in the class around people who are these dual users, who want to use things which are tool, our platforms for they home as well as work and it crosses over. >> interesting contrast between ibm and microsoft and their willingness to shed legacy businesses at what speed? >> i think that microsoft has -- microsoft has lot going for it. i'm not saying buy it. i'm saying they have lot going for it. same thing with apple. this buy ahead of the quarter stuff i'm not playing that game anymore. it's too hard. i used to play the game.

there's too much information. i like what microsoft has to say. i think that they are doing a lot of things right that ibm should have done and i think steve ballmer did not do things right and i think nadella understands that. >> you have been pushing fon an xbox spinoff. >> i look at xbox and hasbro, when i see what's going on in the take 2 world and in the gme world, i just say to myself, you know what, these are stocks that have very much what's 'n sync with younger people. xbox is the best brand in that outfit. they killed it. the you broke it out you would see how well they're doing. >> we'll see if surface can pose a threat to ipad. >> i think the new ipads are great. it happened to be on a day where we were focused on somebody else. i watch jim cramer on twitter and i get tired of people. i'm not saying that ebola is dn. i'm saying that i'm looking at ask restaurants, i'm looking at the hotel stocks.

they're going up. a lot of what i do here is called looking at stocks and seeing they're going up. there's no brain -- this is, you know what, the cowboys beat the giants. maybe you say i would have more insight than that. will the cardinals beat the eagles? it's obvious what was weighing on the market has diminished a little. i'm not saying that ebola is cured because i didn't go to college to get stupid. >> we're not especially me deemologist. >> give me a break. i'm sitting here trying to say the worst might be over for that group. i'm not saying that i'm ready to go to liberia. i'm not calling it all. stop being stupid, stupid. >> get that point. >> i mean, like, look, if you're in wyndham worldwide and you're trying to think why is my stock up, i'm saying that could be because of a feel that people are going to stop traveling. that's what i see. okay? that's what i see. i see it with the credit card companies, i see it with a lot

of different companies where people were worried about travel and it bothers me. i'm not making a forecast about ebola. i'm saying that people feel more calm about ebola. that the panic might be subsiding. and maybe, like my doctor has been saying over and over again, maybe, jim, you shouldn't wake up in the morning and say, you know what, i'm not going to make it through day because of ebola. that's all i'm saying. >> i like that. >> would you calm down? >> we'll get stock trading with jim in a moment as the dow is down 79 on this monday. 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. you ever put pepper spray on your burrito? i like it spicy but not like uggggh spicy. he always like this? you have no idea. at&t. the nation's most reliable 4g lte network.

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. all right. there's a look at the dow. down 94 points. time for cramer and stock trading. >> i want put on my david faber hat. allergin, huge bump today. valeant, huge winner. fantastic numbers. in many -- i've never seen a situation where there are so many winners as valeant andallergin. want to call out again that david is making you more money even if you think he's the ceo

offal al elegan. valeant is dlelivering their quarters. i continue to watch drug companies as the places to go. they've been down badly but this is good numbers all around. >> you've been consistent supporter of piat. >> when the stock was out at 80 last year. he came on the show and said my stock is rid cloiculously low. don't be idle. i'm not. my stock is very unlgds valued. i'm calling your show to tell you that. >> what's on "mad" tonight? speaking of which. >> i'm going to talk about the biggest ipo disaster of the year and i'm not going to tell you which one. the biggest, and people are going to listen to this and say i want to know who does it but i'm not going to do that. i'm not going to name names about who did it. i'm just going to lay out the story because i'm a kinder, gentler cramer.

>> i haven't seen you throw thinking in a while. >> i'm calling the zone. i'm mindful. >> mindfully aware. >> i'm not that guy anymore. i'm not that guy. >> and, well, we'll see you tonight, jim. >> what? >> when we return, david's live and exclusive sfwer rue with ginni rometty of ibm. don't go anywhere. interview wit ginni rometty of ibm. don't go anywhere.

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welcome back to "squawk on the street." our road map begins with ibm. big blue responsible for nearly all of the dow's losses after the disappointing third quarter. david fab we're an exclusive with ceo gin my ni rni rometty moments. apple pay, a mastercard exec will join us live at post 9 to discuss that and to demo apple pay. >> and more of our exclusive interview with microsoft ceo satya nadella. he will talk about his c controversial comments on women's pay. u.s. stocks are mixed. ibm is weighing heavily on the dow following the weak earnings

report. dow down 55 points. opened down more than 100 this morning. tom lee, head of research joins us this morning at post nine. tom, great to see you again. we'll get to ibm in a moment. how important was that solid close on friday? >> i think it's important for the markets to show some ability to sort of rally or stabilize. i think it was a big positive actually. >> doesn't mean we're out of the woods? october traditionally treacherous. waiting for buybacks to kick in in november and december. >> that's right. >> is your year end target changes? >> no. we still think we can do 2100. it's a much bigger move now because of the declines we've had. but you have to remember if we're bottoming and we do think we're in the proximity of a bottom, bottoms are "v" shape sod we could have a 10% month. >> tom, do we need further stimulus from the fed to hold the levels we're at now? perhaps an extension to qe and we just basically rallied in a

straight line up 3 1/2%. what if we don't get that from the fed next tuesday? >> i think one of the big messages from the central banks is they're going to be ready to protect markets. that's really the bigger reminder than maybe promising future action. and i do think with lower interest rates and the drop in oil, there is going to be a dividend coming in the next three or six months. >> can i challenge you and push back, are you sure that's what they're signaling? that's not what evans sid today on cnbc and i believe he is a voting member. >> that's right. but, again, when we think about the fed, you know, they're not going embark on a course that they have a regime to tighten and raise interest rates. it's really going to be at the appropriate time and i think maybe we're talking about the window extepded for the interest rates to tighten. >> a few months ago during the summer people were looking for bargains and they were hard to come back. valuations have run up so high. after the last four weeks of sell-offs and u.s. equities can you find cheap stocks?

are you looking bisector? energy off 8.2% in the month of october. >> yeah. there are -- sarah, there are a ton of bargains. one thing that surprised us is 39% of russell 2,000 stocks have a pe below 15 times. and 20% of the russell 2000 stocks have a dividend yield bigger than the ten-year yield. >> you're looking in small caps? >> small/midcaps have fallen the hardest. when you look at sector, i think investors are going to buy strong, tech, health care, maybe utilities but that seems like a super surge. and energy which has been really -- you want to look at what's been hit hard, energy and small caps. >> i think you're thesis going in the last month is there would be a fourth quarter stampede for momentum names. has that changed? have hedge funds taken it so hard on rates or oil that they have less dry powder? >> yeah, well, you know, the last couple of weeks have been painful. we didn't expect the markets to be down this much. we can sort of see softness but

not, you know, 7%, 9%. i think that there has been a lot of derisking. what we have to remember is if you derisk it doesn't mean the investor has gone away. it's just firepower now on the sidelines. >> does that mean they don't chase? >> i think we're still going to have a chase, yes. i think that it's -- everyone is going to wait for a signal. so better clarity. i think that's what helps establish a bottom is people are going to be watching the move, questioning it, and of course we see they've them jump back on. >> earnings, smack in the middle of a busy week, tuesday, tomorrow, coca-cola, mcdonald's. thursday, amazon, microsoft, gm. friday, ford, p and g just to name a few. do you think the estimated revenue growth is achievable? >> i think it's trickier because of the move in the dollar. but i think what investors are going to be positively surprised is they tend to think, if you miss on revenue you're going miss on the bottom line. i think bottom line misses are going to be smaller than top line misses. that's a reminder that companies do a better job of managing

through currency volatility than just movements in the dollarist. >> tom, it's good to see you. >> great to see you guys. >> tom lee. top story, ibm falling sharply weighing on the dow. big blue posting earnings that badly missed estimates. the tech giant also announcing it will pay global foundries $1.5 billion to take over its chip unit. david faber live at ibm hq with an exclusive interview now. david? >> thank youer have much, sarah. i am joined by ginni rometty, chairman and ceo of ibm. thank you for having us. >> thank you for joining us. >> on a difficult day for the company. you chose to join the conference call. something that is not typical for an ibm ceo to do given what you term disappointing earnings. ginni, on that call to the ebbs tent i had an opportunity to listen to it, there are some who are challenging the notion that the transformation you have been trying to put this company through over the last 2 1/2 years is working. how do you tell them it is

working? >> yes. well, first, thank you for joining us here today as well. and you mentioned the earnings call. it was a unique moment. i thought it was important i be there because the third quarter earnings were disappointing. they weren't what we had expected. we saw some slowdowns. we saw some slowdowns in our services business and services productivity in particular and in software. but as well as slowdown in the month of september we'll talk about. but more importantly, though, and the other reason i joined the call is we had another announcement which is all about taking this company to the future and when you say is this transformation? we are transforming. we're we inventing the company and it is work pentagon you just need to look at the results which to me the results do speak for themselves. and when you look at our strategic initiatives you and i got a chance to talk about this when we were last met and again in this quarter they accelerated. so as you know we're reshaping this company around analytics, around cloud and the term i use engagement. social, mobile, security, but

all for the enterprise. collectively, almost 20% growth. improved every single quarter. even individually each of those areas. analytics, whicheded last year at $16 billion, up in total 8%. a very large number. you take a look at cloud. greater than 50% again. social, mobile, security, every one of them. so to me, that's the measure. it's the measure of those initiatives as well as how we continue the move the company to higher value. and that was a second part of the big announcement today. so while i don't want to minimize our earnings, this point about us continuing to november this company to higher value is what it is all about and difficuis one more piece of evidence of that. david, this year we will have divested and announced almost $7 billion of annual revenue, but as i say, it's empty calories revenue. it's revenue that had declining profits.

>> and did not have a big margin associated with it. >> no margin. >> at all. all that being said, and to your focus of course on your growth businesses and the parts of your revenue that are growing more quickly, certainly you said it as well, there is disappointment with some of your bigger areas you have relied on to be flat if not up a bit in terms of refrigerat revenues. i wanted to ask about that buzz on the call you mentioned execution in the software business, sales execution. but you didn't explain what the problem was. you talked about productivity in the services business not being as strong as you would like but you didn't get an opportunity to explain what. went wrong. so, what went wrong? >> yes. so let me take each one in turp. services productivity, as we looked at it there were a couple of dynamics. part of services businesses that does standard application, implementation, very price competitive. another piece of it, when we wuk about awe to automate our service delivery, needs to go

faster. and then our outsourcing signings were up 60% but the transition times took longer. that impacted services productivity. on software where we talked about mention of both execution and flexibility. execution meaning clients not ready to make a decision, flexibility meaning what we found ourselves and actually clients asking for, offering them more flexibility in our software to deploy it for new workloads. social, mobile. so very much a commitment to it, but taking what it is they bought and spreading it across some of these new workloads. those are very good signs for the future but not at that moment. there was an underlying foundation across both of these. and particularly on the software point that we had mentioned which was a slowdown that we saw in the business. certainly not expected. for those that know our business well the transaction part of ibm's business is second half loaded. it's always that last month,

weeks, day, hours, and we did see a broad-based slowdown in the month of september and that time frame which we can talk about but i must tell you time will tell whether it's macro or not but i'm treating it as operational. so back to those. >> ibm problem not necessarily one shared by your competitors. >> absolutely. >> let's get into it because our audience is interested in slowdowns. i would assume it's not as bad in the u.s. china has been a growth market for you. that stopped this quarter. europe we all know has been slow. >> china obviously -- let me back up bigger picture and then jump into china and europe. what we saw in the month of september was a decline of five points. and if you look around the world, it was less of a decline in north america, u.s., to your point. more so in europe, more so in the growth markets. now, china itself is a decline for us. it was a decline as well over the last couple of quarters. it has a different dynamic. china is a business that's almost 50% hardware to us.

as we transition our hardware business, which we have taken a number of actions to do, you will see that reflected in china's results. >> i want to talk about the speed of the marketplace because it's something that came up in your remarks, in the press release, and it's something that has come up recently when i interviewed john donahoe from ebay and reasons behind their decision to split and meg whitman. the speed of the marketplace everybody says, including yourself, has increased. how at ibm with 431,000 employees can you possibly be agile enough to respond to that increase in speed in the marketplace in these important growth business snes. >> there is no doubt that marketplace speed has increased. in fact, this idea that three shifts changing technology, technology has always been an industry that changes frequently but with these three different shifts all at once it is converging and simultaneously causing more rapid. so one way you do it is very

clear strategy. that's what i feel we have. we have a very clear strategy about how to take this company to the future and more than a strategy, a whole list of bold actions we have taken, one after another this year. and when you're clear with your workforce and you engage them, that's how you move them swiftly. and so that is really what we're about, is mixing into all of those new initiatives while our core business we continue to innovate in it and, as you and i have talked about, some of the core business, while it's essential to many businesses that run the world, it isn't necessarily a growth business. but in total, moving e ing ting value. how you do it is a clear strategy, bold actions, and then you, today actually i took more actions to accelerate it. i think what's happening is the pace is moving even faster. we thought it was fast, it's moving even faster. make no mistake. part of what ware going to do is accelerate faster in cloud, i'm taking several units across the company, combining them, dedicating them into a cloud

division. we're launching several integrated verticals. areas like security, areas like smarter commerce, they're growing great. i'm going to streamline them even more and they're they can grow faster when you move around and take out some of the friction. and then where we had some of the issues you just asked me about software and services, more flexible mod 2ke8 on the software side. services more i.p. and automation, fasters pace. one more change and it does get to your hardest speed again because i believe speed is a very important piece right now. and we are going to take some actions. partly because obviously we've divested in and will be divesting $7 billion in revenue, take advantage of the structures and remove layers. when you remove layer, simplicity and speed happen. so that's another piece of what is -- >> in removing layers are ing there gob to be layoffs? >> we announced some restructuring actions we're going to take and that is really going to be targeted how to increase our speed, simplicity and then again, right sitds

given the divestitures. >> i wonder about the marketplace you're discussing and so many agile competitors far smaller, you feel confident you can fight that battle given, again, size being a constraint, sometimes in terms of agilitagi? >> we're playing to win. i'm confident. there's an important piece, i was with a group of 30 of our biggest clients just a couple days ago and we were talking about there's no doubt there's a lot of innovation in the marketplace from us, from others. but from what they were talking about is the role ibm can play in being the navigator. many. different things springing up. when it comes to a real enterprise who does real work you've got to integrate them with things that you have. this is our sweet spot. it gets to, if you can allow me to jump to this point about cloud. playing to it on cloud, we have always said there would be three things that would make a difference on cloud. it would be hybrid, meaning you

would connect these in ideas, new innovation to your existing systems, data, it would really g about data and security. all that is coming to be now. and that is exactly the strengths and exactly what we built for. >> right. but in cloud you mentioned it, of course, and it is an important component of your strategy and it is growing quickly but it's still a revenue number percentagewise. it's a small percent of your overall, $4.4 billion. >> yes. >> and so can you make that transformation quickly enough to continue to have the con sfiden of the investing public that you need and confidence of your board of directors and warren buffe buffett? >> i believe we can. i want you to understand. remember, we run this company to keep moving it to higher value. it's revenue growth in the places that matter and then it's continuing to move to higher value in other places. so as part of that i am always going to have a part of that farm la is to divest some businesses where it's not value to my clients and not value to

our business model any longer. and then continue to move into the new places, pivot into them. and if you take a look at cloud, greater than 50% again, those are big growth rates. even when we ended last year a you said, $4.4 billion as a service, $2.2 billion. we already just exited this quarter at $3.1 billion on as service. so these continue to move and those are very high growth rates. >> you are no longer following the five-year plan that was set out originally for financial targets by your predecessor. is that a relief to you? does that free you up in some way that perhaps because you were stuck in that plan and what that required of the company? >> look, what you're referring to is the road map that we had, 2015 road map. >> yes. >> it had both a framework and it had an output in what you just talked about was the output, earnings per share guide again for 2015 which we talked about today as no longer using as the basis of your guidance.

the framework, very many consistent parts of that framework. it's what i think our long term shareholders value because the essence of that framework was continue to move this business to higher value, manage it for the long term, and above all, prioritize the importance of dividend and share repurchase for really returning value to our shareholders. none of that changes. that part stay same. >> speaking of the large long-term shareholders. mr. buffett is one of them. it helps you in the marketplace many would argue given his unique place in our capital mark markets. have you spoken to mr. buffett? is he supportive of the changes that's going on and what did he say? >> look, you are right. many companies would be very honored to have warren buffett as shareholder was we feel we are, too, and we have a lot of great long-term shareholders. while i wouldn't share any of my individual conversations with him i believe the warren values what many of our long-term shareholders value. and, in fact, he said it

publicly and we've talked about this many times, this idea that manage for the long term, don't do anything that is not right, just to make a quarter, and of course, don't keep revenue that's empty calories, as he would say, and at the end of the day this is about returning value to shareholders. and so i think this is very -- what we are doing is very con zips tent with what our long-term shareholders want. remember, we are reinventing and transforming this company. you don't get to be 100 years old in the technology industry without absolutely changing what you are m and now more than ever at a pace faster than it's been. >> my understanding you can't communicate specific, but is he supportive still? did you speak to him and is he supportive? >> i think all our shareholders, they vote with their dollars. so they've all been very supportive. i mean, we have regular contact and i have regular contact with all of them. i would never though talk about any individual conversation. >> they're supportive although today many are selling the stock. >> tough day. >> stock is down 7 or 8%.

>> our third quarter is a disappointme disappointment. i should circle back. make no mistakes and i don't minimize that although it is a point in time, it is a disappointment to us. we are going to take bold action about the quarter and then go bold action as we continue to move to the future. >> given the transformation that is taking place and will take place over time, you still may have disappointments in the future. do you have confidence that you won't have a repeat of this quarter in the sense of given the causes of it aren't necessarily going to be offset by many of the things that you're doing in terms of higher value businesses that aring go b to take time? >> look, i keep going back. i've got great confidence not just in the strategy but it's a strategy that all right has results. and a set of actions if i go back to the beginning of the year that have been bold and we're going to continue to make those and recount back from the even just january, a billion dollars to start a watson unit and commercialize watson. and then after the heels of a $2 billion acquisition of soft layer, a public cloud, 1.2

billion to expand from 25 to 40 cloud data centers. another billion investment to build a platform service which goes into the hand of hybrid cloud. relaunched our power 8 business. we then, $3 billion to take our semiconductor business into the future for research and development. i think another thing that's important to note is the announcements we've made not only with apple was sap. these frame us. it's an open partnering but they position was as the go-to enterprise for the future. and then you add that and then add the divestitures. it's a bold set of moves. it's what's required. we are going to continue down that path. therefore, i've got great confidence because of the results you already see out of those moves into the higher value and then the moves that allow us to keep going to higher value. >> you mentioned of course the divest dl itures and thab have been great significance. we can't look at your previous historical revenues and use it

as a basis of comparisons any longer. i've had a number of conversations with your peers to making decisions to split companies. meg whitman or john donahoe. they talk about the speed of the market place and the complexity of their own businesses. it's not inconceivable some will say, you know, what, ginni rometty, it's time to split up ibm, it's better off competing separately with a more agile company. what will you say if, in fact, those kinds of questions and comments start coming your way? >> look, unlike many other companies, we have been aggressive ant changing our company on our own and this started years ago. and so i believe we've made already many of the moves that position us to be successful in the future and we're going to continue. and in fact, the value we bring for the enterprise, i think our clients clearly see that. and much of that has to do with the integration of pieces that we have when we bring together cloud, data, analytics. and so it's both very focused and we've taken our own actions

to reinvent ourselves. >> thank you for your time. thank you for having us here, of course. >> thank you for doing this. >> obviously a disappointing day. ginni ro mmetty, chairman and c of ibm. apple pay is here. the payment system has a lot of skeptics but will they be proved wrong? mastercard will join us live here at post nine with a live apple pay demo right after this break. we needed 30 new hires for our call center.

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to move that old 401(k) to a fidelity rollover ira. wake of david's interview with ginni rometty. she did say that be on the watch for what appears to be some sort of cost in the actions in the days and weeks ahead. keep our eye on ibm which is still down. in the meantime, staying in technology, apple pay is launching today by holding an iphone near a wireless reader consumers will be able to pay by holding their finger on the touch i drks. next guest is one of the big apple pay partners, chief

emerging payments officer for mastercard. ed, good morning. >> good morning. >> big day for you. say said in the break you spent two years on this? >> we spent quite a long time on it. >> you brought in a modified version of what people will see. once you've loaded your credit card into the iphone just talk us through what happens, if you would. >> sure. the first question everyone has is where can i use it? so we have an application called mastercard nearby which can show you everywhere the con tast list is expected. ist just up at times square with the kids and i can go to the disney store when i'm around our office at union square and use nearby to see it. after i find that i can simply go over and bring up apple pay. and what we've done is this is your genuine mastercard. mastercard technology is basically puts a unique mastercard into the phone to work with my account. and then when i want to pay, anywhere i see mastercard contact list i can go to the terminal, use the touch id to verify it and that's it. i'm done. >> i think you get a beep and a

vibrate just so people aren't confused. you can load up to eight different cards in the iphone and select which one you need for where physically you are. >> yes. you also get a transaction history of everywhere you've used it on the phone. and it can link right into my mobile banking app to see more about the account. >> the big breakthrough for you guys and for many people is you're no longer going to be passing the 16 digit credit card numbers around system. what does apple do to prevent that? >> we do a token. this is the mastercard i would like to use. it connects to mastercard systems. get a validation from your bank that you are you, the account is your account. we put a special unique number on it that can only be used from the device. uses the security, emv, high transaction crypt to ji around that and validated with either your pass code or touch id. >> you've got a number of big retailers using this and apple pay but not the country's big e

walmart, going their own separate path, working on their own payment system. don't you need a walmart if you're going to make this more ubiquitous? >> there are huge contact list. over a quarter of a million merchants in the u.s. taking it today. 2.5 million worldwide. we think every retail is going to want to offer this convenience. >> i guess the question maybe asked in another way is, if walmart is working on its own payment system with you guys why does apple need to be involved? >> i think what this is allowing is those consumers who have an iphone, it gives them a great shopping experience. i think every merchant is going to want to extend it out to the consumers. you can always use your plastic. you will have other ways to pay. we just think this is a really compelling way. >> can you get a receipt? >> very much so. it doesn't change anything. you get all the right, benefit, and guarantees from a genuine mastercard transaction, including a receipt if you want it. >> when do corporate cards go live? >> that we haven't announced yet. right now it's debit cards and

credit cards in the u.s. if you look at the banks participating, we start with a set of large banks. we just announced 500 banks more participating. over 80% of the cards in the u.s. today can work with apple pay and we're working to get the sgles what do you do when your phone runs out of battery, use your credit card? >> always have your card for that. that's important is you lose nothing with this. you can always use your card everywhere mastercard is accepted but when you see contact list you can tap and go. >> although if your card is stolen and i think they're stolen at a rate of one every two or three seconds in this country you would be wise to wipe it from deep inside the memory of the iphone. >> was ba it's a unique number if anything happens to your iphone it doesn't change the physical card you have and if we change the physical card you have you don't have to redo your iphone. >> i think eddie key was saying you pay with apps. you no longer have to register or pass your credit card over.

where are you on the rollout of that? is that you or apple that has to bring that to the table? >> we're working together on that one. we think just as compelling it is to tap in the physical world, being able to use your mastercard in app is great. typical consumer has 27 apps, about half of them they use to shop and buy. this will make all of those asp work better and more secure and convenient for consumers. >> good to see you. thank you for coming and demonstrating apple pay. when we come back, a lot more of our exclusive interview with satya nadella. he addresses the controversial comments on women's pay after the break with with the dow now down 36.

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tell tom torlakson to keep fighting for a plan that invests in our public schools. welcome back to "squawk on the street." we're watching shares of new link genetics. it's moving higher on a news with roche holdings making it eligible to receive over a billion dollars in possible milestone payments. those shares you can see there up near off their session highs, up by 19% on the day. back over to you. >> thanks very much. meantime, microsoft ceo satya nadella making waves on his comments about compensation for women in the workplace. jon fortt sat down with him. >> the most comprehensive comments he's made to date on this subject, we talked about it at length. grace hopper is a conference on technology. women in technology. and he had been asked how women should ask for raises. and he said basically, well,

don't ask. and it caused a lot of controversy. here's his reaction when i asked him about what he understood about the reaction to that. >> do you understand why what you said upset so many people? and can you elaborate on why you think that is? >> yeah. i sort of obviously in the last four or five days reflected a lot on it. it's been a very humbling and learning experience for me. one of the best pieces of advice i got when i got to be ceo was, to be bold and be right. and i was born going to grace hopper. i wanted to go to grace hopper. i wanted to imbibe the spirit of the place, understand the real issues so i could be a better ceo, a better leader and work the real issues. so i feel very, very good of having gone there, spent the time, spoken to so in people, gotten so many ideas. but i was completely wrong in

the answer i gave to the question that was asked around how should women promote themselves and make advances to their own because i basically took my own approach to how i have approached and sprung it on half the humanity. and that was just insensitive. it was, as i reflect on it and especially since the conference, busy just gave a very generic answer based on, quite frankly, what i believed and how i practice and lived my life, without thinking through what if someone was faced with bias in their career, how would they feel by sort of getting advice that says be passive? face bias, the last thing i want anyone is to be passive, tif anything, leaders like me have to take on responsibility to break down the barriers, create systems that are better functioning, and every individual face with bias should also not be passive and maria

answered very well when she said advocate for yourself, find other mentors and sponsors who can advocate for you. that is the right way. that's been learning for me. i said something that was just generic but i come out of it with real understanding, real empathy that this is a real issue that we want to make real progress on and i just was -- i would say a bit naive in thinking of my own personal experience versus understanding that i'm speaking to women who really, really want to make sure that people like me are making it easy for them to be able to participate in the workforce fully. >> some in the industry would say it's an aritocacy and there are this isn't an issue but it sounds like you are saying that there has been bias out there? >> the thing that finally -- we all live in it and that's what, you no we, is the optimism we have. but even in ameritocracy there

are objective decisions made by us. how do we make sure those objective decision, whom to promote, when to promote, are not influenced by unconscious bias. just because i was in 22 years, i came to microsoft as somebody who knew nobody here and in 22 years i become ceo and so in some sense i'm the product of the system that worked. but i can't take my one example and say that's how it is for everyone. and anyone who has been faced with, hey, why didn't i get that promotion, i did that great work, those are real issues even in ameritocracies and have to be talked about. if you're a minority it affects you differently. that i think is an issue that needs to be talked about and leaders like me actually need to do work on it. >> some people would say, and have said to me, he's a ceo of microsoft. mirk kro soft is a big powerful company. he can fix this.

what do you say to those people? >> actually it's right. there is no reason why i shouldn't go to work on it and, in fact, one of the dwaata poin that i shared today in our all hands. i asked or hr department is, let's take the principle of equal pay for equal work and let's also talk about equal opportunity for equal work. those are two core principals for us. on the equal pay for equal work it turns out we have a very tight band. it's around .5%. so within a 0.5%, all minorities and women are within that. and, in fact -- >> at microsoft. >> at microsoft. we looked at women in the u.s. in particular, because that's the data cut that's easy to do for us, and it turns out last year 99.7% of men's salaries is what women make. so it's different perhaps than what is felt across all industries. we're doing well on that. i'm not celebrating any of it because what i just say is we

pay equally if you're on the same level. the real issue is do we have enough people of different ethnicity and women in those levels, do we have them in my slt, do we have them in the corporate vice president ranks, are we promoting them as vigorously as we are? there are a lot of other secondary things that we have to go actively work. but to your point, of course, the expectation of anyone should be that a ceo like me should go to work on this and have some principles guided and the two principles that i really want to stay grounded on is equal pay for equal work and equal opportunity for equal work. and we'll make progress on that. >> two things in particular that jumped out at me from his comments. one, he kind of blue up the yid of tech as a ameritocracy, it's been rare to hear a ceo saying that we have work on these issues. and the other piece is talking about the equal opportunity piece, saying that got to make

sure that at these various levels we have enough women, enough minorities doing that. so a different take for tech and definitely a lot to say, satya nadella, had a lot to say. >> good karma out there in the woods of seattle, huh? >> well, you know, he mentioned karma when he first made those comments saying, don't ask for a raise, expect karma to reward you? >> the insight here, which we discussed at the time is actually that's his rre recolle dealing with steve ballmer. how do you ask ceo who is worth that amount of money for a raise? it is surely a different situation al ba it man-to-man, not woman to man. >> in tech very often you get a raise by getting a promotion or by threatening to go elsewhere. around people have done that at microsoft, they've left microsoft, people, you see it happening in the valley. they will threaten to leave google and get several million dollars worth of restricted

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let's get over to the cme group and check in with rick santelli on this monday. hey, rick. >> good morning, carl. it like to welcome the week of trading, peter schiff. thanks for taking the time this morning, peter. >> thanks, rick. >> all right. what are your thoughts of the last several weeks of volatility in the equity markets, a less than a week ago the huge drop in

interest rates that had a tick back up to the upside? >> i think the markets are slowly coming to grips with reality that the exit from qe is not going to be as easy as everybody thought. i heard dallas fed chairman richard fisher on cnbc earlier this morning calling for qe to end on schedule. what dick fisher doesn't understand is you can't end quantitative easing without plunging the u.s. economy into a severe recession. it's because of the monetary policy the federal reserve that the u.s. economy is more screwed up now than it's ever been this history and we cannot unravel all of these economic unbalances without a severe recession. >> let me stop you there. i'm not saying i disagree. there are exit issues. but for a moment, let's just come to the conclusion that the messy exit is a given. now let's look at what we have left. what do you think the state of the economy is right now void of that particular dynamic? >> well, i think the economy is a disaster. that's why i don't think the fed

is going to exit. unfortunately they've got qe4 cued up and ready to launch right now. they're going to do more quantitative easing not because it's worked but because it's nn an abysmal failure and because they can't admit it's been a failure they're going to do it all over again. >> you know, when i see certain areas of the economic marketplace there has been improvement over the last several years. one of the main issues is sustainability. even though on the job scene we could have serious debate about part time, full time, good jobs, not so good jobs, and 92.5 million that are not able to work but, you know, gone from the labor force, but there has been improvement, peter. where do you think the next ding to that is going to be? not exit, necessarily, but do you think china, europe, in particular, are going to continue the give us a headwind as to effecting our growth negatively? >> yeah, well, rick, you have to remember whatever improvements we think we see are direct

consequence of the qe. so when you take away the cheap money those improvements are going to evaporate and we're going to find ourselves in a deeper hole than when the fed first started digging. all the things we needed to do have not been done because qe prevented structural reform from taking place. instead of building a foundation upon which a real recovery can emerge all we did is reflate a bubble that's about to pop. that is the problem that those are the dots that nobody seems to be able to connect. >> listen, we only have ten seconds left, peter. janet yellen has been talking a lot about income disparity. i don't think she's put policy into that line but do you think that's a good thing for a fed chairman to weigh in to? >> it's noted a go thing and it's very ironic because it's been the federal reserve and janet yellen that have been the principle cause of the widening gap between the rich and poor because quantitative easing is diverting resources from the real economy can to the bubble

economy. and this is undermining economic growth and incomes of most people and it's just supporting the very class of people who she's upset are getting so rich from her policies. >> peter, we're just about out of time. it's going to be fascinating at the next meet to see if there are any surprises on wrapping up the qe front. carl, simon? >> simon, back to you, buddy. >> thank you very much, rick. one thing is for sure, it has been a roller coaster week for the last weekend. a bit more, this as, in fact, today marks the anniversary of black monday. art cashin will join us here to talk about that when we come back.

welcome back to "squawk on the street." we're watching shares of johnson after food deknown said it was not interesting in acquiring the company. on friday reuters reported they were interested in making a possible bid for the infant formula maker. the stock down 4% at session lows. >> thanks so much. shares of ibm off after the

company reported wider than expected earnings in revenue miss. david faber sat down with the ceo at the top of the hour. here's what she said. >> the third quarter earnings were disappointing. they weren't what we had expected. we saw some slow downs, we saw some slow downs in our services business, services productivity in particular and in software. but as well as slow down in the month of september, while i don't want to minimize our earnings, this point about us continuing to move this company to higher value is what it's all about. >> ibm earlier weighing heavily on the dow. the index off its morning low still down 52. welcome back art cashin, director of floor operations here for ubs financial services. obviously ibm is the second biggest weight in the dow jones industrial average. that's got to be the story of the divergences right now. >> absolutely. the market is trying to decide if ibm simply is one off and not going to affect the rest of earnings season and see where

they can go from here. as the day wears on we will look at some of the other factors. if it goes below 81 towards 80 that might put pressure. >> i was surprised to see oil opened under pressure today and continues to be given the fact that in several reports over the weekend, goldman sachs putting out a note saying it's bound to bottom and some supply concerns that saudi arabia is perhaps going to start pulling off production. it was surprising to see more pressure on energy. >> well, i think the market is kind of working on its own here. it had a lot of cross currents that appears to be some dissension within the opec community, so i don't think it notes what to believe. it is the levels we'll be looking at. if it does move forward 80 i think it could put pressure on equities. >> one of the unknowns last week was ebola. do you feel that might be passing because the 21 days quarantine period rolled off in texas. a cruise ship, everybody has come back successfully from that and now the military is in involved and a new guy involved

in the situation the authorities could contain it. >> i don't know about the authorities knowing what they're doing, but it does appear to be much less of a threat in this sense that the four people living with mr. duncan when he passed away, no hazmats, no nothing else, close personal contact, apparently, and -- >> it's not airborne. >> far less contagious than it seemed and that's a sigh of relief you're seeing. a little of that was in the market friday afternoon that put a bid in. there were conversations here on the floor in the trading desk that hey, we're just days away from the 21 days ending and so i think we've got a little bit of a bid here. >> you wrote on friday about october 87. >> right. >> it's always an amazing tale, every time you tell it. we ask it every year. >> well, it was an amazing time. and the point that i tried to make and made in the write-up, the 19th, which was yesterday,

was terribly scary but the really scary day was the 20th which was today, because the banks saw that there had been a crash and they went to all the brokers, dealers, specialists, market makers and started calling back in the lines of credit and the market opened up 200 points the day after the crash. rolled over. and went into negative territory and you could hear an audible gaps down here. it was the closest it looked. the wheels coming off the locomotive. >> the world was ending. >> lehman moment. >> i saw this morning in modern dow points, 3600. >> that would be right. >> it was, what, 22% in one day. unbelievable. back to today, we were a coming off the longest run of losses for equities in ability three years. do you have a thought on whether we've seen the bottom? >> well, you got down to almost single figures in the stocks that were trading above their 50-day moving average. and that's pretty rare event. that's a heavily oversold.

my gut tells me, we may have to do one more retest of those lows however. we'll wait and see how this day works out and how the earnings season progresses. >> lots of earnings. >> the blind squirrel tie we can't go wrong. >> right. >> now let's send it over to kayla tausche with a look at what's coming up next on "squawk alley." >> good morning to you guys. what a day to have so much exclusive input from executives across the technology industry. we will have microsoft ceo satya nadella talking to john fortt about the overall macro environment for tech spending and where microsoft fits into that landscape. apple talks the launch of apple pay which happens today and david faber will be back to break down his exclusive interview with ibm chairman and ceo guinea rbegi ginni rometty. that is quarter is leading the dow down. all next up on "squawk alley." t. t. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right.

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good morning. it is 11:00 a.m. at ibm headquarters in new york, 8:00 a.m. out west, "squawk alley" is live. >> and welcome to "squawk alley." joining us this morning john steinberg the ceo of the daily mail north america and cnbc contributor.

good morning to you. kayla tausche and jon fortt joining us on a very busy day. take a look at shares of ibm, definitely the story of the morning. huge earnings miss this morning. shares down about 7%. our own david faber is at ibm headquarter where he wrapped up that interview with ibm ceo ginni rometty. hi, david. >> hey, carl. disappointing day, the words ginni rometty used a number of times in our interview and on the conference call, a rare appearance for an ibm ceo on a conference call, pointing to the importance she felt in terms of at least communicating with investors about what is a significant well day for the company in many ways. not a good one in the sense of missing earnings, abandoned that road map set in place by her predecessor sam pomsono but as she has done in our previous interviews pointing to the transformation that is under way at ibm, moving into what she calls the higher valued businesses with