>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. among the wall street and main street stories that we've been buzzing about right now, falling energy prices. crude oil hovering near $80 a barrel, that st the lowest level in more than two years. it's no surprise drivers are seeing prices at the bump dropping below $3 a barrel. i paid $2.99 yesterday. we've been asking people to tweet us selfies from their lowest gas stations. here is what scott sent in. so if you are filling up on the way to work, take a second to send us your selfie. tweet using the hashtag cheap dpas. go ahead and sent that in to us. coming up at the top of the next hour, our special guest harold ham. he will join us to talk about whether the low prices will eventually lead u.s. producers to stop drilling.

>> energy prices are likely to be a point discussed at today's fed meeting. the fomc is expected to turn off its massive bond buying program while ensuring investors it will start ready to act should the economy be threatened. and we will have steve liesman joining us with the exclusives from the fe survey later this morning. the s&p case-shiller index, consumer confidence, and third quarter housing data. as for earnings, among the names posting quarterly results before the bell, dupont just hitting the tape. pfizer, auto nation, corning, when i will pool. coming this up afternoon, facebook will be on centers stage after a market closes.

we have the dow looking like it will open higher. up about 11.5 points. the nasdaq will open higher, as well, by approximately 24 points. earnings per share, sales, 7.5 billion. revenue is 7.87 billion. so it's a different number. 7.87 compared to 7.95. so maybe just a little bit shy of expectations. but pretty close. and then for the year, the company says it is backing its $4 to $4.10 number and the estimate for analysts is this $4. so analysts are backing $4 to $4.120. in fact, the first quarter for the fourth quarter of the

company, above the year ago's 359 cents. right now we've got 70 cents is what the estimate is. 20% of 60. 59 and 12 is 71. so we do expect a hit in the faurth qua fourth quarter numbers, as well. the broader markets, the yield has been moving slightly higher, which some people would say is a positive begin that whether we were down below 2% that was when we were in the middle of all of the angst about whether we were in correction mode. and some of the market sector. both of the guys we had on set said 9.8 is no 10. >> 9.8? >> 9.8% on the s&p. i said it did because i wanted

to get it out of the way. i'm willing to round it up. come on. it's pretty close. yeah. the market is not that exciting. let's look at the dollar quickly. good time to go to europe. might even to get you better. $126.08. >> 200 bucks for that? >> i could almost hold my breath the. >> no, you couldn't. >> currency is way overvalued. take a quick look at gold, which at this point is -- isn't much to watch. 1227. at my gas station -- >> i was excited to see $2.99. >> it's under three. i think premium was like $3.17. but i was almost, and it filled

up for $38. >> i paid $42. i wasn't completely empty. >> you're carbon footprint. >> this is all greek to me. >> i know it is. you have no idea about driving. you've never done it. >> jeeves fills up the car. >> you're basically a virgin in terms of driving a car, right? >> i can drive a car. i can't drive a stick. >> you company drive a sick. what is that second pedal for? >> keep it in first gear. >> what was i going to say? >> where was i going? >> well, i -- >> oh, oh, your big carbon footprint. >> global warming in hawaii, there's lava. that's how hot it is. >> 15 feet an hour? >> i guarantee you anchors will

be asking whether that's due to global warming. >> don't you have three suvs? >> no. one is a minivan. i'll tell you about a number of the early morning stockholders. i love my minivan, thank you. madison square garden is exploring a split into two companies. the entertainment business could be separated from the shorts business. shares are rising on the news. john rogers is joining us in just a few minutes at 6:15 eastern time and we'll be talking to mario gaboelli this morning. >> shares are tumbling that the current quarter is going to be weaker than expected. investors are concerned about how many people are joining the social site and how often they're beating. its earnings were in line with estimates.

>> our q4 numbers, let me be specific, are a raise on the full year for us and a raise on the third quarter. >> i would say about our business specifically of $ 1 billion digital advertising businesses, we are of the lives i ing. oh, what happens? twitter. what's going on? those guys needs a quit. huh? chaps this quarter? >> at the end of the day, still a pretty big platform. >> get me some doritos. peter said they were all a bunch of stoners.

>> you were surprised? i'm disappointed that there is a lot of optimism coming out of the country. but at the end of the day, you have to have exposure in media. tv, weakening, there's a lot of uncertainty about how digital expects that. twitter is -- >> peter, so a point, you just take away the funny part of it was that the assets of this company are phenomenal. >> phenomenal. >> and they can run this thing and then do well. but if they actually knew what they were doing, it would be doing so much better. >> looking at that, that's the question. by the way, it's not like this is a completely ridiculous visit. >> it wasn't the top or bottom line. it was the user growth that disappointed you. >> i think it's expectations in the sense that they had more than what people were -- than

what they did last quarter. i think it's the commentary about how they get to next year. pricing is generating a little bit. users are decelerating a little bit. at the end of the day, it's still at 50%. >> they claim that they would be profitable by a penny per quarter or this last quarter if it wasn't to accomplish it? >> it's a little agreeshus. it's incredibly high. so targets across the street have to take that into account. actually, but thing i do want to come back to is when you get about the user growth, it's about 1 to 2 million users, but they would have beaten by if not for a software issue that they had overseas. >> what do you mean? >> we had a glitch that made it

more difficult to stay logged into twitter. they acknowledged they think that cost them about 2 million tweets. >> here is the other suggestion. the suggestion is people are using twitter less, meaning there's more people using twitter, but the ones that are on it are tweeting less and does it really mean that they're engaged? that becomes the question. >> that is another one of the disappointing parts. as you increase the quality of the site, usage would improve. it is, but just marginally. that affects the amount of inventory you have to sell. still, you take a look the at ever at this, regardless of people's attitudes and how they're using twitter, why are you giving them to me? that was another surprise

yesterday, how much mobile accelerated. >> your price target on the stock? >> 56. >> thank you for coming in. novartis posted better than expected earnsings as well as revenues. shares trading higher. here to break down the results is joe jiminez, ceo of novartis. i'm going to have a soft spot for you, joe. i think the last time i saw you it was at davos, actually. we are going back. hopefully you'll come on when we're over there. >> it was in davos, that's exactly right. >> hopefully you'll come back this year because we're having a meeting about it, right? eight straight quarters is a pretty good growth, right? >> right. yes. well, what we're doing at novartis is we are focusing on the innovation and that's really driving a lot of our growth. so we were able to, in the third

quarter, to grow sales 5% and cost and currency despite the fact that we had a significant patent exploration in one of hour biggest drugs. so i'm feeling good about the saying groels and the eps double digits growth that's coming with that. >> it's keep it simple stupid in the drug business. and you need to spend on r&d and bring new products. that's what's helping your quarter, too. >> yeah. we have three drugs that in the third quartzer were up over 20%. gileia, afintor and for sigma, these are delivered between $had 00 million and $600 million and

they grew over 20%. when that happened, you're able to more than compensate for any pat incident expiration that you're going through. >> from diavan, the blood pressure, i guess that's one of the things you're referring to there. we also had lily on last week. you were involved in that three-way deal with a switch of assets. can you explain how that set you up for the future and what you did for people that don't remember? >> yeah, yes. back in april, we took a hard look at our portfolio. i believe in the next three years, we're going to have to focus on businesses that have innovation power and global scale. pharmaceuticals, generics, and eye care. these are three divisions that are over $10 billion. they have global scale, they have innovation power. but to do that, we had to optimize our portfolio. and i call this precision m&a

where we look at our portfolio, look at a partner where they could potentially benefit from some of our as aets. so eli lilly is acquirining our animal health business, with gsk, we're acquiring their business. we say a powerful number two in oncology and gsk becomes the leading vaccines business. together we form a joint venture on over-the-counter drugs creating one of the biggest otc businesses globally. this is a transformation that is really opt miedzing the novartis portfolio. many people in the industry said swaps don't work. and i think all three of us, lilly, gsk, and novartis proved them dead wrong. >> so what is -- you may be able to file fairley soon for this

heart drug? i love the name. do not change its name. lcz-696. i can't wait to see that on nightly news with brian williams as they're talking about it. but do you really think it's going to be a multi million dollar drug? what does it do? this is going to be a very important drug. they found lcz-696 reduced death from cardiovascular means by 20% and it also reduced hospitalization costs by 20%. now, there are over 25 million people in the u.s. and europe with heart failure. and heart failure causes health systems over $100 billion every year. so if you have a drug that can

reduce hopzation, that's going to have a bith impact. we have now filed. we're in a rolling submission with the fda. the fda and everyone regulatory authority is very excited about this drug. and we're expecting to get approval .and to begin selling this drug in 2015. so we're looking forward to that being a multi block burst for novartis. >> people don't realize, novartis is one of the biggest market caps, bigger than pfizer, bigger than merck. you're coming to us from lon. people at home should try to do an interview with like an eight-second delay. it's fun. they didn't move london to china, did they, do you know? in fact -- >> he's doing a good job. i'm impressed because it's hard to jump right on. >> john, if you could book our

time, lel love to see you more. >> maybe the lag will be less in china the. >> good. . we've got some sports news force you. the dallas cowboys there in overtime. the redskins. i like the cowboys, the redskins, the patriots. >> i think you you kind of owe -- >> yeah. you have mentioned those. >> and the bengals beat the ravens. >> they don't want you back. >> i don't care. they're going to have to do a lot more. >> they don't want you back. you are like -- >> but after 25 years, they finally just -- after the colts game, i had it. but this was rg3. is he coming back? >> nope. this was dallas's first loss since the opener. >> and they look good. that's why it watts a good rivalry last night.

>> hopefully the bengals keep looking. >> bengals. you sound like gym dmans. i don't, then. >> the last -- no, the first guess. noise? we'll start bashing some corporations next block. that is your -- you took my advice and wrote about that. >> yep, your advice. >> you had no column yesterday. and i said, are you going to see that every week? i said why don't you write about hillary, businesses don't create jobs. >> it's true. and i -- >> you know what? i'm not going to read your column. i hear them for three hours. we're going to talk about an product i care about after the break. what is that? >> applepay. tim cook firing back at cvc and

rite said. it would be a planned -- for investors right here on "squawk box" when we come back. e financial noise financial noise financial noise

financial noise

welcome back to "squawk box." apple and alibaba could be teaming up. alibaba founder jack ma said he was interested in a partnership between apple pay and alipay.

that's, of course, alibaba's payment company. when tim cook was asked, he also hinted at a collaboration. >> we're going to talk about getting married later this week. so we'll see. did jack leave? oh, no, he's still here. and so i have the utmost respect for jack and we would love to partner with people that are wicked smart, that have flexible pain, that are product-based. and that push us. and we like to push them. and so those partners we work the best with. and i think jack has the company that's exactly like that. and i love what he's done. i think he's a briltant guy. i think he has brilliant people in the company. and so if we can find some areas of common space, i love it. i love partnering with people like that. >> and later this morning, we're

going to be hearing what tim cook had to say to other retailers, including rite aid, that have cut off apple pay. >> what do you think of the move to -- by those retailers? >> i can't figure out what i'm -- i can't figure out what happened. i don't understand how they -- why they signed up originally. if they planned to cut -- >> someone made a better deal with this merchant consortium -- >> then why did they sign up? they only had it going for a week and then they stopped it? and they were going to do to use this to publicly zie? sgln. if you decide apple is it -- >> what bothers me about mcs, a bunch of merchants that get together and pool, they share the information so they have a better idea of who is shopping across a lot of different things. that's a privacy issue.

i'm mott sury as a consumer would want to give information away. >> i'm told that they can have loyalty systems. >> but they are looking at invading your privacy. if you're willing to give that up because you get something back in return, that's one thing. >> what do you do with your plus things? >> still got it. >> how long do you have? >> not many more days. i kind of like it now. >> you do? >> i think i'm a -- you know, it's such a big screen that i'm starting to -- i was playing with -- >> i'm getting nervous. what were you playing with? a big screen. >> i was about to say i -- >> do we need that music? >> i know the word you're going to say today. >> do we need the music? >> i was going to have i would -- a smaller one. but nonetheless -- >> hard to imagine. >> you look at the screen, you

look at the screen and you think to yourself, can you really go back? >> i don't know. >> that's the thing, i think it would she addicted to go to a bigger screen. >> i have offered you a merse. >> mario gabelli -- >> joe will die for this. >> i will tell you about -- -- earnings this morning, etna posted better than expected results, raised the forecast membership and it rose for a tenth straight quarter. etna's government business now makes up more than 40% of health premiums. i don't know if you saw yesterday, just totally by coincidence, the "new york times" did a big look back on obamacare. i know it's only -- and it hs

nothing to do with this article they wrote yesterday, but they found that for people that get government sushsydys to buy health care, it has helped those people. they were able to find that it did what it was -- >> is that a factually accurate article? >> it is. it did what it was intended to do and people that have been given the money to buy insurance, some of them have actually bought insurance and they're using it now. now, addition -- >> tearing down walls. >> exactly. you normally love that i'm talking about democrats. not one word about whether job creation could be growing. all it was was for people who get the entitlement, they're better off. that's like saying in europe, the people that get all the -- they're doing better than if

they weren't getting -- but that was the entire thrust of this huge three-page piece, four-page pieces, exactly a week before they're trying to just salvage this -- you know, bruised and battered -- are you ready for this on sus? >> i think so. over the weekend, they had a tie that was -- so it wasn't tie spry? >> all right, tie spry. neck wear, neck wear. >> that's a good idea. anyway, let's talk about another story that we've mention dollars this morning. madison square garden is talking about spinning off its live entertainment business. nominating nelson pells scott sterling to the board of directors. john rogers joins us on the squawk news line.

msg was one of his original picks and the "squawk box" flattened portfolio. aerial owns nearly 2 misdemeanor shares of msg. i don't think of this? >> it would be terrific and the right thing for shareholders. >> is it right right now because of what you see in terms of sports, the huge valuation, they own both the knicks and the rangers and this would give them an opportunity to get valuation for that. >> i think they went to los angeles and made a difference. they value sports teams more than ever. the knicks are really well positioned this year with putting together a great news organization to mix into the world championship. >> is that a suggestion that this -- to grow? >> i think they need to grow

because live television is so important these days. and, you know, people run the pace so much of these properties, because of it. >> john, do you have any concern? we were talking about amc in the segment yesterday. amc was white hot. that was a spin-off of the dolan spun off. it was white hot. just a year ago, we thought that was going to -- it felt like that between mad men and "the walking dead" and "breaking dead." and now that stock has taken a stumble because think think it's a different issue. i think it's different with sports franchises that seems to add value year ar yeefr and generation to generation. >> so if they do, in fact, spin

off the sports interests, you would hold your shares? >> sure. madison square garden has such a large moat around it. there is no implication for madison squared garden. >> thank you for calling in this morning. still to come, crude oil is hovering around $81 a barrel. right now, down close to 25% from its june high. at what price will american dealers start tapping their wells? are we close to having that happen? stick around to find out. plus, a new survey of ceos, a survey on hiring for the next year. "squawk box" will be right back.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. gm is moving the production of a key part of the chevy volt from mexico to michigan. in case they -- this year. ceo mary barra is expected to make that announcement later today. gm won't hire any new workers to make the parts. and shares of regal entertainment get ago boost this morning. the nation's top theater chain announcing it is considering strategic options, including a sale. also, if you haven't been

watching, shares of recepto are jumping. the company saying its bowel disorder drug did meet a mid stage trial goal. if you watch the nightly news, you realize there's a lot of things that go wrong as you get older. and i don't know which bowel disorder we're talking about. this is a $1.8 billion company before that move. so you're talking about adding -- what is that, almost $600 million worth of market cap just today on results for that. but i was just watching -- you know, there is something that they were talking about. >> the brics lining up? >> yeah. i was watching it and it looks bad. >> i hate that ad. >> yeah, it gets totally -- >> the kids watch that with me and -- >> totally for chronic constipation. i was watching it and the

visuals -- that's how you sell these things. they draw pictures of bricks over somebody's stomach. >> nothing is moving. nothing. >> let me tell you about something else. not frozen, sort of the opposite. >> the opposite problem. >> hot la vie in hawaii in this instance. residents in the path of the molten rock have packed up and left their homes this morning. no mandatory evacuations have been ordered, but most residents have been making preparations to leave. >> lava itself, it is fascinating. we think of boiling water at 212 or whatever it is. 2,000 degrees. >> this is so hot, this solid rock is melting. >> what could you stop it with if you had to? >> the oicean could stop it and cool it all down. >> and if you've been to the big island, there are parts of the

big island that all black. >> in the stock market, we saw a lackluster growth. the s&p 500 dipping slightly. so is this still a stock picker's market? joining us now, our two small cap managers. craig hodges, chris wrestler is the fund manager of needham growth fund. gentlemen, thanks for being here with us this morning. chris, why don't we start talking about why small caps. they have gotten battered and beaten over the course of this year. >> last year had a great year. we're not really surprised that there was some correction small caps this year. they have been probably hit a little harder than the larger cap names. but we think that's the opportunity right here going into 2015. we think earnings have been pretty good so far.

we're probably going to see a lot more. we don't know if we've seen the bottom here over the last couple of weeks. we were expecting higher volatility in september, october, and we certainly weren't disappointed in that. we do think volatility will remain here for a while. so pick your points, find good companies and invest money for the long-term. >> craig, i have to say, i don't understand entirely why small caps have been under so much more pressure. because all of the major indices had great years last year. this is the one that has taken a beating, though. >> it has outperformed for quite a extended period of time. anytime there's the upheaval that you see, i think that those things that have moved the most a lot of times get hit the most. the good thing with small caps is the markets aren't deep like they used to be. and when you have smaller companies that there's not deep markets, they tend to -- the

volatility increases and that sort of thing. >> why is that? >> well, you know, with the market making the change, 2003, 2004 became a not profitable business. people stopped doing et for business profits like they used to. nowadays when you want to go in to sell a stock, markets are pretty thin. you have to work them for a very long time. the thing that i see right now, there is a lot of volatility. now is a great time to be looking at small caps. as he knows, as well, october is when most mutual funds year-end and you take your tax losses in october. there's a lot of stocks that have got.hit. i think next month you'll see some of that i think going the other way. at hodges capital, we're looking at a lot of good names that have had big air pockets under them. >> let's talk about one or two of the names hau like the most. >> sure. trade in the industry sess probably my favorite idea right now.

the market cap just in the last month, you know, this is a very good company that's got very good future ahead of it. rail isn't flowing. their tank cars, there's been a little bit of slowdown. we're looking for $5 earnings on a $35 stock. there's been -- you know, the whole oil by rail has cooled a little bit. but there's a big backlog for rail cars. so we love that. materials and other company, it's had about a 20-point from $105 down to 85. the frack, sand business and they just made acquisitions to double their fracks. when you're related to oil right now, they've taken you you down. select the airlines, airlines have retreated significantly. american hawaiian airlines is

one of the small cap names we like. >> chris, what about you? what are some of the areas you think are right this morning? >> one you like there, as an international leasing company for airlines. fuel efficiency, we're seeing prices now, don't know how long that's going to last longer term. i think we need more efficient airlines and a play on the global economy. still we have a slowdown on the brics and in europe. we like the air leasing business. the companies, you know, in the memory, logic area, they're really great opportunities here. so there's a lot more capital intensity. >> thank you for joining us today.

>> the latest ipo pollsters, the young president's organization, an exclusive cnbc partner which has more than 20,000 executives worldwide. the companies generate $6 trillion in annual revenue and worldwide executive optimism dropped over the last quarter with 6 out of 9 global regions down. the u.s. had only a slight dip as many ceos still see strong economic signs. author than 70% are expecting higher sales next year. and only 5% plan to cut jobs. and when we return, the ceo of choice hotels gives us a post holiday lodging updates. "squawk box" will be right back.

welcome back, everybody. after the bell, the markets will hear from social media giant facebook, the economic front, the government will release the durable goods reports. expectations are for an increase of 0.7%. we'll have those numbers at 8:30 a.m. eastern time. that is today's squawk planner. when "squawk box" returns, we'll check in with the ceo of choice hotels. how does the outlook look for the housing giant and its stable brands that crisscross the nation? find out when "squawk box" returns. in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach.

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welcome back to "squawk box" this morning. shares of choice hotels up around 12% this year sitting at a near 52-week high. choice a good proxy for how main street is how the economy is feeling about travel. the earnings beat on the bottom line but they did miss on the revenue forecast. joining us now to talk about it is steve joyce of choice hotels international. good morning. >> good morning. technically we beat our revenue forecast, but it's all good. >> there were some estimates that were higher. >> we came in way higher.

9% room increase which is amazing. a lot of our brands were double digit. so we had a phenomenal quarter. >> and in terms of your brands, they're all in relatively the same tier. but are there ones killing it in a way the others are not? >> what's interesting is this point you're seeing a lot of pickup at the lower end. so in the upper economy and the lower moderate tier, we're seeing increases. >> u.s. or globally now? >> u.s. because europe is slow. and asia actually has slowed down as well. so for us the u.s. is really the hottest market we're dealing in. the results are good. job creation is really helping. those are our folks being put back to work. as a result we're seeing really phenomenal increases. >> what's a price point of some of these hotels? >> upper economy which is typically in the $40 to $50

range to upscale which can be as much as $300 or $400 in the city. but typically is more in the $125 to $150 range. >> this is -- again, we're -- >> you think you're speaking greek to me? >> yeah, yeah. we were talking about driving earlier, football. >> yeah. >> paying for wi-fi. i know you're a big wi-fi payer. >> just your price, you drive in -- >> he offers free wi-fi at all his hotels. >> you have never -- that's never happened to you, has it? >> absolutely. >> up on the 22nd floor? how do you park on the 22nd floor of the waldorf? >> not in new york city. >> we actually told them you were happy with them. >> what lace? >> upstate new york.

for a birthday party for a great aunt. it was a comfort inn, wasn't it? >> yeah. >> awesome. >> and what's going to happen is even you have to travel for the holidays and see your relatives. >> even little old me. >> you have your choice or hard or soft pillows. >> that's nice. >> so 150,000 flat screens. so we're redoing the whole brand. we've got a lot of different things going on. >> you're smart. that's a good idea. there's not that many things to get right, right? >> what they want is they want wi-fi, a good tv, good shower experience. and they want a good bed. >> and basically want clean and a good bed. what does that mean in terms of the capital you're putting into it. ? >> in average, in the comfort inn, there's several hundred million dollars going in. it's a big brand. over 2,000 hotels. >> it's all franchise. >> all franchise.

>> no matter where you stay you can count on the brand you're going to get the same experience. >> exactly. and we've got a great push because we think we're a great value for business travelers. but the holiday season is upon us. and it looks like people are going to be traveling in big numbers. >> all right. you're expanding in turkey. >> we are. >> what is going on there for you? >> turkey is an explosive hotel market. every time i go back there, it's grown. it's amazing. we've got a great hotel in the financial district. we've got two topped off. the next one that's going to open is on the airport and one on the horn which is the old city on the river. fabulous hotels, great partners. we think we're going to end up with 15 or 20 hotels there in the relatively near future. >> what do lower gas prices mean for your hotel? >> it's great for our folks. we are a drive market. you probably fly, but most of our customers drive. and they are clearly feeling

that benefit in their pocket. >> do you see it almost instantaneously? >> it's funny. we see an increase in travel. it is more driven by the jobs market. those 248,000 who went back to work, they're in education, training, i.t., great collar jobs. those are our customers. we like to say we represent the 99%. those folk who is are going back to work, they're feeling better about themselves in their own situation. they're traveling for business, but then they're also going to travel personally. >> i know the airline prices are increasing. they're up pretty significantly and will be this holiday season. does that help you too? >> that helps because it puts more people on the road. and the more people on the road, we're both. we're on the way, but we're also trying to be your destination as well. which is the upscale hotels we're doing. >> you're a relatively all inclusive. the airlines have gone the opposite way especially on the lower end. spirit airlines will charge you

to nickel and dime you for everything. >> we decided to charge bag fees and decided it wasn't popular with our customers. our whole thing is the value. so our customers are rational consumers. but they are very careful with their money. as a result we need to provide great value to them and we do. >> we got to go. how much money did you leave overnight for the maid, for the service? >> i left her $10 this morning. it makes me more generous than i am. normally i would about a five. but i left $10. >> good to know. coming up, crudes crumble. down 25% in the last five months. how will this impact the nation's oil industry? and you really think this? should drillers start to scale back? we're going put that question to america's richest oil man. harold hamm. he is next on "squawk box." and keep that cheap gas selfie, keep it coming. we want to see if we can find

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the pros and cons of lower oil prices. should american drillers stop pumping? harold hamm responds to some critics that say it's time to kill the drill. driving the bottom line. the automakers rolling out strong sales. will that mean bigger sales? cnbc's next 25. how is media mogul ryan seacrest shaping the outlook of hollywood? the second hour of "squawk box" begins right now.

welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen as we get ready to talk to america's richest oil man harold hamm. we need you to take a gas price selfie showing off the lowest price that you can find at the pump. this picture coming in from northern new jersey this morning. so if you're filling up on the way to work, take a second to join our conversation. you can tweet us using the #cheapgas. we will show off those selfies throughout the program. oh, we've got some earnings here. >> yes, andrew. yes, we do. and the stock is trading higher. it's a dow component. that was the last trade. i got 20.20 to 29.50 for pfizer

at this point. and on an adjusted basis the company was able to report 57 cents a share which is 2 cents ahead of expectations. i'm looking at 12.235 for the number that analysts were looking for for revenue. and the company -- that's above, right? adjusted for the full year. the the estimate is 224 right now. so that range bracket is where wall street is at this point. then full year revenue. 49.7. and wall street right now is at 49.46. did you listen to what i said?

i said 48.7 to 49.7. in the midpoint as well. merck had a pretty good number. novartis had a good number. >> ian reed is talking about how they are well positioned, he says, to potentially allocate capital for the benefit of shareholders across multiple financial and strategic opportunities. >> you know, they have a stated interest in trying to do something. and they'll do what they need to do with astrazeneca. >> that didn't work. >> how long do they have to wait? six months? >> i thought they're out of that. >> they are. but there was a certain period. >> i'm not sure it would be as attractive anymore. more top stories at this hour.

the fed getting ready to take away the punch bowl. their meeting will conclude tomorrow expected to include an end to the asset purchase program. joseph, what's going on on twitter? >> oh, twitter, i have my questions. although i do watch it, becky, you're right. to see what's happening. like for anything. ebola. >> it's the social media constantly on your cell phone. >> but the chairs this morning are under pressure. is that trending? twitter weakness. revenue did beat forecasts. a particular concern was a drop in users engagement with timeline views per user dropping by 7%. i don't know what they can do about a-holes that are all over the twitter sphere. people who write online graffiti and i look and they have zero followers. they go onto twitter to --

because they can't send you an e-mail. to send you something, you know -- have you done that? >> no. >> you haven't done that to bill o'reilly or glenn beck? >> no. you think i should? >> hannity. >> i love those guys. >> a guy said something and i knocked him down. that's the way you do it. >> haters are going to hate. remember that song from yesterday. >> yeah. we're going to play that. >> boone pickens is calling for oil companies to stop drilling. pickens said too much supply is putting pressure on the price of crude. but no oil company wants to be the first one to tap the brakes. america's richest oil man is taking issue with that argument. harold hamm is the ceo of continental resources and he joins us right now with why he thinks boone pickens got that wrong. what did he say that you disagree with? >> certainly. we're used to responding to

natural gas prices and oil prices. that's what we live on is commodity prices. the independent has been quickly adjusted. they can do it quickly. everybody's lease is held by production. so we cut back quickly and that's what we do, respond. so some of these projections out there, people aren't taking that into effect at all. we cut back quickly and we're used to doing that. oil prices go down 20% and we adjust. >> that sounds kind of what boone's argument was making that the reason prices are dropping is that people are pumping so much at this point. do you think an oil glut is why we seen prices plummet? >> let's talk about the oil glut. first of all, there's not a glut in the market at all. what we're seeing is people out here projecting next year that we might see that. and certainly it'd have to be a

perfect world to see that. i frankly don't believe that's going to happen. they discount what's going on in the rest of the world. oil supply's going down in venz -- venezuela and argentina. even ours is going down. the only place is on-shore u.s. that's going up. you know, we've had challenges of course in the gulf off shore as everybody's aware. so that supply has been cut. so only place is the on-shore u.s. and demand is there in a world -- these third world countries that are still converting as quickly as they can to motorize vehicles and demand is up. even though china's economy may be soft, those people are still buying cars and building roads. >> i guess the biggest question is when you start looking at the shale production, how much of the shale production here in the united states is the stuff that is high cost that no longer makes any sense if oil drops

below $80? >> well, it's all high cost. these are expensive wells they're expensive when you go down and go a mile or two sideways, it gets expensive. so they're all expensive. that's where that's at. >> do none of them turn a profit at under $80? or what's the threshold? >> people said, yeah, after it gets in the 70s, people are hurt. and certainly they are. you know we don't see a need for it to be there. some of these other factors out there right now, the saudis saying that they are weighing in, frankly they don't have the excess capacity to do what they've done historically for the past 40 years. >> is that why they changed their strategy? about maintaining market share? >> well, they -- they're probably going to maintain their market share. but opec production has been flat for the last several years.

it had been going up. and they're having to do what we're doing. convert over to horizontal drilling and the same thing we're doing. so it's -- their production is going to be expensive as well. >> are you capping wells at this point? >> are we what? stopping? >> are you stopping drilling or capping wells at this point? >> wier just like everybody else. when the price is down, we're going to adjust and do it quickly. >> but have you yet? >> we haven't yet, no. >> so -- >> this thing hadn't been like most supply/demand situations. basically it was due to the saudis' comments. they're getting ready for an important meeting november 27th. they're pulling everyone together. >> let me ask you. we know that you are the richest

oil man out there. i wonder what sort of impact it has on you when you see crude oil prices tumble more than 25% from their highs. how does that personally impact you? >> when you say richest oil man you're talking about stock in the company. and that's not what you take to the bank every day. so we're used to the prices going up and down. >> is it $75 where you cap things and say we're going to make sure we have an impact on where prices are headed? >> what you do, you don't cap producing wells. you know, what you do is cut back in new drilling. and certainly that's going to have a very big impact on things. you know, the shale wells, they fall off quickly. national production falls real rapidly. >> how much has already change snd not just your plans but plans of other producers?

has there been a big pulling in of the horns and stopping production? >> aye heard from other producers recently they've got projects on the books and we're going to wait to see what happens here for awhile. we're not going to do those. >> what does that mean in terms of jobs in the united states? >> well, i think certainly there's going to be a slowdown. you know, going forward. i mean, you look at all the oil states. that's where all the jobs have been added. you know, been good for everybody. in the oil states. and certainly jobs is up. been a good thing. yeah, it'll slow down. >> i know you and boone are friends. have you talked to him at all about things he said in "the wall street journal" and other places? >> i haven't talked with him recently. i see him at different events. >> but what do you think he's missing here? >> excuse me? >> what do you think he's missing in the things he's said and in your own views on the

industry at this point? >> as far as different, you know, boone is -- has been involved in a lot of other things. wind and natural gas. and he's a big follower in those areas. as far as crude oil, i don't think he's heavily involved with that like the rest of us. >> harold, thank you very much for joining us walking through some of this with us today. we hope to have you back again to talk more about it soon. >> okay, becky. very good to be with you. thank you. we're going to continue part of this conversation, because the benefit of low oil prices for transportation companies is straightforward. but companies across many other sectors are set to gain as oil prices fall. dominic chu joins us now with a look at three companies that might not come to mind when you think about the benefits of cheap oil. dom? >> take a look at this. let's get to the conversation about cheaper oil losers. we do know that alternative energy not as attractive because you don't have to do with lower oil prices. service companies. look at the winners here.

there are some sectors that have decent sized winning. if you at industrials and materials. if oil goes down, they do better. utilities and airlines. let's focus on a couple of these sectors. look at these companies. first of all, you have a big name. one of them at least like huntsman chemicals. if you have lower energy prices overall, the cost goes down nap improves their profit margin. according to michael purvis, he says companies like huntsman can do well if prices continue to drop. then there's other power producers like dynegy that uses coal or natural gas to power turbines that make electricity. he singles out dynegy because lower generation helps their profits as well. then there's one other to focus

on. he says it may be a bit of a leap. he thinks apple does well. because as consumers start to play less for energy, they start to spend in other places in the economy. buying the new iphone 6 or 6 plus or those new ipads. watch those types of companies. those ripple effects could be what carries the oil market on the positive side for certain stocks. >> thank you for that, dom. i had not thought of those companies. >> andrew and becky, pfizer is that guidance they gave was narrowing their previous guidance. the stock now is doing pretty well. they're going to buy back another hundred million shares. not hundred million dollars worth, but cutting total shares by another outstanding hundred million by the end of the year. and they also talked about some of their best growth is coming in emerging markets. solid revenue growth in emerging markets. >> it was last week the board of directors authorized that new

share purchase program. >> in the old days -- >> 5 billion of their shares this year with another 4.2 billion repurchased through october 27. and in the old days you'd authorize these share repurchases. not necessarily use them. pfizer actually using them because they don't have another opportunity in terms of who they're looking to necessarily buy. >> your column today, andrew ross sorkin, in "the new york times," wall street wonders about hillary clinton is not awful. >> that's high praise from joe. >> it was my idea which you don't cite anywhere. yesterday you said you had nothing to do and i gave you this thing to do. but you did both siepds pretty well. you talked to the guy at slate. is slate? >> salon. >> i'm sorry. salon. he says it's not what hillary said. it's her inextricable link with already being so business friendly that makes her so awful. where --

>> read the ari fleischer comment. >> i did. but how about the people that they don't want bill maher speaking at berkeley because he's too conservative? they don't want him there because of the islam comments. there's a big protest at berkeley. they don't want that right wing nut glenn beck type bill maher. are there people like that on the right that are that crazy on an extreme? >> who would it be? oh. coming up -- that's not nice. coming up, the profit drive at autonation. the nation's largest auto -- that was a good call. ceo mike jackson talks sales. air bags, not wind bags in this case. but air bags and the impact of sinking prices at the pump. a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one.

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earnings from autonation beating this morning. rising by 10%. that was also better than expected. it's an all-time record for quarterly earnings. ceo mike jackson joins us now. last quarter you were a couple of cents shy. we usually don't remember back a quarter, but we like to hype whatever is current when we're talking because we're cable. but you told us and we probably were, like, going sure mike. but the analysts didn't listen

to you about investments or something and that it was totally in the cards. and now you're beating by 4 cents this quarter. i guess you were telling the truth. >> but joe, what i was trying to say last time is there is companies who give guidance and those who do not. we do not give guidance. so it's to be expected. certain quarters will be a little bit lower. others will be a little bit higher. directionally we're in line with analysts. it was a brilliant quarter for the company, joe. best ever. 90 cents earnings per share. up 20%. all aspects of our business were improved. and also have to say on the capital side it was very good for the company. we made a major acquisition in seattle, washington, including a mercedes-benz and volvo franchise. we were awarded the open point for parr sha in orange county, california. in case you ever move there, we can take care of you. and we also purchased $350

million worth of stock since the last time we spoke. year to date we've purchased 8% of the outstanding shares. overall a brilliant quarter. >> and we've had buyback discussions. sometimes it makes sense for people, sometimes it doesn't. if the stock keeps going up again and again and again obviously every time you bought it in the past, it made sense. mike, we've got to talk about -- >> joe, just before you leave share repurchase, i saw the story in "the wall street journal" today. it's like golf. there's good golfers and there's bad golfers. there's good share repurchase and there's bad share repurchase. now, i may be a marginal, lousy golfer, but i am a plus six when it comes to share repurchase. we've repurchased 80% of the outstanding shares at an average price of $18 a share for a stock that's now trading at 50. all the same while o investing in the organic business and growing this to almost a $20 billion enterprise this year.

and improving operating results. so there's good share repurchase and bad share repurchase. just have to know what you're doing. >> on the buybacks, here's the question. how much time and energy do you focus on -- you always bought when you thought the stock was cheap. >> not necessarily. absolutely. >> you always think the stock's going higher. right? why would you be in business if you think you're in a trading range? >> joe, if i could tell you how i think about it. you' we're in a cyclical business. there are world events where there is dislocation between what i think the company's worth and what the investment community thinks it's worth. i'm on andrew's page. >> but dan carp thought -- >> and i have a contrarian view, i buy. >> dan thought kodak was cheap at 70. >> but he was wrong. >> i know.

i understand that. >> but he was wrong. you have to be right. it matters if you're right or wrong. >> right. but if you're doing all the right things with your business and obviously you're not ceo to have your stock going from five to zero. you were ceo to have your stock go from 5 to 50. every time you bought from 5 to 50, it was a good idea to retire the shares and shrink the float. and reward the people that hold onto the stock. right? well, tell me about -- >> correct. average share repurchase price is $18 a share. >> are your dealerships mobbed with people who say please don't let the air bag throw shrapnel into my artery? >> this is very incoherent why the incidents are very rare when they do occur they're shocking where these cylinders rupture and spray shrapnel into the

driver. takata is the manufacturer. what we're looking at is we've got certain manufacturers who tell us just tell people to keep driving the car until it can be repaired. the chance of occurrence is so rare. and others are saying disconnect the air bag immediately until the repair can be made. when you have something like this that goes across the industry, it seems like it's a steady hand on the tiller. >> all right, mike. we're going to have to talk about buybacks and other stuff next time. we've got to go. got to get to the tees. see you soon. thanks, mike. >> good seeing you this morning. coming up, it is one week until the elections. we'll handicap the races.

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welcome back to "squawk box." here's what we are watching this morning. blackstone reportedly ready to seek $13 billion for its next real estate fund. got 25% of its earnings from that real estate fund in the first three quarters of the year. also we can tell you about alibaba. it wants to bring u.s. movies to china. founder jack ma visiting hollywood film studios this week. and honda is cutting its full

year sales forecast. and check this out. a huge fan of halloween has been shut down by police in southern california. this home was lit by 12,000 lights synchronized to music such as "thriller." they shut it down due to noise and traffic complaints. >> what time were they doing this? >> what time do you go to bed? >> oh, yeah. >> that's awesome though. >> i'm in bed before it's dark. okay. that is cool. i'm on their side. cops. >> in which case, whoa. we are just one week away from the midterm election day. john harwood joins us with a look at the money being spent ahead of tuesday's vote. >> the political ads on your

television tells you there's a ton of money in the campaign, you're not imagining it. but what difference will it make? let's look at the totals how much they've changed over time. look at 2006, the year democrats surged to take the house and the senate. $2.8 billion on congressional races. in 2010 when republicans roared back to win the house, $4 billion our friends at open secrets.org project will be spent this year. there's been a surge of so-called outside money. yes, you can see from these numbers it has more than tripled since 2006. gone up almost $400 billion since the citizens united decision in 2010. but it's gone up steadily even before that. let's take a look at some sectors. if you look at wall street money which is larger than any other business sector, it's gotten slightly more republican since president obama's star has faded. 53% in 2010. now it's 62% republican in 2014.

let's go to tech money nap leans towards democrats, but a little less than it did four years ago. 55% democrat in 2006. 65% in 2010. 60% in 2014. and finally energy money is more tilted than either of the first two toward republicans who are fighting president obama on climate change. 74% republican during the bush administration. then went down to 63% with a democrat in the white house. now 78% tilting republican. but here's the thing about campaign money, the red team and blue team tend to end up with comparable amounts of it. moderate republican edge in 2006. $84 million in a $3 billion campaign. democrat hs an edge of $40 million in 2010. this year the republican edge is up $157 million. but in a $4 billion campaign, what does that -- how much difference is that going to make?

i don't think it's going to decide the outcome, guys. >> all right. come on over, john harwood. politico is here and suddenly on the redskins band wagon. >> where i've been for 42 years. two skins fans on here at one time. >> i like the redskins. >> high five from across the set. >> it wasn't my peak monday night redskins/cowboys experience which was in 1974. playing at rfk. i'm a high school sports editor. abc lets me in the booth for the game. that's the game where kenny houston tackles walt garrison at the 1 yard line. >> no way, really? >> this is the beginning of your television career? >> so we can blame who's that guy? >> kenny houston.

so it was don meredith and frank gifford. >> did you go to a home game last year? >> i did. i went to the san francisco game. >> you want rg3 back or do you like colt mccoy? >> i love colt mccoy, but i want rg3 back. >> he's a winner. rg3 has got to be 100%. then you put him in. >> let's talk about next week's -- must we? let's talk about next week's critical election. the balance of power in congress is at stake. john is still with us. where do you want to start today? >> start with the senate. what's going to happen. >> why don't you do that? what's your number now, 52? >> i think republicans could probably get to 52. you look at the ones they start with. west virginia, montana, south dakota. that's three that are for sure

pickups. they'll probably get alaska and arkansas. then a playing field of north carolina, iowa, new hampshire. a couple others where they could get pickups. there's no huge wave developing, i don't think, for republicans in this election but there's enough dissatisfaction with the president and the economy that the republicans are likely to get seats. >> until recently i've had -- and most of the people i'm talking about were democrat, but they said they've been saying they were going to at least hold their own in the house and hold some seats. that's no longer -- >> there's little chance. >> half dozen. >> get a half dozen in the house. >> i would say there's very little chance that democrats gain any seats anywhere other than the governor's mansions. >> so i'm trying to figure out, this country, we need help. i'm trying to figure out the last two years whether there's any hope for anything good happening other than, you know, completely partisan executive actions which are just going to divide the country even more. i think that's coming.

>> i have a somewhat different view. >> well, did you see the piece where he said if the president can say, hey, look. i'm outnumbered here. he can say to his base which doesn't even matter anymore that i've got to work with them. is that possible he does that and ends up looking better by finally compromising a little? >> i could mot expect corporate tax reform. >> regulations? getting some of those out? anything pro-business? >> well, aren't trade deals pro-business? >> they're a no brainer and we don't do them. >> right. if you look at the 2016 map and this may be wishful thinking for the white house o, but the way u look at it you've got republicans that won in states that obama won in 2008 and 2012 up for re-election. rob portman in ohio. a number of others.

they're going to want a record of degetting something done. these guys running in 2016 want to get corporate tax reform done, something on immigration done. that's probably overwhelmed by the presidential stuff on the republican side. but there's a window there where some things could get done because of those marginal republicans running in 2016. >> can you revisit and you can admit to how much i love brit hume. >> i covered the first bush white house with him. >> you had a little tiff yesterday. if i'm wrong about paraphrasing what you're saying, hillary clinton saying that businesses don't create jobs. you said that's nothing new. that's kind of like just the democratic line that they've been saying for a i while. that's what the democrats say. and my question would be how can an entire party -- in a two party system -- how can one party have as one of their basic tenants that businesses don't

create jobs? >> that's not their basic tenant. >> that's what he said and you said that's nothing new. >> if you look at the sequence of sentences in her speech, she was saying the trickle down economics is something that i and my husband bill clinton reject and we've rejected it for a long time. she didn't mention that she was talking about corporate tax cuts at the same moment that she said businesses don't create jobs. it was an argument against a philosophy that says cut taxes at the top, cut taxes for businesses in order to stimulate growth. and she's saying we all got to work together. we've got to raise the minimum wage. >> i don't know. read the quote. don't ever let anyone tell -- how do you misspeak with something like that? >> she screwed up. >> don't ever let anyone tell you businesses do not create jobs. >> what she meant to say was corporate tax cuts don't create jobs. >> she was saying businesses alone don't create jobs. >> no. you're not back to you didn't

build this are you john? >> that's what it sounded like to me. it was echoing. >> yeah. it is you didn't build this. >> when i said on twitter this is a ridiculous statement for a democrat to make, everybody jumped all over me saying it's not businesses that create jobs. demand creates jobs. there's a huge part of the democratic party that does believe that it's not corporations and businesses that create jobs, it's demand that creates jobs, consumers that create jobs through government action. >> we knew she was going to have to blank left. that's playing out. the question is does she stay there? where is she really? >> don't we think -- i think the answer is she's not there. because she already double backed on monday. i think to the extent there were people on wall street or elsewhere who said my goodness what is she saying. i think the -- >> nobody with a brain really wonders whether she was changing. >> and i think the other piece -- you want this in your

piece today. there was an expectation by default over the next two years she's going to have to tackle left even if she's not really left. >> so she didn't mean it. so then when do they actually mean anything? >> you can pin that on any elected official. >> this was a statement kind of like mitt romney saying corporations are people too. content-free statement. didn't mean anything. of course corporations are run by people. they're started by people. blah blah blah. >> they're not machines. >> it's the same kind of thing. >> she needs to tack left a bit and she's not good at doing it. that's not where she's going to wind up. and her efforts to do it so far have been clumsy. >> does that penalize her if she runs? >> i don't think so. she gets the nomination by a virtual acclimation regardless. >> is it a slam dunk that a democrat wins in 2016 given there has been a pushback in sort of a buyers remorse? >> of course not. >> but all the polls show her

beating jeb. >> we don't even know who's running at this point. >> jeb bush could give her an extremely close race. >> exactly. it depends entirely on who the republicans nominate. somebody like jeb absolutely could. hillary has an advantage in the electoral college, no question about it. she is not a slam dunk to win the white house. >> want to go back to your underlying point about the whole party. the whole party definitely views corporate america differently than republicans do. but that is widely shared up and down the party. and it's -- but it's not like they're saying the corporations don't exist or shouldn't exist or should -- whatever. >> the guy from salon, i mentioned there are people so far out -- the people that think bill maher is too conservative to go to berkeley. isn't that great? >> how is that even possible? >> because that's how far you can go out on -- and i asked are there any right wingers that

extreme and both of them started coughing and looking at me. they thought that was funny. >> you remind me of the guard for the right wing. >> thank you. thank you. >> i was teasing. >> except there's one on tv or two instead of 4,000 in your case. >> gentlemen, thank you. when we come back this morning, the garden plans a split. msg, madison square garden, wants to unlock sports value from entertainment business. we'll talk to mario gabelli about it in a moment. we'll be right back. 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.

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today there's a new way to work. and it's made with ibm. welcome back to "squawk box." a wild game on broadway last night. the rangers trailing 3-0 after two periods before battling back in the third. rookie anthony de claire got his first goal and tied at 4-4. then less than a minute the rangers scored to win 5-4. the minnesota wild had only given up six goals this season before last night. let's talk about madison square garden because it's exploring splitting into two publicly traded companies. to unlock value in the knicks

and sports franchises and entertainment businesses. mario gabelli joins us now -- what are you laughing it? >> the people are talking to me. >> mr. gabelli joins us now on the "squawk" newsline. good morning to you. >> god to be on the program. >> we call you the love doctor. usually things are coming together. this is coming apart. are you a fan? >> well, i'm a big fan. i hopefully will be at the game tomorrow night against the bulls. >> are you a fan of splitting these businesses? >> well, i don't know the details at the moment, but looks like the building itself and the air rights and all of the venues are going to nucal entertainment. what that allows is jimmy dolan who has a passion and love for

sports but also a passion and love for music to pursue other ventures in the live entertainment area. and live nation has done quite well. but the corporate governance is what caused the stock to go back up. an addition of nelson on the board. and that goes to show that he's become for whatever reason a lot more sensitive to the stock price relative to the underlying value. and one way you look at it, you get the knicks and rangers. the stock up $6 today is part of that. >> point of clarification. the teams would be separated effectively from the real estate? >> yeah. you've got the msg network which is the crown jewel and the teams which are part of the crown jewels so you have that element. and then the venues which include the garden itself. i'm told the air rights over the

garden which have a significant value. the forum, the radio city, beacon theater, and so on are all part of nuco along with xyz dollars of cash which i didn't know. >> to the extent that sould would argue are -- >> look. companies under the frequent system, companies should be allowed to allocate capital to where they think the highest return would be and to take risk. and if they make mistakes, e the shareholders have to hold the board and the management accountable. in this particular case, we're delighted that they are doing this and giving clarity to what i want to hold as a holding. this is only the knicks and the rangers are very attractive. >> would you want to continue to own both pieces? >> yes. yes. i owned -- i voted against the

deal of cable vision going private. i own walking dead that is amc network and still cable vision. so we've held onto the pieces. and, you know, we continue to hold pieces of the companies. neither one is going to be sold. both are going to be managed over the next five years depending on how jimmy dolan wants to run the businesses. he controls the company with the stock. that's not going to change. >> there it is. mario gabelli, the love doctor, thank you. >> hugs and kisses. >> nice thing you sent becky. >> hang in there, joe. you won't get one. >> did you bring it down? >> no. >> seriously, how much do you have to pay for those things? >> priceless. >> okay. >> $12. >> he's very jealous, mario. >> i'm delighted. >> that's the worst looking -- you didn't bring it down? >> no. i was taunting him upstairs.

>> what are you going to do with it? >> it's behind me on my desk. andrew might want it. >> had two officers today. >> you need it for your iphone 6. >> for my large iphone. coming up, he is changing the face of media. radio personality and tv host and producer ryan seacrest and how he is shaping the next 25 years. do we have him? no. we're going to talk about him. at the top of the hour, twitter getting hit by slower user growth. about the lack of upsets. speaking of twitter, tweet us pictures, how much are you paying at the pump today? here's the esteemed and talented "squawk" producer matt greco filling up. he also had one of those hot dogs that are probably four weeks old for breakfast. what an outstanding young man here. send us your pictures online. she inspires you.

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2014 marks cnbc's 25th anniversary. earlier this year we revealed our lists of the rebels, icons, and leaders who has the most impact over the past quarter century. now we're turning to our list of the next 25 years. and today a true american idol. ryan seacrest. ♪

>> when i was a kid i was always fascinated by the guys on the radio, the deejays at night. i remember when i was interning at a local station in atlanta, how in awe i was of every single mechanic of the operation. i felt that and i thought if i could get to know everyone in that department and the next department and the other department that that would benefit me in some way later. so i tried to learn all different parts of the business. >> this "american idol." >> i really believed when i started "american idol" we would get canceled after a season because that's what happened to shows. and then we got a second season. i thought we've hit jackpot here. and then 14 years later, i'm still doing it. thank god. i would watch merv griffin and dick clark. he pulled me aside and said if

they all think they can do it, you're doing a good job. it should always look easy. and it's not always that easy. it's true that there's some great opportunity afforded to you when you're in front of the camera. and so to be able to leverage that into something that is an asset to have to own for the future i think is a smart lesson i learned from. the goals of the company are to create compelling content, to tell great stories. it's a really simple goal. we consume media all the time. we're always on the go. radio is with you in the car or on an app. television is with you also on your phone, your tablet. so i think to the extent that we're creating better quality content for all of these different outlets, that's where it's going. and i made an investment in a company called digitour. it's become a really successful touring operation. i think that part of our agenda

for the future is to continue to invest in things that are happening socially and in digital media. seacrest global group is an investment fund to look at different companies in media. there's going to be a bigger need for that kind of marketing as time goes on to take the dollar further when it comes to marketing spendings and advertising spendings. ryan seacrest distinction has been a lot of fun. i wanted to design something that could give guys who are starting out looking for their first suit or they're on the move to feel comfortable and confident in. and i'm wearing one now. this is it. i think as i look at the future, i definitely see myself doing a little bit of everything, but a little less of everything. i like everything, but maybe just with lower case letters, not capital letters. >> and we want you to keep watching cnbc to see more of the list of people who will have the biggest impact on the next 25 years. when we come back, in the

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welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with joe kernen and becky quick. a jogger in the uk learning a tough lesson. watch with where you're going. a man jogging found himself surrounded by security. david cameron maintained his composure and was whisked away. the jogger was arrested but after questioning, police released him saying the man was just in the wrong place at the wrong time. here's what's happening at this hour. the fed is set to begin a two-day meeting with an announcement tomorrow afternoon. the fmoc is expected to turn off the bond buying program while ensuring the economy will be ready to act. durable goods set to be released

in 30 minutes. and if you've been watching the futures this morning, you'll see at this point after a disappointing day yesterday, there are some rather strong green arrows. dow up 95 points above fair value. s&p 500 over 12. and nasdaq over 24. >> so the serious music, does it fit with markets going up. >> it's on serious topics. >> markets going up. let me hear it. is that okay? >> yeah, it's okay. >> number of stocks on the move this morning. pfizer beating the street. shares rising on the news. twitter, shares getting hurt badly today after the company warned that the current quarter is going to be weaker than expected. and people aren't using it for long enough or not enough new people? what was it? not enough new people or not enough people using it long enough? >> combo. >> i think it was both. i think they added more people the previous quarter than they did this quarter. >> okay. kohl's shares getting hit being

near the low end of prior forecasts. sales have weakened little. and crocs are under pressure predicting under analyst estimates. buffalo wild wings, a big earner topping expectations. wow. we have that ceo on occasionally. and regal entertainment shares. considering some strategic options including a sale. and shares of receptos, the company says its bowel disorder drug met a mid-stage trial goal. >> let's get to steve leisman who has the results this morning on the fed survey ahead of this meeting. steve? >> andrew, thanks very much. two years and $1.6 trillion later, qe 4 coming to an end. the question is what happens next? and the answer is we wait. in fact, as a result of what's

happened between the meetings, the weakness in europe, the rise of ebola, maybe we'll wait longer. let's look at the timeline. they had in the prior survey expected rate hikes in june 2015. now it's a month later. july 2015 for the first rate hike. how about when the balance sheet will be able to decline. it has been december 2015. push it ahead. now it's january 2015. when does the fed reach the end of the cycle. push it ahead a quarter. . you take a step back. everything moved ahead as a result of the weakness. by the way, interestingly they didn't extend the growth forecast. just extended how much accommodation is going to be. let's look at the path of interest rates here. just 2% end of 2016. and there's the new terminal rates. you see is compared to the prior survey, it is shallower and it's

extended out. just a little bit. and what's happened is compared to where the fed's own forecasts are, the gap has grown even wider than it was before. moving on, tony said -- no. the risk to the forecast. they say 21% say balance. 13% said the risk is that the fed is more balancehawkish. sending a long commentary to the survey saying this escape hasn't been and won't be easy. finally, what are the chances of things? european qe 74%. 34 of our panelists think so. qe 4, 19% right now. joe, you can read all about this on cnbc.com.

>> more people think we're likely to get qe 4 than a recession? so you think they'll do qe-4 without a recession? >> the question is will there be another kwaunt tautive easying. and the question is the next 12 months. >> still. one out of five basically thinks we're getting more qe? >> that is the current percentage, becky. >> if there's nothing -- if there's no negative effects, why not, steve? i would make it permanent. >> i think the fed wants out of the quantitative easing. >> you told me there is no negative consequences. >> i have not -- >> let's just stay at zero and keep buying. what's the problem? keep it coming, baby. we'll be at 20,000. >> benefits appear to outweigh the costs. that doesn't say there are no costs. there are costs to it. there's distortion of markets, choices that are made otherwise not -- >> so i'm exaggerating your viewpoint? okay. first time i've ever done that.

thank you. the fed is kicking off its two-day policy meeting. they're going to wait to see if the central bank starts their easy money policy tomorrow. for more on the end we're joined by the investment and management at barclays looking over some of your notes. i've just been thinking about this. it was a correction. let's say you want lose ten pounds and you lose 9.9 pound. you didn't lose ten. >> did you put them back on? >> i do. but in this case the correction is supposed to do certain things. and it's supposed to bring out complacency. you would put check marks on all the things we saw and says this qualifies, this qualifies it. do we want to argue about ten basis points? so we did make a correction. can we go to new highs now? >> we could.

we surely could. it all would depend upon earnings. right? and the story for sure. >> you're not willing to say yes, but you're saying this was enough of a correction where we don't need necessarily to test the lows again. >> we will make new highs, for sure. when, i'm not sure. it could be in the next six months for sure. a high probability of that. we did have a correction of 2.5% off that prior high which i think was 2010. i think we're going to end the year somewhere between 180 and 2010. so we'll recover all of it at that juncture. >> and you say the volatility is not worse. if it did help do what a correction is intended to do by getting people's attention and making them question, you know, staying in certain stocks, then it was something to be expected. >> we went from 12 to 30.

and when you look back at vol spikes in some environments, it went higher. was it unusual? no. expec expec expected? sure. what's unusual is we hadn't had anything like this in two years. >> there's some data where they say what the companies cite as concerns. and the concerns that are in the popular mind right now didn't figure prominently at all in those earnings released. so there's a cognitive disdense between what the folks running companies see and the people who are investing right now. >> that's a picture of the world

not ending with quantitative easying coming to an end. if we go to new highs, that correction was enough to ring -- >> it counts. >> it counts. >> why wouldn't it count? >> because people will say you will read we haven't had a 10% correction in four years. >> okay. we got to go. thank you. thanks for coming in the studio. coming up when we return, they go up to 30 miles per hour, have a range of 30 miles, and will be built in the usa. india-based. we got some scooters that are coming and they believe the market is ready to take off. phil lebeau has it. mahindra scooters. and later from the fire phone to

drones, amazon seems to have its tentacles in all types of businesses. that some feel the company shouldn't be in. is jeff bezos a good leader? we'll discuss in just a bit. 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*? (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do,

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welcome back to "squawk box" this morning. the futures right now, take a look. we do have green arrows. dow would open higher about 90 points higher. s&p 500 up about 11.5 points higher. nasdaq up about 24 points. move over harley-davidson, watch out vespa. here comes mahindra. our phil lebeau joins us with more. phil? >> hey, becky. we're down here at the mahindra tractor factory. we're going to talk about that later today. but first we want to tell you about mahindra's new project in the kwiets. this is a huge indian conglomerate that is expanding

rapidly here. this is the new product they're pushing. genze electric scooters. in the united states? will these really sell? mahindra believes they will. when you look at these, top speed 30 miles per hour, 30 miles to a charge. and here's the interesting part, the battery pack, you can take it out, bring it into your home or office and charge it up on a wall outlet. price tag? $3,000. they're going to go on sale within the next couple of months in the u.s. the ceo believes they will sell here in the u.s. because we're increasingly frustrated with congestion here. >> people are looking at them not only for environmental reasons but pure congestion. i mean, we are sitting here in washington, d.c. i went to a dinner last night, i had to walk the last four blocks. it was as reminiscent of mumbai as any other place, the traffic. the traffic everywhere in the world is becoming nightmarish. people are going to want very

easy urban transport. >> as you take a look at shares of mahindra, keep this in mind. mahindra over the course of its history has gradually expanded from its base in india. it is now the largest tractor manufacturer by volume in the world. certainly john deere is more profitable because it makes larger, more expensive tractors. but this is one example of what mahindra sees in the united states. he believes this is his growth market not only with tractors but also with the genze scooter which goes on sale in the next few months in the u.s. they're going to be manufactured in michigan. interesting little scooter. it will be interesting to see what that market is for electric scooters. back to you. >> phil, did they say how many they expect to sell in the first year or so? >> they haven't put a volume number out there yet.

they're careful about that. but they believe they're targeting certain cities. san francisco is a perfect example. they believe that that's a market that's ripe for electric scooters. boston, new york, major cities. >> phil, how -- i would just -- my question would be how big did mopeds get in the u.s.? because electric versus gas, i don't think that's enough to be a game changer. i mean, i don't see mopeds as being a popular form of transportation. it's not as popular here as it is abroad other places. >> they're not. >> and you get jostled or bumped by a car on one of those things, they seem just as dangerous as mopeds. >> well, listen. it's not a huge market. and mahindra will tell you he's not going to get rich off of selling them in the united states. but this is an entry into this market for mahindra. as you look at this company they have gradually put down stakes

in different parts of this country in different areas. saying you make suvs in the india market. will they try to sell them here in the united states? we asked him about that and he said maybe. eventually. but right now i want to concentrate on the genze scooter, the tractors, and a few other industrial products. and b then eventually they might do the suv. >> yeah. that was just my question. i just don't know all of a sudden -- if mopeds haven't taken off, i don't know why an electric mow today would do that much better. in san francisco, though, you're right. there it would be i have an electric moped, look at me. thank you. >> yeah. select markets. >> yeah. all right. did you get on one? do we have any shots of that? >> oh, no. but i will. little bit later on. city boy like myself on one of these tractors. >> no we want you on the moped. want to see that tomorrow. coming up, tim cook taking a shot at rite aid and other

retailers that dropped apple pay. jack ma hints that alibaba could be keying up with apple. we'll hear from both execs after the break. and then investors and users logging out of twitter. we're going to speak to an analyst about user growth. the company's business model and whether or not the stock is cheap or expensive where it is right now. we'll be right back.

what if we finally had a back yard? that would be amazing. hey, what if we took down this wall? what if this was my art studio? what if we were pre-approved? shut up! from finding to financing, how'd you do that? zillow.

at "the wall street journal" event last night, tim cook took to the stage and talked about a wide range of topics including the rollout of their new mobile payment system, apple pay. josh lipton joins us with some of those highlights. josh, good morning. >> morning, becky. well, apple pay already has a lot of fans but some retailers like cvs and rite aid are refusing the service. >> i think it's a skirmish. it's a -- you know, we started last monday. we've been at it far week. and i follow these numbers pretty closely. these first 72 hours we'd gone over the 1 million market on activations of cards. >> cook says he expects more merchants to sign on as apple pay is an easier, faster, and more secure way he says to make payments. now, alibaba's jack ma was also at the event. he was asked about alibaba now

developing a new operating system and whether that is a threat to google. >> google does not cork pretty well with china government. so that makes the engine disabled stuff. and that makes chinese user not using smoothly. a lot of chinese people cannot use. so we need to work on that. >> so obviously ma seeing opportunities here beyond just being an e-commerce giant and offering alibaba operating system he thinks is one of them. by the way, ma is now a big movie fan as we know. he's making the rounds in hollywood to try to learn more about the movie business which he says is another big opportunity in china. joe, back to you. >> all right, josh. thank you. here's an example of a bad winner. he just beat his teammates and friends to clinch the 2014 table

tennis men's world cup title in germany. he then will proceed to put his foot through some advertising boards. and that led to him taking off his shirt -- should see this soon. there's the board. >> why is he kicking the boards? >> so excited. >> and then he takes his shirt off and throws it into the crowd. he was stripped after this literally of his prize money. $45,000 in prize money for excessive celebration. >> that's what happens when you kick the advertisers. >> did you see the nfl guy? who was that? that did the celebrating and tore an acl? >> no. >> he was that excited. >> he was that excited. >> and in fact, they were, like, losing. they were down by i don't know how mu how many touchdowns. so he sacked a backup quarterback that he did a big celebration and tore a ligament. let's tell you about another quick story.

don't call it a cronut. dunkin' donuts offering a hybrid next week. they would like it to be known adds the croissant doughnut. i'm hoping they're going to deliver some of these the delay they launch right here so we can have them for breakfast. >> okay. when we come back this morning, breaking news. durable goods numbers are going to be hitting the wires. we'll get the market reaction right after the break. and later, is the bezos magic fading at amazon? that stock down 14% over the course of the year. we'll talk his leadership and more. right now look at the u.s. equity futures. right now the dow futures up by about 85 points. the nasdaq up by 22.

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a single ember that escapes from a wildfire can travel more than a mile. that single ember can ignite and destroy your home or even your community you can't control where that ember will land only what happens when it does get fire adapted now at fireadapted.org we're just seconds away from durable goods data. we've been watching the futures. they have been high all morning long. the dow up by 85 points. the s&p futures up by ten. getting a bit of help from some of the earnings we've heard this morning.

pfizer is trading a little bit up after beating expectations. also check out the 10-year note. at this point the yield looks like it's sitting at 2.287%. and oil prices have been a huge focus for us. lower oil prices have been helping things at the pump for consumers. right now wti up to 85.51. let's look at the stocks to watch this morning. raising its forecast. membership rose for a tenth straight quarter. the ceo says aetna's business makes up 40% of health premiums. revenue coming in in line. the largest maker of home appliances is citing costs from acquisitions. and shares of coach jumping. better than expected earnings and revenue. jim is standing by at the cme in chicago with some of the durable numbers we've been waiting for. steve leisman is live here in

the studio. >> looking for 0.7%. at least going the other way. it's very voltive number. there's not been a lot of big u.s. data for the market. we were focused on earnings and probably going to get the numbers right now. >> jim is standing by with those numbers right now. >> call this number volatile is a bit of an understatement. they come out as a disappointment. durable goods out at negative 1.3. basically no revision last night. transportation negative 1.3. comes out negative .2 also. and nondefense comes out as negative 1.7. so bad along the board here. the stocks take it a little bit higher. they were up coming in now up about plus six. so they lost three handles. the 10-year yields is down a little bit.

we started this day with some good feelings about some decent earnings numbers. this number does nothing to keep that going. it really turns that around. >> jim, it's still kind of shocking to see the 10-year sitting below 2.3%. >> it's amazing. i think when you look to that date two weeks ago when we had that mass iive capitulation. >> if you look at the numbers as a whole, they've been reasonable. if you look at earnings as a whole, they've been reasonable to decent. when you look at a 10-year around 2.3, i think that's too low. >> when you say you think we've bottomed in terms of the yield, i think we hit 3% before we hit 2%? >> i do think that. i think like i said, you don't see days like that two weeks ago when you see massive trading on that low print and then turn around and not have it mean

something. our numbers could get off. but as long as i think we're going higher as long as we stay in the path around and we see nothing that's going to knock us off it right now. >> jim, thank you very much. >> thank you. right now let's bring in steve leisman. he has more on what to make of some of those numbers. >> one thing we focus on in this number is a capital spending number. and it's non-defense capital goods, looks at the order of machinery and things of company pfs that was down minus 1.7. we've been okay on the capital spending number. there was an expectation things would accelerate. they did not. th again, it's a volatile number. but i'm looking at a lot of negatives. businesses took a pause from the orders of capital goods. also these are durable goods, goods that are around for longer than three years. general machinery down 2.8%. electronics down 2.5. the motor vehicles were down

0.1. the details are not suggesting there's a reason for optimism. >> would that coincide with all the chaos in the markets a few weeks ago? >> they would. decide not to place an order for a machine. >> wait a couple of weeks. the machine or dishwasher. we know the number took a pause as well. >> germany, europe, a lot of stuff, right? >> it's -- it's tenuous the connection between durable goods and noetz headlines. >> i don't think it's surprising now. how long have we had just this overall tepid sort of wondering why our corporations aren't growing more. >> the capital spending numbers of late have not been that bad, joe. look at the overall -- >> to say it's tenuous when definitely there's something causing something and it's been causing it for a long time.

>> i meant those things you were talking about. >> take your big. >> the markets, the stock markets at least have rebounded from those concerns. the question is will consumer and business confidence have rebounded as quickly? >> i think that's a great question. with 33% year over year on durable goods orders in july. 9% in august and 3% in september. we're still ahead of where we were last year and it's the reverse of the 2001 expansion which was very slow and then it ramped up. this was very fast on the front end and been kind of down. it was ticking up but now -- i think there's a good question. the only thing we had out there was the u.s. economy. asian weakness concerned, european weakness concerns. and now people have to worry about the u.s. economy. that gdp number we have, it's going to come down today. we were at 3.1. it will come down into the 2s now. >> wasn't it a durable number that -- >> that started this whole -- >> also you talked about the

business confidence number. which was not a good number. >> it gets us to where you were talking about earlier where one in five are expecting you'll see qe-4. >> that they're not done. one thing i know is the fed doesn't want to go back. when you listen to what guys like bill dudley are saying, what they really don't want to do is to start policy going one way, a tightening process and then have to reverse course. >> not going to look like qe-3. it would be something different, right? it would be a new form of stimulus to say this is a new plan that they're undertaking. i don't expect to see a repeat. >> thap that's when you lose the friar tuck. >> could you be my witness on this, becky? there is no bet. i did not take the bet. >> you're not going to shave your head? >> no. because you've offered nothing. >> i'm getting a tattoo. >> but that doesn't do it for me. >> i think you should offer to shave your head. >> that'd be easy.

it's just velcro. i'm trying to help you. i'm trying to make you an iconic -- >> you think being bald would -- >> just being clean. jeff mackey, man. you know, crazy. >> beck, i think qe-4 would look like qe-3. but here's the story. what the fed wants to do now is adjust policy with interest rates. if we do get poor economic results, they will simply extend the time of rate hikes. and give us a shallower half. >> if they came up with something new and said this is a new thing we're trying, something different, we'll see. all right. steve, thank you. >> sure. okay. twitter beating expectations on the top line for the third quarter, but shares taking a hit following a warning on fourth quarter sales. the stock now down 33% year to date. and later today we're going to get facebook their earnings. they report their results. that stock is a completely

different story. they're up 47% year to date. join us us now is neil dash who covers both companies. neil, were you surprised by not necessarily twitter's numbers, but what it portends for the future? >> you know, the guide was definitely lower than we expected. when we actually kind of looked at the numbers, it assumed no growth in monthly users. they are kind of resetting expectations a little bit. you have a new cfo coming in. our guess is he wants to give himself a little more wiggle room and cushion. the revenue was 4 million short of where we were expecting. i think there's a fair amount of conservative built in there. there's new ad products which we think will contribute. we've never seen twitter not grow their monthly active users. that's the mid-point was suggesting. so we do believe that they will

add probably $8 million to -- 8 million monthly users in the next quarter. >> which stock do you think is going to do better? >> our top pick is facebook right now. we'd still bet on facebook. >> what are you expecting to hear this afternoon? >> yeah. first it's really on the mobile side. we're expecting about $2 billion in mobile revenue. about 24 months ago they had little money coming from mobile. but i think what will be really interesting is going to be what they have to say about whats app. i don't think anyone used the video until the als ice bucket challenge. that got millions of people to try facebook video and share it. i think video advertisers will be excited about that opportunity. >> how much do you care about them trying to monetize instagram?

>> we pegged it at a revenue opportunity. but they're taking a very slow approach to the side. we think of it as youtube and google. google didn't layer in a lot of advertising until three, four, five years after the private got a lot of scale and a lot more embedded into overall culture. and we think that's what facebook is doing. >> how much does twitter have to start to look like facebook to make the kind of margins and be as successful as they have been? how much of the interface do you think has to change? >> you know, i think the interface does have to change a little bit. i think 500 million people come to twitter on a regular basis but don't log in because they don't know what to do. i think what they need to do is make the content more interesting, make it more compact and unique for individuals. that's going to involve a lot more product innovation on their front in terms of making the product unique and engaging individual users.

>> we've got to leave it there. thank you though. >> thank you. coming up next we're going to talk about jeff bezos. is he lost in the e-commerce jungle? none sparking the interest of consumers or shareholders at least not yet. the question then becomes should amazon get back to doing what it does best? we're going to discuss the bezos factor and the direction of the company when we return. take a look at futures. we're back in a moment.

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welcome back, everybody. amazon shares down over 27% year to date. the company continues to suffer losses stemming from failed product launches. in the last year it announced ventures into drones, the fire phone, fire tv, amazon pantry and amazon fresh. is this what the company should be doing with investors' money or is jeff bezos lost in the jungle? bill george thinks he's on the right track. he's a harvard business school professor and ceo. but jonathan geller thinks bezos and team are lost in the jungle. gentlemen, welcome to both of you. get ready to make your cases here. jonathan, why don't we start with you? there have been plenty who questioned bezos in the past. they've been wrong. he's been right.

why is this time different? >> i think it's a lot more difficult now. instead of spending $10 million to undercut a competitor, they have to spend billions of dollars for tv content alone. so you look at the verticals they're trying to get into and the big boys they're trying to play with, they're now a smaller fish in a big sea when you look at them competing. these are big, big companies that have big budgets that have all the things that amazon wants. i don't think they can afford to leap into those categories. >> bill, why do you think investors should have a little patience here? >> well, jeff bezos has proved himself time and again to be a visionary. okay, he busted his pick with the apple phone -- excuse me. the fire phone. but i tell you, he is going through do major transitions. one from being a software content services provider to a hardware provider as well. and also this major shift from online retailing into being

immediate information. it's going to cost a lot of money. i remember i was with them when they tried to bring out the kindle. i said how much money are you prepared to lose on this product and he said how much can we raise? he said i'll spend whatever it takes. and i think you'll see -- i think he should probably cap his losses on the phone, but i think fire tv and all these things related to the shift into media information is going to be a very important movement for him. i think they'll get there. >> george, here's a corporate governance issue. companies are splitting themselves like crazy. everybody is splitting up into a hundred different pieces on the assumption somehow they can become that much more focused. why are you laughing? >> no. bill george. >> oh. i called him george. i had, bill. it's nice to see you. anyway, what do you make of that trend broadly speaking? >> i think it's a big mistake

for i.t. companies to follow this trend. i think i have real questions about ebay breaking up, to tell you the truth. this is the current thing. five to seven years they'll be back to putting them back together again. you need to compete with people like google. that's who amazon is looking at. bezos has built from nothing to a very big entity just like larry paige has. you have to keep going in many ways. mark zuckerberg is doing the same thing. i think you need to build very strong network services. and this whole information thing is a huge game. and he's competing with all kiechbds of people. so he's got to take that on. he's going to invest billions. the one thing about bezos, i think we have to raise the question, andrew, is at what time do investors see monetize of these gains. it's been 15 years. they've been very patient. and fantastic revenue growth. and lots of eyeballs as jeff likes to say. when do they monetize the gains and bring it to the bottom line

like google and facebook and others have? >> that seems to be the question investors are asking right now. >> at the end of the day, markets will pay for possibilities but there has to be a reality. everybody has to pinch themselves at some point. i think if we keep talking about what areas amazon wants to go into, they're never going to make money. every single industry and market they want to get into, they have to spend so much money. i think it's interesting that people think bezos can snap his fingers and magically you'll see a load of profit. >> although one of the things we're not looking at on the screen would be amazon cloud. and that's something that the early spending, the heavy spending got them to be one of the top three players. according to satya nadella, you're looking at those. >> it's a great point. i think it's a great infrastructure and they did a great job there. so these things can yield results, but i think if we look

at their hardware side of the business, they're all loss leaders to keep many the ecosystem. but they're ecosystem isn't as strong as other ecosystems. it's just for amazon prime. and you're getting into grocery delivery and drones and you have moon shots. i think it's preposterous at some point. >> well, i think he's got to keep trying. and look at the ten-year record. he's up 740%. >> i know. there have been times they've been wrong. >> don't bet against him for the long-term. he's proved it every time. >> thank you both. we'll see you back here again soon. when we come back this morning, jim cramer on this morning's movers. and then an advance of advanced war fair coming to a walmart near you. "squawk box" will be right back. what if there was a credit card where the reward was that new car smell and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling.

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comcast business. built for business. jim cramer you joins us now. pulling back on the durable goods number. it's notoriously volatile and a monthly thing. so there is some, i don't know what the standard deviation is, but it is disconcerting, isn't

it? >> i think this is why the fed's on hold. i just think every single month has something wrong with it. i still believe that we are not talking enough about whether job creation is going to be hurt by affordable cares. i think we are not talking enough about how the dollar has been made so strong by our so-called trade friends. i don't know. i just think there's a lot of stuff that i think you and i find very disconcerting that ends up in these kinds of numbers. >> in a not ideological way, that was the problem i had with the "new york times" on the obama piece yesterday. people in need of insurance when you get a subsidy it's going to help them. they didn't take a single look at maybe some of the down side -- i don't think they associated any of the weakness and demand we've seen for the past three years to the uncertainty engendered by 17% of

the economy suddenly being changed and taken under government domain. >> yeah. i think this is, rather than discuss what the fed's doing, i think there is just a free pass. i think the president is getting a free pass. we just accept the fact our trading partners, europe's weak. when you have these bankers on like i have all the time on "mad money," they say the regulatory environment is horrible. these are guys who never complain. these are not squawkers. they just say it's too hard to get a loan. we don't want to make a mistake. our clients are very worried about what they should be doing with affordable care. these are the issues tying everything up. durables, that's just airplanes. there's labor issues. i don't think they are all big complainers. >> and the demand -- you know

some day the demand is not going to be weak because of the hangover from 2008. some day it's going to be weak because of things that are occurring right now that we have to face the fact it's not just that we are trying to come back from a deep financial break. >> also, we always favor globalization. why do we have a deficit with every single country we face globalization with? there is a lot of stuff i just don't feel the government is doing anything to help business. you get weaker numbers. you can say it's not the government's job. we would both say government's job to try to create a benign environment where you want to create a business. >> yeah. did you weigh in on businesses don't let anyone tell you businesses create jobs? did you say anything about that? >> no. i think we've been around long enough to know if you let the government step back, there are lots of people who want to do

things. for the guys, 50 employee people, they don't know what to do. they don't know if they are going to be pursued by the government. they don't even know. if you can't figure it out. >> do anything? >> we are down 15. we were up 90 earlier. you'll let us know at 9:30. >> thanks for the chance to say this stuff. >> don't forget the redskins last night. we still like dallas, right? >> the washingtons were -- >> i thought that was the worst name. >> the snyders? they put a hit on romo. oh, man. he does have heart. >> he is tough.

that's a great rivalry. >> nfc east. you can't count on them. you can't favor one team by ten. >> all right, jim. >> thank you. >> coming up next, can kevin spacey help activism sell its latest installment? here is a look at shares of activision over the past year. up about 7%. financial noise financial noise financial noise financial noise (receptionist) gunderman group is growing.

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the latest installment of the "call of duty" goes on sale next week. walmart is selling advanced 24 hours before its official release. >> a couple more cheap gas tweets before we leave. executive producer sandy cannold tweeted us the best place to find cheap gas is taco bell where you get for $1.09 a bean burrito and cheap gas. >> who is your favorite?

>> happy birthday to our director paul defabo. he's a genius. >> he can get anything to work. >> happy birthday, paul. have a great day. right now it's time for "squawk on the street". good morning and welcome to "squawk on the street." i'm david faber along with jim cramer. carl is on assignment. the latest home shiller report released. taking a look at futures this morning. we are set, poised for a higher open at this point.