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 higher margins and higher growth. although admitting that it was a disappointment. >> third quarter earnings were disappointing. they weren't what we had expected. and we saw some slow downs, we saw slow downs in our services business and services productivity in particular, and in software. but as well as slow down in the month of september we'll talk about. but more importantly, though, and the other reason i joined the call, was we had another announcement all about taking this company to the future. and when you say is this transformation, we are transforming, we're reinventing the company and it is working. 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 last met. >> yes. >> 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 quarter and even individually each of those areas. analytics which ended last year at $16 billion, up in total, 8%. a very large number. you take a look at cloud. greater than 50% again. and then social mobile security, every one of them, that's the measure. it's the measure of those initiatives as well as how we continue to move the company to higher value and that was the second part of the big announcement today. so while i don't want to minimize our earnings, this point about us continuing to move this company to higher value, is what it is all about. >> and, of course, she is referring to the sale of the or really the divestiture because they're not getting it, they're paying money, to global foundry, the divestiture of their micro electronics business, their chip making business. they've been in this business as much as 50 years but she's not sentimental, ginni rometty about

any of these businesses. the divestitures have been an important component of her leadership over the company in the last two and a half years, whether it is also the deal to sell the server business to lenovo which closed not that long ago or the newest divestiture, if not margin in it she's happy to try to get out of that business. but, the growth components of the company also need to actually start to show significant traction if you will, and this quarter as we know, the software business, the services business, both came in at revenue numbers that were far less than had been anticipated. you heard her mention, carl, the idea of slowness, that is in europe, in china, and to a certain extent here in the u.s., she said it hit right towards the end of that september quarter. they also were dealing with as are all multinationals the rising dollar and what that is doing to their business overall. >> right. wish they could have sold that chip making division, not a single revenue increase in ten

quarters, jon fortt. >> right. >> was this a matter of running out of levers to pull? >> yes. i think in a way it is. the results, i don't think they do speak for themselves. i think there's a lot of speaking that needs to happen at ibm what's going to happen next for a few reasons. one is the software business slowing down. that's really the core of their business. the other in the move to the cloud, it's a new way to deploy their technology. the entire services business was built to deploy the technology with people rather than the cloud. so as the cloud grows, what happens to the services business? does it become lower margin? does it become lower value? do they end up having to divest? that, too, very unclear and a lot of people and expense in involved in maintaining that. >> s&p saying some of its income would be delayed because of its shift to the cloud. ibm, rometty today, said this is an operational miss. we missed the boat on some of this income. >> i don't agree. your interview with nadella he

said the cloud players were microsoft, google and amazon, also consumer facing companies as well. i would add apple to that mix. what we're seeing is if you're going to be in services for the enterprise you need to make the tools as easy to use as they are for consumers. in her interview with david she points to social and mobile. their challenge is, they're in the software business, but people want software they can use in a manner. >> what nadella was talking about was not just the software angle but infrastructure. his argument is you need all the piece, software as a service, infrastructure as a service, platform as a service and that those three are the only ones that are at scale to do all of those. he sees the consumer as part of what builds that scale for microsoft. that's where he was coming from. i wouldn't count apple in that yet. >> business insider has a post up. they said the scary sentence for the earnings announcement from rometty we saw market slow down in september and our behavior points to unprecedented pace of change in our industry. how much is macro, that has the

market scared, and how much of it is they don't have the products for the world today. >> let me bring david back in f you're still there. we mentioned apple, there is that enterprise relationship which is looking more asymmetric as we go on. what do you make of that? >> you know, i mean they consider it to be a key milestone here at ibm and, of course, we still are at the company's heard quarters. we'll see. i did not get an opportunity to discuss it at any length given the news that overshadowed it this morning. no doubt she points to that and to the sap relationship in many ways trying to point out this is a different company and i would step back a bit and say listen it's two and a half years since she took over as ceo but you might draw the line and say this is all on ginni rometty. a shareholder, warren buffet looking at the company, it's now her company completely. the divestitures that have take been place, opening what has been a poor quarter and whether

it's execution based or more to macro factors whatever it may be, she's going to be judged from here on in without a doubt having nothing to do with what targets may have been set by predecessors. >> you asked her about the conversations with the likes of warren buffet and other big share holders in ibm. brian rogers of t. rowe price told us that ibm was his turnaround play. he believed it was undervalued and thought it was cheap given where the valuation was. the one number i go no in ibm's release their share buybacks, $1.7 billion they bought back in their own stock this quarter. that's nearly double the cap in the business. i wonder at what point you think the buy side will get frustrated with the way they're spending the money given that the shares keep going down. >> yeah. she is not abandoning. they have abandoned the financial targets to a certain extent for the road map as i said, that five-year plan that called for as much as $20 a share in 2015. but not the overalls essence of

buying back stock and returning capital to investors in the form of different depds. your point is a good one. they have been criticized for some time because epps has grown even though revenue hasn't because of that significant repurchase of stock that takes place. that's still a part of the strategy at ibm, kayla, and that does seem to be something that will at least appeal to investors who are still remaining in the stock with it down about 7% today. >> david, thanks so much. david faber after having interviewed ginni rometty this morning. apple pay launches nationwide and mcdonald's and macy's, josh lipton had a chance to catch up with eddie inside a whole foods. hey, josh. >> hey, carl. so today apple launching its new mobile payment service, apple pay. it's going to be at some 220,000 locations across the u.s. whole foods, macy's mcdonald's, and here's how this service is going to work. users can step up to the checkout terminal, hold up their

iphone 6 or iphone 6 plus to a special payment terminal and with just the touch of a finger, that transaction is completed. what apple is trying to do here is take advantage of that mobile payments market which is expected to quadruple to $90 billion by 2017 according to forester research. i did have the chance to speak with apple's eddie q and he talked about how the service is safer, easier, faster. he said that traditional payment methods and how it's more secure. take a listen. >> all of us right now are having to deal with all of these credit cards getting exposed and your credit card gets canceled and got to get a new one or even worse, your card has beens used somewhere and now you have to, you know, which transactions did you not do to get a credit for and we wanted to create an environment where the credit card number that's given to the merchant is a one-time number. such that if that number gets exposed it's worthless because it's been used.

>> so what this would be would be this unique 16 digit security code that's used when you authorize a new purchase. if that code was intercepted by a hacker it would be worthless for the next transaction. so things tfrs cue saying is faster and more secure. is that going to be enough to attract more merchants and consumers? guys, back to you. >> josh, thank you very much for that. your thoughts on this? >> i'm just smirking. it's not going to be like you walk up to the terminal, walk up, wait, you have it ready, i'm not in -- it's going to be -- i hope -- i hasn't rolled out yet. >> longer lines if. >> longer lines, more confusion. the things eddy cue doesn't make sense. when your credit card expires in your itunes account you have to update your credit card anyway. i'm excited about it but more complexity. >> john? >> i think it's going to be off to a bumpy start as is anything that involves human behavior. once it gets flowing this could be cool. you usually have your phone in your hand anyway when supposed to be getting your wallet out.

wave it over the terminal it has positive implications but the key here is that apple's customers are higher revenue higher spending customers. the merchants have an extra reason to get going with the payment systems now. apple has the opportunity to push this forward. >> i would argue we talk about tesla, charging stations, chickp and egg infrastructure, seems like a dovetailing of getting stations in place and getting the phone in the hands of the consumer. >> the nfc has not worked well to date. that's the issue. all the terminals are sitting there. ever tried to do tap to pay it never quite works. it's not activated properly at the checkout. any time systems get rolled out to many merchants look at square, square's rollout with starbucks the stores were not trained to actually do it. >> apple is trying to ramp it up. subsidizing these terminals for small business. they want to get it in as many stores as possibility. a key component is the nonbrick and mortar. apple wants to be the stronghold for in app purchases as well. i can't wrap my mind around

that. if you have your credit card associated with say your uber account, why would you add another layer on top of that? apple still wants to be the -- >> here's the beauty. want to buy something from a different merchant you don't have your credit card associated with, apple pay will allow you to do that without giving the merchant your credit card information. it makes it -- >> no more plugging in that number over and over. >> exciting if you download a new app and pay with the new app you wouldn't need to give it your credit card. the on-line component may be less visually stimulating than paying at whole foods but probably will work better. >> i saw a stat that apple pay will keep eight credit card numbers for each user on file which could be confusing for users to toggle between accounts. >> it will tell you you should only have two credit cards as well. >> will it? >> it should. people shouldn't have eight credit cards. >> we will not try to guess what they say tonight, are we? is that a less in futility. >> it will have a bumpy rollout.

>> earnings after the bell. >> i suspect what they will say is they'll say a little bit about the iphone 6, will beat expectations, ipad numbers disappointing again but nobody seems to care about the ipad. >> guidance? >> revenue is possibly a little on the weaker side but earnings better given that it looks like the iphone rollout was skewed toward the 6 plus. guidance? they tend to go conservative. but, you know, maybe with the ipad rollout they could surprise us. >> all right. you're going to stick around for a bit? >> yep. >> very nice. >> we want to get a check on the markets which have been moving but mostly on the back of earnings this morning the ecb confirming it would be purchasing some assets in the markets so now all of the focus here stateside is off of europe for the moment and on to earnings, 113 components of the s&p reporting this week. that index is up about half a percent today but, of course, the dow down 32 points. the majority on the back of ibm's disappointing miss.

mixed trade, large part of the red due to big blue. >> when we come back more of john fortt's interview with satya nadella, more on the markets with what has been an inflection point for the trading day. the close of markets in europe. and will.i bl am talking wearables and apple when "squawk alley" continues in a moment. ok, if you're up there, i could use some help. smart sarah. seeking guidance. just like with your investments. that sets you apart. it does? it does. you're type e*. and seeking another perspective is what type e*s do. oh, and your next handhold... is there. you don't have to go it alone. e*trade gives you the support and guidance to make informed decisions. are you type e*?

welcome back to "squawk alley." we're watching blackberry the stock moving higher on a report that lenovo might make an offer to buy the company. citing an unnamed source. an offer for $15 a share could come this week. lenovo and blackberry are neither commenting on this. blackberry shares up 5% near session highs. jon fortt this blackberry merger speculation is something that's not new and circulating around for a while. something to take with a bit of a grain of salt. over to you. >> absolutely. lenovo has been buying up tech. we will esee what happens with that. back to my interview with satya nadella, he talked not just about his comments on women, but on the cloud and also about how he sees the global economy shaking up. take as listen. >> the economy, the markets, are going through a period of great

volatility. how do you feel about the whole global economic picture and how that affects your plans going forward? >> i mean it's actually very interesting. when i look at where -- how we're doing at least currently, we seem to do be doing pretty well in some of the developed markets including the united states. our, you know, we have our quarterly results next week and we'll talk more about it but i feel good about what i'm seeing in the traditional markets where we've been strong. i would say the emerging markets have been a little more challenging for us and that's a place where we're also trying new business model. i spent four weeks -- two weeks in china recently, two weeks in asia recently, and learned a lot about what it takes to succeed in these markets is probably not the same that worked for us traditionally. new business models, what does it mean to monetize post-sale, cloud, because these markets probably will bypass generations

of technology and come to something new. it's going to require a lot more diversity in the approach that we take, both in terms of product and business model. and things as you said are fast moving. and the ability to really learn from that and that's why one of the key things that we have changed in our own metrics is usage. usage. which is wherever we are seeing something getting used, that to us is an early indicator there might be something that people want and then let's figure out how to make that great and then let's go figure out monetization. it's a different approach. the new platforms and ways of delivering things enables us to do it. >> these are particularly important comments especially given what we're seeing today with ibm, with sap. note he said usage being the metric, not just people paying for things. he's looking to try different business models with windows. we know that microsoft is giving away windows for free on devices below a certain size.

also with the cloud and some of the premium they're doing, looking to just get in there and get usage going. that's going to hurt companies like ibm that are trying to charge up front for things like hardware. >> what's amazing, listening to him answer your question, i kept thinking to myself, chrome book. when he talks about skipping entire generations did you get a sense of skipping a generation means? >> i talked to him about the chrome book specifically and asked him about google trying to eat microsoft's lunch there, and he talked about the aggressive business model. when i came in as ceo one of the first things we decided to do is change the business models for windows and not concentrate on trying to get all the money up front. don't be surprise pds if microsoft continues to pull levers and figure out how to do that. i don't know if we want to take the next bite now we talked about the model. >> you want to use -- have you use us, just save any file or document or any artifact of yours and then have a natural way for us to monetize as you

use more of it in the context of the commercial context. >> kind of freemium model, but microsoft has always been fond of getting paid software. it spent time and money developed. >> we've always had freemium. sometimes called piracy. now there are a lot -- there are zero price window skews, many, many offers of office, i mean you talked about office competition and when it comes to education and a lot of markets we're as competitive as anyone else in terms of pricing. never shied away from it. that freemium model is here to stay and try to compete it. >> tried to take on that issue straight on. >> how does that manifest itself? the company does like to get paid up front. do you think this is a way to get incrementally more revenue from people who use these services far more than the everyday customer? >> yes. >> or do you think it's going to be a hit to revenue in the near

term some. >> we're seeing hits to revenue in the near term and profits some cases as we heard from sap. he talks about usage, getting people who first use office 365 at home for free or cheap and bring that into the work place. that being part of the model. we talked about cloud and i asked him where the profits are going to come from in cloud. google is trying to take away the software profits. amazon and google trying to take away the infrastructure profits. where will they end up being? he said not clear but if it's going to come from having the whole package, from analytics, going to come from big data and when you can choose what you want to give away for free and what you can pay for, have the customer pay for, then you've got the power. he thinks microsoft is in a better position than others to pull the levers. >> unlike piracy where you have no choice. the stock for the year, 15% gain, outpacing the s&p by a factor of five, incredible. >> not bad. >> thanks so much. john steinberg, daily mail north america. when we come back, will.i.am day

job, tech, wearable and a lot more. markets are set to close in europe. we'll talk about that. ibm and apple earnings with the dow down 32 points. we're back in two minutes. some come here to build something smarter. ♪ some come here to build something stronger. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪ i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses

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will.i.am of the black eyed peas out with his own wearable unveiling it at sales force's dream force conference. it's a smartwatch called the pulse, more of a cuff design that comes with its own sim card and data plan. a chance to sit down with will.i.am and ask about his plans for the device. here what's he said. >> we didn't make this device for people to, you know, leave their phone entirely. we made this device for people to leave their phone where the phone should not have ever been. like the phone should never have been in the gym.

i should not have to tape something to my forearm and have a wire as i'm jump roping. i shouldn't have to have a phone on a bicycle. i should not have to have my phone while in the car. those places when you're truly mobile and active the phone should never be there. i should not have to worry about what pants i'm wearing to zip up my pants so my phone doesn't fly out my pocket when i'm doing a sprint. a lot of people say yeah, it's fashion and technology because it has a little bit of technology in it. this is a full-fledged computer on your wrist. right. it has a snap dragon qualcomm chip, sim card, wi-fi, a 3g, gps, excel rom ter and pedometer on your wrist. it doesn't need a cell to do anything. voice dictation. streaming music baked into the operating system. this is not just like, you know, a band and, you know, does a little bit of tech. this does everything your phone or tablet will do right here on

your wrist. >> that's will.i.am making the case for this smart watch called the pulse he unveiled and saying the home is perhaps the gym not the runway for a device like this. he's been a smart watch evangelist, building this some time. seem to be a lot of these coming on the market. >> he used to be an intel executive and you can see why. if the watch is as good as his argument, this thing is going to surprise some people. he's right. who hasn't fumbled with their phone in situations like i shouldn't have this around. it's a lot of competition. apple watch coming out, microsoft might come out with a watch we're hearing, moto 360, lg, everybody's got a watch. >> it does look like that intel opening ceremony cuff. the cuff shape it's fairly thick, fairly wide, but then again if you're only wearing it in the gym perhaps that's where it works. >> would you wear it? >> i don't think so. >> put that conversation to an end. >> meantime dow down 26 points

now getting close to the european close. simon is back at post nine with that. >> you'll see carl, noticeably a lot of red, more red in europe than here. partly because brent slipped below $85 a barrel. a lot of the oil majors, suppliers are in negative territory at the moment. private qe started from the ecb today buying bonds in the eurozone we'll know next monday when they stop publishing data. asset backed securities we'll have to wait for later in the year. the ecb has lost the battle of the currencies and melon is suggesting one of the reasons europe is underperforming op the equity side the euro has stopped falling as you can see it's flattening out and the comments from james bullard last week suggesting there will be qe here, dollar negative, may mean european equities they say struggle for some time to come. earnings season disappoint pds sap oracle's rival came with a disappointing overlook for the year. amsterdam, phillips electronics

down 3.3%, trouble in russia and china. electrolux buying ge appliances did well because of currencies and cost cutting and then a number of deals rolling through the european space today. often times private players looking at the equity markets after the falls and taking some businesses private. notably in the netherlands shv paying $3.5 billion to take a big animal feed manufacturer and nutritionist, taking that private, at a 4 % premium. you see how the stock has gained almost 40% on the session today. the french billionaire vincent bullard is trying to take or get a bigger stake in the world's sixth largest advertising agency. may try to sell it down the line the speculation. and no comment on the journal report that abu dhabi and associated fund mace be trying to buy reebok from them. looking forward to the week. two things to watch out for.

next sunday the bank stress test from the ecb will notify the banks this week so you may get leaps on the asset quality review over the next coming days and if you're traveling tonight, and into tomorrow, lufthansa is on strike. >> thank you very much. simon hobbs. when we come back apple earnings after the bell rolling out apple pay stock up almost 2%. the strength of iphone sales potentially and the company's outlook for the holiday season when we come back. take a closer look at your fidelity green line and you'll see just how much it has to offer, especially if you're thinking of moving an old 401(k) to a fidelity ira. it gives you a wide range of investment options... and the free help you need to make sure your investments fit your goals -- and what you're really investing for. tap into the full power of your fidelity green line.

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getting breaking news out of the auto space. we turn to phil lebeau who joins us on the news line. >> hey, guys. want to give you an update on what's going on. the national highway traffic safety administration is issuing what is fairly unusual in their regards a warning to owners of approximately 3.75 million vehicles, these include hondas, toyotas, nissan, general motors vehicles that may have faulty air bags. we've been reporting for some time that the tacada air bags that make most of the air bags in the industry having problems with their air bags not properly inflating and exploding and injuring people involved in accidents.

now nhtsa has taken the highly unusual step of saying to the owners of these vehicles go on the nhtsa.gov website, check to see if your vehicle is recalled. if it is, then retalk to your dealer, start scheduling an appointment to get that air bag replaced. nhtsa is not telling people to stop driving these vehicles. it is, however, telling people see if it's recalled and if it is don't waste time to get an appointment to get it fixed. >> thank you very much for that. we'll watch the auto space as we head into the afternoon as well. meantime a tough start to the week for ibm after the company's earnings miss leaves many wondering what comes next. david faber sat down with ceo ginni rometty where she talked about reshaping the company. >> we're reshaping this company around analytics, cloud and the term i use engagement. social, mobile, security, but all for the enterprise. collectively almost 20% growth improved every single quarter

and even individually each of those areas, analytics which ended 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. >> joining us this morning yahoo! fine nance columnist mike san tolly is back. >> good morning. >> a matter of time coming? >> yes. maybe it's still -- maybe still too slow. even if it is a matter of time. i think my main take away a lot of people would say these are necessary shifts that the company is making, part of its evolution, a company that started 100 years ago with adding machines and punch clocks, reinvented before, but i would say the stock is not getting damaged as badly as you might have thought given the magnitude of the revenue in earnings miss maybe because it's been swai sideways so long, a favorite short. we don't know if it's going to be au successful transformation. i would say quickly that the

market seems not to be extrapolating a lot of fund mental macro news to other companies. it seems like ibm specific. >> one of the things that jumped out at me ginni rometty saying we're going to organize a cloud division specifically going forward and also going to organize into certain verticals that we think we can use to accelerate this business. why not do that before now. i mean when you take a look at the ways that other cloud competitors have organized themselves, does that say something about the way ibm's been -- >> it probably does. probably says it has been an under integration of these efforts over time and, you know, i don't know that there's any magic in putting an individual. why not, more comprehensive split of the company, i don't think there's magic in that either unless something preventing the different divisions from doing what they needed to do on their own whether by customer or geography or whatever else. >> she used one phrase over and over and that was this idea that ibm has long been sloughing off empty calories, empty calories revenue. basically businesses that didn't

really bolster the bottom line. they've been doing this a long time and you would think that once you get rid of enough of those businesses and exit enough of these markets that you would see the core businesses return to growth and that really hasn't happened. >> no, it hasn't. look, everywhere they are, is a relatively mature business. source of revenues, all mature businesses. still at a close to $100 billion run rate company here. it's not something that can kind of capture a couple billion dollars here and there and then it makes a big difference. i think that's why they're feasts for other competitors coming in there. yes, i agree, they've been getting rid of the capital intensive stuff, empty calories on the revenue line, not on the profit line, but it's really hard to take exception to a lot except maybe how much they've thrown at buybacks over the course of a decade or more. >> the question, is that now a risk? >> they say they're going to slow down or stop in the current quarter. i think it's going to be less of a priority. what i think they would say, a lot of people say they never paid out enough dividends over

the year and they were low yielding mature tech company relative to cisco and ibm and microsoft and the rest of them. and maybe now that's probably they feel good about that. it means nobody is talking about the dividend safe. we'll throttle back on the buyback. >> the carnage could have been worse. is there a buffet put in here. >> i don't know. i think so. it's probably lower than the price trading at here. the idea being nobody is in there bidding because warren is still there, i don't think. >> we'll see to what degree. >> i don't think a lot of people are coming away from his investment in ibm saying he knew something there. >> not that recent either. >> exactly. >> been in there a couple. >> not the only news out there. apple reports tonight. out with the ad featuring lebron james and his return to the cleveland cavaliers ahead of the new season. tim cook tweeting don't forget where you came from. along with the link to this video on youtube. ♪ amen

♪ amen ♪ >> all right. we get to see lebron work out, he's been doing some of that lately. lost a lot of weight, jon fortt. >> cognitive dissonance. i keep seeing him with the samsung galaxy note phone. he's splitting two worlds here. apple's beats and what are those plugged into? we can't see what phone. it's probably a samsung. i don't know about that. >> but should we be on alert for this deal, biggest deal apple has done, mike, to start showing itself within the company? >> it is interesting. i think it makes sense for them to kind of make that kind of a push when it is this brand. when it's a subbrand it's not necessarily something else. it was always the talk of apple and every hollywood movie you see a mac and never paid for the product placement.

a point of pride i think. now this is a brand i think where you can put it behind it. not to mention the unpaid press they got for getting banned from the nfl when they didn't pay a dime for it. i think they're getting $3 billion worth even if the headphones haven't gotten better. >> apple is paying now. they're paying for placement. >> for this. >> for the apple brand even. >> yes. >> parenthood i think the show promotional consideration. >> is that right? >> yeah. >> good seeing you. excellent. mike santolly. >> to julia boorstin to get a market flash. >> twitter shares trading higher topeka capital markets raising price targets to the stock and reiterating its buy rating introducing audio card a way to listen to audio within your twitter timeline which means new potential for advertisers and also comes ahead of twitter's developer conference on wednesday. the company is expected to announce new tools for developers. the stock is now trading higher by nearly 3%. back over to you. >> thank you very much. when we come back they have too much power, that's paul

krugman calling out one big tech company. details on that next. but first, rick santelli, what are you watching? >> we're watching the big number for today which is 10.2. you'll have to tune in after the break to see why. but keep in mind, we have important data points coming up for a variety of economies, not only the u.s. but china as well. and interest rates remain kind of tame. definitely in the new range. what about u.s. gdp. we're going to talk about all that after the break. health can change in a minute. so cvs health is changing healthcare. making it more accessible and affordable, with over 900 locations for walk-in medical care. and more on the way. minuteclinic. another innovation from cvs health. because health is everything. painstakingly engineered without compromise.

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coming up stocks trying to shrug off four straight weeks of losses and a miss at ibm. is the worst behind us? billionaire investor leon cooperman tells us what he thinks and buying on the dip and one of our traders has been buying mcdonald's ahead of tomorrow's earnings. we're going to get the bull and bear case pore nis fast food chain. a big debate about it as well. see you in about 15 minutes at post nine. >> all right. sounds good, thanks so much, scott. another voice is weighing in on amazon's battle with publisher hashet. "new york times" columnist paul krugman says the company isn't playing fair writing amazon.com the giant retailer has too much power and it uses that power in ways that hurt america. don't tell me that amazon is giving consumers want they want or that it has earned its position. what matters is whether it has too much power and is abusing that power. it does and is. it's interesting to see this debate and so many sides.

new republic argued amazon was a monopoly and now krugman saying it's a monop. pushes prices lower instead of higher and where the argument originated. >> almost political lines being drawn when it comes to amazon. left/right story. >> it seems to be. kind of this battle between european and u.s. models of anti-trust. europe say they want to protect competition. in the u.s. we want to protect the consumer. what i wonder why haven't more companies like your apple, like your barnes & noble, even microsoft, come out and said here, we have them, go ahead and buy them, go ahead and preorder them. i mean, if this is really that unfair why hasn't the competition been stronger about taking advantage of this position by amazon? they could. >> they certainly could. barnes & noble has been caring heshep books for preorder. not loud about them. but if consumers want them they can get them elsewhere.

to the cme group. rick santelli is there. >> good morning, kayla. we talked about our big number. 10.2%. well, here it is. on the screen, this is from the wall street.com for the 30 years at 2011 china grew at 10.2%, record unmatched by any major nation since at least world war ii. why i do bring this up? because we are continually monitoring, of course, what goes on in china and many still believe that even at above 7% growth, many other developed economies would blush, would love to have a rate of somewhere in the 7s. but that's not the issue. the issue is the rate of change. and this summary of their gdp, their economic power output referenced against history and world war ii really says a lot. the reason i bring it up, yes, you guessed it. tonight a look at chinese gdp, calling for 7.4 unchanged from

last time. keep a couple things in mind. whisper number a bit lower and, of course, if we want to benchmark the last time we've been in the zone, first of all you would have to take out the bad point, throw out the extremes, well taken statistics, march of 2009. 6.6% on their gdp. it's kind of funny because 6600 was the low in march of '09 in the dow. prior to that you have to go back to 1998, to start to see the 7.4 to 7.5 sub7.5 levels. pay attention. u.s. gdp comes out next week. the 30th of october, the day before halloween, we were looking for 3%, that is definitely downgraded based on some of the recent data like retail sales. and it's benchmarked against one of the better quarters since the prices at 4.6. but we all know the story if you blend that with the first quarter which is super weak. what does all of that mean in english? what it means is that china is going to continue on a road most likely to see less productivity and i underscore productivity because the more we try to study

japan, because of their lost decades whether the u.s. will have a lost decade. the one thing that seems to take a higher prominence in trying to explain japan is stacked up lack of productivity growth. meaning, that they're just under the eight ball and carry it forward and hard to get escape velocity and may be true for china as well. not only is it about what's going on with gdp, but here's something fascinating. we're just shy of 29% total return year to date on the 30-year bond and that comes at a time -- by the way, the 10s in double digit over 10%. big banks out there downgrading their year-end call for interest rates from 3 to 2.5% as we sit at 2.17. back to you. >> rick santelli, thanks a lot. let's get over to kay kelly and a market flash here. hey, cate. >> thanks so much. sun edison way up about 7% that is on word that david einhorn,

notable hedge fund manager is talking ability it as we speak at the robinhood conference. as of the last filing period his fourth biggest holding as well. we'll be hearing from sun 2008. we'll also be hearing exclusively from einhorn himself. einhorn is opening up to new investors right now for the first time in some sometime. a lot of interesting development from a hedge fund manager who always tends to move markets. >> thanks. when we come back, zoc doc uses tech to help you find a doctor's appointment. when "squawk alley" continues.

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. from apple to google the minds of the tech world are taking on health. i sat down with zocdoc's founder at the goldman sachs builders and innovators conference. >> health care is an industry globally, domestically 2.7 trillion. typically with health there's sort of a trifecta of cost and effectiveness. if you want to reduce costs you'll reduce access and technology is the only thing where you can make a unilateral move in one of those dimensions without the expense of other.

something has to change in the health care system, the cost can't continue to climb, access, of course, is one of the biggest problems that we're addressing, of course, the biggest problem in health care, in my mind in the united states is not fear of any sort of disease spread except but more specifically the shortage of doctors. >> ebola has it shown up as a major concern among users. >> we get asked that a lot. we have not seen increase in flu bookings either nationwide or even in dallas where the ebola patient was infected. so that luckily has not been something we've seen. we continue to monitor it. of course, when bird flu was happening in the united states we saw sort of that spread and so we do have data that will help us be early indicator of these things and work with our providers to make sure they are equipped and we have enough appointments for patients that need it. >> when we come back, steven colbert taking on google, google hitting back in its own way when we return.

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. to build something smarter. ♪ some come here to build something stronger. others come to build something faster... something safer... something greener. something the whole world can share. people come to boeing to do many different things. but it's always about the very thing we do best. ♪ but it's always about the very thing we do best.

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>> google is firing back at google after the comedian called out the company for listing his height wrong on the site. >> all i want is the height i

deserve. i fought for every inch and no one but no one is taking that from me especially larry page who according to google is 5'11". oh. what a coincidence. couldn't stand the competition. fix it or i'll fix you page and yes that's a physical threat. oh, how! >> in their response to colbert claiming he's an inch taller than the previously listed 5'10" google now listing colbert as 5'10" 1/2. talk about just whipping this up in a tea pot. >> he still couldn't get equality in search results with larry page. >> i love it when it lists it as metric converted. 1.79 metersish, roughly in that

age. >> fabulous. leave it to google told play along. dow continues to have some problem. ibm is dragging 70, 80 points off of the dow but close to session highs. we should point out the s&p and nasdaq going for three straight, hasn't done that since mid-september, hard to believe. the dow hasn't put two winning days in over a month as well. that's the kind of environment we've been living in. >> big day for earnings. apple coming out after the bell but financials reporting this week. if you thought it was all over last week with the banks you have the wave of the credit card companies and expect to hear a lot about apple pay and about how they will work with apple and what the take up they expect to be. that's what i'm listening for. >> a lot of biotech's reporting. cramer this morning making the point if we can get through the 21 day incubation period for people who had contact with thomas eric duncan might remove some of that black swan selling

pressure that has been with the market for the past couple of weeks. not saying we cured the dilemma or public health crisis by any means but that's one thing weighing on stocks. >> one thing to worry about less anyway. >> in the meantime the judge has brought the "fast money" halftime to post-nine and it starts now. >> thanks so much. welcome to the halftime show. let's meet our starting lineup. the senior managing partner at star. josh brown ceo of wealth management. pe pete nigerian. vifrts trying to make sense of what's happened with their portfolios over the past week. a return of the kind of volatility we haven't seen in years. the major averages coming off