>> you need a loan. >> what if we want to redo the set, can we come to you? >> i have a lot of cash right now. >> thank you very much. it is great to have you. >> make sure you join us tomorrow. ge's jeff immelt joins the crew on "squawk on the street." good morning. i'm david faber along with sara eisen and kelly evans. jim cramer does have the day off. let's look at futures this morning. you can see we are set up for a lower open. you have been listening to mr. tepper speak for over an hour. not a particularly sanguine view of the broader equity markets.

let's see how we are fairing, right around 2.2, somewhere in there. i say it from memory. we won't show it to you. hanging in there around 44, 42 for wti. let's get to our road map. investors seemingly in for a repeat of yesterday's losing session at least at the open. >> the final hurdle cleared in its largest acquisition ever. an exclusive interview with ge chairman, jeff immelt. former treasury secretary, larry summers, standing against a fed rate hike, will join us shortly. >> stock futures giving up some early, early gains, extending their losses from yesterday's clothe close. jobless claims down 6,000 to 275,000. import prices falling 1.8%. that was the biggest drop in seven months. all of this one day after wednesday's big game turned into a big selloff. another 400-point intraday swing

in the market. intraday reversal has become the name of the game in wall street. it is nothing like what we started at here in the morning. >> another 400-point swing. yesterday, it was spread out a little bit. the fact that we closed down shouldn't mask it. we had another extremely volatile obsession. the japan nikkei up 7%. the session before had almost no impact. >> nikkei went lower overnight, china went lower overnight. david tepper, he didn't say he was shorting the market but he did sound kind of negative. he suggested that margins were peaking on wage pressures. suggested that eps estimates were too high. >> and the multiple consumablely a bit higher than he would like to be and the cushion of satan , is not there, so to speak. he said he is not the greatest and doesn't focus on shorting stocks. running a hedge fund, you do do that. he certainly seems to be at least taking more cautious view.

i'm not sure what impact that will have. there have been a couple of times in the past where mr. tepper, appearing on "squawk box," has moved the market. >> no doubt about it. >> are you referring to the tepper rally? >> yes, i am. >> in this case, i don't know that we will see a significant down turn. he said, listen, remember the days when we had 15%-20% corrections. this he may not be over. take a listen. >> if we have a 20% correction or a 15% correction, i would buy. i have to see what the world looks like but i would be buying. >> mi meaning, all right, you get a 20% correction. he steps up and says thank you. right now, he doesn't appear to be in a buying mood. >> a lot of people seizing on his two rivers analogy. if you are saying, i can trust that i should be buying into these selloffs as opposed to selling into the rallies. if you had warren buffett on, i'm sure what warren buffett would say that history tells us the u.s. stock market rallies,

because the u.s. economy gross. for tepper and others that make their money in more of a drexel situation, he doesn't seem quite as convinced for the near to slightly near future. >> the point he made was the discrepancy between the u.s. economy, which he said was fine and the u.s. stock market, which isn't necessarily a straight reflection of the u.s. economy right now with 30% of earnings coming from emerging markets. that's where the problems are. obviously, very concerned about china. he said they are making policy mistake after policy mistake. >> i thought that was an interesting point on his part in terms of making the distinction between the u.s. economy and the u.s.? >> we always hear about china. it is not the chinese economy. >> all the things can come up with our next interview with the guest that just snuck in to the right. general electric earned approval to buy the power business. $13.5 billion deal. it would be one of ge's largest acquisition. joining us is the chairman and

ceo of ge, jeffrey emmelt. i said $13.5 billion after asset sales that are going to be required under it. it has been 9.5. >> less than 10. >> i have seen you do a lot bigger deals than the past. why is this important for g.e.? >> just another step along the way of the transformation of the company. it is a perfect fit with our energy businesses. it helps us grow globally. a lot of synergies and it helps us accelerate our industrial earnings at the same time that we are doing distribution and ge capitals. perfect business fit and well-priced. >> you have been talking about the industrial earnings and telling the market we are going to be doing between 1.13 to 1.20 this year. >> there is a lot going on in the world. i just had the last two days in ge, all of our business leaders. i get a pretty good panorama of the world. it is slow growth. it is volatility.

it is uneven but there is still growth there. i look at the rest of this year and into next year seeing a lot of opportunities for the company. i think some of these things get overdone. >> it may be the case that the fear of china's slowdown is skroefr done. you would be a person to ask. what are you seeing in that particular market? >> i think it used to be easy for everybody in china. it was a macro story. everything in china grew. now, it is more of a micro story. if you are in the aviation business like we are, things are booming. if you are the electrification business, things are booming. if you are in the mining business, it is quite tough. if you are in the construction business, it is quite tough. this year, up high single digits. it is probably slower than it was in the past but it is not terrible by any means. >> the orders are up 15%, i believe, in the first half in china. >> they are up about 8%, 9% in the first half. they will be up low single digits in the third quarter and up 8%, 9% for the year.

>> what are your expectations tear? >> we hear about how quickly things may be slowing. frankly, we don't know. >> i think it is more volatile than it has been in the past. the underlying growth rate is still 5%, 6%, 7%. we see it in revenue miles. we see it in electrification. we see it in the businesses we are in in china. it is a well wbellwether for thr emerging markets. there is a lot going on even despite the economy. there is real reform so people are more rest tant hesitant to . underlying, there is still growth there. we see it. it is going to be the largest market for aircraft in the world. it is going to be a big gas turban march ca turban marquette. >> some people would say it is a little overdone in terms of your

stock price suffering as a result of people's focus on oil and gas despite they are not a preponderance of the businesses you have. oil and gas, you got so many questions on oil and gas, jeff. what are you seeing there right now? i know you are taking a lot of costs out of the business. >> our team is executing extremely well. clearly, it is less fun with oil at $50 than it is at $100. our premise always was, around oil and gas, more technology, more consolidation, more focus on customers would be a winning hand. i see that in spades right now. our organic earnings growth is going to be positive this year. we think next year is going to line out to be okay. it is a challenging environment but not one that you scant execute in. i would say the industry has gotten massively sloppy in the past. there are ample opportunities for everybody to clean up their act and take costs out. >> you are talking about some big numbers in what you think

you can take out in costs this year. >> we think that over two years will take out $1 billion in costs. so with revenues, let's say, declining slightly, like it has been, we still can hold margins flat and still have decent earnings performance. meanwhile, aviation is booming. >> good for cincinnati. >> i just think, slow growth, volatility. that's the world. there are pockets of growth out there. we are doing a couple billion dollars in egypt this year. we will do $1.5 billion in pakistan. africa is still growing massively for us. mexico is quite strong. people tend to get fixated on one thing. the u.s. economy is doing better. in europe, one of the things we talked about, europe is doing much better for us. >> currencies have been hurting you with such a big

internation international. >> we are so well-balanced globally. we can mitigate. >> are you worried what would happen if the fed does raise interest rates sooner rather than later? >> i think the dollar is going to continue the strength more than likely. we just continue to watch where our production is and tradeoffs are. interest rates have been zero for seven years now. >> time for a change? >> i think the fed has a challenge. the u.s. economy is getting better but we don't see anything that's inflationary at the same time. so i think it gives the fed some optionality about where it goes. i actually think interest rates starting to go up, that's a good thing for us ultimately, no the a bad thing. in terms of globalization, we worry more about things like the xm bank not getting reauthorized than we do quite honestly about currency. >> on that point about globalization, for the last 10, 15 years, it has been the working premise that the world is flat and getting flatter. that makes it great for businesses and in some ways, great fort world's consumers.

the other day in the journal, brett stevens said, the end of the world without fences, whether it is the migrant policies or some of the others, for the next decade, having done the awesome deal, it is going to get a lot tougher for businesses internationally. >> it is a great question. there are fewer traders today than there were ten years ago. let's face it. now, for us, being positioned in 175 countries, that's an advantage, not a disadvantage. you have to be very flexible and very persistent in globalization. the opportunities are there. when i became ceo, we were $500 million in africa. this year, it will be $6 billion in africa. the opportunities are still there. you have to show some flexibility like we did in austin in order to be successful. >> it is hard to grow from 175 countries. you are basically in all of them. is there any risk in the years to come that american businesses retrench and focus more on

domestic operations where there is the right political, legal environment as potentially the risk/reward would be. >> the best companies are the ones that are adventurous and continue to go forward regardless. governments are harder today than any time in my business career. if you let that slow you down, your toast. we follow markets. we are in the energy business, the aviation business, the health care business. if indonesia needs 30 gigawatts of power, we are going to be in indonesia. we are going to find a way to be successful and better than siemens and other people. i think everybody right now, the market is in a bad mood. everybody wants to follow anything on china. it is volatile but it is not that bad. the global economy has enough opportunity to grow that we raised our numbers at the end of the second quarter. we confirmed them the other day.

>> nobody seems to care. we are looking at 2016. look, david, it is always about the future. i look at the fourth quarter. we have synchrony that is going to happen. we are exceeding our plan. our organic growth rate in this environment has been 4%, 5%. we think our organic growth rate for the year is going to be at the high end of our estimates. i don't want to complain about that. >> few people would except you are not getting rewarded for it in the stock market. we have had this conversation for 13 years now. your investor base is frustrated and i'm sure you are specially after the g.e. capital announcement when the stock really seemed to have something. >> you have a ton of volatility still going on in the marketplace.

you are going to reduce the flow with synchrony and g.e. capital. >> you are going to get down to what, 8.5 million. >> our industrial eps rate is going to be in excess of our piers. look, i could always look backwards. i'm super excited about the future. >> this is your company. you have completely changed the portfolio. it is an industrial company. once the ge capital split is completed. >> we love our portfolio, leading franchises. buffalo would say, big modes, good opportunity for margin expansion. returning $90 billion plus to investors. in the world we live in, that is volatile and slow growth, uneven, we are in a pretty good place. we are in the places that are going to grow. >> what about the regulatory battle with the d.o.j. over the electrolux, the appliance unit sale. >> it is 6-5, six appliance

makers. retail customers are extremely strong. sometimes i look at these and say, i just don't get it. i still believe it will get through. we want to complain about europe. we have tougher regulators in every corner of the world. we have to be consistent with that regard. >> fed up with this administration? >> who knows really, kelly. we are fighting xm at the same time, which is more driven by republicans. if you ever pointed to me a country that said they believed in exports but was going to blow up their export tank, we look insane to the rest of the world. it seems like we are getting a little bit from both sides. >> you fed up with connecticut. >> i think we are a high-tech exporter. we want to be looking forward in a place that's going to be supportive of where the company is going. >> a lot of us live in connecticut. >> we have been there four years. we would never do anything like this carelessly or casually. we are quite intent on being

aligned with where we go. it is the only way today. >> what does that mean? >> indonesia. >> it means you want to be some place where people support job creation, where its attractive to talent, good cost of living and very supportive in terms of what a high-tech exporter has to be about. it is a global battle that we are in and we need people that are on our side. it is the only language people understand, when you talk about it in the context of jobs and the future. >> where do you make that decision? >> in the fourth quarter. you only think about it every 40 years. >> do you think donald trump can make america great again? >> it's a process that's going on right now. i'm a republican. so i'm always anxious to see

what's going to happen there. >> i want to ask the hudson river. "the new york times" implored g.e., even though you finished the dredging to do more. any chance you will listen. >> we have been at this 50 years. we have done everything the epa has asked us to do. we have been very supportive and they have been very supportive of us. all things have to end someday. i think we have fulfilled what everybody has asked us to do i think this is coming to an end. >> you really feel like you are a 30-year-old. isn't that what you told mary thompson? >> seriously. these jobs are marathons, not sprints. >> i think about what we can do in the next three or four years.

>> i think we have a lot to prove to investors and i want to prove it to them. >> 14 years in. i like to hear it, jeff immelt. >> take care. >> chairman and ceo of general electric. still to come, larry summers upping the ante. let's take another look at futures. dow looks to open lower. only about 50 points. after that session yesterday, much more "squawk on the street" live from post nine at the new york stock exchange when we come back. can a business have a mind? a subconscious.

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let's show you where we are on futures. ahead of the opening bell, looking at a down start. not as far down as we had been. dow set to open lower by 41 points on top of yesterday's more than 200 point slide. s&p down six. nasdaq down 10 points. another volatile trading session. already volatile in futures. larry summers speaking out on the fed and interest rates pleading with the fed not to raise.

more "squawk on the street" straight from the new york stock exchange straight ahead. they come into this iworld ugly and messy.

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welcome back. six minutes away from the opening bell this thursday a week before the september policy season. director of floor operations with ubs. good morning to you, mr. cashin. is this move to be in focus? >> it spooked the markets overnight. a larger than a 1% move in the offshore currency and a big debate whether the chinese officials themselves had moved into it. markets are getting a little calmer now. it made all the markets around

the world jumpy not knowing what the full motivation was. i think the markets are going to trade nervously. the other thing i would watch for, kelly, is keep an eye on crude. we are going to get inventory numbers around 11:00 today. that could be important if crude breaks, $44. i think it will put the market back under pressure again. >> is that what we saw yesterday? it didn't get a ton of focus, because there were other things happening like apple for example. we had a big reversal here to the clothse on stocks. >> if you look at a minute by minute chart, they gave up the opening rally by noon. it was after apple began presenting that things changed. 15 minutes into the apple presentation, the market looked like it ran out of patience, like, where is the surprise? where is the beef? they didn't get that. t the other thing was, as i said, crude broke 45 and it looked like it was going to threaten to break, 44. that's going to be critical to what we do today. >> did you listen to tepper at

all in the earlier? worried about margins and sounds particularly cautious on the stock market. >> he admitted he had a tough time saying it. he said, i don't like being a bear and it makes him nervous. these are volatile times. i think you want to be cautious here. i think that was said properly. particularly about margins. we have had some problem both here and in china with people reaching a little too high in margin. we are making a little triangle here, a series of high or low or lows or highs. i think it will stay range-bound until we break out either side. on the up side, you need to break above 1995, 1996. and on the down side, about 1911 to 1915. >> thank you very much, art. >> we have the opening bell in about 3:30 minutes. stay with us on "squawk on the

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applause building as we await the opening bell on the new york stock exchange this thursday after a big reversal in the broader markets yesterday, of course, brought us down for the day. yesterday, a huge board. that is jessica simpson celebrating the 10th anniversary of the jessica simpson's collection and macy's highlighting, presenting the front rowment be sure to watch kelly's interview with jessica simpson. i won't miss that, i promise. over at the nasdaq, bebe, specialty women's retailer did the honors. it does look like we are going to open, offer course, down this morning. we have talked about china in terms of currency. the other concern, of course, is china overall on the economy and the continued weight it seems to

be bringing back here regardless of how you want to go through the numbers. our own steve liesman did yesterday. one impact it has been having is, for example, the stock of general electric. we did speak earlier with ge's chairman and ceo, jeff immelt and asked him specifically what he is seeing on the ground in china. >> there is a lot of change going on. as much change as i have seen in 20 or 25 years from china. but, underlying, there is still growth there. we see it. it is going to be the largest market for aircraft in the world. it is going to be a big gas turban market. it is a little bit overdone, what people are saying about china. >> a little bit overdone. it is g.e. stock price. let's call it more or less flat down one cent. we talked about many different things given the portfolio of businesses and the fact that they do business around the globe. >> this point in china is, look, no matter what happens in the near term, they are going to

sell a lot of airplanes, airplane parts to that country. they got into the aircraft engine business big-time, even after 9/11, at a time when a lot of people were walking away from it. it is oil and gas. want to show you what's happening with energy stocks. they are in the lead today. crude oil is actually higher. this is going to be an important point for the mark debt. we saw more than 3% decline for oil. a lot of folks yesterday were attributing that to the market slide. wti now 4468. the two groups starting off in the green are energy and industrials. >> we are talking about the big reversal we saw right into the clothes. he said it did run out when the apple event failed to come out with any big, exciting prices, into the to blame people for marking up their expectations. interesting to hear him citing that is one reason. >> another reason, david tepper having appeared earlier on "squawk box." the noted hedge fund manager whose performance, i must say,

is pretty extraordinary, when you look at that time over time. he has made more money than you could in 100 life times. not nearly as bullish as we have heard in the in the past. he believes margins are not going to be going up as a result of potential wage pressure, not to mention stronger dollar. he also focused on the market's multiple and said that he doesn't see a safety cushion if you will in the market that perhaps has been there in the past. all of that leading him -- i'll let him put it in his own words. >> i'm not probably as bullish as i could be, because i have problems with earnings growth, multiples, all kinds of problems. so i can't really call myself a bull. if you invest today in the stork market and i think people have said it, even if you invested 1800, earnings grow a little bit, not 7% a year but 5.5% a year or something like that. you will make money at the end of five years.

>> there you have it. mr. tepper sounding long-term bullish, short-term cautious. >> he mentioned apple. he said he is maintaining his position. he didn't say whether he is buying or selling. he said he has a small position. apple deserves this sort of low valuation and it is a cheap stock, that his son wants to buy him an apple watch for his birthday. shares of apple, they are up half a percent after closing lower after we got all the new updates. the first upgrade to the apple tv in three years. the brand new ipad, almost 13-inch screen and the new updates for the iphones which wasn't that well received on wall street. research, pretty positive. nobody raised their forecast. maybe a little bit with sales but not so much with price targets. it did say, not necessarily a game changer. the key is going to be in the iphone sales. >> do you have an apple watch? >> i will be a last adopter, no the a first. >> even now that there is an

aramis apple watch. that was the most expensive product they announced on stage yesterday starting at $1,000. >> i would have figured they would have marked it up even more. i am sure they can make that go up into the multiple thousands of dollars. >> we do have some individual movers that are worth mentioning. loo l lululemon down. it appeared the forecast came in lighter than anticipated. >> a lot of high expectations going in when the stock is up more than 15% this year. it has been going through a turn around. customer sales, 11%, strong in retail. you do have this phenomenon in at leisure, a rising tide that can lift all boats, nike, underarmor, gap, lululemon as well. they raised their forecast. it was priced in. it came in a little bit less. this was high into the earnings. >> you would think the lululemon crispy cream trade might be working better.

it was down after it had a triple miss on earnings and lowered its guidance for the year. on the flip side, conway, we talked about this afterhours yesterday. about a $3 billion deal there for rival spo logistics getting done. 47.60 in cash. >> how about box, went above its ipo price after it had been selling off sharply. they raiseded their forecast for the full fiscal year. they are seeing deals with thousands of new and existing customers, according to the ceo. a big deal with ibm back in june. >> and palo alto networks, i think are going to open higher, about 5.5%. they beat estimates and cybersecurity is a big part for all of these big companies. >> i did want to come back to

energy. in speaking to bankers and investors, we are getting closer and closer to this point where a lot of the banks are going to be reviewing their loans essentially to many of these corporations, oil or gas. i am not talking about the biggest guys, sort of medium to smaller. the anticipation is that they are going to become stricter as a result of some of the regulation that they are under. the fact that they can afford to take hits if they need to. >> what about the high-yield market? this is saudi arabia's biggest frustration. are you kidding me? all this private equity money flowing in? >> it rushed in about eight months ago only to get burned. we'll see if it happens again. the point of me mentioning this, over the next four to six weeks, you may start to see those forced restructurings not having the borrowing capacity they had

previously, losing some money. to mr. immelt's point earlier, so much cost has been taken out. the ability to take a lower oil price is much easier than it might have been. >> let's check on mondelez. they are finally talking about growth initiatives, which is interesting. mondelez is increasing spending on advertising and brands like oreos, boosting their digital app spending and boosting well-being products, a specialty for allergies or special food needs. they are making some moves. 7.5% of the company. they are going forward with their plans. >> two things that i just saw while watching the u.s. open were oreo advertisements and

bill ackman. >> mondelez is front and center whether it is bill ackman backing the company. david tepper mentioned mondelez as an example of a company with a high along with colgate. let's go to mary on the floor of the new york stock exchange. >> good morning to you. a bit of a choppy opening stocks under a little bit of pressure. the dow has recently turned higher, holding on to a 13-point gain. the s&p 500 under a little bit of pressure earlier. now, trading higher. what we are seeing is basically strength across the board with the exception of banks and early trading transports making a strong move to the up side. david tepper of app pa lusa management on cnbc saying, get used to this volatility. in the near term, we are expecting this volatility.

ahead of the fed meeting next week when they could make a decision to increase data points. the jobless claim numbers were good. suggesting continued strength in the u.s. labor market, while import prices were actually weaker. that, of course, suggested inflation in the u.s. remains under control. lots of data for the fed to consider when it goes ahead with its policy-making decision on tuesday and wednesday of next week. let's take a quick check of some have o the dow components in the news today. 3 m saying they are considering strategic alternatives for the health information unit. a unit with 700 million plus in revenue each year. it will make a decision whether to sell, spin off or make a reinvestment by the first quarter of next year. apple reversing the losses. a top pick because of the strong fundamentals and the possibility of mna. jeff immelt was on "squawk on the street" earlier today.

very positive outlook. saying its organic growth orders will be at the high end of the company's estimates and the stock is moving higher. quick sector check. materials were among the best performers in a down session yesterday. financials under a little bit of pressure. energy getting a bid from the strength that we are seeing in oil prices early on and utilities higher as well. i want to point out that the brazilian etf under pressure, because s&p down grading the country's debt today. one thing to watch. >> currency has been absolutely slaughtered. thank you very much, mary thompson son the floor. coming up, an exclusive interview with larry summers who says the case against a fed interest rate hike is somewhat more compelling than it looked two weeks ago. he will explain his new position when squawk returns with the dow up 41 points.

good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*trade opportunity is everywhere. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on.

(laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. welcome back. apple shares rising this morning. good morning, angelo.

>> good morning. >> so it wasn't just one product to unveil. it was a bunch of them. shares didn't necessarily respond well. the whole market kind of tanked on this. is apple doing enough here? >> yeah, overall, we saw the event as a negative. however, you kind of look at the products that they have revealed. none theless, they contin nonetheless,they continue to innovate. we don't think they will generate enough revenue to meet those expectations and why you saw the selloff after the event yesterday afternoon. >> i understand people have a lot of high expectations for apple. they are also realistic at the end of the day. we know the iphone has been such a huge project. it is almost impossible to maintain or repeat that kind of sales growth. shouldn't that be baked in? shouldn't that be a factor. why should apple be punished for

something so obvious. >> the market has possibly baked that in with the performance in recent weeks. that being said, this is a game and a market of expectations right now. unfortunately, the market is very nearsighted in our view when it comes to apple. given what the fiscal 16 expectations are and what potentially the near-term head winds are, i think you are seeing what you are seeing in p ale shares. they are not being rewarded for the potential long-term opportunities out there. >> the shares do seem hung around that $110 level. do you still think they are going to 150? >> our 12-month target price is $150. our recommendation is a hold. so there is some type of disconnect there. the reason for our hold recommendation is we do see a lot of volatility in the near term. we do see a number of head winds over the next 12 months. that being said, i do think longer-term, this is a great story. over time, with he e do expect

the grand. >> what should investors think about the new ipad and the new watch the fact that tim cook said apps are the future of television. these are big statements apple is making strategically but they don't move the needle on the top line? how as an investor do you think about it? >> as it concerns the ipad pro, not much to be concerned about. apple is stuck in this no man's land. nobody wants to pay for the high-end product they have out there. so they are shifting their gears towards the enterprise side of thing. the very best you can hope for is for the bleeding to stop here. we remain cautious as it pertains to thatt product line. as it comes to the apple tv, to your point, it is not going to be a needle driver for the company being less than 1% of

the total revenue base. if you are an investor and looking at the long-term growth opportunity for apple, it remains in the living room. they are doing a lot of great stuff there. because of that, we are very excited with what they announced yesterday. you have to start somewhere. an skrel l angelo. still to come, former tresh are your secretary, larry summers, on the fed. back in two.

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do not raise interest rates. that's larry summers message to the fed. larry summers with harvard university joins us from cambridge this morning. good to see you again. >> glad to be with you. >> bring us up to speed on your position. for a long time, you were saying, it is too dangerous. don't raise rates. it sounds like you are still saying that with a little less conviction. is that right? >> no. probably with a little more conviction in light of the instability and uncertainty of recent weeks. the fed cares about three

things, inflation. it is now about he low target. that's no argument for the breaks. employment. employment is a fraction of the population, lower than it has been in a quarter century. that's no argument for the brakes. financial stability. markets have undone any complacency they had all by themselves with the vix that is pushing 30. that's no reason to introduce extra uncertainty. so on all the things that the fed is supposed to care about, this isn't the time to be moving. i was on balance against it. there was an argument last spring. that you had an economy that was all right. you had signs of frost in financial markets that might be getting worse. there was an argument then. today, when you've got real major uncertainty coming out of china and the other emerging

markets when it hasn't been such an easy period in japan when worldwide, if you look at major countries, real interest rates are zero. long-term real interest rates are zero and everywhere, inflation is expected to be about he low 2%, it is very hard to see the case. >> larry, the counter argument is, it is just one little 25-point basis rate hike. the fed has indicated it is going to be a slow path, not aggressive. david tepper was on this morning. jeff immelt was on this morning, the ceo of general electric, saying we can handle it. our economy is in pretty good shape. we don't have to be at zero rates. >> look, it is a question of what direction you want to go. is this the moment to be hitting the brakes? if it is insignificant in its impact, then it is not very important for whatever benefits people think that it will bring.

the truth is, that financial officials thought the russian default was insignificant. they were wrong. they thought ltcm was a small hedge fund. they were wrong. they thought the sub-prime issue was a small issue. they were wrong. we don't know what the impacts were going to be. >> they have to do it eventually. >> the fed said it is data dependant. it should be data dependant. how can you be data dependant and promise to be one and done. they can't promise to be one and done. if people see a fed that is willing to -- >> they can promise to be slow. >> they can indicate a desire to be slow. >> if people see them move at a moment when the market says a move is unlikely, that's what the future is saying, when people see them move when inflation is well below target

and market is high, i think people will be very uncertain as to what comes next or they may be uncertain as to what comes next. that doesn't seem leak a prudent risk to take. much better to remain data dependant and when and if, and that time will come. it may welcome soon. when and if inflation really looks like it is threatening to breakthrough the 2%, that's the time to move. the fed moves too late. >> if the fed moves too late. what about the credibility factor and the uncertainty factor. the fact that we just don't know and they keep telling us, this he want to raise rates and don't pull the trigger. that creates this major source of uncertainty that some emerging market policymakers are even saying just get done with it. the uncertainty is killing us and our currencies.

>> well, i think there has probably been a bit too much confident announcement of what's coming next. remember when they said they were going to change qe when the unemployment rate got below 6.5%. i this i they need to stick with the idea of that would be my advice. i don't think it is plausible if they raise rates once and they have established that they are now raising rates, that somehow the uncertainty is all going to abate. here is the crucial point, kelly. if they don't raise rates, and they regret that decision, it can be reversed in seven weeks. it is hard to believe that some kind of profound change in inflation psychology is going to happen in seven weeks.

if they raise rates and it's a mistake, then they have a real problem. then they have drama in financial markets that they didn't want. they have the possibility of a deflationary psychology taking hold. they have got the need to reverse themselves on a dime, which isn't ease why i y to do d do much more damage to their credibility. i think in policymaking, what you have to do is recognize no matter what choice you make, you may well be wrong. you can't know the future. you need to choose the policy where if you are wrong, the regret is small rather than the policy where if you are wrong, the regret is large. >> got it. >> you have made yourself clear. thank you you for joining us. we will see if the fed listens next week. the former treasury secretary of the united states, who has class

in two minutes. lairly summers from harvard university this morning. for more on the state of the economy, do not miss our interview later in the show with jason f jason furman, the chairman of the white house council of economic advisers coming up on "squawk on the street." hungry equals overshopping.

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good thursday morning. i'm carl qintanilla with sarah and david eisen. market hanging on to some slim losses. jim live at the cme with details. >> i guess there is no such thing at tier-2 data when we are five days away from the fed and have zero clarity on what they are going to do. we were expecting plus .3. it came in at a disappointing negative .1. last month, .9 was revised down to .7. wholesale sales, we were expecting plus point 1. we got a negative .3. last month's was a plus point 1. that was revised up to plus.4.

we are five months away from the fed. with he know th we know they are looking at data. when they saw the print, it jumped back down. we are still playing a fairly wide range. we sit about 10 points over support of 1920. ten-year yields are 2.21, which is where they came in before the number. >> thank you very much for breaking that data ahead of the big fed meeting. stocks are in the red, barely. swinging around in a tight range this morning. the dow is now down about three points. s&p 500, down slightly. the wti up .75. joining us now to talk about these crazy markets is ben mandel, global strategist at jpmorgan. when we hear about the pressure on stocks, you hear about the uncertainty on the

fed, on china and its policy moves and on technicals and apple. what are you most worried about? >> you might get a knee-jerk reaction going to a fed rate hike. what larry summers said a few minutes ago is quite a possibility next week. you also have the fact that financial markets have run out a little bit ahead of where the economy is. at this stage in the business cycle, we think the u.s. economy is sort of in the middle of a long, flat cycle. financial markets have run out a little bit ahead. >> you are talking valuations. it is interesting. dave tepper was on this morning saying that this market, maybe not 18 times earnings. maybe we should be 14, 15, 16 times earnings. how overvalued do you see this stock market? >> the up side from here on in is moderate rather than gang busters. we see a lot more opportunity in relative value. we have a very high conviction

view that developed market equities still do better than emerging market equities in this environment. >> jpmorgan had a note, maybe it was yours, as you say, limited upside here given what profit margins are doing and what mna is doing that europe is the better buy. is that your point of view? >> we like europe and the macro story in europe. credit growth is very strong. companies, sales seem to be relatively strong there. exposure to china is a bit of a worry. you have the spectrum across developing markets to china. japan being the most exposed and then european and then the u.s. if your focused on domestically oriented firms, that should be a good idea. >> it is striking to hear from larry summers pleading with the

fed not to raise interest rates, saying this is not what to do. you hear it from the imf and the world bank, this pile-on of pretty credible sources telling the fed not to do it. is that ir a credibility issue if it goes ahead and does it in the face of all this high-profile criticism. >> i agree the criticism is pretty high-profile. maybe i can make my own modest case for the fed to actually move. number one, the u.s. economy is on a solid footing. over the last two years, notwithstanding all the head winds, two really weak first quarters. you have the residual vestiges of the financial crisis, these head winds. the u.s. economy is growing at 2.6 above average. that is above trend and doing the hard way. would this be a shock to anyone if the fed did move in september. they have been telling us they are going to move in 2015 for a long time.

in fact, part of their economic projections is a survey of participants which asks, what year are we going to raise rates? the majority of participants say it is 2015. are you aware of the first time they said the majority of participants would be raising in 2015. september of 2012 was the first meeting that they actually said that. so here we are in late 2015. that's basically a cornerstone promise of their forward guidance. >> and fisher has been almost exclusive that he wants to do it by the end of the year. so why are expectations subserving? >> we think they are lying? >> i think there is a very nontrivial contingent of investors who think that the fed rill either raise rates in 2016 or maybe never. so there are people, for good reason, larry summers makes some good arguments. >> the russian default was a big deal.

we didn't think all of these things that sort of happened over there were a big deal. we don't know what is going to happen when they do raise rates. >> that concern and uncertainty coming from the fact that the world's two largest economies are going in opposite directions. that's not going to resolve by december or mid next year. that is essentially an argument for not raising rates indefinitely, which i don't think the fed will internalize. >> when i heard summers talk about all the time since central bankers have gotten it wrong. >> i have heard this reliance on central bankers to get it right and they don't often get it right. we are too reliant upon central bankers for supporting our market broadly. do you adpree with that? >> i agree that monetary policy has born the brunt of adjustment. you had an initial reaction of fiscal policy and then a fiscal tightening through the middle of the recovery. monetary policy had to carry the burden there. op ti

optimally, would you imagine a lower balance? we are subject to the constraints of politics. >> the debate of the moment. ben mandel, from jpmorgan. >> lots of buzz and not all of it good with the buzz yesterday. our john fortt was there and has all the details on what was revealed and what it could mean for apple in the long run. welcome home, john. >> thanks, carl. it was a big event. the most significant iphone event we have had in a long, long time. perhaps since the iphone 4 and the buzz around these events. when was the last time you remember the general buzz being, oh, my goodness, that blew my mind. is it the best thing ever. first, the iphone. you have 3-d touch, a variation on 4 touch. you have to try it to be convinced one way or the other. i had to run out there at the clothes of the event and get on

a plane to be back here at the stock exchange. hopefully, over the next week, i'll get a chance to mess with it. if that is a significant upgrade as they are pushing, good for them. also, the camera. don't forget this iphone upgrade program that apple has rolled out. that's going to make it easier for everybody that didn't get the 6 to cheaply upgrade to the latest phones also. that could be an important enticement. a new remote. you can shop on it. you can watch shows. you can also play games. it will be interesting to see how people adopt this. the trends are going in apple's direction, though. tv everywhere viewing. that's getting that paid programming. your already a cable subscriber. getting that through an over-the-top box. that is up over 110% year over year according to adobe. an apple tv share of that was

already up 10%. that's apple tv without having it upgrade in quite a long time. then, you have the ipad pro. quite a few snickers reserved for this device. big ipads, big price. $799. considering that ipads normally start at $500. 12-inches diagonal. you can get a keyboard along with with t microsoft certainly has with the surface. also, you can get this pencil, which is something that microsoft has done with the surface that samsung very notably had done with its tablets. they have the "s" pen. a lot of talk about, steve jobs never would have done this. when he bashed the stylist, he bashed it as an essential part of a touch interface. you shouldn't need a stylist. you don't need a stylist with this. this is for specialists, professionals. this doesn't fly in the face of everything that steve jobs did. you know what steve jobs did kind of hate?

the enterprise. apple is embracing the enterprise. clearly, the company has changed and the goals have changed overtime. apple showing some strategic shifts. as you know, i think the success is going to surprise some people who are expecting them to be down in units year over year in the december quarter. there is only one day of sales of this new iphone in q-4. the rest on the launch week are going to be in the december quarter. that bodies well for my outlook. >> the bet you will have that you will eat my tie if iphones go negative in december. we will see you on "squawk alley" in a few moments. john fortt back here. >> when we come back, g.e. ceo. jeff immelt. hear what he had to say. "squawk on the street" will be right back.

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i'm a gas service my nrepresentative. n. i've been with pg&e nine years.

as an employee of pg&e you always put your best foot forward to provide reliable and safe service and be able to help the community. we always have the safety of our customers and the community in mind. my family is in oakland, my wife's family is in oakland so this is home to us. being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. together, we're building a better california. we are here to talk about any number of things affecting the company and the recent $9.5 billion deal when you account for the divest tours that will take place, no shortage of topics to hit, including the decline in oil and its impact, tumult in china as well and we

did hit them. oil and gas in particular seems to be a focus of many who follow the company. i did ask mr. emmelt what is the impact of $50 oil. >> clearly, it is less fun with oil at $50 than it is at $100. our premise always was around oil and gas, more technology and more consolidation, more focus on customers would be a winning hand. i see that in spades right now. our business, our organic earnings growth is going to be positive this year. we think next year is going to line out to be okay. it is a challenging environment. not one that you can't execute in. i would say the industry got massively sloppy in the past. there is ample opportunities for everybody to clean up their act. >> when he says, clean up their act, he is talking about taking costs out of the business, which g.e. is doing quite dramatically. talking about as much as $1 billion of cost being taken out of the oil and gas business. therefore, you allow those who

are contracting with you perhaps to do so at lower rates but still are able to make money. >> something we always talk about when mr. immelt joins us, of course, is the stock price, itself. no shortage of people out there who have been long-term investors in g.e. who are frustrated. mr. immelt coming up in his 14th anniversary. a subject we have revisited many types. you saw the stock price up as high as $28 not long ago. it has retreated to the mid-20's yet again trading below $25 a share. i did ask him, are you frustrated with this continued inability somehow of at least getting what you believe is the necessary reflection of val crew in the stock price given all the things you are talking about. >> the market is in a bad mood. everybody wants to follow anything on china.

it's volatile but not that bad. the global economy has enough opportunity to grow. we raised our numbers at the end of the second quarter. we confirmed them the other day. >> you did and nobody seems to care. >> nobody seems to care. they are talking about 1.13 to 1.20 in industrial earns for g.e. the continued divestures. $35 billion in dividend will be put to buybacks as much as 50 billion in buybacks over time. they are going to shrink the flow of outstanding shares dramatically. it does appear that china, concerns about oil and gas, still are the focus for many investors in this company's stock. while he can be very calm about the stock price, i know that he is personally very much focused on his legacy, even though he says he feels like he is 30. it has been 14 years. and the fact that that is lost a third of the value.

>> and he continues to transform the company into something it is not. it is a difficult time for an industrial company and a globally exposed company. he played down the impact of the strong dollar. he said he was more worried about the xm bank. that they need to return it. >> fan dual has a valuation of more than $1 billion and has received funding from kkr, google capital, time warner. what makes it so successful and how does the nfl season look. the ceo is going to join us live at post 9 after the break.

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nfl kicks off and the dual of the craze. promising to pay out more than $3 billion in prizes combined. the 25th season make or break for these $1 billion start-ups. joining us is nigel echols. good to have you back. baseball is a high frequency sport. there are more opportunities to play. the nfl is still the lion's share of the business. >> nfl is the number one sport. the number two is basketball. it is the fastest growing sport. it has frequency, high scores and a young demographic. football is number one. >> how have you adjusted your business model? >> it is still very much with the season and the core sports.

there is a big romp in acquisition right now. the business model is still very fundamental. we are really blessed with very good unit economics. our players keep coming back. that's really what drives business. we mentioned that $3 billion figure. how is that possible? how can that number be done? >> player prize is driven by entry fees. we don't. the money that comes in is we take about a 10% cut. we pay out everything else in prizes. it is really self-funding. >> i know you and your competitor do dominate this market. there are established players like yahoo! coming in. is that a threat? the market has always been competitive. there has been over 40 companies in the market. people like yahoo! are coming in. we always expected they would come in. they are very strong and season long. it will be interesting to see how they do. >> what happens if new entrants flatten out?

prize money flattens out. >> do you mean growth? >> the growth of players. >> the only thing i would say, la last year, there was 1 million, this year might go to 3, 4 million. there are 57 million fantasy sports players. >> who play in any sport? >> what we are doing at the end of this year, still less than 10% of the season long industry. we have very many years of fast growth. >> in idea what that percentage will be? hard enough to get there for draft day much less redoing your lineup. >> what percentage of that 57 million can you get to? 15% or more of our new players don't play season long. what percentage of the 228 million sports fans can we get not what percentage of the 57? >> you think some might leave prague. >> a lot of them are not doing season-long. are you going to commit to a

six-month season? >> how sophisticated have the analytics gotten around fantasy. the more time you spend on there, the more systems and calculations do, the better it is. i wonder if that's a threat for you. because it means it is not accessible to everyone. there are a lot of losers. >> two things there. it is getting more and more sophisticated. it is a game of skill. everybody is looking for that edge, being able to protect. what is the impact of jordan achtjordanals jordanalson being injured? i want more information and be able to help more. we acquired a company, the state-of-the-art, best in class ann analytics to be able to help our players and come in and quickly make decisions. infrastructure is built around giving people information, where is value and where is no the

value. >> i used the word bell. there are still a lot of people who believe this is betting and believe that long-term, the government is going to turn and put your model out of business. >> very clearly, a federal and state law, a game of skill, a contest between players. it is a game, like a tournament, a golf tournament or a spelling bee with an entry fee, a competition and a prize. we are very comfortable with that distinction. even people that oppose say it is the right definition. we don't like it. i would say we as a company and as an industry, have worked very hard with our trade association to talk to legislate terse. we have fantasy sports out there including a lot of legislators. there are states like washington and arizona. a lot are saying, why can't we play fantasy sports? >> the one player you would want on your team this fall?

>> for opening weekend, a couple of interesting options as we mentioned. tom brady. >> i mentioned, because it is one of the few that i know. >> i meant dark horse. >> i should not be giving advice. that would be unethical and also very financially bad for anybody. >> nigel, always good for you. >> nigel eccles of fan duo. tune in tonight, the pittsburgh steelers take on the new england patriots. it begins tonight at 7:30 p.m. eastern on nbc. >> straight ahead, former chief evangelist for apple, guy kawasaki joins us live. find out what he this i thinks about that $100 pencil. we'll be right back.

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welcome back to "squawk on the street." i'm jackie deangelis reporting from the floor of the nymex. we have weekly inventory for nat gas. an injection of 68 billion cubic feet. less than the 90 billion cubic feet than last year but it is above the 63 billion cubic feet, which is the five-year average. in terms of price reaction, prices are continuing a little higher, we were at 268. now at 261. we have seen prices come down about 6% in the last month or so. not surprising to see us go up.

total stocks is what traders watch. they are now under 20% higher than they were last year. that number is slightly declining as we're going to head into the winter. we are going to look to build in the fall and have good slice as we get those cold winter months coming ahead. if there should be some disruptions, you should see the prices go higher. sharon epperson, with the cnbc news updates. >> authorities in arizona are checking out another possible shooting on a phoenix area highway this morning. this follows 10 incidents in the past 12 days involving projectiles striking cars. seven have been shootings. police are now warning, there may be multiple shooters fee yacht chrysler is recalling trucks to fix problems with air bags. it covers 1.3 million ram

2500-3500 pickup trucks from the 2012 to 2014. mondelez says it plans to have 50% of the portfolio contain healthy snacks within the next five years. currently, it is at 33%. this follows other food companies shifting to healthier fare to satisfy customer preferences jimmy fallon and justin timberlake entertaining fans, this he got up and danced to a beyonce song much to the amusement of fans. tennis john mcenroe said they make a good doubles team. that's it for this hour. back to you. >> thank you, sharon. apple unveiling those new products from its latest iphone to a large ipad and the apple pencil. clearly, not steve jobs apple. will the new products click with customers?

joining us today, guy kawasaki, chief evangelist. great to have you back. >> good morning. >> thank you, always a pleasure. >> it is funny how these events are met with instant snark, instant skepticism and ridicule. >> yes. >> of the products, let's take the pencil. does it make sense to you and, if so, how would you convince someone for whom it does not make sense? >> well, to be determined. with the big ipad, i think there is a class of graphic artists and designers who are going to think this is the best thing that ever happened. you could make the case that samsung and other asian manufacturers have tested this. obviously, apple is not stupid. they see that people are using stylists. gradually, everything that steve decreed is being altered, i guess. >> do you believe that some said jobs changed his mind all the

time. if we were to play that game of what he would have approved of and what he wouldn't, would he have liked this iteration of it? >> steve jobs was a pragmatist. i think it is a sign of intelligence when people change their mind, not stick with the same old stupid thing just to be consistent and to avoid embarrassment. we'll see if people rush out and buy this large ipad. the apple surface, if you will, then declare victory. that's how it goes in technology. >> speaking of changes, from the days of steve jobs, who you about the fact that amicrosoft executive appeared on stage at an apple event. >> honestly, that's not such a big deal. bill gates appeared in many advertisings and many marketings. that was the height, the ceo of microsoft appearing. i wouldn't read too much into those tea leafs. i think they want to be successful on all platforms. that means we need power point

and word and ac secell on these large ipads. >> they have brought up a number of companies. what do you think of the increased partnerships that apple is doing, whether it is an enterprise or fashion or technology? >> they have to show that they truly achieve ubiquity. the way you do that is with partnerships. i think it is a very good sort of scatter approach to marketing where if you have enough of these things, maybe you will hit these pockets of desire. so, for example, if you use a go p p pro and yesterday you learned there is going to be an apple go pro app and that's how you use it, that is a big deal. with live photo and you hear facebook is going to support

live photo, your photos will be better than if you didn't use the iphone 6 x plus, whatever it is. >> speaking of which, i wonder, these "s" cycles have become somewhat of a crew cybil every other year for apple. is this the most impressive you can remember? >> it is right up there. apple has to thread this needle where it provides enough upgrades that people with existing iphones lust after it and are willing to bite the bullet and say, finally, i'm going to upgrade from my 4 or 5 to this new 6. if they announce something so great and they start conditioning people to expect this revolution every year, that's not sustainable. you kind of have to hand it to p ale. they thread the needle with this series of announcements. >> a bunch of reaction from wall street analysts today. those that are maintaining neutral argued that apple is in

this elongated cycle where the path to those higher margin, recurring revenue businesses like music and like television, are a long way out. in the meantime, you are going to have to satisfy yourself with these tough phone cycles. is that sort of where you think apple is? >> i don't think anybody really knows. a year from now, we may be saying, wow, what a revolutionary announcement that was. ask those analysts if they are going to short apple. let's see how much they believe their hype. >> how about the watch, would you like for them to give us a unit sale number? why are they keeping that so close to the vest? >> i bought an apple watch. i didn't expect to like it nearly as much as i did. i was concerned about battery life. right now, i'm wearing a bright ling, because my daughter took my apple watch and i can't get it back from her. so, listen, in the past, apple

is always going to put up these numbers, like 26 million or whatever the large number is. there would be announcements like we sold more watches in the first three months than watches have been sold in the history of mankind. we haven't heard those kind of announcements which would logically lead you to believe that maybe they are not hitting it out of the ballpark. if is hard to bet against apple. the watch does add functionality. my 13-year-old daughter loves it. that's the test. >> they did say they have a 97% approval rate of the customers that do have the apple watch, that they like it. >> i'm just curious. it is fun to talk about all these products by 3/4 of their revenue is still from iphones. which do you think is going to make the most impact in terms of an iphoneesque kind of masked product? you sound bullish about all of that. >> well, i think in the short-term, it real i remains

iphone. it is hard to imagine it is all going to flip over to ipads. it is also hard to imagine it is going to flip over to macbooks. so, you know, iphone forever. what can i say? >> guy, we always like to get your point of view and your view after one of these events. it is good to see you again. we'll see you next time. >> all right. thank you. >> guy kawasaki, with canva, former chief evangelist over at apple. >> when we come back, exclusive interview with the jason furman, council of economic advisors. let's hear what he has to say about the latest job interviews. "squawk on the street" will be right back. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack,

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the dow pushes higher. up now more than 70 points. data, jobless claims showing continuing strength in the u.s. labor market. is the u.s. the open only bright spot in the global economy? that's the question of the moment. let's bring in steve liesman here on set for a treat. >> with a special guest. we have jason furman with us, not on jobs day but any other day to talk about all the other stuff around here. joining us from washington, he is the chairman of the council of economic advisers, the top adviser to the president. >> thanks for joining me. >> thanks for having me, steve. >> goldman sachs out with a warning today, jason, on the issue of a government shutdown. is this a real possibility? >> we certainly hope it is not. wouldn't be good for our economy. austerity wouldn't be good for our economy too. there are only a few legislative

days left. congress really needs to focus on the budget to get this done. right now, they are not getting in he closer. >> isn't it a tradeoff, jason, between the idea of attacking the long-term debt of this country, which has tripled as a edp and keeping the government going? >> it is not a tradeoff. if you look at something like the bipartisan ryan murray deal, from two years ago, which is the type of template we should have, gooed for funding government in the short-run. good for certainty and it was also paid for. it helped the deficit over the medium and long run. that's the type of template we can do now. it is just really basic economics. the problem is, congress right now is just not bringing the focus they need to solving this issue. >> jason, another political issue, economic issue, financial issue, is the level of growth in this country. we have been stuck around 2%. there are candidates right now

from the other side saying we can grow 4%. can this economy grow at 4%. >> let's not get hung up on in he particular number. the debate we should be having is absolutely how can we raise economic growth. we think the answer is expanding international trade, investing more in infrastructure and research, cutting the deficit over the medium and long-term, investing in education, a whole range of things. what are the right ways to expand growth? some of the other strategies like cutting spending across the board, not investing in infrastructure, raising the deficit. i think all that would hurt growth. >> i know you are not going to comment on the federal reserve, which is sort of the top pick du jour. when the president asks you, jason, whether there is a risk that a fed rale reserve interest hike could hurt the solid foundation of our economic recovery, what do you tell him? >> i will keep my advice to the

president between me and him. we take and think about the economy as the fed as given. they are going to make their decisions independently as us. as we look around. i heard steve in the beginning saying the united states is a bright spot in the global economy. i think that'sen aaccurate assessment of where we are. i would be happier if more of the global economy was bright too. it worries me, what's going on in the rest of the world. that's why we are trying to make sure congress gets this budget right and trying to put some insurance policies in place by expanding what we do on infrastructure. >> just under two weeks before president xi jinping of china joins the state dinner back here in the state, how contentious do you think that is going to be? is the big topic going to be cybersecurity, currency, something else? >> those are all going to be important topics. cybersecurity is a really

important issue that's we'll be making to the chinese. you had secretary lu on your show. i think ultimately, a lot of the economic issues, our main ask of china is that they be an engine of growth for the global economy. that's not a zero sum ask. that's not saying they sacrifice to help someone else. that's saying they expand their consumption and domestic economy. that's good for china. that's good for the global economy. that's asking them to step up and play a role in the global economy commensurate to their size. i think ultimately, there really is something cooperative there. certainly, a number of other issues on the table as well. >> i want you to adjust a frequent criticism we hear of the administration. on the one hand, you say, what you want to do is get as many people employed in america as possible. on the other hand, many of the president's policies seem to raise the cost of labor. the recent decision by the

president to provide sick leave to federal workers, supporting the minimum wage, other proposals, aren't you making it tougher for employers to hire workers by raising the cost of labor? >> i don't think the problem the american economy has today is that workers aren't paid enough. i think the problem is precisely the opposite. we would like to see the middle class doing better that would expand their purchasing power and help overall demand and help the economy. if you are saying the president is doing policies that are helping to raise wages, increase compensation for people, i would say absolutely guilty as charged. if you look at the economy, one aspect of the economy is consistently outperform forecast is the labor market. unemployment is coming in below expectations, job growth above expectations. i think if we had stronger wage

growth, we would be in even better overall economic shape. >> thank you for joining us. jason furman, chairman of the council of economic advisors. >> good to get the white house view on the economy. up next, looks like all these data breaches might be good for some companies. we are talking about shares of cybersecurity, giant palo alto network spiking after reporting its strongest revenue growth. the ceo will be joining us in an exclusive interview right after this break.

cybersecurity company palo alto network seeing the biggest revenue rise in 10 quarters with an earnings beat yesterday with, digital privacy becoming more and more of a concern, can we expect this kind of growth to continue for the company? jon fortt joins us with the ceo of palo alto networks, after a pretty good quarter. jon? >> great quarter. and the guidance as well. mark mcgloghlin thanks for joining us. so a lot of speculation as people look at the security market. it's been an incredible run. some people were hoping that they would be able to pick your stock up in the 140s, but it didn't get down there. and stay there and you're bullish on your prospects going forward. talk a bit about wildfire, about auto focus.

two of the new features thaw guys are rolling out and how that's going to continue your momentum. >> yeah, thanks jon for having me. big picture what's going on, is it's pretty obvious that security has become a fabric item through society and all the i.t. decision-making. what we have is a backdrop of a couple of decades of every company enterprise company building legacy architecture with a lot of cobbled-together point solutions and legacy pieces technology, and that clearly doesn't work any more. what palo alto has done is brought to market over a decade of really native and truly integrated platform approach that sub assumes those capabilities to do true preventionnd and that's why we're doing so well in the market. we keep adding to that for things that make sense to increase the level of prevention, one is wildfire, which has been a fast grower for us. it's the brains of the platform, plus doing advanced persistent threat detection. we have 7,000 customers using it have been adding 1,000 customer

as quarter to the capability set and the newest one, auto focus is a data analytics tool, looking at the data sets across our 26,000 plus customers and making very fast informed highly relevant correlated decisions about cyberthreats that otherwise you would have no knowledge of on your network. >> do you have a ses, two, three years from now how your business is going to look revenuewise. you're expanding into a variety of different areas, auto focus, threat intelligence. how big a piece is intelligence about threats going to be of your business, or is that more a loyalty builder for your customer base, where this is a service that they get that keeps them looped into your ecosystem, consuming your security products. >> every time we talk to a customer or prospect what we're talking about is the idea of can you actually have a natively integrated platform that does prevention in a highly automated manner. it's always the platform approach we talk about and the capability sets we can describe to folks about how they work

together. so auto focus is a layer on top of that analytics, about everything that we know. so i think that makes the platform more interesting. it makes it stickier and from a size perspective, one of the ways i think about that is palo alto has high single-digit market share in a 15-$20 billion totally addressable market. and we're rapidly capturing market share. so i think we have chance to have a lot more market share in the next few years. >> when you look at consolidation, when you look at market players who used to have security as part of their portfolios, such as your ibms and ciscos. do you expect to see acquisitions ones that you're continuing to do, and by a larger enterprise players? >> yeah, i do. i think we'll see a couple of things happening. think we'll see companies that are somewhat in the space, will try to get out of the space and focus on things that they're

better at than these sort of sidelights they've been at for a number of years and i see other companies acquiring smaller companies over time. we did an acquisition of a small company called zero secure. which puts us into the s.a.s. security space. which our customers asked us to do and we had the opportunity to find a great team and the technology and did the acquisition last quarter and will bring it to market in september. >> to your expertise, the administration is considering cybersecurity sanctions against china. just curious as to what the state of the threat is from beijing right now when it comes to cyberespionage and whether you think it would be a good idea. >> i think there's cyberespionage happening from lots of nation states. china gets called out often and i think the difference here or the cultural difference is trying to have countries agree it's not objection for a nation state to use in essence its nation state or military

capabilities to take secrets, intellectual property secrets and in turn give them to a country to give them a leg up. that's not okay for developed nations to do that and i would expect that would be the line we would take. >> all right. mark mclaughlin, ceo of palo alto networks, a beat and a raise has your stock up quite a bit. thanks for joining us. >> thanks for having me. >> see you in a minute. because coming up on "squawk alley," periscope introducing landscape mode, the ceo will be here for an exclusive interview.

welcome back to "squawk on the street," i'm jackie de angelis reporting from the nymex. the department of energy out with ilgts inventory report. a build of 2.6 million barrel, higher than the api last night. a bearish report, we were up $1.11. now up only 60 cents. $44.83 is where crude prices are tracking now. traders were expecting a small build, only about 300,000 barrels, this is the time of year that you do see the builds come online as people start to stay home, not hit the road as much as they were during the summer