commander and chief's first formal talks with russia in two years. it's tuesday, september 29th, 2015 and squawk box begins right now. ♪ >> live from new york where business never sleeps, this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with andrew ross sorkin and brian sullivan. joe is off this week. our top story is the markets. check out the u.s. equity futures. things are indicating a slightly high wrer open. dow futures are up. s&p fau tours up by 6 and the nasdaq up by 21 but it comes after the dow, the s&p and the nasdaq closed after one month lows yesterday. this was a broad based sell off with all ten sectors ending in

negative territory. andrew mentioned carl icahn's comments and boy does he know how to pick them. carl hitting it right with the timing this time around. you look from the record high and the s&p is off by 12%. check out this chart. >> this shows the nasdaq forming a death ross. that's where you have the short-term averages moving back below the long-term average and tends to spoke investors in a big way. in the last month we've seen death cross formations for the s&p, the dow, the russell 2000. now you have the nasdaq added up and that makes the four horse men that starks to freak people out and nasdaq held on until yesterday. here's a statistic for you: since 1979 there's been 13 times when all four indexes traded in the death cross. in each case the market returns over the next month or week. however performances got better

with the market up 75% of the time three months after these death crosses formed. so look out in the near term. maybe better news three months from now. >> well, maybe it's only a death cross for the short sellers because to the point, three out of every four times this happens the stock market goes up -- i was joking around about a month ago, maybe we should call it the life cross because it tends to be -- >> we're signaling the bottom. >> it tends to be good for stocks longer term. >> but you do have october coming. it tends to be a spooky month. you have carl icahn saying he thinks things could get worse and that has people on edge i think. >> we have had a six year bull run. >> you expect a pull back at some point. >> it's healthy probably. here's the stories we're watching also today. san francisco fed vpresident jon williams says more economic data

could get him to support a rate hike at the next meeting. >> if the economy is allowed to run hot or in a high pressure state for too long then eventually people are more likely to make decisions based on excessive optimism and maybe unrealistic assumptions as opposed to founded in good basic economics. >> on the other side of the world and the other side of monetary policy, india's central bank cutting interest rates again. they cut by .5% overnight. more on that story from our colleagues in asia in a couple of minutes. meantime, two economic reports of note today. you the s&p case-shiller home price index and then september consumer confidence an hour later. >> let's tell you about stocks to watch this morning. we had a number of things to talk about. first shares of glencore recovering this morning but only slightly after getting slammed. that's almost the understatement of the day in europe yesterday. that stock now losing about a third of its value. analysts at city suggesting the commodities and mining company should consider going private if

the market continued. some compared this company to the lehman brothers of the mining world and question given the debt load of this company and it's trading operation whether it unfortunately could represent not just it's own problems but other problems in that industry. so we should keep an eye on glencore and it's competitors today. vale is cutting it's dividend. trying to sure up it's balance sheet and yahoo! will be moving forward with the planned spin off of its stake in alibaba. this is coming even though the irs has declined to say whether the transaction would be tax free so it puts marissa mayer on the hook because this deal now has to go through because she put it out there and if for example we find out later that the irs would want to call the money back it's going to create all sorts of problems. >> let's talk about other corporate news as well this morning. microsoft is changing the way it

reports financial results. it will be breaking out revenue and operating income based on the three units. it wants to highlight it's cloud and mobile businesses. more information from investors and clarity is a good thing. also japan tobacco is in final stage talks to buy santa fe natural tobacco unit. they put the price tag at about $5 billion. and a number of casino stocks getting hit in asian trading today. this comes after one of the area's biggest junckets warned it will have to wind down operations if they continue to decline. those are the things that facilitate loans for the high rollers. the whales as we tend to call them. >> let's check the overall markets this morning. futures are thinly trading but those trading are having a slightly higher open for the dow. down for the past five sessions. european markets are lower as well. the eyes of the investing world

on a couple of companies right now, vw and glencore and petrobras and jim cramer tweeting out about 20 minutes agatha they're your touch stones for the overall market at the moment. those market followed us down. the nikkei in japan was slammed. with those losses it's negative for the year. oil slightly higher but brent and wti stuck in the current price range for about a month. ten year bond yields are changed. this morning it will cost you about $1.12 to buy a euro. pretty much the same yesterday. gold lower. and platinum falling below today. among the reasons that vw admission scandal, platinum goes into the converters for diesel engines. it goes in for regular gas leol engines. the stillwater mine as good the

largest miner of both platinum. >> let's get a look at the markets. we'll head overseas. martin it was a rough, rough session when you look at what's been happening in asia. >> you got that right. good morning. higher on wall street and we'll see more stability your side but out here in asia it was just an awful session. you took a look at some of the scores. tokyo down 4%. china stocks and shanghai down to india though. the rbi, the central bank down that side cut interest rates of bigger than expected 50 basis points down to 675. they can afford to do so because they've got inflation sticker prices running at a record low 3.66% but part of the selling here of course down to the sell down in pharma and bio techs your side but a lot of it to do with the story we have been talking about all here in asia

which you just mentioned, glencore, overnight tanking 30% in london. in asia, take a look at their hong kong listed stocks mirroring the damage in europe down 29% as well and taking down names in sidney and also noble listed in singapore as well and with this whole glencore story though, i mean, look, we know about the $30 billion worth of debt. we know cash flow is not great for a company with that kind of leverage. we were talking to frank holmes earlier today from u.s. global investors and he put it out there. he said look, he compared it to a lehman moment, maybe isolated to commodities but you never know in terms of the spread and he now runs his own shop who we talk to quite a lot out here in asia, he started connected the dots. he's been more technical. he said with regard to corporate bond spread at 3 year highs right now it's not the anticipation of rates going up

by the fed, it's more what's going on in the commodities complex and in oil which is blowing out the spreads and which could, let's see if it hits the lift off button, trigger a bubble popping, can you hear that? we have a lot of leverage out here in asia with dollar denominated debt as well. not to mention glencore and the energy space. guys. >> martin, thank you very much. we should point out that while martin was talking we did get this crossing on the wires. the story we told you about before. reynolds american announcing it is selling the natural american spirit business to jt group. >> let's check on carl icahn this morning. a dire prediction this week. we gave you a little bit of the taste of the new video warning of danger ahead for investors. tiling seems to be on the money right about now. today releasing the full video he produced himself saying he's worried about several things including corporate earnings which he calls suspect. >> instead of taking the money

that they can borrow and really investing in capital, new machinery, new equipment to make them more productive what they do with the money is almost proverse. they just go in and buy another company to show the analysts on wall street their earnings are going up so their stocks will go up and it's financial engineering at its height. >> one thing he is now worried about is his largest holding. scott joins us with more on that. >> so we had the teaser yesterday and then the full roll out today. while he may be dishing on bubbles and high yield in art and real estate, one thing he's not fretting over is apple. his biggest position. icahn telling me in a phone interview surrounding his video's release that he's sticking with the stock. icahn telling me that he thinks the stock is still under valued. but it's some of the activist

investors newer positions that raised eyebrows lately. he built large stakes in those suffered mightily in the commodities crash. he bought freeport because he thinks copper prices will recover in a couple of years. he likes cheniere's price and calls them a free option if energy prices go up. he added to them last night. he made it clear these are long-term plays and admitted while he's more hedged than he's been in years he's still probably a little bit longer than he is short. particularly the lack of corporate tax reform and dysfunctional congress. >> we need government to get out of this gridlock and this dysfunction. a example is repatriation. it's almost funny who is going

to get the credit for it? is it going to be the republicans that are going to put their foot down and say oh we're not going to charge any tax to take it back or the democrats that want 15% to take that money back. so the whole thing is absurd. >> he is quote, guardless optimistic own the issue of repatriation. perhaps all of this is why donald trump is with voters. because the middle class is fed up. he did say he's ready to be mr. trump's treasury secretary should he win the white house. >> don't look for him going to washington any time soon. >> there's a lot to digest and talk through. >> where do you want to go first. >> let's start with cheniere energy. didn't know that carl was going long at the same time so they were probably bumping up against each other in some of the trades. >> hard no know whether their time horizons are bumping up against each other as well.

icahn just filed a 13-d yesterday revealing that the stake is now 11.5%. he has a couple of board seats. you know the industry well, it tells the story about where it's been because of where liquified natural gas is. >> he's concerned about the amount of debt they have taken on to try and build some of these natural gas plants the way you'll be able to move this stuff around. i don't know who is right. brian you know a lot about the industry too but i think he's concerned not just about the pricing over the short-term but also what happen with the debt from what they have taken on. >> i'm sure icahn has thoughts on the debt. he likes the contract that they have. he thinks it's a free option on the stock if energy prices recover at all. the kind of businesses that they specialize in, these contracts

to export natural gas will do quite well. the freeport thing i find really interesting because as we sit here and we talk about glencore for the last many days, freeport a mining company you'd say wow, okay, icahn comes across as extraordinarily bearish and he's been negative on the market for awhile. so why in the world then would you buy a stock like freeport? and it's because he thinks copper prices are simply going to recover. is he trying to bottom pick? is he making a long-term pick? yeah. will it play out? who knows. >> it's also interesting that you said he's still probably slightly more long than short. we know he said yesterday he's more hedged than he's been in a long time. >> i have a lot of tweets from people and e-mails saying is he massively short the market now. i wanted to wait until today to get into our conversation about that but it is interesting, yes, so he's so negative on the market but he's still longer than he is short but that's the way he is just hedged out. >> i still want to go back to

the question we talked about yesterday which is why is he doing this? >> the video. >> yeah. it's a beautifully produced video. he is talking about financial engineering and all sorts of issues. by the way, that he historically has been accused of. he has been accused of going into companies and accuse d of pressuring them to sell themselves to other people. so what is this about? >> he's doing it because he can. he feels like he has this message that he wants to deliver, whether it's altruistic or not that he's trying to help investors you have to decide that for yourself but he is at the point where he has gotten public about warning on the markets. he was disappointed that not more investors warned about the pill falls of '08. he feels that it's some what part of his duty now to do that. >> it's interesting the macro

trends he's shifting from. he's talked about twitter and apple technology and now he's talking about liquified natural gas. he's shifting from apple, i'm sure he still owns a bunch of it but to the commodities beaten up. you wonder if that's a trend others will follow. >> it all goes back to the word he uses when he describes apple. freeport, before the market had the big pull back and you could look underneath the surface and say, wow, so many stocks have already pulled back a tremendous amount, freeport was at the top of the list. it was already down 70% from its highs before the market had the major upset so he would look at that and say i think i said to him on the phone one time, why would you do with that stocks down 70%? he said that's why i like it. again not for 10 minutes or 10

weeks but a longer term play i think in his mind asewelling that things fall into place and copper prices recover. >> that's important too. what he said about copper prices multiyear. he's not calling next month or next quarter. this say multiyear because copper has been in a multiyear bear market. >> copper is down 20% this year at least or there about and apple stays the same. he loves apple. >> how big of a correction do you think he's calling for? he doesn't say it but at what point is he actually going to jump in and start buying things? forget about whether he's short right this minute. >> he's doing what people come on our air say you should do. that there are -- even if stocks pull back a tremendous amount that doesn't mean that there aren't values to be had. you just have to have the right kind of eye to try to pick out where the values are and at least he thinks, i don't know, if stocks go down another 5 to 10%, i don't know what his number is, is that going to change his long-term perspective on where he thinks freeport?

does he think that apple -- >> maybe he buys more if they pull back more like that. >> look at what he did last night. >> there's a lesson in this for all of our viewers. you don't have to be carl icahn to understand his message. if your time frame is 5, 10 or 20 years. you want lower prices. a correction is not the bad thing. >> he buys more of the stocks that he likes. >> yes, 20 years out. if you like stocks six months ago you should love them now before 20 years from now. maybe not two years from now but 20 years from now. >> so many of the big investors say what you just said about what war reason says and what you say as well. do they like the market here? no. do they want it to go down so they can like the market again? >> yes. >> it hasn't done that in a long time. >> they like it when the prices go down. makes it easier for them to buy more. >> thank you. >> joining us is the head of

investment strategy and you hear all of this, everything we're talking about today. how do you feel right now. >> i'm noticing one thing that didn't work well in the last couple of months. treasury yields didn't move that much. you would think with all the turmoil in the market you get more than a 10 or 15 basis point move in the 10 year treasury so that reminds us that as difficult as this environment looks that bond market is still a symmetric. they may want to keep that dollar down but there's only so farlower it could go so you would have thought you made some money in bonds but nothing major so some things you think would work in a crisis namely the treasury market and the dollar didn't bail you out this time. >> why do you think that is? >> rates are too low. if we didn't have this financial repression, even in a modest

growth or slightly weak environment you ought to have a 4% tenure. >> does that mean you think the fed will be under pressure to raise rates anyway? >> the answer is yes but it doesn't much matter. we float upwards if you look at consensus estimates for the ten year, they're at about 3% for the end of 2015 so that's not a bond market route but if you have a regular duration portfolio that's your safe money you don't want to wake up and lose 5 to 7% on that. >> do you find some measure of comfort in the fact that bonds haven't rallied that much? stocks are selling but not as if a lot of the money has gone to treasuries or gold for that matter? >> no, that's right. you'd see a 50 basis point drop. >> tell me if you agree with this, investors are raising cash and not necessarily hiding out of fear. >> no, that's right and if you

think about the equity markets around the world. so some extent the commodity impact is overstated. sure notwithstanding a 20 year time horizon it might make sense to remain light on energy and materials. you don't have to have falling energy prices for energy stocks to do poorly. they're so low right now consensus and earnings expectations dropped through the floor and they keep getting worse but there's pockets of tun where markets very corrected. europe has dropped substantially and maybe there's a little ray of hope in there. maybe there's an overreaction to commodities and the vw crisis and then if you look at, a market like the u.k. where you have potentially a economy that looks like the u.s. >> that's the top thing you'd be

telling people? look at europe. >> that's a very good idea. the u. hawaii has not had the correction you've seen elsewhere. europe is the opportunity and the caveat with the u.k. is double the exposure to energy and materials. >> but you have two of the biggest companies in europe in major trouble. glencore stock is down 80%. that's one of the ten biggest companies in the fortune 500 and then vw, the biggest auto maker in the world. those period aren't spooking you away from europe? >> they are. but that's where you have to find some opportunity. so you have to call your shots if you will. i would argue that -- >> unless there's a systemic risk. >> you have to assume there isn't systemic risk. >> that's a mayor consumption. >> it's not lehman. >> do we know that for certain? >> we don't he know anything from certain but what we do know from history is it didn't blow

up the markets. various large commodity players had troubles in the past but it hasn't gloen up all global risk assets and if you want to look at places where it might make sense to not take that bet, emerging markets are still, many of them are so dependent on commodity prices maybe it's too early there but maybe a more diverse place like the europe and the u.k. are a place where you might want to take a little bit of a bet that they have taken a bite out of those evaluations. >> thank you very much. >> thanks. >> when we come back, congress making progress in it's attempt to avoid another government shutdown for now but is the risk gone or not? we'll talk about it. plus donald trump invailing his tax policy and then everything from the economy to the race to the white house. first as we head to the break take a look back at this date in history. ideas are scary.

they come into this world ugly and messy. ideas are frightening because they threaten what is known. they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.

good tuesday morning, everybody. welcome back to squawk box. if you are just waking up with us this morning, good morning, by the way. let's bring you up to speed on the markets futures indicating perhaps a slightly higher open. it's been a tough ride for the dow. we're down for the past five days. if the market ended today it

would be the 3rd worst year for the dow since 1977. it's not even october. you've still got time. in washington news today the senate taking steps to avoid a government shutdown. a stop gap spending bill with a procedural vote. this clears the way for the senate to pass the spending bill early tomorrow and send it to the house just in time to beat a midnight deadline. legislation would extend all funding levels until december 11th. >> we also have news from the campaign trail. donald trump unveiling his tax plan. he is promising to simplify the tax code to eliminate the loophole and impose a levey on oversees earnings. people earning less than $25,000 a year and married couples under $55,000 a year would pay no income tax. he got an oped that lays out some of his thoughts on this. he has four brackets he's going to be talking about.

0%, 20 and 25% does other things to eliminate the estate tax and gets rid of that in part and seriously cuts overseas and corporate taxes too and the most that anyone would be paying under a corporation would be 15% as well. >> it's very interesting and if you get a chance to catch out robert frank wrote a great piece about this plan. the reason i suggest reading it is even though it's a very populace plan it's ultimately a regressive plan and to some degree the people that will have the largest tax cuts are not the peel at the bottom. >> it is progressive when you look at 0, 10, 25. >> i think part of the idea and correct me if i'm wrong on this because i haven't dove into it too much because he's saying don't file taxes but you would also be ineligible for the earned income tax credit and

other benefits you would receive and therefore you're actually not going to be paying more but receiving less and therefore it will hit you harder. that's part of the criticism of this plan. >> i think that's part of the criticism but on a percentage basis if you look at who is going to save the most money the argument is that if you're at the top you'll save the most money on this plan. >> i read a bufshlg abonch aboui don't understand everything in it. >> both of my parents do taxes for a living so i'm a tax nerd and if you ask most people have their taxes gone up or down they'll tell you they've gone up. oh i'm getting crushed. federal income taxes, federal income taxes are at an all time low. if you make 100,000 a year you probably pay about 3%. >> real estate taxes. >> property taxes in a lot of

states really hit people hard. if you own a home in that scenario it's your property taxes. >> but they fund different things. i'm saying from a federal income tax perspective middle class tax rates are at an all time low. >> speaking of politics. >> not saying they should go up. >> bring back joe. where's joe. >> e-mail him. tweet him on this. >> talking about politics i sat down with bill clinton at the clinton global initiative yesterday. we talked about nafta and donald trump's pledge to break nafta if he were president. >> if i walked away from that it would have been devastating to mexico's economy. we would have had illegal immigrants coming into america. something mr. trump says he doesn't like and we would have literally despised by all of our neighbors south of the border and people would say america is running away from this. >> i also asked the former president about the controversy

surrounding hillary clinton's e-mail use while she was secretary of state. >> what exactly does it matter? e-mails about which she has been transparent, disclosing, asked for more disclosure than she's gotten. how did this happen? the people telling them about it believe that's way more important than reminding them that this is the 8th committee to look into benghazi. this committee has been dribbling out information but won't let anybody testify in public. so the disclosure problems are not on her, they're on other people. >> as for hillary clinton's run for her party's nomination, here's what president clinton had to say about the idea that joe biden might possibly enter the race. >> i like him. we've always been friends. i didn't stop liking him when he and hilary ran against each other in 2008 and if he runs again i won't stop liking him then. he's a good man. he's been in public service in

the united states. he was first elected when he was 29. he's been if public office ever since. i think he's a good man. >> of course in that same breath he also brought up how biden went all the way back to the hearings which are the most controversial things that ever happened with biden and to mention in the sail breath we're good friends and also bring it up which i hoped we had in the sound bite, it shows you him as a politician. >> did you think that he thinks he thinks he's coming? >> hard to say. he keeps things pretty close to the vest. >> do you? >> i'm not sure. >> the things out from nbc today show biden would be the most popular person in the race if he got into it at this point. his liratings are higher than t nominees on both sides. >> did you see the tweet a couple of days ago?

michael bloomberg. he knows people close to mike and michael bloomberg may be thinking about it. >> i know the whole back story on that tweet and it's no good. >> no good. >> you heard it here first. no good. >> we're first on business worldwide. >> you heard it here first. first on cnbc right here. >> coming up, the state of the individual investor, a unique take on the little guy from td ameritrade's ceo. that's next.

actions. they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton.

cfo of td ameritrade and member of the global cfo council and you are retiring.

>> unbelievable. >> how does it feel? >> it's a strange feeling. i think i started delivering papers when i was about 12 but it feels a little different. >> when you started it was about $100 to trade a share of ibm. now it's down to $9.99. do you see it being free? >> i've tried free. i don't see that as being an inhibitor to clients that are going to trade. different people have run at it and tried that but it doesn't really work. >> is the average investor and there are no average investors, all of you america are special in your own way -- >> agree with you -- are they stick of the stock market? i'm going to buy an etf or forget individual stocks it's a

sucker's game? >> no most of the investors we have are still in individual stocks. you do is those going into etfs. it's a huge portion of it but our clients to this day love apple, they love netflix, twitter, the usual suspects that you talk about all the time on the show and that's still the largest positions. >> they're ignoring a lot of other great companies? >> it is wide based but those happen to be the largest positions in our company. >> the question i would have this morning is just when you look at where things stand today i know you don't make predictions on where things are going. >> i got one day left i can make a prediction. >> but just help us because you do see the flows and what the retail investor is doing and what they're thinking right now. >> correct. >> so you can't be wrong or you can be wrong. you can be wrong but you'll be out of the seat by the time you are. >> that's true. before the facts come in to

prove me wrong. i think that again people are still bull isish on the economyd our clients are still buying. historically when our clients are contrarian so as the market has a dip you'll see more buying goi going on. >> because it's a different client base? >> no, it's a different base of the same people. our clienlt versus been buyers this year. i have not seen the statistics for this quarter but this is been true for the entire time i've been at ameritrade. 16 years. >> what's next? >> i think i'll going to go down and coach football. >> that was my idea. go out, the former ceo who is now coaching coastal carolina, get in the same division. >> that would be good. >> make it interesting. and i would need a lot of verial

he -- very talented players. i tease joe that i'm going to coach defense but i'm going to go on boards. >> diving boards. >> there will be more diving boards in my future too but going to a couple of boards of directors and stay in the business. >> we appreciate you coming on. enjoy your last day. >> thank you. thank you. i'm going to go golfing after this. so i appreciate that. >> all right you guys. >> coming up when we return, new york major bill de blasio and fred wilson will be joining forces. both men will be joining us on the set to tell you why, that's still ahead. ♪

welcome back. it's now time for the squawk planner. the case-shiller home price index due in. costco will be reporting quarterly result afs the close and at the un president obama will be meeting with cuba's president and that's today's squawk planner. when we return, our news makers of the hour, new york mayor bill de blasio and fred wilson will join us on the set when squawk box comes right back. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

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welcome back to squawk box. new york city public schools are getting ready to offer computer science courses for all students by 2025. they plan to raise money privately helping students stay competitive. new york city mayor bill de blasio is here. congratulations to you. >> thank you. >> how did this happen. >> it happened because fred wilson and some other good folks realized if we were going to prepare our kids for the 24th century economy we needed it to

be part of our curriculum overall. about 5% of our kids in the public schools get computer science education today. it's not going to build the work force of the future and the capacity that kids need to succeed in a modern economy. so fred deserves a lot of credit for leading the way saying there was something that we could reach and the more we talked about it, we said, why shouldn't this be throughout the entire school system. every grade. every grade kids should experience some form or another of computer science education. we'll get this done over the next ten years. it will be the largest school system in america devoting to making sure that every kid has the opportunity. >> you're on the hook to raise money. >> raise about 30 or 35% of it. hopefully the people listening will get excited about helping us come up with the rest. >> the money goes toward what? how much of is this for the technology itself? the computers? >> well, the technology itself,

the city is making a very large investment right now. in broadband connective to the schools and laptop carts in the school. so the $80 million million doese the significant investment -- do you know that the school system's make a very significant investment in wiring and putting the technologies into the school in addition to the 80 million. >> that's right. and, look, i think this is going to be transcendent for the kids. it's fantastic we get such support from the private sector. this has been a real enthusiastic response. fred's deeply involved, aol, robin hood foundation and many others. this is good for everyone. we said we have to reorient our schools to the reality of the modern economy, not just where will the jobs be like the tech sector, growing six times faster than the rest of the economy. that tells us a lot. since i've come into office, we have 177,000 more jobs in this

town in 21 months, but a lot of that will continue to be happening. we have to prepare our young sector forit and get the business community in the schools making curriculums appropriate to where the economy's going. >> that's important. if you say anything, mayor or fred, about slowing spending to schools, you automatically hate children and want everyone to fail. that's sort of like the automotic response. >> right. >> the u.s. spends more than any other nation, more than the oecd nation. if we spend more in technology, which we probably should, what needs to go? the curriculum seems dated. >> it has been. when it comes to preparing kids to go into the work force, what we found coming into office was a lot of the skills taught were not pertinent for this job market. we know where the economy's going. we have to reorient the curriculum to work for the young people, but capacity was not there. the beauty of the plan is we teach all teachers who need it

how to integrate commuter science education in everything we do. not saying kids go into stand alone computer science education, but it's part of math -- >> in many ways, the kids are well ahead of the teachers. >> yes. >> may not be pure computer science, but they know more about the workings than teachers do. >> where is the money going? teacher training. teaching 5,000 teachers. think about that. 5,000 teachers teaching computer science, so that's where the money's going. you think about how much money the 5,000 teachers make, we're going to divert hundreds of millions of dollars of salary in teaching something that's not relevant to something highly relevant so we make a one-time investment of $80 million to take hundreds of millions of dollars of teacher salaries and point it towards something important. >> computers too, though? >> the kids have laptop carts in the schools. what happens is kids go in the classroom, check out the laptops, put them on their desk, and at the end of the class,

they are put back on the cart. that's what's going on. >> i rap into your friend over the week. are charter schools a part of this? how do you think about them in the context of the situation? >> look, charter schools are part of the public school system too, so, of course, they are a part of this, and we want to work with all our schools. bottom line, though, look at the beauty of this plan is that what we're seeing is get our kids ready for opportunities that are just not ready for today. if we have a booming tech sector, and we're proud of that fact, what's going to credential kids to go into it? this is a ground work that we have to set. now, by the way, we're also investing in our public colleges, our city university of new york, two year stem education programs, so young people can get that kind of degree and go into the tech sector. this is about reorienting our education system to actual skills, not just the hard skills around commuters science and learning that goes with it, the problem solving, critical thinking that is implicit in computer science education. that's the mind set kids need for today's economy.

>> mr. mayor, while you're here, the clinton global initiative was yesterday. you were not attending yesterday, i don't know if you are later, but there's new poll results showing if joe biden jumping into the race, that he would have the strongest poll numbers coming out, but we've seen sanders picking up, not yet endorsed any candidates. what do you think about where they stand now? >>ic i think we have a strong democratic field where it is right now. they are speaking to the core economic reality people are facing in the country, and they are doing a good job of laying out a positive vision of what we have to do. i've said i'm satisfied right now that the candidates we have are the right ones? >> leaning to hillary? i'll look at it as they lay out their plans. >> you know her more than any other people, you worked with them. what are you waiting for in. >> a matter of clarifying the vision further. i've been very impressed by what

hillary clinton's put out with each passing week, adding to her vision in a compelling manner. a lot of credit for that. there's areas where i think we have to fill in the blanks and get a better sense of where things are going. >> any trust deficit over the e-mail server issue? >> no, not at ul. look, i think she's an extraordinary capable person, more prepared, arguably, than anyone who ran for president, and i think she served this country well. >> any chance you'd get behind sanders? >> again, all the vision of all the candidates when the time comes. >> this next question is for the people of new jersey like myself. do you think that that new rail tunnel will be built? if one of the two rail tunnels from new york to new jersey goes out, that's an economic ka tat tro fe. you know that. 80% reduction in commuting capacity into the city. your city suffers. will it get built in. >> it has to get built. >> now, mayor. >> yes, it's a basic infrastructure investment for a

strong coherent economy. it's amazing. a lot of the economic competitors would have focused on this and invested in it. we have need to do it now. >> we had this discussion, how should the business community look at -- talking about technology, this whole uber experience raised questions, people said he, meaning you, the mayor, doesn't get it or you are trying to squash technology. >> no. first of all, let's face it, ube are is particular. they have a particular business model that is not consistent with some of the other firms out there. we are walking very closely in the technology community in the city. that's why it's growing so intensity in part because there's a tremendously cooperative approach between the city government and technology community. the approach of uber is particular. we are now trying to find a way to work together towards a good outcome for in city. >> hey, andrew, one thing on that. you know, the reason the medallion system exists in the city because back during the depression everyone turned into

a delivery driver, and you couldn't get around the streets of new york so they created the medallion system to limit the number of for-hire vehicle on the streets. there's always been a cap. this is about how much of the cap does uber take and yellow and greens take? >> thank you for being here, congratulations on the prak, and we look forward to seeing it continue. when we return, the top stories and selloffs in asia. back in a moment. sees. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus, powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours.

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because we should fit into your life. not the other way around. selloff in asia overnight, and tech slammed on wall street. straight ahead. kevin mccarthy throws a hat in the ring for speaker boehn boehner's job, talking about the odds of the a government

shutdown. if you want $20 million, all you have to do is solve one of the most difficult problems in the world. the ceo of the x prize foundation here to explain in the second hour of "squawk box" lifts off right now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. brian sullivan is in for joe kernan. here's what's going on. asian stocks sold overnight, it's on track for the worst loss in four years, an nikkei fell 4%, and shanghai dropped 2%. let's look at what's going on in european equities at this hour. we have a bit of a mixed picture, and then if we flip that board around, see what's going on in u.s. equity futures,

right now, things are looking up, better this morning, dow would open up 78 points higher, s&p 500 up, and nasdaq up 27 poe points. our top stories, the senate taking steps to avoid a government shutdown, a stopgap spending bill passed a vote with bipartisan support clearing the way to pass the spending bill by early tomorrow, send it to the house to beat a midnight deadline, extending all funding levels until december 11th, so, of course, that gets you through the immediate threat of a shutdown, but with boehner leaving, there's questions about what happens next. we'll talk more about all of this with house majority leader, kevin mccarthy at 7:30 eastern time, a candidate to replace boehner as house speaker, and deal news this morning. japan tobacco is buying reynolds american natural gak unit for $5 billion, giving japan tobacco

the rights to american spirit, that brand outside the united states. we're watching shares of glencore, the stock under massive pressure, but recovering this morning. you can see it's up by 4%. got slammed in europe yesterday, and analysts at citi suggest that the commodities mining company should consider going private for a management buyout. if this continues. a lot of interesting people on glencore's board. do you know who is on the board? >> no. >> the nonexecutive chairman is tony hayward who ran bp, and the independent director is john mac and peter bloomberg on the board as well as others, but an interesting group on the board. all right. the markets have given us a wild ride this month, and it's probably not over yet. chu has a look at what's going to close out as an extremely volatile month. >> luckily for some and not others with two trading days. heading towards the last two trading days of the september

year, so far this month, on a relative basis, it's been the nasdaq composite leading to declines. remember it's been a source of strength over the past few years and calling into question perhaps a little of whether this market can go higher or not. if you look at some of the better performers so far, overall, what's leading things higher? in terms of the s&p 500 sector wise, no surprise as things are volatile. it's eutility stocks and staple, less economically sectors have done better. on the other hand, there's energy and materials. again, no shock here. the cyclical economic sectors are doing poorly in the environment, energy a big story, has been for a couple years now. if you look at the best stock performers, tico energy and molson core, one is taken out, one possibly could be in terms of deal terms could be in play in assets given big beverage

consolidation right now, and energy and freeport, coal, natural gas energy, and mining, some of the star performers in terms and laggers. look at this. we want -- i mean, again, biotechnology, we keep on saying it and have been for months now. this is a source of the strength overall here. you can see between the dow and nasdaq, ishares by yo index, ibb is the ticker there. you hear us refer to it ouch, 17% down compared to the dow down 4%. remember, becky, the small cap story's important here as well because many, a slew of the top performers in the russell,000 small cap index are biotech related. try to watch them stabilize, watch the small cap russell 2,000 index as well. >> thank you. dom, hard to think that story's going away soon considering how it's picked up by the campaigns, but, dom, thank you. the next guess is the chief

investment strategist at raymond james, a bold call the last time he was on the show. listen in. >> our timing models call for a low between august 13th and august 18th with a plus or minus 3 day margin of error. >> that's like today. >> it feels like near the bottom. >> so we are nearing the bottom? >> absolutely we are nearing the bottom. >> that was august 21st, just a few trading days before the s&p 500 hit the august closing lows. since then, you know the story, the s&p barely above the levels, up less than 1%, but have seen up and down momentum along the way. the question is now is this the bottoming process or does the market go lower. a shoutout for that because that takes a bold man to make a call like that. you were right. congratulations on the call.

>> i appreciate that. lows, however, are easy to call, becky. as i said at the time it's like pornography, you know it when you see it, and we've seen a bunch of those over the past 45 years. the subsequent throwback rally was easy to call, but from there, it's gotten pretty difficult because bottoms are a process and not an event, and i'm hopeful we're going through that process. >> hopeful we go through a bottoming out process meaning there's still downside to come before what? >> well, in a lot of cases, what you go is go back and test the low on the s&p that is 1867 which was the closing low on august 25th. if you break that low, then another story. that august 24th and august 25th dive, however, did create a dow theory cell signal that worries me because of the false signal in the past 18 years, and that was in the flash crash in may of

2010. >> i know you follow all these signals and technical signs pretty closely. we talked about the death crosses, about how the nasdaq has fallen into the death cross too, meaning the short term average fell below the long term average. it's now the fourth of the major averages to be in that situation. does that mean anything to you? >> not really. if you look at the fundamentals, if the s&p earnings estimate next year is near the market $130, we trade at less than 15 times earnings. from a fundamental stand point, tough to make a case here, but any time i get a dow theory cell signal, it makes me nervous. >> others said, look, could be a bear market at this point, that the entire sentiment changed at this point. if you take a step back, the signals and signs, what do you think is happening, jeff? >> i think we're in no man's land here. i was in new york last week, on "the closing bell" thursday, and

the money managers i talked to in new york last week are pretty much frozen. they want to be flat because if they make a big bet here and they are wrong, not only do they have performance risk and bonus risk, but they have career risk because december is the month you are fired if performance is not good. >> jeff, it's brian, how much is etf driven? dom chu talked about bioteches before you came on, there's a $5 million market cap. in other words, the whole sector has been dumped. these are different companies, different model, different products. is this an etf-driven selloffs? dpl they had a lot to do with it, but look at the stock, trading at price to estimated growth numbers of less than one times, and companies like cellgene and gillead grow, and you see in the large caps not

seen in quite some time. >> all right. jeff, thank you for joining us today. always good talking to you. >> you bet. always a pleasure, becky. >> all right, frosty diplomacy at the united nations? president obama met with russian president vladimir putin, and twa leaders disagree over the way to end the syria civil war, and michelle caruso-cabrera is joining us now with more. the pictures in the papers this morning are, like, obama and putin looking in very different ways. >> not friend. >> scowling. >> holding up -- do we have it? the daily news, one of these. >> there was a photo on twitter going on at the luncheon where it's clear how much they dislike each other. it was the biggest event this year. 90 minute meeting late yesterday afternoon. by all descriptions, it was tense, agreeing their militaries would talk to each other when it comes to involvement in syria to avoid mistakeningly fighting each other rather than trying to achieve trying to destroy the

islamic state. vladimir pew tip's put up real arms on the ground, a limited number of troops on the ground, far willing to be more interventionist in syria than president obama is. they have divergent views on a key issue. should assad stay or go, the dictator of syria, and president obama said he should go, and putin wants him to stay. vladimir's willingness to get in syria to a greater degree gives him a wide opening to put his stamp on the middle east. >> your willing to put your people there. >> with wan intelligence sharing agreement with iraq, who is supposed to be our ally, et cetera. >> a classic move by putin. when the economy stinks, you remilita remilitaryize. you distract the population, and you try to grow the economy and

build up arms and weapons. >> wag the dog. >> exactly. playbook from a hundred years ago or 70 years ago. >> cold war move, if you want influence in a certain region in the world, give arms and money. it's, like, you know, the '70s all over again. obama east going to meet with castro, first meeting, they met in april in the summit of americas, but they had not reestablished rests at this time, so this meeting 1 official. i suspect what castro fells president obama if he repeats what the people have said to me, have said to businesses, have said to everyone is that president obama still has not done enough when it comes to the relationship with cuba and the united states. that there are even more things to do under executive order and they need to end the embargo. >> looked as pleased in those pictures as he does in these

pictures with pew tip. >> right. i think that relationship's a little bit better, but not great, but castro said before that he likes president obama. he said that in a speech in panama at the summit of americas. >> wow. >> a lot of fireworks continuing this week. >> for sure. >> we'll see. one thing about the u.n., you cover it, and yet you feel like you have to, but, ultimately, it never leads to anything. >> you're wrong. it leads to something. traffic. >> yes. horrendous. [ laughter ] so bad. >> jams on the fdr. >> champagne problems in new york. >> someone had a great comment, years ago, i don't know who said it, if you the u.n. to actually accomplish something, move the u.n. to a country that needs the u.n. move it to an impoverished nation where leaders come in, they won't want to stay and hang out, they'll get it done, help that economy, and then they'll get out. they won't want to lounge about. >> all the cities in brussels,

stop serving wine at union, they'll go home earlier and get things done. >> whine. thank you, michelle. >> see you later. >> coming up, carly fiorina's former colleague is now speaking out. bill worked for carly fiorina car for seven years here to tell us why he's supporting her next. later, the current front runner to replace boehner is kevin mccarthy and why he's the right man for the job. we're gak in a moment. run on? it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... ...in this big, bold, beautiful world.

hey, welcome back. presidential candidate, carly fiorina, attracted close scrutiny, but less attention paid to 20 years in at&t, and the lucent, ipo, the largest and most successful in history, the next guest penned an op-ed, titled "carly fiorina, a 21st century leader," he worked directly with her for seven years, and, bill, welcome to "squawk box", and i want to start with the op-ed. you said, carly, is, quote, the real deal. you heard the criticism on hp, and we can talk about lucent, but why are you so convinced that she would be a great president based on business

history. >> thank you. i worked for 10-12 years for carly, and i saw her ability solve problems in a way i've never seen before. her ability to reach out people and have them join her on a journey is almost extraordinary. >> right. how should the public think about the outcomes, not just, and i think everyone agrees she's a great marketer. she brings a great energy to what she's done, but look at outcome, for example, of the valuation of lucent two years after she left, obviously, we know what happened to lucent. look at the outcome of what happened to hp, if you believe that the score card is there and

it's empirical in terms of the numbers in the marketplace, it's difficult to say they were successful outcomes. >> well, i don't accept the premise of the question, andrew, and i'm not speaking to hp because i have no firsthand knowledge, but i think it's -- i think it's unfair and inaccurate to portray her performance at lucent as anything other than stellar. when she left in 1999, the company was doing quite well, and it was two years later before the company got itself into trouble, and quite honestly, had she stayed at lucent the outcome would have been materially different. >> whether she's responsible or not, you don't believe the seeds of what took place two years later were sewn during her tenure, whether the decisions around vendor financing, other things, decisions up to her, you can debate, but some of the things that led to the down fall, if you will, took place while she was there? >> absolutely not.

were there things going on behind the scenes that perhaps were the seeds? quite possibly. let's be clear. she was not the ceo, nor was she one of the two coos. she running the north american service provider business, and i saw her firsthand grow herself in the way of people trying to do bad business. >> when you look, for example, she was put in charge for quite some time of the consumer division, merging with phillips. >> right. >> that turns out to be a failure. just -- that was the outcome. it is what it is. >> i understand. >> this is not a judgment on her personally, but toopgs. >> i'll address that, although, i was not at consumer products, so i only have peripheral knowledge, but i worked in a at&t joint venture in the netherlands for five year, and i know a fair amount about the

condition that phil lips wips w with the consumer electronic, particularly telephone set, and they were, at the time, facing extrord yar competition from the japanese companies making hand sets at the time for motorola, a primary business, and nokia. they were doing -- they tried to put the two companies together and see if they could be a competitive force in the market, but i think, in many ways, it was far too late, but the -- the attempt that they made to save those two businesses can't be attributed to carly. >> there's a sense of inevidence blt. >> why are we obsessed with this topic? i don't know her, i don't support the candidacy, i don't know. it's a weird obsession with her,

with her job, why not acknowledge that she made it to ceo? hp is 300,000 employees. the fact that anybody, man or woman, whatever their race, creed, color, age, whatever, makes it to that level -- >> right. >> and i'm not defending carly, but anybody who makes it to that level, does speak somewhat to their ability to not only succeed, but manage people. >> yep. >> it is hard as hell to get to that the top in that pyramid in any organization. >> thank you for saying that. bottom line is she would never have been offered that job had at hp or recruited and pursued the way she was had she not had an extraordinary record. >> i understand. i understand you have to go after people for the record. i get that. if the politic's running, you go go after the political record, and nobody said, wow, whoever they are, made it to the top of the 300,000 person organization.

>> it's like alex, right, or whoever else, derek jeter, you make it to that level, you strike out in the bottom of the ninth, you are crushed for it, but, wow, you're one in ten million to make it to the level. no one thinks that. >> that's right. >> we have to run. they are yelling in the ear to go. >> thank you very much. we'll continue the conversation. maybe you can come back with more time on this one. in the meantime, there's a programming note, cnbc hosts the next presidential debate on october 28th, and carly fiorina likely to be included, i imagine, i don't know yet, but live from boulder, colorado. coming up, a "squawk" sports update, a rundown of last night's nfl matchup between the packers and average chiefs. and then -- that's not a comment on the cities. 3-0, and 1-2. we'll talk about the prospects of a government shutdown and bid for the speaker job.

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333 yards and five touchdowns. yes. he's my fantasy quarterback, and the packers win over the kansas city chiefs, final score, 38-28. green bay dominated the game. i know because i stayed up. the chiefs fall to 1-2. when we return this morning, the search for the next speaker of the house of representatives is underway, and the front runner is kevin mccarthy, joining us from washington after this quick break. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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and welcome back to "squawk box," everyone, cnbc, first in business worldwide, and we have an experimental arthritis drug, and the main goal of a late third stage study, meantime, air

bb expected to double nightly bookings this year to 80 million. reuters citing investors familiar with the performance. yahoo! announced it's moving forward with the stake in ali baba although the u.s. declined to say whether the investment would be tax free. right now, german springer will buy 8% of the insider, business insider, that deal valued at $43 million, and it's fronted by henry, well-known to cnbc viewers, a recent guest on this program, analyst in a prior life, but, andrew, we talk in the break, and the big winner is double click founder kevin ryan. >> yes. he's probably -- >> we all -- >> jeff besos has a stake in the business. >> they are hard working folks, always writing, congrats to them. >> by the way, we have springer

on tomorrow to talk more about it. also in economic news today, san francisco's fed president says that even a little bit more economic data could convince him to support a rate hike, and next month's fomc meeting. yesterday, bill clinton said they did the right thing, he thinks, by holding rates steady. >> they didn'tment to take chance on slow growth in the united states, but having a bad impact on the rest of the world, and i have to make full disclosure, in addition to janet yellen, dan, and they were part of the my administration, so that's three of them i'm highly prejudice towards and i trust their judgment. they are smart. they are looking at more data than i have, but my instinct is they did the right thing. >> the next fed decision is october 28th, the same day as the cnbc presidential debate. andrew? >> okay. kevin mccarthy announced his bid

to be house speaker, the bid open after the surprise resignation of boehner, scene we are joined now from washington this morning. good morning. >> good morning. >> thank you, leader. explain to us, if you were to take over the role, what you'd do differently. he's served his country well, but he sets the culture. this is a generation more about institutions, did not care about changing the lives of everyday americans, so you're going to find i listen to every voice, i have a wisdom to listen to america, but also the courage to lead. >> do you think that he failed? >> no. john's worked very hard. if you take history, no modern speaker that went from minority

leader to speaker has ever lasted longer than four years except john boehner. he served in this congress uncovered at a young age, the banking scandal, won the majority, went out of the leadership, became a committee chair, then won majority again and became speaker. i think history will be kind to john. >> when you lock at your party and how divided it is, what is it exactly that you think he can do what he was unable to do? >> look. 60% of our conference has been here six years or less. i was the 2010 recruitment. i recruited a lot of members that are here. i think the generational change where it's the bottom up that every voice matters, everyone is a part of it, make a committee structure where the work comes through, there's a better outcome, and one thing i know is, as you listen to the people across this country, we need to be closer to who we represent.

we need the people to understand and believe that this is their government, they are in charge, and we're here to serve them. that's not happening overnight, and it's not easy, but that's my mission. >> does that mean more or less compromise by you? mr. boehner, of course, was criticized by some parts of your party for trying to dproms too much. >> look. we have a system in government that you're going to have compromise. i'm not going to get 100% of what i want. i'm going to work to get the most conservative piece of legislation that i can solve a problem and win the argument and then win the vote. >> so when you think about, for example, a potential government shutdown not in the next week or two, but, perhaps in december and now that seems to be more on the table, at least the expectation is it's on the table, do you think there's a government shutdown, and what will you do to bring the party to the to avoid it? >> stop having the cliffs. start working on issues well in advance so -- every time you have a cliff, it's disruptive. if you really want to solve

policy, smooth out, take the cliffs say way, put your idea up, challenge the ideas and make the ideas be the victor. >> congressman, it's brian sullivan, is the oil export ban going to be lifted? >> yes. it should be lifted sooner than later. in the next month, it will be lifted. >> you sound definitive on that, sir. >> very. how can the president sit back, sitting there with putin, putin uses oil and gas as a military weapon for europe and ukraine. the president sat down and lifted iran to be able to go in, but america is denied? that does not make sense. we are going to use our oil and gas as a resource to those who believe in free loving institutions, and we're going to help our ally, and at the same time, it's going to help the economy of america have more jobs. >> will it? because refiners believe it raises gas prices, the problem is simple. if we saw stuff around the

world, less here to sell, and, therefore, that means higher prices for the american consumer at the gas pump. >> no. what we do with crude, we refine it. where does refined gasoline go? sells around the world. why is that argument not the same for crude? why do we now have 1600 rigs dropped? our rig count is lower. if we want to be energy independent, we have to have a free market to be able to drill. we have to have the free market to be able to sell in the same way the free market sells what you refine. that is a fair process that helps all, that in the end will actually lower because we'll produce more and become energy independent, but we'll also be treating ourselves the same as the president treats iran. >> leader mccarthy, are you prepared to approve a spending bill that does not defund planned parenthood? >> look, when i look at the c.r. going through right here, it is a very short term process.

i don't believe in tax dollars going to planned parent hood on what they are doing, but the bill moves forward. we'll set up a select committee because we want to get to the bottom of this like we've been able to do with benghazi. it might not happen overnight, but in the end, truth comes out, and we will win. >> later, mccarthy, circling back on the issue that's dodged speaker bayne for five years, trying to make sure that he was able to move forward with things without being held hostage by one wing of your party. i just wonder if you were in a position, if we get to december 11th, say we get through the funding until december 11th, and you face this issue again, would you sign a deal assuming you're speaking, would you sign a deal that would go ahead and continue to fund the government and do that deal with democrats rather than not do a deem as a wing of the party would like you to potentially not do.

>> why do i sit there as speaker and say, if i'm speaker, i'll sign a deal i've never seen? if we're the majority in congress, why wouldn't we lead and wait until the end to put our agreement up, what we believe? majority of the america voted for this congress, so why don't those voices get heard. >> speaker boehner did that in the past, too, unfortunately, because you own the majority in that house does not mean it passes legislation. >> look, i understand there's going to be some short term difficulties walking in, but what's it's going to take is work, time, and trust, and when we build that, every voice is heard. most people believe being a speaker is a team manager, i believe it's a team captain. i'm part of the team like everybody educational. have the voices heard, put our ideas out to the public and do it early enough to solve problems that we no longer have cliffs. >> leader, i don't know if you saw the "wall street journal" this morning, mr. trump proposed a new tax plan.

curious on your thoughts? >> i have not been able to read through it, but the more is simplifies, lower rate, i'm a believer in three rates, it's a positive. if we want to get out of the problem, we have to grow the economy. i know lowering and simpling the tax code is a way to do that. >> thank you, hope so see you soon. >> thank you for having me. when we return, stocks dragging down averages, and what's behind the selloff? then, if you want to make $20 million, solve the world's toughest problem. the ceo of x prize is here to talk about. stick around.

welcome back, everybody, biotech stocks slammed in the volatility. the etf suffered a one-day loss since the year 2011, down 20% in the last six trading days. we are joined now with a look at the selloff. >> drug pricing is under the microscope after last week with the drug raised by 5,000% brought it in the mainstream, and hillary clinton laid out a plan, and valeant is under, they

want to bring in a ceo to ask about price increases of 200-500%. this is something publicly traders do. it was hit 16% yesterday. this is really just stretching across the drug industry, and the research seen being put out by analysts now, we have an example of one coming out from mark at evercore afi, looking at medicaid and medicare exposure to the biggest drug companies to show. you can see there, he looked at those, and gillead has 50% exposure. folks are worried about pricing pressure and ability of medicare to negotiate on drug prices so people are starting to worry about this, even as they say it's unlikely it gettings through congress. i've been talking with folks about what's happening in biotech this year, and historically, the fourth quarter has been a very good one. his tor click in 15 years, biotech outperformed broader market 11 out of 15 times from september to december.

so that's taking an extra third over the last third of the year because there's a lot of catalysts at the end of the year with medical conferences that happen. getting into conference season with cancer conferences, rheumatology, and leading into the beginning of the year is a big investment conference in january. because of these catalysts, biotech outperform, and they hope that comes back because we're on track for the first loss in a long time. >> yellen looked at the stocks over a year and a half ago saying these were the stocks that were flying high. reminds me of irrational exuberance. >> yes. everyone was gleefully scoffing she was wrong. >> well, she was for a little time. >> greenspan said irrational exuberance years before. >> this is a program that we use to do data analysis, and the 144 times in the ibb bio etf, up an average of 21.9% over 12 months.

>> over 12? >> 12 months, the last couple weeks have been awful. i want cramer's take ton this. i don't think it's fundamental, i don't know that it's a pricing concern when all 144 names 234 in an index were down in a day, that's not anybody doing analysis. that's just hit the sell button, flush it. let it go down. >> questions are raised, and the house democrats called before them. it could change the way you can price these things down the road, and that's a fair overall setting. >> are they going to reprice every drug in america, though? i don't know. >> there's a fear of pricing control, but folks say there's folks who do not specialize in biotech who were into it because of the growth. they may be selling the etfs driving down the individual stocks. >> meg, thank you. >> thank you. >> all right. if you're headed into work right now, listen up. it is national coffee day.

something that we appreciate here on squawk box. in honor of the caffeine filled day, there's discounts and freebies for everybody to grab a cup. there's krispy kreme giving a free donut, and dunkin donuts offering coffee, and if you grew up on the woes coast as i did, i don't know if they are offering, but check it out. money for solving the drift problem in the world. the winner gets $20 million. the chairman and ceo joining us with details coming up. as we head to break, how are u.s. equity futures doing? four or five down days for the dow, but today indicates a likely higher open. you're watching cnbc, first in business worldwide. can it make a dentist appointment when my teeth are ready? ♪

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xprize, offering large prizes to drive breakthrough technologies, and they have a prize of four and a half year prize, curbing emissions, and joining us is the chaerm of the xprize foundation, and chairman of the singularity university, and also, by the way, peter, i don't know if you know this, but

your book, "abundance," is a must-read for everybody, business or otherwise. one of the best books i ever read. it's inspirational. everyone, read the book. i don't know you, never met you, but throwing that out there. thank you for coming on the program. tell us about the prize. you got to figure out emissions. is voke way again is sponsor? >> no, they are not. but we are working on a price to really take care of and be part of the solution at the origin. you know, today, the world uses 82% of the energy from fossil fuel, and this energy carbon xprize is a competition asking teens how to extract this from the smokestack, add pressure and concentration, turning it into a project at the end that is more valuable than the cost of the extracting it. you know, we hope teens will build a slew of projects out of

the c02 and make it an economic solution for energy producers to extract. >> what kind of response are you expecting? >>. >> well, the last few prizes, we got 600-plus teams registering, and they want to know about the prize, register, go to carbon.xprize.org and start to register today. teams from around the world, turning it into billing materials or energy sources or diamonds, who knows, but that's exciting, it's carbon, a building material, create value from. >> you know, and, peter, we've got the transport security on in the next hour. i'm an infrastructure geek. there's another initiative to expedite infrastructure, which is great, but governments in general, state, government, local, the answer is to create

another agency, create an agency for people to talk about problems, throw money at it, see what comes out. why are you going this economic way? you've done research on this. how do you figure the differences between sort of thinking about something and offering cash? >> you know, you get what you incentivize is the model used at xprize, and you can try to regulate and try to force, and try to con joel, but if you make it in someone's economic best interest to do something, then it sort of zips and goes. that's our goal. it's in the future, every energy producing plant actually is able to attach one of the devices and start producing a valuable material out of the c02, we all win, right? the team that wins the prize, the world wins, the energy producers win, and it's really where we have to go. it's about doing something smarter, not harder. >> peter, i want to put you on the spot, back to the book

"abundan "abundance," and i gave a graduation speech at a high school a couple months ago referencing these points. our industry, peter, is a big part of the negative feedback loop. >> yes. >> the world is better than it's ever been, living 60% longer, food has never been cheaper, people are coming out of poverty in record numbers. as you point out, among other things in the book, why do you think we are so focused often on the negatives? >> so, and i do say that the news media focuses too much to the negative. evolutionarily, our brain was designed to pay ten times more attention to negative news than positive. if you missed the positive, too bad, you miss a negative news, you're out of the gene pool. negative, we focus in, our lobe focuses and pays that much more attention. we forget that the world is getting better at an extraordinary rate.

technology takes what used to be scarce and makes it abundant over and over and over again, you know, a kid in india on a smart phone has access to more technology than we would have spent a million dollars on, you know, with two-way video conferencing and video skype and so forth. incredible. it's -- technology caused problems, for sure, but i believe that entrepreneurs around the world, registering for this prize, are part of the solution, so, today, we're announcing a $20 million prize. we want teams to register. we want people to realize there is something we can do, and we can stop complaining about problems and start fixing them. that's the mind set we have to instill in people. >> that's great as well. your book is an inspiration, thank you for coming on the program and nice to, quote, meet you over the airways. >> a pleasure. look forward to seeing you soon. >> take care. before we head to break, if you were in las vegas over the

weeke weekend, you might have seen this, upside down hot air balloon sparked a series of calls, but it was diesigned to appear upsidedown. there was a dummy cabin at the top. the authorities say the company that made the balloon alerted them beforehand about the stunt. cool. coming up, the cisco chairman is here joining us here on the set to talk about some plans in china and helping the u.s. economy. back in a moment. daughter: do you and mom still have money with that broker? dad: yeah, 20 something years now. thinking about what you want to do with your money? daughter: looking at options. what do you guys pay in fees? dad: i don't know exactly. daughter: if you're not happy do they have to pay you back? dad: it doesn't really work that way. daughter: you sure? vo: are you asking enough questions

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global markets in turmoil, selling off on renewed china fears, how worried are they about a slow down there, and what needs to be done to rev up investments here at home? we'll have cisco's john chambers in a first on cnbc interview. america's crumbling infrastructure front and center, transportation secretary anthony fox with the government's new plan to fill the potholes, fix bridge, and more. >> plus, the world's youngest

self-made billionaire up send ending the industry, elizabeth holmes talking rizing medical costs, future of treatment, and what it takes to build a successful startup. the final hour of "squawk box" starts right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." welcome back, everybody, this is cnbc, first in business worldwide, i'm becky quick with andrew and brian sullivan in for joe today. less than 90 minutes from the opening bell on wall street, and so far, things are starting with green arrow, and, of course, you can't trust that based on the last couple months in the market, but right now, futures indicated up 62 points above fair value, nasdaq up 21 after a rough day yesterday in the

marlgs. what's happening in germany in muted issues there. the dax barely budging, same with the cac, and ftse is down .4%, and in italy, up .25%. goldman sachs cuts the year end forecast for the s&p 500 by 5% to 2000, citing slow downs in china and drop in oil prices. meanti meantime, yahoo moving forward with a plan stinoff with a stake in alibaba, although the irs declined to say whether the transaction is tax free. germ man publisher buying 88% of the business news website business insider, and that deal valued at $343 million, and ceo of axel springer is our guest tomorrow. >> interestingly, jeff besos keeping h ining his stake. >> 12 % left?

a little left, and part is besos, and he's staying. >> he doesn't needs the change. >> he does not need the change. a dire prediction from icahn. there's a video out produced, and stocks have gone down more, warning the market needs to deal with bubbles exacerbated by the fed, among things keeping him up are buybacks. rather than taking money they borrow and invest in capital, new machinery and equipment, in their workers to make them productive, what they do with the money is almost perverse. they go in and buy another company to show the analysts on wall street earnings go up so their stock goes up, and it's financial engineer iing at its

height. >> go to cnbc.com to check it out. >> two leaders over the last few days, and a common theme is the future of digitalization and the future of its economy. john chambers, former ceo of cisco, and, john, a pleasure to have you today. >> becky, a pleasure to be with you, andrew, brian. >> i really want to dig into the idea of digitalization, what's happening, and you have thoughts on what's happening country by country, but before we do, you're a globe trotter, seeing what's happening around the world, and i want your take on where you think the economy is, not just in the united states, but what you see around the globe. >> what we are seeing around the world, and what we hear from customers and top financial people is uncertainty. the u.s. is clearly the most predictable economy. we appear to be between 2-3% growth numbers, but what i miss is the point you raised.

every major government leader, whether it's china with xi or o modi in india, merkel in germany, benjamin netanyahu in israel, they are going to a digital country. they know it generates growth, and it's the second generation of the internet, only five to ten times power in terms of capability. we are moving fast on companies, but way behind in a government approach, in our new potential presidents to be are not talking the topic either. >> it's an issue we do not spend like we used to, like in the 1990s, when the u.s. developed, u.s. was at the fore front, that's not happening today in. >> i think the infrastructure is the vehicle to get there. what was different in the '90s, and it kills me to say this, but president clinton rode the information ange, understanding it would transform the company, 16% growth in real per capita

income, 18% growth in gdp, what modi said he'd do in india, only a million incremental jobs a months. in israel, 2400 jobs in a 700 million population, and in france, talking about how it changes the average citizens' lives and partnering with business for a million extra jobs. this is a socialistic government partnering with business on what the next generation of the internal is going to be, and as you move from a thousand devices connected to the internet to 14 billion today, to 500 billion in 15 years, this will transform every company. now, the bad news is 40% of the companies that you deal with men follow in the market do not exist in ten years. the ceos know that. every company's going digital, and we're in the right spot in terms of the network that has this together. what's happening is every country, other than the u.s., has a major plan on what to do. >> you can't get anything done. here's how it works politically, right, you talk spending on

anything, democrats say, well, raise taxes to do that. republicans howl. republicans say, well, if the government helps cisco, its corporate cronyism, and sub diization, and everyone howls. how do we get anything done? >> leadership is about outlining the situation. i spent three years, he came to the valley, first time a leader from india ever has. outlining a vision at the digital india, had the top it companies there, microsoft, google, cisco all on stage with him, picturing where the industry could go, outlining what is a digital economy means to india, went through every state. this is what it means to manufacturing, what if means to broadband, and he enticed business to invest. it is leadership. it is about selling the dream. president clinton did that with the information age. we were at the white house when he did that, france is doing

that. the u.k., merkel, and we have to get our act together. >> is this an indictment of president obama, in office now seven years. >> it's not an indictment of any leaders, but a criticism of both political parties that neither the presidential candidates are talking about that, nor our current administration, and while they are beginning to look at it from the commerce side and jeff on the economic side, we have to realize we're behind. it's not an indictment at all, but it's a challenge that we need to realize the rest of the world, if we're not careful, leads in the next information age. >> we did have bill de blasio on this morning, the mayor of new york city, here with private investor raising funds to get computer sciences, something you teach in the new york public school system. i didn't realize it's only 5% of students here in new york city that get that access right now. >> well, if you believe that every company is a digital company and ask them, they say, absolutely. ask doug at walmart, he'll say

absolutely. as companies go digital, you'll become a technology company first. uber first, transportation second. completely transformed. if we don't prepare the young people, this is where jobs break down, and we train a million students a year in academies around the world, france is part of the -- the country of france partnered with cisco. they have never done that with a business before about digitalization. part trained 200 frenchmen and women in the internet of things to get jobs in the new economy. modi, a million people in india, how do we do this? he's right on. we have to train the young people, including our college graduates, for where the economy's going, not training to be a lawyer like i was of things of the past. >> talk about china. >> absolutely. >> your relationship with china, which is complicated. not -- well, your relationship is probably complicated like every american business is. president xi was here, and the president tried to give him a hard time, and yet, so many ceos tried to do business.

how do we make that work? >> well, you're outlining a strategy i believe in very strongly. first, i've been in china for 30 years. i was the first non-chinese ever to be a part of the world producter at the laboratories, and we put in place a plan three years ago to earn the confidence at the leadership in china, the businesses in china, and even the security agencies. we outlined and chuck robins, now our ceo, and i have been there for three years, outlining where the strategy is. the president xi's speech was a great policy speech in seattle, and the other ceos tell you also that he talks from a personal side, never seen a chinese leader do about the culture revolution, and then he said we need rules on the road between the countries which is, by the way, what i suggested to president obama in a letter a year and a half ago, and i think it was a good first step. i think you're going to see and partnership is way more than 100 million transaction. that's the signal by the chinese government it's okay to do business with cisco.

we trust you. we'll drive it through. results should show in one to three years. >> should we trust them? >> i think it's an area where both sides have to meet in the middle, and i think you earn trust over time. you know -- >> when we hear reports, for example, that it goes all the way -- i mean, there was reports this week of a hacking attack that went all the way up the chain. so -- >> key element is there is watch very much what he said. he said going forward. this is where both sides have to be going forward. >> but the situation of things have not been good to this point, we've been doing it, but not from here out in. >> i think every government in the world participates. get the rules of the road suggested, and you got to say what's acceptable. what is not business conduct. you will never get this global economy out of its current rut unless china and u.s. work together to get the economies going. if they work together, you do a digitalization of every economy around the world, you grow the world one to three points faster. europe should be growing at 5%,

and generating 3 million jobs a year. >> if you're a company like google, do you do business in china? would you trust them to do business? you do or found a way to live with this. >> what i've done in any government in the world, is to develop trust with the business leaders, say what we do and not. don't give the code. he's the rules, if you need my code or you need back doors, i'm out of the country. how do you do this in a win fashion and identify opportunities on both sides? come around the positive side. look at what modi did in india. he came over and sold the high-tech companies, sold a dream to the countrymen and others, and i went on to chairman of the business counsel because i believe if i doubled down in anywhere in the world, india. >> bingo. you nailed it in a way because you are, unfortunately, a lawyer. >> yes. i've never practiced. don't hold that against me. >> same here. here's why i bring it up. this is important.

>> yeah. >> the indian rule of law is british law. >> yes. >> contracts are enforced. >> yes. >> chinese courts, not the case. why are we so obsessed with china when india has almost as many people? >> the former usc ceo told us eight years ago, he'd rather play in india. >> rule of law is better than china, yes, gnp is less, but gdp tripled in ten years or so. we are obsessed with china when another tiger is growing with better protection from a contract perspective. >> well, the answer is well-ranked companies do both, as you'd expect. you can't ignore the second largest country in the world. president xi gives it a crack, and understands if the governments work together, it's a real win for both sides. modi is an amazing man, and i met every leader, and he's in the top five. if he executes like i think he will, he'll be amazing.

he's a good person. i think that you're now seeing leaders like modi coming up to influence the world in a unique way and humble way. >> john, talk about the partnership kicisco formed with apple. i don't think of you as true competitors, but seeing you work together like that is a different thing. >> well, it's the first time cisco did a deal like that and first time apple's never done a deal with the engineering integration, and what it speaks to, cisco made our living in differentiation in part because of mergers and acquisitions for 20 years. best in the world at it. we make mistakes. when they don't work, we know that. for the next 10-20 years, what chuck believes, and i do as well, there's the exact same role. the deal with apple was a game changer. take a cisco architecture from the data center through the networking center, the infrastructure, you combine that with apple, ios platform, and then you have enterprise

customer, and some say this is a combination i've been waiting for. they got it. >> video conference from your ipad or your iphone? >> exactly. in a bod meeting room or virtual meeting, you can bring video to any device all the way down. collaboration, it's going to be amazing. watch the next moves on the partnership. inspire, a small move in china, it was huge. if you execute right, you'll see results in one to three years. as chuck said with jim cramer, there's a number of other key strategic moves in the pipeline. watch strategic partnerships, watch the market follow what we did like 20 years ago. >> going back to the economy quickly. at the top, you said, u uncertainty describes the world outside the u.s. in terms of what you've seen six months ago, have we gotten noticeably worse or better? >> i think it's just choppy, becky. parents of both doctors, i don't get distracted on symptoms, but focus on the underlying issue.

i'm bullish on the global economy, especially in the next generation of the internet. it'll raise cisco's stock and other high-tech companies. i think we have a chance to get middle income growth in this country for the first time in 20 years. we need that back. i'm disappointed the political leaders are not focused on it. >> you talked for a long time on a territorial tax system to repatriate taxes in the country. >> yes. >> you see trump's tax plan today, bush's with his, and everyone has one. do you think we'll see a day to repatriate significant sums of money? >> i think if we don't deal with the territorial tax system like every other exports country in the world, that costs a point off gdp, causes companies to invest overseas. i want to be an american company, i want employees here, acquisitions here, i want to win together here. >> you think it happens? if i ask you five years ago, what if you thought it already did? >> it's interesting. the ambassador in china is a very good friend, democratic lead, and he told me when he was

in the senate, he said, john, i'll have this for you in four years. i said that was six years ago. i'd be shocked whether republicans win or democrats win, they'll move to territorial system. in fact, i'm surprised that our current government doesn't say let's compromise on a national infrastructure program. bring the money back, invest in americans, we're got getting corporate tax reforms this year on next. we know that. we could have an infrastructure program, help the economy, help the cities, and, by the way, begin to do broadband. india bringing broadband to everyone in the country within five years at one-tenth the cost to the u.s. at ten times the power. we're falling behind. that's a startup country. we need to get our act together. >> thank you for joining us, thank you. >> thank you. paychecks on the state of hiring for small business, and later this hour, transportation application secretary is going to join us to talk about a new partnership to help improve the nation's infrastructure. we return in just a moment.

foxx

we're having a debate on set. it was polite. when we return, the state of small business and hiring trends, the ceo of paychex has the latest read on the state of

the economy, and "squawk box" unedited will be right back. >> totally disagree. you're watching "squawk box" on cnbc. first in business worldwide. (vo) what does the world run on?

it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest...

...in this big, bold, beautiful world. breaking news right now, fresh data on the small business jobs market. the paychex survey continued employment growth, and index is

expanding with the details breakout of jobs in eight major industry sectors. here to go inside the numbers is the ceo, good morning to you. thank you for being here. i don't think we've seen you physically on set before. >> never realized how much fun you have. >> i thought you said anyone could do it. >> apparently anyone cannot do it at this point. this is the carly fiorina debate, but we'll just take you inside the number, and the survey, and what the eight industries are? >> interesting thing this month, first of all, the index overall, the small index, dropped from august a little bit, but we've been silently over 100 from the base year 2004 for 48 months now, so what that means, good growth, solid, sustainable growth, even though it's dropped off a bit for small businesses. the best thing is it takes 350,000 of the businesses and tracks it in realtime, and it's not a survey, but an index.

we are seeing regions all dropped a bit other than the mountain regions, number one, texas is the top state, and michigan's growing the fastest in the last 12 month, and in dallas, still number one and strongly in dallas. >> right. can we go back? put that map back up for a second. that's what i was going to say. >> pure michigan. >> what's going on with michigan? >> detroit is becauouncing back. small businesses, businesses with under 50, detroit's doing really well, bringing new businesses in and starting up small businesses. in the other -- in the industry information that we just released starting this month, other services is the strongest. other services being discreti discretionary services like pet care, personal care, things like that that i think does bode well for small business. >> does that signal a revival, a vibrancy that's returning to the area? zbling it does. i think gas prices down, there's more discretionary income, and the good news of other services being first is that they are spending more on

discretionary-type things that they may not have last year. downside is much more part-time type job, and part time is now making up 8.5% of total jobs, and that's up 2.5% in two years, so it's an interesting economy right now with part-time growing. >> where do you come out? we had the mayor on, mentioning uber, where are you on the debate around employment and the sharing economy, the companies, everyone is a contractor? >> well, you're seeing a lot more of those and millennials in multiple part-time jobs which is interesting. it's growing. you know, i think, you know, it's an interesting debate. one of the toughest things we're -- >> a sign of strength or weakness in the economy? >> i think it's performance. it's personal preference. there's a generation, hey, they'll do multiple things, not afraid to have multiple jobs. >> you think it's on the employee side, not the employer side?

>> yes. well, part is employee choice, but i think employers between affordable care act and overtime rules proposed that increase a lot of folks getting overtime, they look more at part time. i think there's more available and i think people are more interested in them. >> i think voit detrodetroit's bre brooklyn. >> look at the new downtown, we had richard branson. >> great interview. i heard. >> we talked with other guys who have done this, but it's the inner city downtown and beyond that. >> needs a lot of help, but it's cool. who's not performing? >> well, unfortunately, new york city, and some of the areas, metro areas like boston and new york city are coming back a bit, but they are lowest on the index roll, and while it looks like things are better, small businesses are still suffering a little bit from the big ones. >> i quote the internet, a couple years ago, the rent is too high. marty, thank you for coming in. >> great, great to see you.

still to come, youngest self-made billionaire in a rare television appearance. we'll show you the founder and ceo, elizabeth holmes, joining us here after the break, talking startup success, women in the work force, and more. look at u.s. equity futures as we break. is out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.

welcome back, everybody. here's headlines this morning, about a half hour away from fresh data on home prices. the latest case schiler report is expected to show a 5.1% increase in home prices for july, compared to a earlier. walmart has a new service offering free parking lot service for groceries ordered on line. the service rolls out in eight cities and expands to other markets in the coming weeks. air bnb is expected to double bookings this year. quote, investors familiar with the company's book, and guests book 80 million nights this year. brian? >> house majority leader, kevin

mccarthy, claiming candidacy for house speaker. he joined us in the last hour to explain why he's the man for the job. >> i heard what's happening in the country, watched what happens in washington when people care more about power and institutions than changing the lives of everyday americans, so you're going to find i'm going to listen to every voice, have the wisdom to listen to america, but the courage to lead. >> leader mccarthy addressed the issue of the oil export ban. he says he does expect it to be lifted over the next month. becky? >> the world's youngest female billionaire is up ending the lucrative medical testing industry by the pricking of her thumb, making it possible for more and more thorough tests to be run on the amount of blood obtained from a single finger pinpri pinprick. elizabeth holmes is joining us. great to see you. >> great to be here, thank you

for having me. >> known for you a while, first time had you on air with us, so i want to take it back a little bit, and just let people understand who you are. this is a company that you founded yourself after you dropped out of stanford at 19 years old. what were you looking? what have you done? why did you leave stanford now to do this? >> we were looking for a way to build a system that could help make early detection and prevention a reality in our health care system, and we spent 12 years working to make lab testing more accessible because lab testing is a key to being able to get the data to see that you're sick in time to do something about it, and tried to focus on consumerizing the whole lab experience in the cop text of incredibly low prices, transparent prices, a wonderful experience through which to get tested, and smaller blood samples so it's not as traumatizing to people like me

who, otherwise will not get tested. >> what was the original idea? where did it come from? what inspired you to do this? >> came from losing my family members and people that i loved, and the belief that in my mind, i always thought the true legacy of silicon valley is to build great products that make a difference in the world, and, to me, i couldn't think of something that could make a difference in the world more than something that would change what we all go through saying good-bye too soon. >> and fear of blood? >> traumatic fear of blood, yes. >> you talked about transparency, and what critics said, woah, woah, woah, we don't know what they are doing, they are not establishing in journals, how are they getting the results? can you ease concerns some? are you a person behind the curtain pulling levers? >> it's the lab industry that said that, and, in fact,

theranos committed to an unprecedented level of transparency in work, the only lab to publish all prices, only lab to publish scores which are audit scores as a lab, only lab to establish data now, through fda data summaries to be the first lab to submit all tests to fda and only lab to advocate for fda lab tests because we believe so strongly that in order to realize a world in which prevention's a reality, you have to hit that quality standard. >> let's talk about pricing issues. the way you work right now through partnership with walgreens, people go in themselves to test for how many diseases? >> we opened a full service lab, and this year we added full reference lab capability because we believe that the tests that are the most rare should also be as cheap as the other tests that we're making available so our

tests are anywhere from 50-80% off of medicare rates meaning a cholesterol test is $2.99, and so we've now made the whole spectrum of tests available through lab locations that we have inside walgreens and our own locations too. >> how many locations now? >> just over 50. >> what's been amazing is what you managed to do, has caught a lot of people by surprise. it definitely has people who are willing to jump in and bid up valuations for your company, $9 billion was the last valuation i've seen on it. privately held still, people, obviously, very excited about this, but as brian mentioned, there is this issue of not being peer reviewed, and i understand in a line of business, keep a secret, protect yourself with what you've developed. how do you answer critics or do it by continuing to roll things out? >> we do it by submitting to the

fda. look at a peer review, spend five minutes on it, and release. if someone said, don't worry about the faa because we issued a paper in a journal, i would not be comfortable on that plane. in lab testing, there's no higher standard than the fda, and especially with the work we've done to advocate for individual rights to get engaged in the testing process, you can't compromise on that. >> it's a multibillion industry, though, quest diagnostics, lab corp. out there, testing is super expensive, you know, insurance pays, you're going off a frame work, right? how are you doing to tear down that wall, so to speak? like uber in a way going after an entrenched and connected industry. >> we're going after a dream which is early detection and

prevention and solve problems than the lab industry triy eied solve. >> they not do a good job? >> they have not built the infrastructure around realizing a world in early detection is reality. for example, in arizona, we were able to, and i had the opportunity to be involve in drafting industry, giving individuals the right right no order a lab test. >> what do you mean? i don't wait for the doctor, i can say i'm going to send a test? >> it's illegal in states for you to order your own test, although, you can buy a weapon, but lab industry considers it too dangerous for you to get access to your own health information, and for us, the individual has to be at the center of getting information about their own health because it's the only way in which people can then begin to take

control. >> when if they find out they are testing high for cholesterol or some sort of thing. do you have an hiv test too? can they find out? >> connect them to a physician. the over the counter hiv testing that is legal everywhere plays a huge role. the paradigm today for a pregnancy test, our paradigm is not go to walgreens, and, you know, look at the tests on the counter, but don't do them, talk to the doctor first, say, i think i'm pregnant, get the test, and come back. the paradigm is take the test, and talk to your doctor. the purpose of testing is connect people to physicians. there's a bruproduct called md connect, allowing every person who takes a test, can connect to a doctor. >> i feel weird asking a 31-year-old what their legacy is going to be, but you own 84

patents it is, thereabout, something like that. you speak fluent mandarin. how do you want to be remembered? >> we want to be remembered for person by person -- >> you, not we. elizabeth holmes. >> for making it possible for people who could never afford the ability to get care to get care, and for making it possible for people who otherwise maybe would have said good-bye too soon because they found someone they loved had heart disease too late, to not have to do that. >> what are the next holy grails in terms of what you want to be able to achieve just with blood testing? can you take it too early? cancer detection? >> we think in line with the discussion on an individual's right to health information, we have a $4 trillion health care spend in this country, and 20% of it is type ii diabetes, and 90 million americans don't know they are prediabetic, and give people access to that information and showcase by beginning to understand, you can

change the trajectory of those numbers in those outcomes. that's what we're incredibly focused on. >> your kpe competitors, how quickly can they catch up if they wanted to or catch up on price? >> well, we are advocating that transparency on pricing is exciting things we've done is physicians look at our prices and call other labs, and say, if you don't match prices, we're not sending patients. it's a good function to operate in the space. >> their models work at your prices? >> you have to ask them that. i mean, we have a whole different framework built around the technology infrastructure that we've developed. >> you think the health care industry tried to build around purposely around secrecy? i can walk out of here, trip, hurt the wrist, get an x-ray. i have no idea what it costs. >> right. incredibly important point, the reason the market does not

function in health care because individuals have absolutely no visibility in pricing. >> some argue health care is not a market. don't look at it this way. it's about life and death. it's not about money. it's about saving grandma. >> if you knew what you were spending, you could make choices along the way. >> you have a right to the lowest cost highest quality product. right now, there's no demand for that because there's no pressure to build a greater product. >> what do you think of just drug pricing fraud? we had the issue last week, a huge technology issue, a biocompany acquired another one and upped the rate by 5,000%. how do you -- do you think that should be regulated? do you think you should be able to charge what you want? how should it work? >> people have a right to the lowest cost health information possible, and we have, i mean, we spent 12 years investing in our frame work to make now over 150 tests available for less

than $10. >> what's the biggest barrier holing you back at this point? what do you have to conquer before you're in front of every american? >> we need to have the patience and discipline to be able to continue to build this infrastructure the right way. i mean, there's so many stories of companies, technology companies especially growing too fast, and this is an area, as you said, that you cancer compromise. >> have you been approached to be bought? >> we're not going to be bought. >> have you gotten a call? >> well -- >> if they called you, theoretically, what do you say? hi, this is big corporation of america, i want to purchase theranos. >> we have a long term vision, flattered by the call, but we're just getting started. >> do you want to be a publicly traded company? help or hurt you? >> there has to be a good reason to go public. we're in a blessed position now to scale the business now without being a public company so we'll keep doing that. >> if you need the money, forget it? >> there has to be a good

reason. it's a different time now, unless you trying to use the cash for m&a or unless you need to raise the money through the public markets, we, right now, and it is -- >> when you look at the horizon, is there a moment where you think you ultimately need capital in large amounts to somehow scale? >> well, we're see. we're scaling fast now, but we'll see. >> if i give you blood now, how long does it take to realize i have high cholesterol. i have not had a blood test in years, too afraid. >> we should talk about that. >> i don't want to know. 60% of the people don't do it. >> that's what we have to change. >> is there a safety pin here? >> andrew will take your blood. >> thank you for joining us. >> thank you for having me. >> we'd love to have more time, go teacher, but come back again. >> thank you.

when we come back, transportation secretary, anthony foxx on a plan to help towns fight infrastructure breakdowns. things are looking up, better than before, dow opening 93 points higher, and s&p about 12 points. back in a moment. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things.

changes you'll notice. wherever you are in the world. sheraton. welcome back, to the new york stock exchange where mr. cramer is joining us. after a tough day yesterday,

what would you do? are you still on the fence, that's too nice, right? >> yeah. i just dislike the market. i said i hated the market, but david faber says i can be constructive on certain stocks like a conagra or general mills. declining use of stocks, but there's a nice bounce today, and people have to rethink and decide whether they sell into the bounce or not. it's difficult to come on and be as negative as i've been and be reviled as being as positive as people claim i've been. there's not a lot of stocks i like. when they bounce, how do you not like this and this and this. i'm realistic. >> what's the level attractive to you so we understand? >> okay. look, i have 1600 -- i got -- there's 1500 names in the s&p, okay. i've got 600 of the 1500 down 25 % from the high, 117 of the 1500

down 50% from the high. now, we could easily be down 17% for the peak, which was still putting us lower, down 17% from the year, and 17% from the peak is realistic because that's 2011 when we thought the world would end because we thought of europe, and this time it's because of glencore, and totally respect the naegatives and the fed has little to do with the slow down in business, but you know what? sometimes it's not worth it. it's not worth it. come out, look, it's a horrible market, it bounces that day, and people say, well, he's a nut, but you know what? i dislike the market for so long, now people dislike the market, like, where you been? 600 stocks down 25% and now you dislike it? that's a huge decline. i'm more constructive with biotech selling at 14 time 20% earnings, but it's not worth it.

>> now you're a genius again? don't sweat it again. don't get it. >> it's not worth it. >> you can go on air saying i like ham. >> then five minutes later, on twitter, someone will say why do you hate ham? >> i love aaron rodgers. >> speaking of twitter, have you seen the apple news on ios9? looks like twitter. it's a customized feed. check it out. >> looks like dorsi will get it, he's entrenched. what do you do? buy twitter. sell twitter. we are really gripped with a bear phase meaning the big rallies are not able to be met with buyers, but that's okay. when you have 600 names down 25% in the s&p 500, that's not the day to get bearish. that doesn't make sense. >> thank you, mr. cramer. we will see you in about ten minutes. >> all right.

>> thank you. all right, when we return, a piece turned for a good cause, and that story is coming up. ♪ j ouisour. we'll see you in a minute.

one of the paris' most famous monuments turned pink. october is breast cancer awareness part. up next, transportation secretary anthony fox will talk about rebuilding america. we'll be right back.

welcome back, everybody. shares of glen ifcore recovering this morning, it's been fluctuating through the morning, and now up by as much as 11.5%. analysts at citi suggesting that the commodities and mining companies should consider going private through a management buyout if the market routes continues. brazil's vale is cutting its dividend. you can see that stock is up about half a pers. yahoo is announcing it would

move forward with the planned spin-off of its stake in alibaba. >> it's a huge risk for marissa mayer. if it works, it's great, but if it doesn't it creates a lot of problems. there might be shareholders who might potentially sue the company. there are some real issues about what this all means. another stock to watch today is johnson a& johnson. deutsche bank's note says don't throw the baby out with the bath. don't dump this stock if you're selling everybody else. they came across impressed, saying companies across all products lines should continue to grow. their target price is 110. that's about, what, i don't know 17% or 18% up side. so johnson & johnson getting an upgrade as well. the major market indices where the futures are indicated.

remember yesterday the dow was down about 312 points, that was a decline of close to 2%. s&p was down by 2.5%. the nasdaq was down by about 3% yesterday. this morning you could see some green arrows. given the declines we saw yesterday, this is not breaking into new territory. the dow futures up now about 83 points above fair value. if you look at what's been happening in some of the early markets, relatively flat there. you can see the dax, the cac, and the ftse down about a quarter of a percentage point. and the big one for us, a huge -- a little bit crazy? >> i think they're losing money. >> listen, we have a lot of friends there, great company. i'm happy for henry and hits

team. if anybody at b.i. is watching, congratulations. >> it's fantastic for them. very interesting headlines for those of us in the media. >> and pay attention to glencore. the company's got about $100 billion in long-term debt, $9 billion in ebitda. it's a major story. >> story on the front page of "wall street journal" that lays out its unique structure versus others in the industry. >> head quartered in switzerland and jersey, and tony haywood is on the board. it's got an interesting cast of contacts too on the board. final story. today is national coffee day. i'm like on cup 4 or 5. we should tell that you dunkin' donuts is city participating and so is krispy kreme. free cups of joe. >> cheers. >> free bailey's?

i didn't say that. i have to host "power lunch" at 2:00 p.m. eastern time. tune in, america. >> we'll see you at 2:00. he'll be back tomorrow morning, too. >> get some coffee. thank you very much, everybody. right now it's time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm karl kin nilla, david faber, jim cramer. an ugly session in asia overnight. japan was down 4% as the glencore worries made their way around the globe. the oil is up. case-shiller is home prices are up. carl eye sawn's danger ahead individual is is out, filled with words of warning. >> glenwore rebounding a