>> good morning everybody. welcome to squawk box here on cnbc. welcome back. we do have breaking news at the hour. hurricane joaquin getting stronger. the storm now a category 3 packing 120 miles per hour winds. it's approaching the bahamas now. as for the u.s. impact the track is anything but certain. some models have it slamming into virginia, maryland or north carolina. others have it heading back out to sea. it's still early to try to be tracking exactly where it's hitting. the east coast is bracing for a rough weekend. we'll have a live report from our colleagues at the weather channel in just a bit. >> the third quarterfinally over for the stock market and anybody bullish on this market is glad to see it go. take a look at the futures this morning. dow futures up by triple digits. you see the futures 112 points

above fair value. s&p futures are up by 12 and the nasdaq is up by close to 35. as for the 3rd quarter it was the worst quarter for stocks in four years. the dow dropping for the 3rd quarter in a row. that's the longest losing streak we've seen since the financial crisis. plenty of pain inflicted on anybody. the dow, s&p and nasdaq all ending in correction territory. all dropping about 7% in the third quarter alone. >> if you put up a two year chart, we eliminated all of 2014's gains too. we're back to 2013. >> you lost a year and a half. washington avoiding a government shutdown. president ball balm signing a short-term spending bill that gives lawmakers about 10 more weeks to agree on a longer budget deal. uaw members rejecting a proposed contract with fiat chrysler.

union leaders backed the deal but workers voted against it. they called a meeting in detroit today to decide on the next move. in other auto news the major car makers are set to release their monthly sales today. big news twitter expected to name jack dorsey as it's permanent ceo. the co-founder has been serving as interim ceo since this summer. dorsey will also keep his job as head of online payment service square. >> that's a lot of work. >> that's a lot of work and they're going to have to square a lot of things up with investors because square was hoping to go public. i think you'll be hearing about a square offering in the next month. so how are you going to articulate the square strategy and what you'll be doing. >> pretty unusual situation. people have pointed back to steve jobs being able to do it with pixar and apple at the same time but it's hard to think of too many ceos able to juggle two

like that. >> the only one is elon musk doing spacex and tesla. >> he said he tried to take vacations two weeks out of the last 12 years and neither time worked. >> i'm not surprised. walmart ready to cut hundreds of jobs at its arkansas headquaters. all part of the retailers plans to cut cost. also news corp. sold it's digital education brand alabama m -- amplify. the buyer and management team backed by a group of private investors. microsoft and google agreed to get rid of all patent infringement litigation against each other. the companies say the deal ends court fighting involving mobile phones, wifi, xbox game consoles

and other windows products. >> let's get a check on the markets this morning. triple digit gains for the dow. up 106 points above fair value. this all comes after the gains we saw yesterday but the gains yesterday were the coda to a really lousy quarter. we'll talk more about it in just a bit. check out what's been happening in europe this morning. you'll see right now that things barely budged in germany but the ftse is up by 1.3%. the cac in france is up and stocks in italy are higher as well. >> in asia you saw some gains. the nikkei was up by 2% and the hang seng was up by 1.5%. that helped the sentiment in chinese see the shanghai composite was higher. this morning they're up by 2.5%. that's a gain of up to $1.

take a look at the bond market. the yield, wow, under pressure once again. that yield sitting near 2% for the ten year note. 2.058%. check out what's been happening in the foreign exchange market and the dollar is higher against the euro at 11151. dollar is also higher in this situation and gold prices which dropped by about $11 yesterday. you'll see they're down by about $1.90. $1,013. >> david einhorn and dan loeb on the list, all men lost money last month amid the market turmoil. green light capital fund dropped nearly 4% in september. now the firm is now off officially 17% year to date. green lights fund is 92% long and 66% short. as of now he is on pace to report his first down year since the financial crisis in 2008.

also loeb dropped almost 5% in december while jana partners lost 4%. unless they get the gains back and that's representative of what's going on across the board. bonus season is not going to look as good. >> let's check out the markets. closing the last day with a bit of a bang but it's a different story when you look at the quarter as a whole. what lies ahead as we enter this last quarter of 2015. joining us is steve reese. he is global head of he equity strategy at jp morgan private bank and drew who is deputy chief u.s. economists at ubs. we been talking about the quarter and this is not just lousy returns for the quarter it's so bad it wiped you out all the way back to where we were in 2013. what do you tell clients? >> it's been a tough quarter. we need to focus on where the market can go from here.

the sentiment right now is very negative. there's a lot to be worried abo about. we're in a quite period and looking forward to hearing from earnings. if you actually look at the expectations, they're negative. so people that say i want to get invested in the earnings are too negative. >> that's been the question. people have said are we actually going to see earnings growth? particularly when you have the strong dollar hurting the multinational companies. >> i don't think we need to see a lot of growth. expectations are already down 3 to 4%. that includes a big decline in energy. the early indication from the consumer companies we've heard from have been pretty good. so my view is we probably come in better than low expectation and to get invested today you need to take a look at 2016. a lot of the big negatives that hurt the market whether it was the energy drag or the strong

u.s. dollar become a lot less negative into next year. >> just because of the comps. >> comps comparisons become easier. energy down 60% this year. it's still going to be tough but not like -- >> how much lower could it go? >> it depends on what happens. >> it could go lower. >> it's masking the better returns we're seeing in places like consumer discretionary, health care. so we're advising clients to be selective, focus on quality, focus on the more domestic parts of the u.s. and take a longer term perspective. >> let's talk about the jobs report we're expecting tomorrow. adp we got yesterday showed a descent number. what does that tell you or what are the expectation of what to expect from the government tomorrow. >> we expect a good time tomorrow and the federal reserve is going to see 220 or 230 more jobs thab the month prior. for me the biggest risk is that

people again to sense that the fed maybe waited a little too long. if we can get to december and we just get okay news that keeps us on this stable platform we're good. if the economy accelerates in the next three months then the fed is way off sides and everyone is going to know it and you're going to see that response in markets. >> what's the chance that really happens? >> you know, look, with the way unemployment moves normally you could be rounding it down. i'm not saying you can get the 4.5 but it could be moving lower on a sustained basis and we're expecting higher wages to start showing through in the u.s. economy and every sign of labor market tightness is blinking bright red. >> correct me if i'm wrong but the conventional wisdom is the fed doesn't move until december because that's when they can host a press conference afterwards and october is off the table. that's a little silly, right in they could do something in october. they made up the rules as they

go along. >> but you waited ten years to hike rates and you're going to trust it to your conference call software. >> but it doesn't really matter october, december. we're talking about months here the good news is i think they will raise and the market is looking toward that. >> the way it pack fires is things have gotten ahead of them and people are like they're behind the curve. if they're behind the curve on hiking it's a much different response from markets. >> you're talking about the market response. >> i don't think the average person on the street cares or even knows. >> we think the economic response will be positive. it will be good for consumer. right now they don't have to think about capex. >> so you're saying that the corporations will follow that and change their behavior as a result if the fed raises rates. >> yeah, people like dividends and buy backs now and the investor preference should shift. >> if that's the case it looks like it would be a bit of a lag

time between where the market picks up with that. maybe the market reads that as bad news. i'm not going to get my buy backs or the dividend that i wanted. it's great for a long-term investor. >> you have to look at what the market has done year to date. i don't think the expectations are that high. a lot of people came into the year and bid more cautiously. rates are go up and it will be very slow and low. there are tuns opportunities in yielding assets. >> is the long end going anywhere at this point? they control the overnight rate. >> if you listen to larry sommers it isn't moving for ten years. >> you make a great point which is why you can get 3.7% dividend yields in utilities and these sectors lagged. a lot of that has been priced into the market and there's good-bying opportunities for quality u.s. focus companies. >> you don't worry about things like the drug pricing concerns that have worked their way into

the house? >> that's a huge concern. it's nothing that we've seen this before. the difference now is we are in an election year so it's not likely to go away in the near term. we're going through the numbers assuming the law gets passed and there's certain numbers penalize in the last few weeks more than what the impact would be if this thing passes. if you've got staying power, these are good opportunities in health care right now particularly for the large cap diversified companies that pay good dividend yield. >> do you want to give prudence to carl icahn's apocalyptic fear that something is coming? you don't sound like it at all. >> i agree that rates are too low and higher rates would be good for the economy and good for the market. i don't think there's a bubble out there right now. we're in pretty good shape from a valuation perspective. >> you know, apockalyptic visios

come and go and we're sitting here. >> thank you for coming out. >> thanks a lot. >> good to see you. a developing story this morning, hurricane joaquin getting stronger. a category 3 packing 125 miles per hour winds. general joins us with the latest forecast. >> good morning to you. and we were just talking biblical proportions, the rainfall that we could be talking in the eastern u.s. regardless of what happen with the track of joaquin could be e tremendous. but let's start with the here and now. we have a hurricane joaquin. winds of 120 miles per hour. this is a major hurricane. the pressure dropped dramatically in the last 24 hours. we're down to 948 and the move ment has been important. that's keeping it here. very close to the central bahamas. about 20 miles to the north which is an uninhabited island

but it's not going to move much in the next 24 hours. so these islands will be dealing with the surge, dealing with the lashing of the wind and very heavy rain which will be adding up to maybe more than a foot. warnings are you as you can imagine. tropical storm warnings for the other islands as well and as we take a look at where this is projected to go, there are no warnings up yet or watches up yet for the u.s. coast. that may need to happen later today or tonight. there's divergence. in the short-term it's sitting here in central bahamas as we get into saturday and sunday many of the models are turning it back toward the u.s. coast. the european model has been taking it out to the east and out to sea and interestingly with last night's run of the american model it's been turning more to the north and the question is what will happen?

will there be more of a pivot making the turn off to the east and away from the coast when it comes to the u.s. impacts. another point to make is regardless of the specific track. we have a lot of rain in the forecast and it starts today and continues tomorrow. look at all of this rain tapping into the tropical moisture flooding and coastal concerns regardless of the specific track of joaquin. big concern on the pacific coast of the u.s. >> coming up, crude realities. oil prices rising this morning. we'll talk about the reasons for that next. first as we head to a break, here's a look back at this date in history. ♪

>> in geo political news i interviewed the president of columbia. huge news out of that country last week. the president has come to an agreement with rebels that could end the 50-year-old guerrilla war. it will be good for the people and economy. >> nothing we have negotiated will effect us or the business community or investor community negatively. the impact on economic growth is going to be very positive. the growth of the country could

increase around 1.5% forever. >> the deal has been extremely controversial guys because they're going to offer some degree of impunity to a lot of these rebels. so imagine they have been killing people, they have been bombing people but at the same time if you want the war to end there's a continuing -- we have to decide how much impunity do you give in exchange for peace. >> stuff like that usually comes easier with time. with a lot of time. tougher to do so close to when events have been -- >> yes, yes. and the other thing that's interesting is its possible that these guys might run for election. they'll be allowed to form a political party. we've seen it before in latin america. former rebel leaders becoming presidents of countries. >> it's just when it's so near to win those are taking place it's a lot harder for tensions to die down. >> yeah and the closer you are to have been a victim the

more -- >> a little tougher to get by. >> thank you. >> we have other geo political news. russian air strikes in syria have the pentagon nervous this morning. what is vladimir putin up to. we'll get the latest from tracie potts. good morning to you. >> good morning, there's new reports that there were as many as 30 more air strikes overnight in a rebel held area. now before that, the pentagon said that they're not sure at all that these air strikes are targeting isis. >> here's what russia is saying about cooperating in syria. >> we agreed that the military should get into contact with each other very soon. >> and here's what's happening. the first russian air strikes. the u.s. only got one hours notice. >> concerns that we have obviously about the nature of the targets, the type of targets. >> russia lames they're targeting the islamic state isis

terrorists. they believe russia is targeting opposition forces supported by the u.s. >> that approach is pouring gasoline on the fire. they say he's taking action because the u.s. didn't. >> he proceeds the administrations caution as weakness and is taking full advantage. >> after that frosty handshake the u.s. and russia are still on opposite sides. >> back live here we have been monitoring this and the u.s. has been monitoring this for awhile. russia has been building up it's forces in and around syria for weeks now. again making the pentagon nervous on where they're going on this because they don't believe it's about isis at all. >> no, it feels like another proxy war. we have colonel jack jacobs coming up about this same issue. thank you so much. it's been a wild ride for oil prices with crude falling 25% over the past quarter.

now fears over russia air strikes in syria and a fierce hurricane brewing near the bahamas could shake things up more. here on set is matt smith. good to have you here. >> good morning. >> are those the key issues right now for oil or are you watching something else? >> i think that there's something else that's going on here. arab gulf exports for september have dropped to 14.2 million barrels. the rest of the year they have been around 15.5 million barrels. suddenly dropped off. what i think is happening there is you're seeing a huge amount of loadings dropping off from saudi, from kuwait and united arab emirants and this is telling us there isn't a market for this oil out there and global inventories could be full here which would be incredible. it's either that or we could actually be seeing the opec perhaps coordinating and perhaps

pulling back on their production and exports. >> contrary to what they have been telling us they would do. >> exactly. and they have been holding that for all of this time. we've seen production up to 10.5 million barrels a day during the summer but suddenly you come to september and they dropped off from 5.8 million barrels a day down to 5.1. >> that's a meaningful difference. >> it's the 7 countries. six of them opec. what happens is that you take that out on a daily basis and that's 50 million barrels that the arab gulf nations haven't been able to put out into the global market. it's because there doesn't seem to be the space for it potentially. >> let's assume it's the first scenario where you say inventories are full. what does that mean for pricing? >> that's the thing. the concern is that right now we're having global refinery maintenance season and we're

seeing stocks strong and oecd stocks are strong. but what we're seeing in our clipper data is the fact that they're trying to -- there just isn't the room for this in the market now. so either it is that or we are going to see demand continue to be strong like it is and we're actually seeing a change in stance by opec. they think they're winning this war. >> so ultimately i'm trying to find out, it sounds to like me you're saying if inventories are are full and they can't unload it prices would go down more. >> potentially yes. >> wti could go to where? >> i'm not saying it's a temporary thing we're in now because it's maintenance season and there isn't a demand for the crude but right now based on the data it's saying there just isn't the demand out there. >> if there were a change in tack on opec that would mean higher prices. >> correct. they're looking at the u.s.

seeing we're down to 9.1 million barrels a day. going below 9 by the end of the year so we're seeing their strategy is working. longer term projects being cancelled. budgets cut. >> people getting layed off. >> we may well be seeing that opec is saying guys, this is working. now perhaps we stop flooding the market. >> we'll see. >> when we come back this morning, if you think you've seen and heard it all from donald trump, think again. up next we have what he has to say about double dipping your food. i'm with the donald on this one. check it out when we come back. first we'll have a look at yesterday's s&p 500 winners and losers.

welcome back to squawk box, everybody. donald trump grabbing a bite to eat with john harwood this week. it's the latest edition of john's speak easy series and nothing was off the table for this one. >> i'm imagining you skipped the dip appetizers because you have a double dip issue. >> somebody was dipping the shrimp into sauce. he weighed like 370 pounds and he had a shrimp and dipped it into the sauce and then he dipped it a second time. i never even met the guy.

i said you just double dipped. it was incredible. he didn't know what i meant and then he understood it. he was a nice guy but i didn't have any shrimp. >> it was straight out of seinfeld. it's pretty disgusting, right. >> right. you have an issue with germs and the whole handshake thing? >> you know certainly i was -- i think have been proven right. you have a cold and you come shake my hand, who knows what's going to happen. i had a friend recently came up to my office and i haven't seen him in a long time and he kale up and shook my hand and i said how are you doing? he said i'm so sick. but i'm on the campaign trail and shaking thousands of hands. >> i have been wondering this. i knew he had an aversion to shaking hands. i'm with him. i hate shaking hands. all you do is pass it down.

you give it to the kids. >> being on planes. same thing. hate it. >> if you're on a campaign trail you're on planes and shaking hands. >> and kissing babies too. >> and can't possibly say you're not going to shake somebody's hand. >> if anybody could get away with it, donald trump could. >> can i ask one double dipping question? how does anybody feel with going to the other side. >> if you were to break the chip and do one and one. >> but if you were to go one side and then go to the other side? you're okay. >> i'm okay with that if you're at a small private family event and you know that people are are doing that but we have to monitor somebody to know that they're actually turning the chip. it's too close to a potential double dip. >> there's something different between a tortilla chip and shrimp. >> anyway, we're going to have much more of john harwood's speak easy coming up at 7:00 a.m. eastern time. they're going to get into some of the serious issues too.

the things he was talking about. i agree with him on this. i don't know if this was a fun story or crazy story or scare story. there was a congressman overseeing or looking into something the secret service was doing so the secret service which was upset about this, one of the agents decided maybe we should try to leak some stuff about this congress person who actually tried to apply to the agency years earlier and they had all sorts of information. >> and had been rejected. >> and had been rejected under bqa, better qualified applicants existed. >> he wasn't good enough. >> good enough to be in congress and not good enough for this job but they talked openly in the office on e-mail about leaking this guy's file. >> i've seen some of the actual e-mails and it was very clear that they think something bad needed to come out about hill. something embarrassing. they leaked it and it's frightening to think that if the secret service is doing to

members of congress, what could they do to anybody else? >> it's hoover all over again. >> the quote, by the way, some information that he might find embarrassing needs to get out, just to be fair. >> they're looking into the secret service or agents that had been drinking and run into barriers in the road and others that hired prostitutes. his investigation of these issues brought this out and this was the response from the secret service. >> revenge. >> by the way, this is a secret service that president obama just praised for the amazing job they did while pope francis was here. so less than a week ago you have president obama saying what an amazing job they have done and this comes out right afterwards. this is a secret service that's been struggling. >> think about that if you're the president and you have to trust these people around you and you fine out this same group is doing this stuff all the time?

forget about the chinese hacking. you have your own people. >> nobody spoke publicly for years about the situations with jfk and the women in the white house. it wasn't until years later they said anything. it was already out and peel knew about it. >> i just went through the nixon documentary but in it one of the things they talk about and this is nixon in his own words because it's interviews and tapes made in the white house. and he talked about at one point he was discussing with one of his aids the idea that bobby kennedy wanted secret service, somebody to be watching hill and they said okay but go to the guy that's come to me repeatedly and said i thank you and the president for what you've ever done for me, if you need somebody wiped out let me know. they gave him that agent. >> when you have a history like that and this it raises massive red flags. >> you have to worry all the

time about any bureaucrat or armored government being able to use the information they have. >> abuse of power. >> any of these organizations that look like they're ever abusing their power that way, the irs included should be massively investigated. that's a huge violation of the public trust. >> rest of the week. >> moving on to oil. we're just talking about situations in latin america and the price of oil and what it's going to do. mexico finally does this massive reform where they're going to be able to allow private investment in a big way in the oil sector and then the price of oil plummets. they do auctions, nobody shows up. guess what, they held an auction and finally people showed up last week. they auctioned out 3 out of 5 lots when so a big turn of events for them so we're starting to see some activity down in mexico. super crucial for them because the government there relies on revenue from the oil industry for like 25% of the budget. >> that's been a huge turning point for them to bring in companies to help them get some of this oil.

it's terrible timing. >> it was just a dramatic, dramatic issue in mexico because oil is just part of the mental dna of the country. the people own the oil. united states is so unique. if you have oil under your land you own that oil. that's rare in the rest of the world. mostly it's countries that say you may have that land but we the country own that oil. >> it's the country's natural resources, right? >> so this is a big turn for them. >> when we come back, jp morgan launching a new fund today. it's focus is companies that improve the lives of people 50 and over. we'll talk about that but first take a look at what's happening in european markets this morning. you'll see there are green arrows if you're checking out the ftse. ftse is up by 1%. and here in the united states we're seeing stronger futures as well. the dow is up triple digits this morning. stick around, squawk box will be right back. 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.

welcome back to squawk box everybody. take a look. if you're just waking up the fourth quarter getting off to a good start. a much better start than we saw for the overall quarter we just finished. take a look at the futures. futures up about 90 points of fair value and s&p futures up by 9 and the nasdaq up by 27. >> it's the buying power of the 50 plus aarp saying that people over the age of 50 are responsible for annual economic activity. that number is expected to grow to almost 14 trillion by 2032. our next guests are trying to tap into that market.

joining us is joann jenkins and kathie. they are here with an announcement. they put together a fund. you are putting together a fund to fund innovative companies that are helping and looking to assist people over 50 years old. >> absolutely. we're very excited about it. over the next three years we'll be investing nearly $40 million in companies, start up companies who are addressing the needs of the 50 plus particularly around the health care area. >> how did this come about? what's your role in this? where does this money come from? >> aarp is putting up the money to do this and we have added in jp morgan asset management who is actually going to be handling all of the management of the fund for us but it's an acknowledgment that we need to bring new solutions to the

marketplace. the way people are aging is changing and we need new solutions and this is a way to spark the market and get others to draw attention to the wants and needs of the 50 plus. >> have you ever done anything like this before? >> never. i'm not sure if any other nonprofit has done this in this way before that's solely focused on the wants and needs of the 50 plus. >> and you'll be managing this as if it's a venture capital fund. >> correct. our private equity group has been working in the venture space and supporting growth companies so we're decided to partner with aarp in identifying, sourcing such companies in the atmosphere and then being able to bring not just financial support to support products and services that are innovative to that demographic but also to tap into the knowledge and the resources that aarp has. there's no organization that knows more or has more members in that demographic. >> are you planning to piggy back additional investments on top of the money from klines?

how does this work? >> our private equity group manages about 54 billion in pie v -- private equity assets. so to the extent that investment in that company can support other investment guidelines there's the opportunity to bring more capital beyond what aarp does but what's really powerful is aarp's network into the demographic of the 50 plus. an ability to touch both distribution channels or to bring insight to those companies as they're developing product and services for that area. >> what are you hoping for in terms of a rate of return on the investments? >> we're looking at this as a responsible risk for aarp. we're focused on drawing attention to solutions that will help people live better. there's 10,000 people a day turning 65 and that will happen for the naex 15 years. there's over hundred million

people over the age of 50 and we want to spark this change in the private sector that we need to have solutions that are adapting to the needs of the 50 plus rather than company -- 50 plus adapting to their needs. >> you're not that interested in making a profit. >> no, i didn't say that. we absolutely would like to make a profit but we he understand that this is a responsible risk and that it's going to take tile for us to get into it and i think bringing the valuable insights that jp morgan has to it gives us a better tun to be successful. >> is there an example of a company that would be prototype that you would be investing in? >> one of the things that we're looking at is we have been funding for a couple of years a number of grants to mba schools across the country and a number of ideas have come up through that chain. we work with a number of other

innovation groups and whether it's around allowing people to live in their home with more technology, whether it's access and convenience or whether it's allowing them to live healthier. so this particular fund is going to be focused on those three areas. >> can i ask you, is it frustrating to try and find kind of a search for yield at this point? the returns have been so low for so long that you would be putting people over age 50 in that we talk about it all the time that that has pushed investors to search for higher returns. other places for returns. has that been frustrating? >> from our perspective as private equity investors we're less concerned about what's happening in environment today and where yields are and we're must have more looking at how can we support and grow companies longer term and through a cycle. so we're actually in some ways a little bit back from that concern. we are seeing it from what

clients are looking to do in their broader portfolios and where they can get returns from but i think to your question about types of companies, there are lots of companies very focused on -- they're so focused on the millennials well the truth of the matter is the 50 plus has the biggest buying power and is such a growing demographic. so if we can work with companies that some of them already have products and services and say how do you think about this, with this demographic that's a very powerful combination. >> we'll leave it there. keep us updated. i'd love to hear what businesses you ultimately invest in. >> new numbers on manhattan real estate. the stats and what they tell us about the overall economy. first check out the price of oil this morning. higher by $1.06 for wti. brent below 50. you're watching squawk box on

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welcome back. we have new numbers on the manhattan real estate market this morning. robert? >> average price hit 1.74 million in the third quarter, sales up 10% of the year.

the average price per square foot hit a record of 1497 per square foot. bidding wars are common. more than half of all apartments sold in the quarter traded for at or above the list price. it took an average of 73 days to sell an apartment. that's the fastest ever. most expensive was a penthouse at 1355 north avenue going for $38 million. joining us to discuss this is howard, chairman of douglas elman. thank you for joining us. >> great to be here. >> real estate is a bubble. we had a 200 million sale in manhattan in the most recent quarter that will close in two years, but that's been purported. are we at a top in. >> i don't believe so. based on the statistics you read off, we're at low inventories. everything is selling fast. i don't see how there's a bum. if you say there's a bubble

because calls are bearish on the starcht, and i think to some degree the real estate follows the stock market, but people buy real estate to live in also not just to invest in. >> where's the money coming from? hearing problems from overseas and china and wall street having a tough year. who is buying the real estate? >> well, you know, the economy in new york city is good. jobs were up, you know, all time record, i think, since the last recession, up 500,000 jobs since then, so i think that the locals are the buyers. generally speaking, of course, you have international, and as with what we're seeing now, the chinese, asians in general, especially in china, when the markets went down, the real estate market went down, didn't stop from buying, but more interested in getting money from there and buying in new york city. >> you saw more money coming out of china to here during the turmoil in china? >> here, miami, l.a., the big

markets. >> you have offices in l.a., miami, aspen. what is happening in the other markets, nationwide at the top end? >> almost identical to new york city. >> really? >> all day, $30 million house closed in aspen, the highest in a number of years. l.a. is very strong. you know, there's certain periods in the summer that quieted down a little bit, but i'd say things are rolling quick again. >> do you expect as the year progresses, talking earlier about the hedge funds, the big hedge funds, green light, david einhorn's hedge fund. it looks bad. i mentioned bonuses, but at the end of the day, they are not buying next year, right? >> well, the ones you mentioned can buy because they made money for lots of years. >> yeah. to me, there's a larger problem -- to the extent that wall street folks bought high

end places, come january, i imagine it's going to be tougher for them to buy them at those prices? >> i don't necessarily agree. the established hedge funds guys make money for many years, and because they don't have a great year, that's not going to affect them. someone who is a new person on the block in a hedge fund not making money, yes, that could be, but i wouldn't hold the ben fits for any of them. i think they will be big buyers. >> new york's unique, right, subdivided between condos and koe co-ops, which is difficult to get into. condo, all new construction is condos. that has to be part of it. so little supply of condos in new york for so long, that has to be a reason why. >> no question about it. average condo prices are 25 -30% higher. no one builds co-ops anymore because of markets. >> i thought privacy reasons are changing?

>> there's been a couple co-ops that are allowing some foreign money in, and they are starting to crack down on exactly how you can structure a trust to hide your ownership, but it's still -- you can buy a condo and not know who owns it p. >> the "new york times" series shows you're not that private. >> right. >> well, again, that's a condo. >> right. that's the point. >> it's still a tale of two markets, isn't it? look at the averages, so much driven by new construction which are going for over 2,000 average per square foot versus a co-op. >> nothing new built now sold for less than 3,000 a square foot because of land prices and construction prices. can't make money if it's not 3,000 a foot. >> hence why there's the hou housing. >> three, four years ago, base price was 2,000, and 3,000 today. >> wow. crazy.

thanks. >> my pleasure. >> appreciate it. >> hope to see you soon, robert, thank you. when we return, top stories, plus, donald trump speaks out again. yes, he is. the presidential candidate, the republican front runner as only you can see here talking jobs, the economy, and the competition. first, though, as we head to break, check out the futures right now, dow opened up 105 points higher. stay tuned, you're watching "squawk box" on cnbc, first in business worldwide. the gillette mach 3 turbo

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donald trump sounds off. >> there's truth to that. >> we don't to superman presidents.

>> you will if you have trump. >> taxes, the economy, and why he's america's next superman president. the third quarter seeing the biggest move since the financial crisis. the chief equity strategist has a playbook for the fourth quarter and three dig things you should worry about. >> hurricane watch, joaquin and it's unclear whether the east coast is in for a direct hit. we'll get a live update as the second hour of "squawk box" starts right now. ♪ live from the beating heart of new york city, this is "squawk box." welcome back, everybody. this is cnbc, first in business worldwide. i'm becky quick with andrew ross, and michelle caruso-cabrera is here this morning as well in for joe. it is the first day of october,

the first day of the new quarter, first day of the fourth quarter people have been hoping and waiting to get here. if you were a bull, you didn't have a great last period, the worst in four years. dow fell in the longest losing streak since the financial crisis. you can see the pain on the boards. they ended the month in correction territory, dropping 7 % in the third quarter alone, and if you want to check out u.s. equity futures at this hour, it's a more positive situation. looking at triple digit gains for the dow futures this morning. right now, indicated to open by 110 points. futures up 11.5% above fair value, and nasdaq up 34 points. we have more in ten minutes. the top stories at this hour, extreme weather. hurricane joquin. there's no con ssensus, some sl

into virginia, maryland, north carolina, and others have it out to sea. regardless, the east coast is preparing for a rough weekend. we have a live report on the path of the hurricane at the bottom of the hour. in washington news, shutdown averted. congress approved and the president signed a stopgap measure to extend funding for federal agencies until december 11th. negotiators have ten weeks to work out a longer term budget deal, and in corporate news, twitter is expected to name jack dorsi as the permanent ceo as early as today, receivering as interim chief since dick costello stepped down over the summer. reports dorsi will be head of online payment service, square. >> okay. donald trump grabs a bite to eat with our john harwood. john? >> reporter: good morning, app drew. the goal in the interview was to test the connections between donald trump and the actual

reality of america presidential politics and government. it was an interesting journey. take a listen. >> last one. >> i guess i couldn't get enough. ♪ >> your answer to policy questions is, i'm trump, i'm good, i'm the best, i will get it done. >> well, there's a little truth to that. well, in fact -- >> you've been successful -- >> a lot of truth to that. >> but we don't have superman preponderate presidents. >> we will if you get trump. you watch. >> you get in, all the problems you talk about are much more difficult, what do you say to the people who vote for you who say, hey, wait a minute, i thought you were the wizard of oz? >> i'm a problem solver, i will not disappoint people. i will find it. i have to solve problems. >> you made the argument that

the reason average people in america feel economic strain is because their leaders are stupid. >> well, their leaders are incompetent. in some cases, stupid. what's happening now where we allow china to devalue their currency constantly, allowing japan to devalue. they just did a big devaluation, where we allow mexico to really take so many of our companies. what they are doing is smart, but bad for our country. >> when you started in the campaign, some of the things that you were talking about were not real. obama, where was he born? that's not real, we know where he was born. >> go ahead, tell me, where was he born. >> i believe he was born in hawaii. >> i don't discuss the birther thing anymore, and you know why i don't discuss it? >> when i discuss it you don't get on to jobs and the other things so i don't discuss it. people find the subject to interesting we could spend a half hour talking about that.

i never discuss it. >> on immigration, immigration rates have been declining. >> they go up and down, people are better staying in mexico and various other countries than coming here because we are doing very poorly as a country. >> you know we are not going to deport 11 million people. >> we'll see what happens. last week, a woman was brutally murdered, a 66-year-old veteran, raped, sodomized. >> is that the case you're talking about? >> there's many cases like that. it's a tremendous crime wave. >> you know the jinx? >> that's not the evidence that real estate developers are in a crime wave, and, by the way, i don't say everybody or a big percentage, but it is a substantial percentage and tremendous crime. >> what do you say to someone that the core idea of your campaign is appealing to fearful, anxious, white americans and encouraging the belief that their problems are

because of people who look different than them and have different features. >> no, i don't think so. my audiences are strr -- many, many blacks. i had a poll the other day, i was 25% approval rating as a republican, highest recorded, usually it's 7%. in fact, they said if the election were held, and you got 25% of the black vote, like in this poll, the election's over. you win. >> you don't think racial tension is the jet fuel of the campaign? >> no, i don't want it to be. i don't think it is. >> if you face the prospect of losing primaries, would you decide -- you're not winning anymore, would you decide to step away at that point? >> right now, i'm leading every poll, and in most cases, big, leading iowa, new hampshire, south carolina, and i'm leading everything. >> yeah. >> that's good. if that changed, if i was, like, some of the people at 1% and 2%, there's no reason to continue forward. now, if i tank, you know, sure,

go back to business. why wouldn't i? >> thank you, a great honor. >> appreciate it, thank you. >> guys, i think the point at the end was significant because the -- everyone's wondering how the trump story goes now that we're in the testing time of the fall. if he starts to fall behind, i think donald trump has sketched out what the exit strategy would actually be. that is, if he's not winning anymore, he goes back to the business. don't know if that's going to happen. he's still ahead. iowa, new hampshire, south carolina, and nationally, but that's what we got to watch for. guys guys? >> he's still ahead, can't write it off, but you see other candidates who tiptoe carefully. some of them, kris kentechris ce will not say anything bad for endorsements.

do you know who he likes in the debate? >> it's a little more clear who he doesn't like so far. you know, yesterday, for example, he was temperat in the interview. the worst about jeb bush was he's doing very poorly, and he's the last person i want to cope. i gave him a chance to say something about carly fiorina. he didn't take it. of course, 24 hours after the interview, he was tweeting yesterday that rubio had the worst voting report in the senate and was lazy, so you never know from day-to-day with trump, and, of course, we'll have our debate on october 28th in boulder, becky, you and i will have a chance to talk to him and see just what sort of mood he is, how combative he is, and whether there's another strategy closer and closer to the iowa caucuses. >> have you decided how many people are on stage for that? >> we set the parameters, and there's not a set number of people on stage, but the

parameters -- john, so i don't mess it up, i believe you have to have 3% average and six national polls to be on that main stage. >> that's right. >> or a 1% and at least one of six polls or something? >> right. >> on the national level for the understage. >> right. and there will be a little cushion there. there's rounding at 2.5 or above, you may be rounded to 3. what happens is all close calls will be decided by becky. [ laughter ] >> no, no, no, no, no. >> and, john, since i'm sure you've been looking at this in terms of the numbers, like, right about now, generally speaking, how many people would qualify -- >> i bet it's a lot. 3%? >> right. 3%, still get ten people on the stage? >> i don't know if you would, and, remember, a lot of the polls that are going to go into this have not. taken yet, but i think it would be a pretty familiar cast of

characters as we've seen in the first couple debates. >> john, i think the biggest kudos goes out to, you got him to shake your hand at the end. and we ran the bit from the interview talking about the germophobia, the double dipping, the handshaking. he shook your hand. >> yes, but did not pull nuts from the same bowl of nuts that i pulled some out of. >> there you go. >> had the purell ready to go. >> did you notice he never took the paper off of the straw of the diet coke on the table. >> no, no. >> yeah. he's a little cautious about, you know, doing these things in mixed company. >> i'm with him on that. i have purrell right here. thank you, we'll see more of this, but great interview, thank you for joining us this morning. >> thanks, becky. >> john, along with becky, and carl hosting the debate at university of colorado in boulder, and you don't want to miss it. it's wednesday, october 28th.

>> i like carl's -- like, we don't have the say the last name. >> it's just carl. >> coming up, a fed rate hike and potential government shutdown could throw the marks a curve ball in december. we have the fourth quarter analysis, and the gop debate strategist is here, and plus, hurricane warning, a live update on hurricane joaquin strengthening making for a wet weekend. we'll be right back.

stocks closing out the third quarter with the worst performance in four years. dow down almost 8 % turning in a three quarter losing streak for the first time since 2009, but key catalysts could turn the tide in the fourth quarter including earnings and tomorrow's job number. we are weighing in on what he's watching. the chief equity strategist at citi group. thank you for being here. >> thank you. >> you are calm, you talked to the guys in the credit markets, and they're, like, something wicked this way comes. i mean, are you worried? >> i try not to let my emotions get in the way. i look at data that -- i would say calms me down, but i think of the old, you know, british thing, be calm, you know, carry on. keep calm, carry on.

you know, look, we track emotions. >> right. >> we have our panic model that tracks where we are, five weeks in panic. yields at 96%, probably, markets up a year from now, and that's about 20 points better -- >> a good indicator. >> good things for an equity investor, even if in the moment you can kind of get very skiddish. >> so very rough third quarter. let's kiss that good-bye. what happens in the fourth quarter? >> a number of things have to happen. investor confidence is shattered around august 17th, seeing the chinese currency dropped three weeks in a row, and wicked this way comes is coming from the east. and in that sense, investors need to build confidence again. i think enings could be part of it, the fed, stabilization in commodity prices, a variety of sources, and it's a domino effect. it's going to have to build

piece by piece by piece. i think it will, earnings, for example, go to the second quarter for a second, only because we have the data, it's real, not a projection. earnings flat in the s&p. people thought they were down 5%. they were flat. if you took out the drag from energy, they are up 5%, take out fx, they are up 7. think about this simply. in june of last year, that's where oil prices fell and dollar strengthened in the third quarter. as we go through the year, as long as other parts don't fall apart, you're going to see a headline improvement because the drags won't be as fear, and right now, investors started the quarter thinking third quarter numbers are down 6% and energy is flat. think of it in those terms. don't take the bad way any and it's all good, but the anniversary is going to go away. >> look ag the higher prices, up

7%, people said stocks are expensive here. where are they now on a basic valuation model? >> we look at the schiler, i'm a cyclical analyst, so i appreciate it. everyone says, man, this is really, really high. what it doesn't show in the numbers is addressing the notion called the time value of money. there's a nobel prize -- >> opportunity lost if you don't put it in? >> it's more what is the cost of capital. >> right now, it's so low. >> really, really low. >> right. >> without getting into too much, our met trirics normalizi the bond ye, it's 94% of making money in the next year. we're talking about kind of double digit returns, mid-teens, high tens type returns over a course of 12 months. i don't spend a lot -- >> interesting. nobody talks about that.

schiller talked about it. >> he'll admit it's not a great indicator for what happens in a year. >> you understand intuitively, right, managing the portfolio, get 2% on treasury or buy a dif depd. there's so much out there with a dividend of 3-4%. buy that, get paid the same, or more, and hopefully, the underlying asset also appreciates, and if you're willing to hold for a long time, even if it goes down, you're okay. >> that's the biggest problem. we overtrade. we get emotionally responding to what happens in the market on a day-to-day basis, and, i mean, i talked to the 89-year-old dad, i love talking about it, you know how much money i lost yesterday? i said, no, dad, i don't, and number two, i don't know how much money i lost yesterday because i don't look at it that often. >> we talked about how much money big activists and others lost. the hedge funds lost. should we be surprised they lost the money? when people talk hedge fund, should they be more hedge? >> interesting question. there's leverage longs that refer to themselves as hedge

funds so i think that's where issues pop up. in the last few days, people looking at the biotech stocks, how that played out to a number of hedge funds. we are negative on health care. stocks were out to lunch. even after the correction, stocks trade at 80-90 times earnings, not particularly cheap to us. >> the jobs report on friday, in light of what appears to be a big acceptabilitiment shift in the market, i mean, let me ask you first, if the fed raises rates, do they rally? is that what we saw after the last meeting? >> i think the fed, you know, kind of messed up that call on a variety of ways. you can see where the ten year treasury yield was, and the bank stocks ran up, the market was poised for rising rates. i don't understand how the market making group or market monitoring group, the fed did not see that.

too plain. obvious. i don't know if they want the -- i don't know what the street wants all the time, if they want the fed to raise rates or not. what i walk ed afrom that is we were positioned differently, and when the fed conference call was finished or press conference finished, there were views, what do they know that we don't know about the global condition. there's a new set of fears. that's different than rates going up. we want them up because then the economy is decent health. >> if there's a good number friday, like, now, no excuse, i that have to go. >> it's part of the building process. there's no magic bullet saying, hey, we turned the corner, everything's fine. yay. that's not the way markets work. too many out there with different perspectives. >> all right. nice to have you in. >> great to be here. >> walking to the office from here? >> pardon? yes, takes about an hour. >> it's that far? >> downtown. >> it's all the way downtown. >> in the rain. >> that's cool. it's not going to rain right

now. that's my weather forecast. >> there you go. >> thank you. >> oh, when we come back this morning, recreational marijuana sales legal in a third state in the united states. we have the details and restrictions that might harsh your buzz, whatever that means. that's coming straight ahead. time now for today's aflac trivia question. what passenger airlinefuls t wa first to put a jet into passenger service? the answer when we continue. aflaaac. aaaa-flaaaac. someone's sandbagging. i'd be tired too. he paid my claim in one day when i got hurt. one day? serious hustle. serious duck. in just one day, we process, approve and pay. one day pay, only from aflac. ah!

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now the answer to today's trivia question. what passenger airline was the first to put a jet into regular passenger service? the answer? aeroflot, the russian airline, in 1956. >> welcome back, everybody, corporate news this morning. walmart reportedly ready to cut a number of jobs at the arkansas headquarters, part of the plans to cut costs. technology news, microsoft and google agreeing to get rid of patents against each other, settling 18 cases in u.s. and

germany, involving mobile phones, wifi, game consoles, and other products as well. as of this morning, recreational marijuana sales are now legal in the state of oregon. this makes oregon the third state to legalize the sale of rekraegal maryland after colorado and washington. the drug remains heavily regulated there. you have to be 21 years old to buy recreational weed and only joints, marijuana flowers, plants, and seeds. the state is not allowing the sale of edibles or other products while they determine how to regulate them, by the way, shops sell 7 grams or quarter ounce at a time, that's way more knowledge than i've ever had. >> so much information about pot in oregon. >> good to know for those folks who are traveling there soon. we need to make sure everybody knows. when we return, breaking news on jobs and challenging report on layoffs, and top political strategists reacting to john harwood's interview with trump and potential field for the gop

debate later this month. back in a moment.

♪ welcome back here to "squawk box" on cnbc worldwide. russia defending air strikes in syria saying they struck isis targets, but u.s. officials question whether they were aiming for isis or using it as cover to strengthen president assad. in other news, russian linked hackers tried to access hillary clinton's e-mail at least five times while she was secretary of state. this coming from new e-mails released from her private account. infected notes were disguised as

speeding tickets. no word if she is clicked on the attachments, but it's a security issue. >> these were not smart hackers, sending them as speeding tickets, and she's not driven herself since 1976. >> not so bright. on the russia theme this morning, a new law allowing russian citizens to fooil for bankruptcy for the first time ever beginning today, citizens with debt of more than about $7500 and over three months of missed payments can file for bankruptcy protection. more than half a million people are expected to file immediately with as many as 6.5 million believed to be eligible. there's a donald trump joke in there somewhere. we are just one day away from the september jobs report. any data just crossing the wires this morning that shows that quarter ended with a surge in job cuts, heaviest since 2009. let's go to the ceo of challenger gray and christmas. this does not sound good, john. >> well, certainly, cuts were

heavy in the month, third heaviest month of the year with 58,887 job cuts announced, up 43% from what we saw in the month of august. >> so -- but what do you thinking thes f-- what do you think accounts for this? >> there's big layoff announcements this year. this month it was hp that made a major cut as the company starts its process of splitting into two companies. one of the things you start to see as you get near the end of a period of expansion, but before it really turns, as you start to see major layoffs occurring, big megalayoffs, like we're seeing now, so the layoffs are not that heavy, but they are on pace to be the heaviest since 2009. >> but looking at this saying it was a one-off or look at next month and think it's worse? >> no, i don't think it's worse. it'll be worse next month, necessarily, it's not like

there's a lot of pressure on companies right now, but maybe some of the pressures are mounting and companies that have not hit revenue targets do more cutting. i think there's some signs out there that may be there are sifting going on and companies are having the most difficult times will start to show more layoffs. now, some of the cuts seem almost like manna from heaven of companies that are cutting and beefing up recruiting and staffing departments, so that really also is going on as well. >> automotive down 3,000, what's that about? where does that come into play? >> well, automotive is generally in a good place, but i think there's some concern about effects from china. they may be affecting the a automotive market. the issue going forward is, are the difficulties in china going to roll out and hit u.s.

businesses? exports somewhere down the road? >> okay. john, leaving it there. thank you. >> thank you. >> great to see you. appreciate it. our john harwood sat down with donald trump this week. let's hear what trump had to say about his tax plan. >> jeb told me the other day that trump's strategy is to say things over and over loudly -- >> loud, and repeat things over and over again, you think it turns it into truth. >> what do you think about that? >> i had not heard the statement. he's a very nice person, doing poorly, maybe he'll do better. he'll spend a lot of money. >> did you see what jeb said about your tax plan? >> i did not. >> looks like his, said you should have tried fiscal responsibility? >> i didn't do that at all, the last person i want to copy is jeb. the economy will grow much faster with my plan. >> you talked about cutting

expensive hammers, things in the budget, but if you don't touch medicare, medicaid, social security, the military, there are not enough to cut. >> the big part of the plan is to take all of these government agencies, totally out of control, and cut costs. coupled with a large taxz decrease. it's not for the rich, but they benefit especially if the economy takes off. they are better off, include eing me. >> benefits to the rich in your plan? >> benefits, rid of carried interest, certain things that make it too easy for people. >> cutting the top rates 40 %. >> if the plan takes off, great. even though we're getting rid of carried interest because it's unfair. you know it -- >> carried interest is tiny. >> psychologically very important. what happens is this. my plan is best for the middle income, for the middle class, which has been decimated in the country. they built this country. they have been lost with our politicians for the last 25 years.

i think my biggest impact is to the middle income people. i think we're going to give them great incentive, and i think it's going to be a great plan. >> joining us now with more on presidential race is sarah fagen, white house political director under george w. bush, and jared bernstein at policy and budget priorities, both cnbc contributors, and welcome to both of you. >> thank you. >> the leading figure right now, what do you think about the state tax plan? >> there's a lot of good in the plan. certainly, he's lowering rats, flattening the structure. he has a corporate tax plan, which, of course,llowing money united states. there's good tenants in the plan, but want to see him more specific about the pay force. as he mentioned in the interview with john harwood, he's going to cut these agencies. he did not get in specifics about what to cut. he's going to need to lay that

out in the future, but i think all in all, are good things in here. a final thing, though, on this, it's ridiculous to suggest that people, who are making less than 25,000 individually or 50,000 as a couple are going to send a statement to the i rrrs saying win. it's insulting. it's not serious. >> what do you mean? >> part of the plan suggests if you don't pay taxes, he's going to eliminate one of the brackets issue and people who make less than $25,000 individually or $50,000 as a couple wouldn't pay taxes, wouldn't pay federal income taxes, but they still have to file a paper that says, quote, i win. that's not serious. >> i think that was -- >> come on. >> i think that was part of the hyperbole, wasn't it? >> you know, if i can join in here -- >> yes, jared? [ laughter ] >> i think that's the least of its problems.

i mean, i agree that's silly, but, you know, sarah makes one important point, which is this pay-for issue. now, you know, you're running for president, maybe you're not going to specify every little nook and cranny how to pay for this thing, but according to independent, nonpartisan ab analysis, this costs the treasury between $10-$11 trillion over decade. now now, there's no way he can make that up. no way. that means larger deficits or massive spending cuts that he has not articulated. >> jared, how did you get the numbers? wait, finish your thought on that, but i want to go back to 11 trillion. i've been looking at the plans, hard to come up with any numbers because there's not enough specifics, across the board, i should say. >> two separate analysis, one called citizens for tax justice on the left, and one called the tax foundation, on the right, both of them have very elaborate tax models of the type that all

the professionals use here, and one said 10 trillion, the other 11 trillion. that is what they've come up with. now, look, the other thing, trump said something that was really just flatly wrong, that the middle class does better under his plan. according to the analysts i just mentioned, the cut for middle class family is $2500. that's not nothing, but the cut for the top 1% is $180,000. so -- >> i guess -- >> he does eliminate deductions, though. >> his plan versus the current plan, which think tank weighed in on that, jared? >> that was -- i think they both weighed in on that point. >> well, i think -- >> go ahead, sara. >> the point you make is the right one, becky, which is -- this is very typical of donald trump, is he lays out, and give him credit for laying out specifics, the first specifics seen from him, but there's not enough to really analyze what this plan will do and there have been varying estimates, but there are not specifics, and

until you're going to tackle entitlement reform, you can't get a holistic picture of how you're going to grow this economy, and, you know, he said he's not going to touch zz, so on one hand, you know, jared's right. there's a big plan. on the other hand, you know, he's not going to touch entitlements, so he said at least initially, and i don't know how that squares. >> yeah. i think that's correct, and i simply don't think there's any, you know, jeb has a similar problem, diminished, because the plan, according to his own analysis loses 3.4 trillion, and throw in the economic effects they assume it's 1.2 trillion. none of the people are telling us how to square the difference. i think that's a challenge for them. >> yeah. i think some of the other candidates have said they have forthcoming plans coming on entitlement reform, dealing with

the structural problems we have in the federal government. >> yeah. if you don't tackle entitlement reform, you have to eliminate nearly every other department in the government, which i don't disagree with, by the way, but, you know, i mean, if you got rid of this and commerce and all the other places, maybe you start to approach it, sara. >> i mean, look, that's not going to happen because it can't happen. anyone who runs for president says i'm going to eliminate the agencies is just blowing smoke. >> let me ask you -- >> well, i think there's consolidation that could occur. >> that's different. >> the government is growing, and, you know, we've seen, you know, and in multiple cases you have, you know, six, seven, eight different departments within six or seven agencies that overlap. >> i hate to say it, but the problem is that's chump change. i mean, you may have great consolidation. >> it's the point. do entitlement reform or get rid of everything else. >> it's the mad views of the people who run our government.

sorry, go ahead, i interrupted. >> sara's making the same point. unless you touch entitlements, you can't get to the numbers. >> by the way, the thing about entitlements is interesting. if you look at the increase and share of the population over 65, it is going to grow 15%-25% over the next ten years, so there are these kind of mechanical pressures on the entitlement programs, even if you just held constant where they are, we need more revenue, not less. same with infrastructure. we're going to need more, not less. these plans that cut everything to shreds, you're never going to fix them by tweaking the department of this or that. >> right. >> that's fair, but broadly, we do need a flatter, fairer structure, which will encourage economic growth, jared, and, you know, particularly, our corporate tax structure, the highest in the world. >> yeah, we can agree on that, yeah. >> yeah. and to trump's credit, jeb bush, others have proposed the plans

lowering corporate rates, giving companies a chance to bring that money back in the united states. that's a good thing for the economy, and that will promote growth. >> i agree with you, but i think if we were in a room together, we could figure out a better corporate structure like this. i think the problem is all of the industries who love their precious loopholes stand between corporate tax reform and where we'd like to take it, and no one's been able to solve that. it's not the politicians who are the problem here. >> no. which is probably why you see, sar sara, the three leading in the polls are washington outsiders. they are now at 23%, consolidating the lead, followed up by ben carson and carly fiorina, each with 13%. if you look at the senators, you drop down to 1 and 2% of the people saying they are likely voters in republican primaries who would vote for them. what do you do at that point? >> that's right.

people are just extremely frustrated with what's going on in waurshington, but more importantly, what's not going on, these folks are not getting anything done, and republicans are particularly frustrated, and trump tapped into something that many voters are feeling, which is that they have been completely left behind, and he deserves credit politically for that and politically running the campaign, but as we get into the fall and people focus, trump in the lead solidly, but fell from 30% down to the low 20s, so he -- the shine is off a little bit, and i think you're going to -- >> but nobody else is really stepping up and outperforming by any way, shape, or form. >> that's right. >> carly fiorina's seen gains, but beyond that, well below what trump is polling. >> you know, i thought donald trump made a bit -- i don't know -- i felt what jeb said about trump's tax plan was an

interesting point. donald trump, as sara said and you said, becky, is really, i think realistically showing himself as an antiestablishment candidate, doing well by that. however, the tax plan looks a lot like jeb bush's tax plan and marco's tax plan, it's an establishment mitt romney typical tax plan. i don't know how it fits in the i'm an outsider persona. >> you want a 9-9-9 plan? >> exactly. >> i'm looking for -- when he says i'm going after the hedge funds and the folks at the top and cuts taxes by $180,000 and cuts taxes at the bottom by $ 0 $250, that does not sound like the pow pew list he's pretending he is. >> right. >> look ag ting at the numbers, means bigger numbers for the people at the top, but not bigger percentages. >> just saying if you're talking

about cutting taxes at the top by, you know, massively mm lly than in the middle and bottom, and you're right on the relative percentages, but it's hard to say i'm going after the hedge funds when you cut 1% by 18 0,000 a year. the logic to the average person, i don't get it. >> sara? >> i was going to make a point on the race and the field. the single biggest predictor since 19 80 of who the republican nominee is the number of end dorsmentes a candidate gets, past and present political leaders around the country. i'm not aware of a single endorsement that donald trump has. it -- >> yeah, but -- >> it's possible it's a paradigm shift. >> defying your conventional wisdom. >> like the ross perot movement, but he was never leading in the polls like this. >> trump has consistently defied that conventional wisdom -- >> but it's early. >> every prediction that he's, you know, gone away tomorrow

tends to be dramatically wrong by tomorrow, so, you know, looks to me like he's here for awhile. he can sell finance too, a nontrivial point. >> unfavorables, though, i think are high, certainly high in the general electorate and 30% among republicans, hard to see how at the end of the day after all the debates and primaries are underway he's going to have enough of a coalition to ultimately be the republican nominee. i still believe that one of these governors whether it's jeb bush or chris christie, john casic emerge as the republican party nominee. >> we'll see. we've seen conventional wisdom defied again and again. thank you for joining us today. see you soon. >> thank you. >> cnbc is mohosting the next republican presidential debate at the university of colorado in boulder, wednesday, october 28th. coming up, hurricane joaquin

strengthening in the caribbean, expecting to hit the u.s. east coast over the week. an update next. as we head to break, u.s. equity futures giving up gains from earlier, and right now, s&p opening by 2 points and nasdaq 35. had been much better earlier on. we'll be right back. you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. ...of fixodent plus adhesives. they help your denture hold strong more like natural teeth. and you can eat even tough food. fixodent. strong more like natural teeth. fixodent and forget it.

welcome back. let's get a check on the markets right now, how the u.s. equity futures are headed when the market opens up this morning: you're looking at green arro arrowsinarrows, higher this morning, dow 47 points higher, s&p 500 3.5 points higher, and nasdaq 12 points higher. new york launched a probe into a leak of sensitive information from the federal reserve, according to the "wall street journ," and at issue, they disclosed to clients details about the fed's plans for economic stimulus in 2012, a disclosure, though, that came before the fed's official announcement, and, of course, how do they do that? >> see the defense medially is

using? >> i have not. >> they are journalists. >> oh, right, yes. >> reporters. >> freedom of the press, and, apparently, there's language that exempts journalistic entities. >> for sure. people leak stuff to us all the time, you know, we go to a broad public, but -- >> it was interesting. there's a global news letter read in the united states, india, all over the place. >> do you think yellen thought it was a reporter when she sat down for the meeting? check eye there. facebook launching a slew of new feature, video and time limits so you can shoot short video now for the profile picture or have a baby picture live for throwback thursday. >> exciting. welcome back. hurricane joaquin gathering strength in the caribbean. we are joined now in the bahamas with more. >> reporter: good morning, folks

went to bed, category 1, woke up, it's a category 3, winds of 120 miles per hour. here in nassau, they are lucky. looks like we're on the western edge of where the hurricane is going to come. it's going to be brushed with topical force winds, but further to the east, it's a different story. winds at 120 miles per hour, and areas like long island and the bahamas, cat k, san salvador island, 700 islands in the chain, those in the eastern edge are in worse shape. really some of them are already getting hit. the population centers there are very small. some as little as 100, maybe as many as 3,000 on some of the areas, but for those going through it, it is an ugly, ugly experience, and it can be deadly. the areas there are not built up as well as they are here on this island, paradise island where i am now, but the question is, where does it go? code of uncertainty suggests it

heads up to the washington, maybe into the virginia area, but it is just a cone of uncertainty, so folks should be keeping their eyes open because this category 3 could grow and forecasters say it might grow into a category 4 as it makes its way over open water headed up the east coast of the united states. back to you. >> yeah. likely checking in with you again tomorrow as we watch the progression. thank you so much. when we return this morning, we will have a list of the big movers today, list of stocks to watch is next. a programming note for you, later on "squawk alley," the president of the world bank tackles today's biggest gop political problems from migrant crisis to combatting poverty around the world, that's a cnbc exclusive, and it starts at 11:00 a.m. eastern time.

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welcome back. one quick stock to watch this morning, mixed quarter from mccormick. company's results hurt by the strong dollar. they say full year sales growth would be cut by 5% as a result. we're going to come back in a moment. when we return, a key read on jobs ahead of the employment read, and jobless claims at 8:30 eastern time, and we'll talk about the spending battle now delayed until december.

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earnings season could set the stage for a fright fest. we're going to walk you through what you need to know and watch and kick you off in the last quarter of the year. >> why syria matters to your money, and why you should be worried, and russia's intent and uncertainty on the market. the hurricane expected to bring heavy rains, latest on the storm's path as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first worldwide. we are now less than 90 minutes from the opening bell. futures now are looking up,

thr though, as the show progressed, it's less each time. dow opening 25 points higher, and s&p would open up, rounding up, a point higher, and nasdaq opening up 7.5 points higher. the markets in europe at this hour, a mixed picture. >> breaking news. fiat-chrysler out with the september sales numbers. the total number, up 14%, that was roughly in line with estimates. in other news on the company, uaw members rejected a proposed contract. union leaders had backed the deal, but workers at the company's largest fact tries voted against it. they called the meeting in detroit today to decide on the next move. walmart ready to cut hundreds of jobs at arkansas headquarters, part of the cutting costs, and they are reporting monthly returning to investors, among them david einhorn, dropping 4% in september, and the firm off

17 % year to date. david faber reports that the green lights fund is 92% long and 56% short as of now. einhorn on pace to record the first down year since the financial crisis in 2009. a few stocks on the move this morning, watching shares of the apparel retailer gap. that stock fell yesterday after the departure of stephen larson, the president of gap's old navy unit, widely seen as someone who turned that unit around completely, maybe the bright star in the entire retail e and that's why the stock was under pressure. s&p cut the outlook for gap to negative from stable because of larson's absence. this morning, looks like the stock stabilized. >> did you see the memo that came out yesterday from ralph lauren, so emasculating to him. >> larson? >> yes. the big announcement saying that he was stepping down. next day, so he gets the job, the ceo, next day, ralph lauren says, no, no, no, i think everybody misreported and

misunderstood what's happening. i'm not stepping down, but stepping up. i'm going to remain leading the company. i'm not stepping back, but remaining the chairman and the chief designer, whatever that title was going to be. one of the most remarkable memos ever read, and you have to think, if you just got this job, and you somehow stepped into this thing -- >> you wonder, wow. >> think you'll control the ceo or the title. but depends what he thought he was getting, and putting out the memo as if, like, anyway, fascinating. >> they should have managed release better. i was live on set at the stock exchange what the news broke. all the exchanges, like, woah, ralph lauren is stepping down, like, this is a big moment, folks, et cetera, et cetera, so if that's not the message they wanted, right, exactly, make it clear. >> i think what happened ralph lauren had a president underneath him that managed the business. >> uh-huh. >> i think to get this new guy, they had to give him a ceo title, but i think i'm sure in

ralph lauren's mind nothing really changed. >> oh, i smell trouble. >> anyway. >> twitter close to naming a ceo? #finally. we have more. julia? >> reporter: after a report yesterday saying jack dorsi could be named ceo today. a message sent to employees to ignore the announcement, and the announcement is expected in the next week or so, but it's not necessarily going to happen today. dorsi has been the lead contender of the role of the permanent ceo after dick costello stepped down. dorsey has product vision, and the board initially ruled him out saying only interested in a full-time commitment to twitter. dorsey does not want to leave the post as ceo of square, that filed confidentially for ipo.

if the board apoints him as expected, they have to explain it's about face. many could open the company to shareholder lawsuits for giving investors a false expectation, the twitter ceo would not split time with another company unless, of course, he steps back at square, based on public comments r it's unlikely. if shares rise on news of dorsey's permanent appointment, spiking by the recode report yesterday afternoon, lawsuits are, of course, less likely. we also expect twitter's head of revenue to be elevated, most likely to the coo post, and there are also to be some shakeups on the board with dick stepping down. i've reached out to the company repeatedly with request for comment, and they have not gotten back to me. becky, back over to you. >> julia, thank you very much. broader markets now, expectations for the fourth quarter may be bright after the bleak third quarter showing. deutsche bank's david bianco

forecasts a rally from mid-november into early next year. he did accurately predict summer correction here on the show. joining us right now is david, himself, also covering the economic angle, joim o'sullivan and, gentlemen, welcome to you both. >> thank you. >> david, start be what you think now. thinking later, there's rally from the end of november on up to the immediate future in october. you're not expecting much, why is that? >> well, right. many times we consider it a dangerous summer, scares in october, but expecting happy holidays at the end of the year into early next year. look, there's a few concerns for october and early november. earning season is going to be sobering. again, getting marked down as a profit recession. we have the fed to contend with, and although the fed doesn't do anything in october, they signal a hike for december, but we have to deal with the fed uncertainty until late this week lakely and we have the debt ceiling to continue to watch, but what i

think happens -- >> watching the debt ceiling, waiting for the fed to make up its mind, why november is the thing when the time when things turn? >> a couple things, so i think that you will get some enc encouraging results from technology, parts to consumer, technology, health care, and big banks lead the rally, get good earnings and sales growth reports from the healthy sectors. they signal the hike, and that's what investors want for banks for higher interest rates. debt ceiling is an issue that i'm not thrilled with continuing resolution. i don't like the way it'll be ongoing all the way up to the debt ceiling, but i think before we hit that deadline, something's done, that adds fuel to the rally into the end of the year and early next year. what i do is, although there's volatility until october, now is the time to be opportunistic, a dip in the stronger sectors year to date like health care, parts of tech, and consumer -- >> you're not recommending the overall market, but you are

recommending business? >> we think it's too early to get in there and scoop up energy and industrials and materials. what we see in the economy and jim can elaborate, all yearlong, for more than a year, we have a good service economy, service side of the economy, very challenged manufacturing side of the economy, services, when that does well, creates jobs, and the economy's fine, jobs are fine, manufacturing side of the economy, that's been weak. that's where the weakness and profits are, particularly energy industrials and materials. >> do you agree with the assessment of the economy? >> construction as well as well as services, but certainly manufacturing is the weak part where you get weakness in foreign demand. this morning, we'll get the manufacturing numbers for september, and it probably goes down again, could dip below 50. that's not my forecast, but in any event, it's weak. the non-manufacturing index covering not just services, but construction, that's at 59 right now, even if it is off a little bit, that's strong. you put it together, and you get economy numbers like jobless claims that come out this

morning snoignaling that the economy is chugging along pretty well here. >> that explains of how we feel this two sides of the economy, how sometimes dependi ining on e you stand in the economy, things feel great or terrible. >> the foreign demand part in particular is weak. exports are contracting. we had a hit to the oil industry, of course, the oil drilling numbers plunged in the first half of the year, so that part of business investment took a big hit, but the broad domestic demand side of the economy is generally chugging along well here. >> what's the fed do with that? >> well, if we keep getting what we have been getting, in terms of the overall economy, overall labor market improvement, trend employment is 200,000 or so, and unemployment is down, numbers tighten. that's what they show so far. worried turmoil in markets and globally is going to change the overall trajectory, waiting for more informationi inginformatio won't have enough by the october

meeting, but if it's the broad story in december, they tighten then. >> what would the market do, do you think, if they raised? >> yeah. the thing market wants the fed to move, not because they know something there for validating the economic expansion, but it's that, you know, interest rates are the price of money, and banks sell money. if we don't get higher interest rates, banks are just a significant part of s&p earnings, there's not a lot of upside. >> are you assuming the short end, the long end moves? >> that's right. we expect the short end to move up, obviously, but the curve to basically flatten as this occ s occurs. keeping long term interest rates low is good for the pe, and short term interest rates is good for bank profits. now, i believe if the fed begins hiking now rather than waiting longer, they don't go as high as otherwise would be, and the sooner they are going, the more likely you are low. >> advocate october? even though they are not having the press conference? >> they signal a hike at the

october meeting. >> signal. okay. >> david, jim, thank you for coming on. >> thank you. okay. when we return, urgent military talks underway between russia and u.s. to head off clashes in the syria war. what are russia's intentions and how will the u.s. respond in find out later. preparations in effect, up and down the eastern sea board as the hurricane joaquin approaches. a live report in just a couple minutes about what's about to happen there. squawk box returns in just a moment. why pause a spontaneous moment to take a pill?

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russian air strikes to syria raise questions whether they are, in fact, hitting isis targets, terrorists, or attacking rebels against the regime who are backed by the united states. what's the real motive behind putin's strikes? joins us now is retired army colonel jack jacobs, great to have you here. >> great to be here. >> this is rich, an agreement after putin and obama come out of a meeting last week, intelligence sharing so we are not bombing each other's guys, and then if you believe what happened yesterday, russia bombed our guys. >> well, the discussion was not that we're actually going to have a protocol to avoid killing each other, but set up meetings

to talk about talking about talking without it, and that's exactly what's happened. we -- we actually have not started to talk about setting up meetings. >> forget the meetings to talk about talking about it. >> we might forget the meetings. reminded what happened in the end of the war of vietnam, negotiating, took, like, 18 months for a discussion, i'm not making it up, about the shape and size of the table, and all they were doing was dragging it out as long as they could. what putin will do. >> what is happening here? >> putin decided he and the ally here, iran, by the way, want to be able to influence what's taking place in the region. they want to make sure that assad is not toppled, and if he is toppled, ultimately going to happen in any case, nothing lasts forever, that russia will be in the middle of it, and they'll be able to kidictate wh

things look like. >> willing to do more than we are, right? willing to commit bodies on the ground, not many, but -- >> special forces on the grown and forward observers, only way to put air strikes on the ground, and there's special operation forces and trainers on the ground. >> what do you think of the timing? meaning he coming here, and them leaves and then this happens? >> well, you know, he's a master of theater. i mean, he's -- he's -- you know, he could do great on broadw broadway. perfectly suited for that. >> i mean, it was so perfect, right? makes that speech, they have the photo op, et cetera, et cetera, and then does this. that is, like, par for the course, so we have an agreement about no shooting in ukraine, and what do they do? they shoot in ukraine. >> does what he wants to do. first of all, he's dealing with people who have to think about everything they do, that's us and our allies, and he doesn't have to do that. he does whatever he wants.

>> how premeditated? thinking about it for a month? >> moving aircraft in the region since before that. >> right. >> transport aircraft, tankers, and all the stuff to support him moving in for six to nine months. he's planned the whole thing. >> it's proxy war in the middle east, right? >> we're not doing anything. we had an air strike yesterday, but one of the things this uncovers is the fiction we're actually engaged in getting rid of assad and destroying isis on the ground with air strikes. we have -- we've been doing air strikes, but we have not made any headway whatsoever. isis is still as big as it was before. bigger than it was before. >> what's in the best national interest at this point for the united states to do? >> shut up is the first thing to do. >> because we're talking too much, but not acting? >> we're not doing anything whatsoever. >> but talk as if we were. >> you had the most outrageous

secretary of defense publicly saying yesterday, his criticism of putin was that putin was not professional. that the way russia's been doing it is not professional. if the worst thing you can say about somebody is that he's not genteel in waging war and making you look like a dummy, you got nothing to say. >> what's step up, shut up, and then what? >> i -- what we have to do is make a coalition to influence what actually takes place in syria, and, by the way, i'm not convince. >> me either. yeah. >> if we were serious about it, go up in the northeast, get the kurds together with sunnis, generate a large multinational force that would include the arch enemy of both russia and iran in this, and that's saudi arabia.

we're not going to do it. saudi arabia's not going to do it. united states has no stomach for war in the middle east. you can tell it's fly paper there. >> you know, i guess what i don't understand is, maybe i just don't understand politics well enough, but it's clear they want to keep the u.s. -- the administration wants to keep us out of war. i get that. the american people are not up for it, but if that's your tension, if, basically, you're rand paul like in the view of it, if you talk tough all the time, you look silly. you like hypocritical. >> that's why shut upping works for the guys. >> can't trust what you say. it's terrible. >> it's terrible you don't know what you're talking about. anything with military experience knows everything we've been doing there is bankrupt. talking about how you will not have people on the ground is foolish if when you say that the way i'm going to win this is i'm going to bomb guys. >> all right. i have to tell you, there's wires cross right now as we're talking about this. putin saying russia and the united states plan to set up an emergency mechanism to

coordinate on syria. is this worth more than the paper it's printed on, should we say? >> no, it's not. what he's -- his position is going to continue to be the same. which is what he said many times already. stay out of my air space. i'm doing what i'm doing. stay away from me. do what you want to do, but stay out of my air space, meaning that we're away in the northeast, that's all we'll ever be, not going to do anything further. i -- i -- the -- for putin, though, this is not a huge victory for putin. they've been down this kind of road before. syria is one enormous sheet of fly paper, and he's going to get stuck there and pour more resources into syria. he's not going to be successful because assad eventually goes, nothing lasts forever, and putin, while he thinks he may be able to control who succeeds him, whoever is going to succeed him will succeed in controlling a very small part of syria at the end of the day.

>> when you look at the map, unbelievable. >> god bless him if he thinks he's going to have some fun, but we've got egg in our face because we clearly have a -- we don't have a strategy. all that notwithstanding, putin is heading down the road. >> feels like pakistan of 1980. good to see you -- >> when we -- >> sorry. >> no, it's my turn now. [ laughter ] when we come back -- >> there, you take it. run. >> hurricane joaquin turning towards the east coast, rain, wind, and power outages could be headed your way, more without that after the break, and check out the futures right now, we're back in just a moment. you're watching "squawk box" on cnbc, first in business worldwide.

welcome back, everybody. telling you about hurricane joaquin that's been getting stronger. the storm now a category 3. it's packing 120 miles per hour winds. it's approaching the bahamas at this point, but for the u.s., the track is uncertain. some track it in virginia, maryland, or north carolina, and others track it back out to sea. hard to see where it's going, but in any case, the east coast is bracing for a rough weekend, rain, wind, particularly in the shoreline areas. coming up, more jobs data

preparing for tomorrow's government report, jobless claims come out after the break, and heidi heitkamp will join us, talking about russia, oil prices, and much, much more. as we head to break, u.s. equity futures in the green, dow looking to open 41 points higher. back in a moment. 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.

russian linked hackers tried to access hillary clinton east e-mail five times while secretary of state. this according to new e-mails just released from her privating the. the infected notes disguised as speeding tickets. no word on if she clicked on attachments exposing her account. she's not driven in years. >> last year, said she's not driven a car since 1996, so if she clicked on those, you got to wonder, had to be obviously phishing with a ph. >> businesses are spoochi ispoo ceo ease name, asking for authorization to move money, and people are doing it. it's a real thing. >> oh, boy. >> microsoft and google getting rid of patent infringement against each other, settling 18 cases in u.s. and germany. it involves fights with many

windows products. u.s. prosecutors in new york have launched an insider trading probe into a leak of sensitive information from the federal reserve according to a "wall street journal". at issue, medially global advisers exploosed details abou the feds' plans on economic stimulus in 2012. that came before the feds' official announcement, and, steve, as pointed out before, they said that they are journalist rs and so they were able to get away with this, which is a little bit of a fine line to cross. >> treated like journalists at fed functions i've been at. i don't know that they paid, but treated like journalist. >> interesting insight. >> they charge a fee for their news later. >> newspapers charge a fee. >> we charge a fee in terms of watching our advertisements, so what the difference is, i mean, they definitely seem different from a broadly distributed media outlet. >> when yellen sat down with

her, do you think it was a journalist? >> yeah, somehow, they are grandfathered in. they have been around as rt of the fed reporting core. we have to go, though, to rick according -- >> rick santelli is standing by at the cme in chicago. take it away. >> all right. initial jobless claims, 267 last week, add 10,000, no changes to last week. so 277,000. 2.19 million on continuing claims. that's a drop from 2.24 million. as i look at the markets lining up here, a couple things jumping at me quick. there's no huge surprises here, but, of course, we continue to rest slightly above 2%. bund yields, now to close at 56 basis point, that's a four month low yield. not that that's that long, but it's a significant one,

especially considering how it rose and fell and was close to that four basis point area before liftoff, tied in with quantitative easing. we have want to pay close attention to that relationship, and, of course, the ongoing issues of how normalization, how europe, how china all dove tail in. for the the moment, equity moments are passing along the anxieties into the credit markets. yesterday's bounce seemed to relieve that at least for the moment. michelle, becky, steve, back to you. >> all right. andrew too. >> andrew too. sorry, andrew, didn't hear you. speak up, buddy. >> thanks, man. i hate to use the metaphor people who don't fish don't understand, but the kind of -- the tide stopped going out, but the current is still going. i think what's happening here is that we have this residual good economic and good jobs data from the good economic growth numbers of we've had, but i'm afraid it's going to get difficult from here. let me explain.

the numbers 277 on claims you have, lower jobless claims on average in september than august. all that points to a robust report tomorrow morning at 200,000. however, we did have gdp step down because of the trade data, and other reasons, 1.5% is the running consensus for the third quarter, a touch weaker. there's been high profile layoffs, hp, caterpillar, and now walmart. i don't know how much all that amounts to out of walmart, hundreds. i wonder if there's a right sizing going on for a step down in economic growth here for the next quarter or two and how long that will last to account for the two portions we talk about all the time, lower energy prices and stronger dollar and challenge to the export industries that we have, and i think some of that may show up in the ism data at 10:00, and what's critical is the number could go below 50, suggesting contraction in the manufacturing sector. the other side of the coin is

the strength we've had in the auto sales and the strength we should beget in auto sales manufacturing. that's a cross current. hopefully the hope for the economy here, and we've seen this in the adp report yesterday is strong housing data, strong housing hiring, could offset what's happening in manufacturing. keep us in the 2% growth. >> two different opinions from two different strategists this morning. does the market rally when the fed raises? >> you know, i have no idea. if you really want to know, these actions of the market, they seem tied so definitively to things like china's weaker, markets selling off, the next day, rally 300 points. what do you do with that? the actual fundamentals on the ground of china did not change from the day before from the thing that sparked the market so much. i have a regigeneral attitude t do not determine ultimate u.s. economic outcomes. that's the right way to think about it. despite the spooks and scares we get along the way that i don't

think that china ultimately determines outcomes here. >> i was more talking about the fact that the markets did not cheer when the fed did not raise, right? did didn't cheer. >> didn't cheer. >> we're addicted to sugar. >> joe was sitting here in your chair right there arguing for days and days and days that the failure to raise was the reason why the markets sold off. >> right, yes. yeah. >> now i've got the two year, if you look at it, down at 63 basis points, which is 7-10 basis points away from the level that it seems to get to when it thinks the market's going to hike. i got the ten-year down to 204-205 right now, so, again, the credit markets move away. i'm moving towards the notion of a hike. >> the long end, the ten-year, looking at that at 2%, that's out of the fed's control. no matter what the fed does. >> it is. not the two year. the two year -- they should be adjusting getting ready. i think october is a live meeting, and tomorrow's numbers could be really significant. >> a live meeting? >> meaning they could do

something in october. >> they could do something in october. >> i knew it. >> there's a procedure for a press conference afterwards if they need to. >> you want to handicap that? >> i want to see tomorrow's numbers, waive the date, 24 hours. >> more excited about this than the last meeting. >> no. i was not on the last meeting. >> you were unclear, but this is the strongest opinion i've heard you take. >> it's a live meeting. they want to go. janet yellen's speech, the other last week about hiking rates and inflation suggests she's ready to go. >> i had -- we have to go, but i have a question, couldn't they hold a press conference in object? >> they could. >> not in the december because there's a press conference. >> have a procedure for that. it is live. tomorrow's numbers are significant for the meeting. >> all right. >> tune in tomorrow. how about that for a tease? really, you got to be here. >> okay. the employment report. tomorrow. >> jobs report. michelle caruso-cabrera, wake up. >> okay. >> smell the data. >> thank you, steve.

house set to vote on lifting the oil export ban and the measure is heating up the campaign trail. jeb bush supports lifting the ban to fuel growth and jobs, and democratic candidate, hillary clinton, only supports it with concessions from the oil and gas industry. joining us with more on this is the sponsor of the bill, senator heitkamp of north dakota. good morning to you. >> and to you. >> what can you do to get hillary clinton behind this, if you care for her to be behind it? >> i've been really focused on getting something done right now, which we were dealing with the white house, dealing with my colleagues in the democratic caucus who show a lot of willingness to lift the ban, willingness for discussion, but it needs to be a broader bill. that's what i've been talking to the industry about, talking to the republican sponsors about -- >> what does that mean, though, broader? >> has to look at something for

renewables, take a look at something for energy efficiency. it's going to have to be something that's not just focused on the oil and gas industry. >> now, can we turn attention to the import-export bank? >> oh, yeah, you sure can. >> where does this stand? what's really going to happen here? >> well, i think the good news is we understand that they are moving with the discharge petition, which i think there was in the house which was hesitancy to do as long as speaker boehner was going to continue as speaker, no one wanted to challenge him in that way. we have a free spot before he resigns. i think that's a good sign if we can get a discharge petition, get the vote, get it over here so it's incumbent on us to get majority vote here and get it done. >> what do you think -- >> i don't know if you saw that boeing is announcing there's over a billion dollars worth of sales in jeopardy overseas because of this problem. >> the implications of boehner leaving, long term, in your mind

-- >> what do i think? >> yeah. >> i think it's more of the same. i think it's an ungovernable conference. i think that until they actually completely have it out, i think he's right to say they're false prophets. his frustration level reached a point where he knew he couldn't lead the conference. i think there's some hope that mccarthy can, but at the end of the day, how the american public views this institution seems ir irrelevant here, it's not getting done, it's costing the economy $28 billion last time we did it, or the congress did it, and we just can't seem to put the people and our economy ahead of our politics, and that's enormously frustrating for a lot of us who actually want to get things done. >> headlines this morning about putin who actually just came out and said he's going to have an emergency meeting, of course, after he launches air strikes, came here to the u.s., had

conversation with the president, all looks like a bit of theater. what should the president do about all of this? >> i think the president should lift the ban on oil exports. that nay sound -- you know, there's a lot of ways that we can push back. we can try to contain what's happening in russia, but the easiest ways to contain what's happening in russia is compete with them for oil markets, and so, for me, the oil export issue is not just about national energy security, it's not just about making sure that our production industry is healthy, but it's also about using this great technology that we have for a force of good in the world, make sure that international communities who are favorable to us can buy oil from us and not russia. >> i like the way you brought that all back, but is there anything else we should be doing beyond that? >> well, i think -- i think that the sanctions are, obviously, hurting. i believe the sarnnctions are hurting russia. depressed oil prices are clearly

hurting russia. they are a one note economy, and, you know, i know you think that i'm dodging it, but i truly believe that most impactful thing we can do is actually export our oil. >> watch for that, and we appreciate it, senator, great to see you. >> thanks, andrew. >> thank you. up next, a new study how long it takes to reach gender equity, and when it says about the future of women in the workplace is next. the number may shock you. later, september's expected to be another impressive month for auto sales, other than one auto maker, guess which one, preview the numbers and talk sectornomics in just a bit. try the superior hold...

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welcome back, everybody, corporate america is not on a path to gender equity according to new research. in fact, they say at the current rate we move right now, equal representation in america is about is 100 years away. eric kutcher, director at mckenzie and company, and part of the firm in the west coast practice. thank you for being here today. >> great to be here. >> lay out the study you did, 118 employees, how many employees over how much time? >> 118 companies all north america based divisions of very large companies, mostly fortune 500, and then we did an attitude survey of 30,000 employees from that group, so it was a broad viewing. >> when you say c suite, it's the ceo, cfo, coo?

>> exactly. all of the ceo and direct reports is the way to think about it. >> the management team. sheryl sandberg laid it out. if nasa launched a person in space today, she could soar pass mars, travel to pluto, and return to earth ten times before women occupy half of the offices. a reason to say that's how far away this is. we think we're making progress, but what did you actually find? >> yeah. i think the notion of it taking a hundred years really is a statement of the lack of progress knemade, right? we did a smaller version in 2012 comparing where we are today and compared to where we were in 2012, and the answer is we have not moved much. >> why? >> there's a number of reasons, focusing first on the more positive. many assume it's because women leave the work force, and women tend to stay or going less than men, but in the roles longer, bigger in terms of the women's

attrition and men as attrition. >> of staying at the company. >> yes. i think the biggest reason is it's not a level playing field. >> hold on. a couple has a baby. my experience is that if somebody's going to stay home, it's going to be the woman, not the man, right? happens less, but saying it doesn't happen or -- >> it's interesting. the data does not bear it out, number one, and number two, we looked at ambition gap, do i want to be promoted and grow into a senior role? after having children, women are more likely want to grow into the role than not. these are things from the data and the -- >> so you found women did not leave more once they had a baby? >> that's correct. >> does that have to do with the levels you are looking at, management on up? >> looking at entry level up to the c suite, looked at it by -- >> so counter to what anyone thinks. >> it's a big finding. >> okay.

>> when you interviewed them, did you try to understand what's going on? >> we department do interviews in this case. >> no interviews, okay. >> purely empirical of the 118 companies and their pipeline and did a attitude survey of the 30,000, and in the attitude survey, having children led to a higher desire to grow into senior roles. >> immediately after having a child or later on? >> we don't know. we don't have that. they filled out overall, before and after, and then, also, obviously, people who had children and didn't have children, and look at that gap. >> what do you think is happening, then, if it's not women staying out of the work force, what's keeping them from getting ahead? >> this is an interesting finding was while we're not making the progress overall in the pipeline, a huge gap is in line rolls versus staff rolls. look at what leads to the c-suite, it's different. >> the ceo, the head of the

business unit opposed to -- >> that's a line role? >> the staff role may be the head of the strategy. >> or head of human relations. >> hr is a great example and i.t. looking at difference, men and women start off in sort of similar positions in line rolls, and, again, line rolls had higher propensity to move towards the c-suite. over time, women tend to -- women don't get promoted much more into the staff, and line stay in the line and grow in the line. that becomes a big reason why, right, we are not seeing growth in the c-suite. other thing is when you look at women in sponsorship and networks and networks are really important to get promoted, right, if women have more women in their networks, and those networks tend to have many many staff roles, the whole process is not there. that's another big piece from this. >> quickly, on the network

component, at a company where there's a lot of women, but not even a lot of women, but certain places, do you see a whole lot more? >> so in terms of the actual network, men have almost predominantly male networks. women have networks that are mixed and predominantly women. when you look at the impact, it puts too much a burden on the ceo women. they can't have the same level of network and mentorship for the women throughout the organization. it causes a lack of just pure numbers for the seniors. >> all right. eric, thanks for coming. >> thank you so much. >> when we return, we'll go under the hood of the auto sector sales data due out later this morning. how healthy is the sector, and what's that say about the state of the consumer? find out right after the break, and, also, a programming note, the world bank president jim yong kim joins the crew on "squawk alley" following our show in an exclusive interview

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auto makers reporting september sales. phil lebeau joins us. >> a day of really strong

numbers from the automakers. we heard from fiat chrysler. up 13%. a very strong number. the sales pace is what we are going to look for in december. most believe we are looking at a sales pace of 17.7, maybe 17.8 million exceptionally strong and almost every automaker will be reporting double digit increases with sales with one exception. volkswagen. we all know the story in terms of what's happened with sams over the last week and a half. we are starting to get the first numbers. we will get more within the first half hour. expect really, really strong sales numbers. 17.7, that's the pace most are expecting for the month. guys, back to you. >> at the worst part of the crisis when all the auto executives were begging for money in front of congress, they were desperate. it was 10 million cars per year was the average sales. they were hoping that someday, it might go up to 13, right? >> that's what they were hoping

for. remember, michelle, this he reset their cost models to be profitable at 10 million. that's why when you look at the uaw negotiations right now, these unions are saying, wait a second. you were set for $10 million and now the pace of 17, $17.1 million. things need to change. >> explain this v.w. number to me. is this because they had to pull the cars or because americans are rejecting the cars? >> combination. partially, because they had to stop sale of order and you couldn't sell diesel, which is about 25% of their sales but also this is a brand that just got battered within the last two weeks. i have heard from dealers saying it is tough to get somebody to come on the lot to look at a nondiesel volkswagen. >> were these numbers as bad as they were expected or more than people were looking for for decline in sales? >> we haven't got the full

number on volkswagen. >> we are showing people estimates on the screen. apologies. >> if they are down 2%, 4%, that's what most people are expecting. they fell off within the last week and a half. that's when you go into a v.w. dealership and they saw a huge dropoff in sales. >> all right, phil, thanks for calling in. these numbers will be coming out throughout the day. looking for the v.w. number. super interesting. >> we have stories that will have you buzzing this morning. that's coming up next, "squawk box" right here on cnbc. we'll be right back.

welcome back. stories that caught our attention. a volcano in western mexico erupting again this week. this is time-lapsed video. showing it releasing lava and shooting large columns of ash high in the sky. authorities describe it as normal. it is also known as the fire volcano, one of the most active in mexico. >> people aren't hanging around

it, are they? >> you can drive around mexico and watch that. >> you can go right up to the lava, which i wouldn't do either. >> cool images out of china. the country's first high altitude glass suspension bridge is now open to tourists. >> i would never. >> you can see down the prinlg. >> like over a canyon, which is 591 feet deep, 984 feet long. china's state news run agency said designers changed the original wooden bottom of the bridge to trans parent glass. >> is there a weight limit on that? >> if you've been to an apple store with the glass steps, i don't like that. >> it looks like they are all wearing special shoes. >> do you think that's just for the day so they don't ruin it the first time? >> i would think you never get to wear your own shoes. >> probably more than you scuff

it than break. >> i am afraid of heights. i would throw up, couldn't do it. a new poll showing that 40% of mellenals pay for news. it includes print newspapers, a digital news app. how does this compare to other spending? 80% say they pay for entertainment service such as netflix. 13% of millennials say they don't pay themselves but use somebody else's subscription. >> mommy or daddy. >> or a friend. >> that would be true of netflix. people are sharing pad words. all sorts of people. you could be on a millennial, up to 30 years old. >> in fact, here is proof of it. another millennial statistic. half of millennials don't feel a

need to put a ring on it before merging their finances. half of them merge finances before marriage. that compares with a third of the boomers who did the same thing. >> i don't know. >> donald trump says get a prenup. >> make sure you join us tomorrow. "squawk on the street" begins right now. michelle, thank you. good thursday morning. welcome to "squawk on the street." i'm carl qintanilla, simon hobbs, david faber. sarah e sar sara eisen is in washington. we kick off the third quarter with a decent market. we are keeping our eye on the ten-year where the yield is now below 203. that is the lowest in a month. our road map begins with twitter. tara swisher reportingha