to being a bartter economy. we know that did n >> great to be with you. >> thank you. >> jay leno, ben carson and you. >> thank you. >> that does it for today. join us tomorrow. right now time for "squawk on the street." good wednesday morning. i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the month of rocktober continues. yum, adobe and this morning monsanto reporting. oil has not closed above 50 since july, awfully close to that now as we get inventories. our road map begins with yum brands down 15% on trade with

results that came in significantly below expectations. >> sabmiller rejects inbev's takeover offer saying the 42.15 number is still below what they want. >> first up, yum brands will take a hit in the premarket. the home of kfc, pizza hut and taco bell missed with third quarter results. greg creed says the pace of recovery in yum's china division is below expectations. in q3, we were looking for a 9.6 number. they used the words unexpected headwinds, despite everything we know about what is going on there. >> let's understand -- i know david tweeted what does this say about china growth. i say what does this mean about

execution? nike is selling a lot of shoes there. starbucks has had a fantastic run. apple is selling well. samsung, verification of that. samsung's business strong with apple. this is inexplicable. i think people are tired of it people are tired of the breakup story, the sum of the parts, when will it happen? you don't break a company up when the business is bad, because we just get a bunch of parts we don't want. i question kfc and its execution. i question the long-term love that the chinese had when they used to get married at kfc. there's a secular change. >> what i tweeted yesterday is whether wanted or not, it conceivably will raise questions about the consumer. your point is the right one from what i'm hearing this morning and others are upset with the company about their own communication. pointing out, i think it was in august, august 18th with 2 1/2

weeks left in the quarter, they said i'm especially pleased, this leadership transition comes at a time that same-store sales have turned significantly positive demonstrating continued recovery in the business. there are those saying there are only 2 1/2 weeks left in the quarter, it was this bad and you were saying that? >> shocking to me. they just lost control. that's how you feel. there were two companies that reported last night after the close. one was adobe, they issued what i wanted to see. stock went down 10. yum issued exactly what i wanted to see, down 10. adobe should have been up. yum is correct to be down 13. i think there are activist hedge funds here who took the plunge, not up like macy's and forgot the numbers do matter. they do matter. >> 12% div hike. bernstein today saying the pressure to unlock value starts anew. you don't think losing taco bell helps? >> taco bell was one of the few

things that was good. i went by a taco bell with my daughter this weekend in oregon. she didn't say that's the worst place on earth. she said they're trying to make changes. taco bell is showing some life. there's a pulse there. >> you don't see that as the downstream to alcoa, for instance? >> no. i would much rather use alcoa doesn't -- they actually have a 3d product, alcoa is a technology ycompany. yum, when you go to a european yum, not up to snuff. easterbrook is taking a brand, you know i'm a fan of easterbrook especially after that conversation we had. after i compared their big mac unfavorably to goodyear tires. mcdonald's is making a lot of changes. yum is making changes but going in the wrong direction. i'm not there for this. >> i didn't see that number

there. let's call it 70 bucks, maybe below that? >> yeah. >> still talking around a 20 multiple -- >> how is that possible? is it chipolte? >> my question to you then is what is an appropriate multiple given what we're seeing from this company? hence where should the stock be? >> when you have a shrinking earnings base, it's hard to come up with a multiple. i would tell you that to have that level of multiple in an uncertain environment seems wrong to me. that's a takeover and break up premium. if you have to look at this company as a regular restaurant chain you would put it in the bottom quarter. >> to be clear, you don't expect as earnings start to come in that the nikes and starbucks of the world to confirm what they're saying -- >> totally the opposite. yum, i love david novak. i know david ran that company well. there's a transition that happened. these -- this is unacceptable.

really unacceptable to give that guidance. when i hear that, i immediately think, not that they were lying, not at all. just that they didn't know. >> something is very wrong. >> wasn't like the last week suddenly everyone decided to go chicken-free. some sort of vegan thing. you know, that vegan thing? they do that thing? where they lose a lot of weight and stuff, eat protein pills? >> all right. you mentioned activist investors. dan lobe owns a big stake and corbex a sizable stake. both of which will see significant dimmunition of the dollar stakes. >> i will contrast that were starboard. starboard went into darden, green field. you still can't get into an olive garden. i have a show on cnbc, i have -- i have been on the today show. i can't jump the queue there at

olive garden. you ought to try it. unlimited salad. >> wear the cargo pants, those rolls, you can take them up. yum brands didn't have a lot to work with. david, i'm disappointed in the actual forecast than i am more in the decline in sales. >> all right. let's move on to beer, shall we? of course being goings on. >> it's early. >> sabmiller rejects anheuser-busch's inbev's sweet takeover. sab says the latest bid substantially undervalues the brewer. altria comes out and supports that proposal. it's 42.15.

42 -- something like that 4. 41% of the offer is in ab inbev stock. that has an effect of bringing down the overall value. this was pointed to in the press release in which sab says we don't believe this values the company where it deserves to be. when this began, there was much expectation we might get a price around 42. many thought that price was appropriate for ab inbev. let's step back and tell you where we are. one week to go before october 14th, the drop dead date, if you will put up or shut up. if the board says no on that date, there's no engagement, it's possible that this -- they will go away, ab inbev. it canning extended by the board

of sab that put up or shut update by two weeks at a time. but it's unclear whether that will be the case if they can't reach something between now and then. at this point, judging from comments on a carlos call that's been ongoing, there hasn't been much engagement of any significance in terms of making progress. they said no, no, no. no to 38, no to 40, and no this morning to 42.15. of course arguing 42.15 is really not that number because the huge component of the stock part of it, if you will, designed for altria, which is going along, and the santa domingos which aren't. alejandro santo domingdomingo. if you want to find out what's happening here? find that guy. he's on the board of sab. continues to be. >> he is the world's most

interesting man at this moment? >> he may be. and on the conference call they said the santo domingos are not on board. the question is why and what are they trying to accomplish now in terms of really saying no or trying to get a higher price in the next week out of ab inbev that satisfies them and can be used to bring the rest of the board around. the strategy, jim, had been on the ab inbev side, let's get altria and the santo domingos on our side. once we get that -- really, they have six boards, seats between them, we'll get the rest of the company. santo domingos are not on board. that's the key question here in terms of where this thing goes. >> david, people at home, they listen, they say what do we do. i want to know this. does this raise the possibility that tap, coors is going to be a big winner.

constellation brands reported one big blowout number. i want to buy tap. >> you do want to buy tap if you think there's a likelihood that the deal happens. if the deal doesn't happen, none of those transactions occur, many people have played the prospect of this deal by actually buying tap, as you say, because they believe molson c e coors will be in an adavvantages position. there's seven days. they won't answer the question specifically, will you go hostile? will you bring a tender offer to shareholders directly? i heard all along, no, they most likely not. they want this to be recommended by the board. they want this to be a negotiated transaction. it becomes difficult to bring a hostile offer given the sizable stock component that they have designed specifically for the

santo domingos and for altria. it's a five-year lockup from closing. 41% of sab shares, a separate class of abi shares as well it can then be converted into ordinary shares one for one at the end of the five-year period. there he is, find that man. alejandro santo domingo. he holds the key. they have two board seats, the santo domingos. they are very close to 3g. clearly at this point, and breedo said it on the call, we don't currently have their support. they are the key t seems to me to bringing the rest of sab's board into line, perhaps, if they do agree. what's the number? they haven't said best and final. is it 43? 43.50? where do we end up here? the clock is ticking. >> if it's good enough for altria, why not good enough for alejandro? >> good question. >> altria, very smart question what is alejandro's card here? >> i think saying no.

>> wow. this would be good for the whole industry. he ought to wake up and smell the hops. >> then again, you're 30-something years old. nice looking good. >> i'm a 60-year-old guy, not that nice looking, he should take the deal. >> alejandro, welcome to join us on post nine. any time. we'll talk to him about what he's thinking. >> you think he's up yet? >> i have no idea. >> was he up all night? >> maybe he was. >> ernie herman expected to be ceo of the company. >> the best retail ceo of tjx. she will not come on. she will not hype herself and say how great she is. look at what she has done with that stock. she's so, so good.

i salute you, carol. i wish the best. sorry, i don't want to buy the stock as much now that you're not involved. yes, i have clothes on right now that i bought at tjx. i'm a constant user of their product. home goods? you can't see them! that's the point. i could show you during the break. >> maybe not. maybe not. >> maybe that's too much information. >> more morning is getting more exciting by the moment. we have gotten the beer already now underwear. when we come back, saudi prince alwaleed doubling his stake in twitter. should you follow the prince's lead? we will get pierce storage today. monsanto laying off a good percentage of their work force. more on that when "squawk on the street" continues. that man? dad: he's our broker.

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going to join the dow joins transportation average on october 14th it will replace conway. american air up in the premarket on that news. actually will increase the weighting of airlines in the

index. reflecting the larger total market cap of companies in that subgroup relative to, say, trucking. >> that's a shame. i think trucking is is a better indicator of the economy. that's why i look at the transports to confirm the dow. you have to be careful with these stocks. oil is really shooting up. you know, look, we're set up to have an up opening. i have to see the drug stocks bottom. the airlines, they were terrible yesterday. i'm looking at those key groups. i need to see the high growth semiconductor go down. those are been the core weakness. biotech has been horrible. i'm not buying this. this opening is guilty until proven innocent, particularly american air and united. >> we'll watch that closely. a story i know you're interested in, saudi prince alwaleed and his investment hold having doubled their stakes in twitter, according to a statement from the prince's office. together they own more than 5% of twitter, that's a total of 35

million shares. it's more than ceo jack dorsey owns. what do you think? >> it's great to see someone buying, not selling. i think, as you have, those of us who have been -- moments is exciting. perhaps the prince feels as some of us do, this was a product story. how do you lure the people back, l-u-r-e -- i'm from philadelphia, i apologize -- lure people back. the prince is someone i have been following historically, he's always ahead of the game. delightful man. >> he never sells. he told me that eight years ago in an interview. i will never sell. never sell. that was more of an -- he was trying to bring up the insider selling at twitter versus -- >> when you have him as a holder, you can bank on the fact

he'll be there. i think he still owns citi. >> i will tell you that the guy has got a great reputation of picking bottom and twitter has been in search of a bottom. i've been reaching out to jack and anthony to give them kudos. we'll look and see what people are saying and may want to see. >> it's gotten good reviews, we need the ad buyers to follow. we need adam bane to say how they'll make money. >> if you build it and the viewers come, they will come. i think it's a very exciting buy. i've been tweeting since 3:30 this morning, and i am only tweeting nice things. my daughter taught me -- i learned so much this weekend. you learn so much from your kids. it's very simple.

twitter twitter, if we amake it a kinde, gentler place -- >> that's why instagram has done so well. >> i feel like a cowboys fan sitting in the linc, the beer poured on me. no, we get the beerpour ers away, we get a better twitter. you get me? >> i do. >> you do? >> i do. >> pure storage going public at the big board. we'll get you that opening trade and the ceo later this morning. we've got trouble in tummy town.

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♪ >> all right. time for mad dash on hump day. we will go back to beer but a different company. >> rob sands, who is the ceo of constellation brands, was the beneficiary of a big justice department give which was the modell and corona. he has taken them to new heights. he's a great operator. those who know him know he's on a great operator. look at this number here. beer net sales increase 14%. volume growth, they are -- get this -- amazing. they represent 45% of total u.s. beer industry volume growth. >> wow. >> the hardest thing when you're running things, keeping it in

stock. david, i only have two taps. i don't need more taps. they are my best seller and it is for a lot of people in the country. this company has the leverage. >> by the way, it was over here. so it's -- >> yeah. a lot of people here. talked about tjx. this is such a good company. >> yes. >> it has all the momentum, but it shows you consolidation in beer, if molson coors gets it. if you are altria -- >> if ab inbev prevails, many divestitures will have to take place, including molson coors and sabmiller were sabmiller would sell back to molson coors. >> i the justice department, i

wonder if they know ipa is a beer? ipa tastes like a bread. >> does? >> yeah. a little cornmeal. i like beer, as beer should be. corona. >> we have a lot more, not just on beer but other stocks and other things to watch on "squawk on the street" after this. [announcer] you're on the right track to save big

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. you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in less than a minute. some decent numbers out of the european stock markets. the dax up more than 1%. china remains closed. people ask whether this early october rally is legit while china is closed. >> yum, some people might say yum, the consumer, is not that strong there. but when they open, it is going to be whether the morgan stanley

upgrade today of bhp and rio, is that real? that means that glencore is off the hook, that's copper. >> we'll hear some volume from the floor today. this is pure storage leading the opening bell. celebrating its ipo. we will talk to the ceo of that flash storage company. i'm told they brought in at least 100 employees and guests. this is a real company with real customers, conoco philliped, f. they can do cloud. people will say, jim, 174 million in revenues. 183 million in losses. i hate to say this, it always comes back to bite you, sometimes companies are growing

so fast, it's okay to take the loss this is one of those times. >> one of the companies we name to our cnbc disrupter 50 a while back. a number of which companies on that list have gone public, twitter, box, lending club, etsy and now purestorage. hopefully they can have a smoother ride. we have this weird dichotomy, we have microsoft and intel stock moving higher, and we have the skyworks yesterday doing poorly. where does this fit in? the more aggressive workday category, the highest multiple growth stock other than the palo alto network security stocks. we have to watch this this could be a tale of the tape. europe, the guys in pajamas don't know what they're doing. europe is up because the dollar is strong. the pajama game continues. you can't trust them. >> i assume your eye on oil once again, we're above 49. >> that helps take off the

pressure of the high yield market that david always keeps in front of us. i'm not wearing the orange tie because of purestorage, the wife picked it out, but it does jive. thefr >> they are all in orange. energy, we mentioned oil just now. i mean, it doesn't mean that you won't continue to see the potential restructures we've talked about for quite some time. and/or mma. i keep waiting for the big deal in energy, it doesn't come. >> no. these guys -- i remind people this is about selling futures to bring in income. when oil perks up like this, you can sell futures. make no mistake, there's a glut. the production is coming down. this number may reflect more geopolitical tension. but there's a lot of oil hanging around. if you can keep those companies afloat, you will not get a bottom in oil but you won't lose all that money in high yield. >> right.

>> remember, a lot of people are calling this the carl icahn bottom. >> high yield, last week there was not a high yield issued for the first time since '09. >> is that true? >> i believe so. >> today the journal reporting on loans that are sort of hung up. i think it was goldman and jpmorgan leveraging loans, full beauty. so there are some issues there. high yield, we'll see if it moves along again. >> can carl come with his two new directors to freeport and make a difference? they're a worry. >> another 6% on fcx. i'm struck, jim, the biggest losers in morning are all earnings related. yum, adobe and monsanto. the estimate is for s&p earnings to drop. >> monsanto is bad because ag is so bad, brazil is so bad.

biotech, no earnings related, and this group can't get out of its way. yum is terrible. adobe, i don't know. they gave me everything i wanted. they're spending to win. >> what a week ge has had. it had continued momentum, general electric, after the trian announcement on monday morning. yesterday up again. this morning up another 1% is ge. doing what immelt wasn't able to accomplish, it did move on the ge capital announcement and fell back on growth worries quickly. we'll see if it can sustain this move as a result of trian's $2.5 billion i investment. >> if they do buy back the stock, i think it will be added to earnings. 19% of the company was oil in china, until a few days ago, we hated that. it was absolutely the worst performing commodity in the last quarter. now it's starting to percolate.

china, we hated rio, glencore, they're going up. tesla, we're back to levels that we last saw in august. down another 3% today. yesterday was morgan stanley cutting their target to 4.40. today baird cutting tart get to 2.82. their note is a little less -- little less tough. they can't to keep some dry powder and come in at a lower entry point. >> a lot of this is the new model and how well it will sell. this is a cult stock. if consumer reports comes out and says this is the greatest thing since sliced bread, it will go back up. it's a cult stock. i don't rule on it. if you're freeport would you announce going from 16 to 9 yesterday and then today the other two -- couldn't you have waited a day?

>> they never impressed me as being brilliant. though the son of the owner is brilliant. big beer distributor. that's a good business. >> it is. you mentioned it, we mentioned t you see at the bottom of the screen. carl icahn, yesterday freeport went from 16 to 9. they added two icahn nominees, andrew langham and courtney mather have been added to the board of directors. back to 11. nine independent and the two i just mentioned. we'll see whether it helps. >> directors per share, doing a little better. david bernstein out with a note talking about myelin's acquisition of perigot is questionable. >> what is questionable. >> i was going ask you. >> the october 23rd is the date under which perigot will have to move if it wants to buy some other company. that seems unlikely. if they did so, they would have to schedule a shareholder vote

it would take place after the tender that mylan has underway. so-called frustrating transaction would require a vote under irish takeover law. a lot of this will depend on mylan stock prices and the active investors who look at the potential spread there as the tender comes closer to closing, saying if i buy more and get it over 50.1% i can capture that spread quickly. mylan has not done a great job getting the stock price moving in the right way. caught up in the drug price concern as well. >> i think perrigo is a buy. >> the only way it's off is if they find somebody to buy them. >> one thing i'm seeing is the micron effect. mu reported a bad number and the stock rallied. monsanto, it is trying to rally.

caterpillar up about where it was before they announced that hideous number. there's a hope spring eternal trade that china will open up big. >> yeah. you know freeport month to date gain? 33%. since the beginning of october. >> were people who were betting against that. oil is flying. they are an oil company. they're a copper company. copper some people think is putting in a bottom. a lot -- the story behind the scenes people at home -- people keep saying china is making moves that is working. it's golden week. my life doesn't change from golden week. many hedge funds do the word is that the rio and bhp upgrade by morgan stanley is having an impact and people are buying what they hated not that long ago. international stocks based here that are industrial and minerals mining and oil. this is what went wrong in q3 is what is going right in q4. >> shares of viacom, it's always

interesting when the journal and the times have the same story more or less on the same day. clearly people have been focused on what may occur there. we have talked so often about this being the company that has suffered the brunt of the impact of the change, is that have been taking place and viewing habits across the country. we watched that stock decline dramatically, talked a lot about sumner redstone. always interesting, no surprise you might be working on a story, you hear your competitors will have it, you run yours. front of the business section in the times, front of the paper of the wall street journal about continued potential pressures in the boardroom. you can't wonder why people are questioning why felipe dumont should keep his job. we'll see what happens. the journal story said that redstone took a mental competency test about a month ago. and passed.

otherwise, nothing that new. >> mental competency test. older gentleman. >> his 90s. 92, 93. >> listen, the thing got down to about a six multiple. >> that's ridiculous. it does have cash flow. look there are stocks down so much that are just -- i'm watching bp go up. bp. justice department -- what is going on up here is coiled springs. watch biotech that has to turn around. >> mcdonald's is down. >> that's guilt by association. >> so is nike, off a third of a problem. >> it's a yum problem. i love nike. that stock. what a quarter that was. >> yeah. >> i'm watching this monsanto. when i look at these companies that do the layoffs, suddenly are layoffs good?

caterpillar did layoffs, people think they're saving money what we hated in q3 we can't have enough of in q4, except kentucky fried chicken. >> dow up 129. let's get to dominic on the floor. >> again, behind me here, what's happening with purestorage, waiting for some of the action. some of the wheels are turning, matching buy and sell orders. for the markets generally speaking, a dow, s&p 500 and nasdaq working their way off the turmoil lows. that was the closing low back on august 25th. if you look at the international markets that will set a tone for what's happening on the floor. markets in germany, france, of course in asia as well, all posting solid gains so far to end the session for asia, and still progressing positively for the european forces so far right now. if you look at the sectors that we have -- we will be focusing on. you mentioned oil and gas, the energy sector. it makes up about 8% of the i

d ndex of the s&p 500. in that way it has a solid weighting. you can expect some of the oil and gas companies, apache, chesapeake, mining companies, certainly a focus again as a barometer for what's happening with the overall markets. then, of course, we have to mention what you guys are seeing now, the big crowd of orange for the employees and affiliated people, but also marketmakers and other people with purestorage. just to bring you up to speed, selling 25 million shares. 17 bucks a piece. that's the mid point of the expected range. values the company at $3.9 billi billion. we're still waiting for an indication on whether we can see this open here. 25 million shares for sale. they'll raise about $425 million. we'll bring you all of those details when they start to show

some action on the floor. >> they definitely packed the room today. we'll come back to you. let's get to the bond pits, rick santelli is in chicago. good morning, rick. good morning, carl. we see on the rate side nothing urgent in terms of range movement. there is an ongoing rate, and one could say it's associated with the stabilization of global equity markets. and a post-fed environment where tightening seems to be a pipe dream at this point, at least in the eyes of the markets and investors. we know they carry a lot of weight these days with janet yellen and company. may 1st, short maturity. the three-year, you can clearly see we're hovering at areas that not only have support but look at the formation there, contrast that with the long maturity of the 30-year, which is at a bit of a higher place. remember, it never joined the other maturities in trading below what was 275 at the end of last year.

let's look at a spread. long end versus the five-year. the fulcrum of true finance. the 30-year yield has been more buoyant than the five-year yield. that's converse to what you normally see in a cycle where the fed is in the box to tighten. there's a lot of cross-currency that maybe tightening is there or quantitative easing could be next two day of tens. very important chart. we're up in rates a bit today. should we close here the highest rates of the week on pretty much every maturity. in the context of yesterday's highs, if you start to get into the 2.09, 2.11 area, you will see some selling in treasuries. dollar index, so much talk. everything is wrong with the corporation, multinational or at least in some part blamed on the dollar. i don't know. let's be more objective. if we look at a dollar index chart from the end of 2013, we

could see the dollar index clearly had a big move higher. but tighten the chart up a year to date of this year. i'm sorry, for the most part, especially after the march highs it's been in a range and in a range going nowhere quickly. if we look at crb, we know commodity route, glencore is the poster child for everything evil in the world. but this chart looks like it's really challenging some tops now. so we want to pay close attention. carl, back to you. >> rick santelli, we'll come back to you later on. we are on ipo watch at the big board. waiting for flash memory company pure storage to open for trading. when it happens, we'll talk to the ceo. in the meantime, dow is up 132. this is the highest since september 17th. dow on track for the best week since february. back in a minute.

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. hasn't been the best summer for tech ipos, pure storage will try to demonstrate that was an outlyer going public today on pstg. mid point of the range at the offer price, market cap over $3 billion. a name you're interesting in. >> yes. they've got a flash storage which has been the holy grail. i've been waiting for this. a lot of companies were trying to get in it. they own the space. when i see linkedin, linkedin can use anybody. conoco phillips. it's a real company. i know it's losing money, but it's got what i want to see, pure growth. let's see if the market -- the market likes this, it will return to the pure growth it's hated since the quarter began. >> does that set up a quarter where the ferraris and the squares and the first datas and the albertson's have an open

door? >> i would say for first data, yes. square, yes. albertson's needs kroger to go higher. it would be a huge sign that people don't hate growth if this thing goes up. the selloff yesterday in skyworks solutions, where they preannounced a better than expected quarter, people still hated it. and they have the love for intel and microsoft. we don't even talk about those companies anymore. they've been red hot. the money needs go back to growth. >> interesting. amazon with their web services event in las vegas today. john fortz there. >> that will be very good. we need to see those stocks move. it's been a rolling bear market. that's the way i look at it. the rolling bear market yesterday had everything from bristol meyers which is something when that stocks get in to the drugstore chains to biotech. pstg, if it had been public would have gotten slammed. that's how bad the group has

been trading. >> still no indication on it when we get one, we'll tell you. we'll get stop trading with jim. dow up 140. "squawk on the street" will be right back.

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dow up 141 led by

transports, even with oil up almost a dollar. that's interesting. >> that's very important. >> we wait for stop trading. >> juniper has been going up. jp morgue within a piece saying it's considering going private. it would be a big deal. i don't know a thing about it. juniper is another one that hasn't done anything in a long time. kj, kevin johnson, number two at starbucks, doing a good job. watch cellgene. that's been the most pressured in the biotech cohort. it's the cheapest. selling below multiples. valeant led the group down. watch celgene at 15 times earnings. they can be the spur. it's too darn cheap.

cheaper than bristol meyers! >> really? what is the multiple? >> 15. >> 15? when talk about ipos, juniper, you throw a premium on there, that's an equity tech that needs to be written, especially lack of club deals. you also have to consider that. >> i'm not buying it. and, by the way, chuck robert-- >> for the week, 8% on csco. >> i understand people think a big competitor. competition is intel, dell, i don't regard cisco a company that can be hurt by pure storage. pure storage is moving up because it's a cheap way to play cybersecurity and chuck robins is doing a good job. 11 times earnings.

11? >> two of the high-profile new ceos, easterbrook and robins have had in quarters. >> people think easterbrook is screwing up yum, give me a break. he turned up international for mcdonald's. i'm going to have breakfast all day. >> let's get to dominic chu on the floor and see when an indication on pure storage may be coming. the screens behind me may be frozen. a lot of guys are yelling levels. $16 on the low end to $17 on the high on the spread. so again no indication right now. we hear we're getting close. we have some traders down here saying it could be in that range. however we are hearing some signs that it could be on the lower end of that range right now. they are getting close to opening this stock. that's what everybody is saying down here. we'll give you more details as they become available. for right now, the screens behind me are not showing an

indication on price. they appear to be frozen. the time stamps still from 9:45. we're hearing anywhere from $16 to $17 per share. >> we won't go to break until we do see an open. we will watch this closely. i wonder, jim what it means for the likes of an hp. >> hp has been so red hot. i saw that upgrade today of lexmark. i was going to call hp friends and say buy lexmark. the fact that hewlett-packard is doing well. reversion to cheap tech. it's a gdp play. the quarter wasn't that bad. hewlett-packard will continue to go bad. i need to see the workers get the money. don't forget, the one that's held up well besides red hot is mark bennihoff's. >> hp, the split less than a month away.

they will start issue trading in the not too distant future. we have to stay focused on that. 28 bucks. you get both pieces now. the one they bought, and what was the original hp. >> i can't wait to debate. we will clarify some of these things about carly fiorina, having been close to her during that era. clarify it. >> i was curious to hear mark andreesan yesterday afternoon saying he would vote for her that she did some great things. >> just in terms of cio -- ginni rometty, has anybody seen that that stock bottomed? watson? you are the only man to beat watson in jeopardy what do you think? >> that's not a possibility at all. watson in its first generation. >> watson is a health care --

>> watson is in oncology. a lot of things. they're trying to commercialize it. yesterday with the announcement of the cognitive busy, 2,000 person team that will go into companies and try to assess their needs and what they can do for them for a data perspective in terms of putting all that unstructured data together to help them make decisions. >> i've been trying to get them to call it artificial intelligen intelligence. they have stuck by cognitive. artificial intelligence -- i think ai, they thought it was allen iverson. no. no. any way, ibm is not -- seems to have stopped going down. that does matter. here goes celgene. i like some of the action. guilty until proven innocent. maybe pure storage will be the tale of the tape today. >> that will be interesting. we mentioned freeport at the top of the winner's list, now it's joy global. >> coal mining equipment.

man, harland county, listen up. good movie. >> what's on "mad" tonight? >> we have alkermes, they got a huge win on a schizophrenia drug. stock went down yesterday. we have to see richard pops come on and talk this drug. people don't care is people yawned and sold. yawned and sold. >> and yawned. >> you know what i mean. i can tell from how -- >> i do. >> enthusiastic you are about my view. >> yes. >> i'm always enthusiastic. >> you're on board. yes, i'm on-boarding, not off-boarding. >> monsanto up. that stock is down so low, it looked up to me. >> back to 88. jim, we'll see you tonight. "mad money." let's find out what is happening at post eight with dom.

>> carl, post eight, right behind where you guys are sitting now. we are waiting still for pure storage to come out with its particular opening price. we do know the facts right now as we know them for the record it was expected to be between $16 to $18 per share for this cloud based storage company that specializes in business clients. they priced it at 17 bucks a share, over $400 million in capital raised. you have, again, this issue here about what kind of valuations and what kind of tone this will set. the estimates -- renaissance capital says it would be a $3.9 billion valuation on a fully diluted basis if it comes in at the $17 price. the interesting part about what's happening now, a couple things. as jim has been saying, carl, you, david, everybody. this is very much viewed as a barometer stock right now. a barometer ipo in terms of what it could mean for every other part of the market coming out there.

this ipo has come out on the heels of a month and a half worth of volatility, the likes of which we have not seen in quite some time this is a tone setter for many people. another thing, this is the biggest venture capital based ipo of 2015. in many ways this is one that has a lot of focus. guys a real issue here is whether or not this thing can open steady. there are a lot of factors, i will point this out that go into a price. this could change at any moment. the indications are 16, 17 for 2 million 3 million shares. just letting you know, still waiting for the open. we think we're getting close. the range, anywhere from $16 to $17. still waiting on an indication on a more set price orange. >> the timing, i'm thinking back, occasionally we have seen it take a while for some new issues to open.

visa took well past 10:30 teime. you are watching "squawk on the street." welcome back. i'm carl quintanilla. markets are having a decent day as the dow tries to make it five -- actually we just had our first four-day win since july. we're up 157. s&p back to 1997. reaching some interesting psychological levels. the big story this morning is pure storage, as we await for some indication at post eight. >> i'm not clear s there a technical problem given that the clock is frozen? is there a digital problem. >> which clock are you looking at? >> the one on the quote board on the post there. >> i think it just means that's the last time we got an indication. nothing suggests that it's not functioning normally, but we're not seeing it on the screen. this should not be a terrible high volume ipo. i'm surprised it's taking as long as it is.

that's the process. >> it has been a while. this is exciting to be back on the floor during ipos. you mentioned we were in a quiet period during the worst quarterly performance for stocks since 2011. 46 ipos actually shelved their plans go public. >> and digicel of course. >> we'll talk to the ceo about that and about why he is rating. >> dom says it is not a problem, just that the screen is frozen. it's been an interesting overnight session. china closed for the week, some say the rally may be suspect until china reopens. bank of japan kept policy unchanged. germany output was a miss. oil is turning into a big story. closing in on 49.50. we have not closed above 50 since july. even with oil on the relative

tear it's been in, transports leading today. american airlines being added. >> more interesting overnight, morgan stanley had a big call from europe, nonetheless, has implications here, saying now is the time to buy emerging markets and commodities in particular. they're suggesting that good news flow both on the economic front and the policy front from china will be the big kicker in q4. they're overweighting a lot of the commodity stocks. they say that could come back to bite the consensus overweight you have for developed markets and defenses. it's just one call and moving europe stocks and having an influence here. if you look at the s&p 500, the biggest leaders are energy, industrials, materials. some of the most beaten up names 206 of 2015 coming back. the question is, and, carl, it gets back to your point, is it sustainable while china is

offline. >> that's not the point s it? no news from china is no bad news. on that we rally. >> what happens when golden week is over and the stock market open there's? >> maybe they rally because we rally. we will talk later to one of the top metal and mining analysts, u.s. steel is up 6% today. a lot of the steel stocks ahead of alcoa earnings tomorrow. but still down 50%, 60% for the year. >> by the way, we've talked about what a light summer it's been for tech ipos. but the ones that did price so far today this is year to date 2015, 16 tech ipos. average first trade day gain was 60.2%. at least a good first day. we'll see what the future holds -- >> first day is a strange day with underwriters, everybody watching. perhaps it would be more

interesting to see what happens three months down the line. you have a natural selection process of those coming to market. >> monsanto, adobe's guidance last night. yum is going to take the cake in terms of losers. the stock tumbling after missing their forecast for the third quarter. jane wells has been monitoring the conference call which began around 9:15 eastern time. >> carl, i -- i don't -- i don't think i heard conference call like this before. you know when you have a meeting at working everybody is supposed to complain about what they don't like? that's sort of what's going on with the analyst. an analyst saying to the management, pretty much every quarter we've been disappointed by the top line. at what point do you consider you're the right people to run the day-to-day operations in china? this is what's going on in the call. the company now says full eps growth will be in the low single digits for the year. that's big cut from last quarter's prediction of more than 10%. greg creed says there are no excuses, but the problems are

china and the strong dollar. exchange rates could shave 6% off the eps. "the most pressure we experienced in the history of our company." china turned negative quickly, completely off guard, but the problem wasn't kfc as much as it was pizza hut there. in late august sales at its casual dining pizza restaurants took a dive with competition from new-comers with discounted online ordering and marketing promotions which didn't catch, including a premium steak product larpr product launched as the economy went south. >> we have seen companies cut back on parties, dinners, entertaining. while our weekend business is doing okay, this impacted our weekday dinner results significantly. >> kfc same-store sales in china in september, the first month of the fourth quarter, were up 9%

showing recovery. on the bright side, he said taco bell "this brand is doing all the right things in all the right places." as for those suggestions that the company change its corporate structure, creed wouldn't comment only saying they are always reviewing options. there will be an update in december at an analyst and investor meeting in dallas. a lot of when did you know this was happening and why didn't you tell us? >> i just want to make the point that china is very much in flux at the moment. i understand that yum has its own difficulties there. we'll talk to the ceo of hefrpg henkel. he is suggesting once you have a plan in china, it's now managing on a day-to-day almost hour by hour basis because the china situation is so influx, it's causing big problems. we'll expand on that.

>> yum is down 18%. worst performer by far on the s&p 500. >> the s&p, which got close to 1998, that's going to take it above the 50-day for the first time since august 19th. it's not closed above the 50-day since august 18th. the dow managed to get above the 50-day yesterday. that was for the first time since july. the markets open -- we might be getting some movement at post eight regarding pure storage. if you're looking at the boards, we're told there actually is an open outcry process going on. we are getting indications it's not reflected on the board itself. not sure as to why that is. but the process is playing out maybe faster than the boards might suggest. we're told we're very, very close. but in the meantime it was interesting, david to listen to jim's -- jim is -- some issues he has liked, not liked, liked at a certain price and not above that level. he does seem to think this is

important. >> he does. and said as much. given the performance of ipos lately, we're watching this one. a hush over the crowd. they brought in a lot of people. >> a lot of orange ties. >> to celebrate here as they get closer and closer to giving us an opening price for this stock. >> it's a barometer, not just a tech ipo. like a lot of the technology companies to go public, we've seen fast revenue growth with this company, but not profit growth to back it up because exee pences are so high. how important is it to take market share, grow the top line and sacrifice profit. >> a growth tech company, it's obvious. >> it's a barometer of sorts not just of the public markets but how the company is priced. >> this company has raised hundreds of millions in the private market. >> your point is well taken t has an impact in the private market as well and --

>> doesn't it? >> does, absolutely. on the next round for a company going in the similar area, seeing what this company traded at. >> does that equally mean digicel canceled its ipo that that would have an effect on other -- >> it conceivably could. if y would you go into -- >> are you going into market? >> no will you make the next investment as a private investor? >> one of their big competitors is hp. so much bigger with more fire power to make accquisitions. >> one of the key reasons why companies do still choose to come public is to allow them to use their stock price to allow them to do deals.

if and when this comes public, when we get a chance to talk to the ceo, we'll ask him about that. >> as we await the opening of pstg, let's get to robert frank who has details on this ken griffin settlement. >> i have just confirmed that we have a settlement in the widely watched divorce of ken griffin. he is the ceo of citadel investments. worth $7 billion. his wife was asking for a larger share of that fortune. i've been told and we confirmed there is a settlement. terms are not disclosed. papers are likely to be filed in the court later today. that case, scheduled to go to trial this morning in about 15 minutes whhas been settled. back to you. >> she was asking -- she had 50 in the prenup, she was asking for a billion? >> correct. her prenup gave her 50 million, she was asking for 1 million a month in child support. she was asking for child support

for a larger share of that 7 billion. >> that was to cover 24/7 private jet. >> million does not go far for a private jet. this is a lifestyle you have to keep up. want to get to big news we go this morning for potential transaction that would be one of the largest we've seen. talking about abi inbev's offer to buy miller. 42.15 is the price they're offering. it also includes a partial share alternative designed to get the support above altria and the santo domingo family. represented under bevco. altria supports the current proposal. however the santo domingo family does not. at least according to carlos breedo earlier on a call who said they are not supportive at this point.

the key to their strategy to get altria and santo domingo on board and then work with sab in full and accept a proposal that would be one that would happen. where are we now? more in the realm of a public bear hug being undertaken by ab inbev. in a call earlier, they were calling on all shareholders -- oh. let's check in with pure storage on the open. it looks like it is priced down. >> it looks like we have our first trades. here's a look at pstg, which managing to open. we are told by the way that this process was not as confusing as it might have looked. the screens were interrupted by a vendor issue, we're told by

the exchange. that is a slight decline of about 1%. 16.85 on pure storage. we will talk to ceo scott dietzen in a few moments about their profitability for the future, use of cash. >> seems like a big hullabaloo for a stock priced at 17. >> it does. >> down on the floor is dom. >> dom what can you tell us? >> 16.74, that was the opening trade. about 3.5 million shares have traded so far. now closer to 4 million. for the context purposes, 25 million shares was the offering price outside of any overallotments, anything like that. 16.74. it's gone as high as 16.90. 16.93. as low as 16.65. they took their time and made sure they got it right. 16.74 is interesting only because we talk about this stock as an overall thermometer or barometer, not just for the technology industry but also the ipo market and whether or not we'll see other companies coming

to market given the strength or stability of this issue. 16.74 the opening trade here. we got $425 million raised from the ipo. the valuation close to 3.9 billion according to renaissance capital. as we talk about the price action here this will be important to see whether or not we see that stability in the price action throughout the course of the day. a lot of factors coming in. not just from investors and people with stakes in the companies, but also the underwriters. they can step in and provide ammunition if they deem necessary. 16.74. we'll bring you more details. for now it looks like shares are trading now down, again, 16.58, 16.52. >> down about 2%. >> not a great start. not great start. not the way you want it to go. a lot of waiting for something starting down the hole. let me finish off for you in explaining what may occur next in the battle, if you will, that's occurring between abi and

s sab. abi offering 42.15. it has seven days under uk takeover law to reach an agreement. the question is will it get an extension from the board of sabmiller or go hostile? that seems unlikely given comments i heard in the past. we would like to have a recommended deal. they have to the said publicly they would not do that. it does not seem to be the way they will go. they would hope it seems over the next seven days to get a deal done. key may very well be the santo domingo family represented in part on the board by alejandro santo domingo. he may be a key here in terms of what they choose to do. choosing to remain on the board rather than altria, which said we're recusing ourselves. we step off. they support the current bid. they are a key nexus between what they want to get what sab's overall board wants. the ceo of the company itself in

their rejection said ab inbev needs ab miller, elements of which have been deliberately designed to be unattractive to shareholders. this is a quote that scared investors. ab inbev is substantially undervaluing. what ask that mean? those are some key questions. we'll be watching closely over the next seven days. >> then we get into the anti trust concerns which are not small. >> very significant. but ab inbev has said we are fully expecting to divest assets. one of the key ones being sabmiller divesting their ownership stake in the venture were molson/coors. the so-called tap -- >> here in the u.s.

>> where they sell miller here. that would be beneficial to molson coors. when we come back, as we watch pure storage, digicel calling off what would have been the second biggest ipo of the year. the chair mapp will join us live for an interview. the s&p trying to get a two-handle for the first time since september 17th.

fresh from the opening bell,

celebrating their ipo today, pure storage, the flash storage company ranked number 16 on our 2016 disrupter 50 list. stock is under ticker pstg. let's welcome in scott dietzen. great to have you. welcome back. >> carl, great to be here. >> you want to walk us through the process over there just now? because we had very little information leading up to the open. >> so, i think it was -- the stock was trying to find its price there were some variation back and forth. then we finally settled into our groove. here we go. >> are you satisfied with the open? you're not getting a pop. >> you know, we came into this -- this is a marathon, not a sprint. i've been encouraging the team to think long-term. don't look at the stock day-to-day. think in quarters and years. because that's the kind of company we're looking to build. >> can you explain what you do to the layman.

>> i can try. there's a technology flash memory inside your smartphone but also inside the big consumer tech websites. we packaged up that technology to make it available for every business. the secret sauce that makes those services go fast, and actually be more cost effective is what we're delivering to businesses around the world. it's a very large market. $24 billion are spent every year on performance storage. as a result, we're the fastest growing systems company in history. >> how do you manage to stand alone when so many other big players are doing it and could cross-subsidize with other offers to big corporations and undercut you? >> it's ultimately about innovation. to have success in this market you have to craft a software model that takes great advantage of the flash. build the right hardware, cloud automation and change the business model, too none of the big competitors have any of those four ingredients yet. we have a two-year lead that will grow.

>> you were on our cnbc disrupters 50 list. you were the first one on the list to go public. why, after raising a lot of money in the private markets did you decide now you'll go out to the public market? >> we had the luxury of raising two rounds of public market financing. the businesses continued to scale and mature. most of the businesses we do business with are public companies. it was our time. it's been a little more of a sideways market. i didn't understand the vic before we went out on a road show. i learned about that. a great company can go public in any market. >> why governance? why is that important to other companies you're doing business with? i had not heard that before. >> there's a level of transparency in public companies that gives other public companies comfort. they have access to finances. you see the board of directors,

they know how decisions are made. storage is a very business critical investment. we have customers betting their data on us. if data is not available, businesses can't do their jobs. so that kind of business critical need is why, you know, they really need to trust us. >> no profitabilities since inception in '09. is that going to change soon? >> it's a $24 billion market. we're playing for the number one share in that market. this is about growth. it's also about growth and improving the health of our business as we go. if you look year over year for every dollar of expense, we're adding 1.50 in revenue. we've improved operating efficiency five fold. even as the biz chance been scaling, it's been getting more profitable. >> scott, we'll watch it for good reason. it's good to have you. congratulations again. >> thank you so much. >> one company has decided to

pull its ipo. digicel has decided no to proceed with their ipo. they are citing are market conditions. dennis, how do you feel when you see your colleague here managing to successfully go out today but you are having pull the ipo. >> our board made the right decision last night. we woke up this morning and we are happy we pulled the ipo. we will come back to the market in time. when market conditions are right for the business. >> we are go on and discuss market conditions to keep everybody on board in simple terms what do you do? >> we have a mobile phone and fixed line business and cable tv and a digital business in the caribbean and also central america and the pacific islands as well. we operate in 31 countries. we have about $2.8 billion of revenue and make about $1.2 of

ebta. >> talk me through the process that you want to ipo. the board says let's ipo. you employ bankers and presumably you start a road show. and then you halt -- give us some color, if you would, on what went on during that process. >> we started the process six months ago, led by our chief executive. we had a small team then. the team widened. you know, we hit the road about 2 1/2 weeks. it was quite volatile in the emerging markets. the discount people looking for an ipo is high. it's widened. we're not backed by private equity. it's all owned by myself and my colleagues. so we didn't need do an ipo at any time. so, it was opportunistic from our point of view. we'll come back. we don't need funding at the moment. it's a great feeling not to need funding. >> since you are a private company, can you give us an idea of the magnitude of the figures, what you were after? what they told you you would

probably price at? >> the comparables -- you know, obviously we're comped against a basket of other companies. but they declined by a half turn of ebta during the road show. we didn't hit our price target. we decided if we don't hit our price target, we won't sell our shares. why sell the front garden when you know it's worth a lot of money? why sell at a discount? >> i understand you've been watching emerging markets. is that a reason for concern? >> emerging markets are choppy. a lot of outflows, a lot of caution, jittery -- this morning it's better. over the last few weeks, he would have seen outflows, people are concerned about the future. in our circumstances, when you don't have do an ipo and you don't hit the price target, you defer or move it out for a year. >> that's what i was going ask. when do you think the time is

right? what did the bankers say to you about when next the market won't be volatile and presumably will be in a rising environment? >> it's difficult to get bankers to tell you what the future holds. nobody knows. the markets will settle over the next three to six months. oil recovering. so, you know, i actually think that the market will be fine then. there won't be as big a discount. you know, people will be hitting their ipo ranges. >> you know, you are losing money. you have adequate access to capital from what you need, from other capital markets including the debt markets? we operate free cash flow of $418 million on 1.2 billion of ebta. we have no maturities until 2021 of any consequence. we funded out balance sheet in the bond market in the last 12 months. we're comfortable. we're generating a huge amount of cash. we can do our mma strategy and develop our business. alone we spent 1.5 billion on

cap x building fiber to the home and the markets. >> denis, pleasure to meet you. >> thank you. >> respect for coming on the television and doing an interview on a morning like today. >> thank. busy wednesday. we get some breaking news. crude oil eia numbers leaking over the tape. jackie has the numbers. >> that's right. these numbers moving the markets right now. we got a build actually in crude inventories, 3.1 billion barrels, that's what traders were expected, but they were thrown off last night when it was recorded as a draw. now up about 50 cents at this point. trading around $49. that will be key to dig into here is to look at u.s. production numbers. last week, just over 9 million barrels a day. have those numbers come down on a weekly basis? what's happening there? what's happening with imports? seasonally you do expect to see builds at this time of year.

i will also say gasoline saw builds of 2 million barrels. gasoline prices were a bit higher before the report, then turned negative on it. we do have market making numbers here. very important to pay attention to them. having said that, $50 still in the sights for oil prices here. we had a very strong day yesterday. possible that with this drop people will bid it up again today. back to you, simon. >> jackie, thank. straight ahead, amazon already dominating huge parts of the online retail space. find out how it's thrusting forward to do the same with web hosting. we'll have a firsthand account of that when we return.

good morning, i'm sue herera. here is your cnbc news update. three scientists including one from the u.s. winning the nobel prize in chemistry. they were recognized for their work on dna repair. doctors without borders calling for an independent fact-finding mission citing the rules of the geneva convention into the u.s. air strike on a hospital in afghanistan. 22 people were killed. the head of the group telling reporters the attack cannot be tolerated. sports gambling side fanduel says it has permanently banned

employees from playing any daily fantasy game for money on any site it will also require all customers to confirm they are not an employee of any other third party fantasy site. and brazil is slashing its 2016 olympics budget by almost one-third as its economy slips deeper into crisis pressured by lower oil prices. yesterday members of the media were given a tour of facilities at its olympic park in rio. lots of work still to be done there. that's our cnbc news update. back to you. >> let's see if we can get ourselves on the list for that one. >> wouldn't that be lovely? >> yes. amazon is a vast online retailer but its biggest growth opportunity and earnings may be the cloud itself hosting the platforms of other businesses online. john has more on that. >> simon, i'm here at reinvent where in the next hour we expect

amazon executives to take the stage and make the case for why they can accelerate cloud growth and take it to competitors. i talk to the head of amazon's cloud business about the scale of that business and the scope of his ambitions. take a listen. >> we've built a technology infrastructure platform over the last 9 1/2 years. our goal is to have every company run all of their businesses, all of their applications on top of our technology infrastructure platform. we have a robust, fully featured platform with over 50 services, lots of features within those services. if you look at the business, it's a $7 billion plus revenue run rate business and a trailing 12 months basis and is growing 81% year over year. it's getting pretty big. >> pretty big, yes, but microsoft, google and others are nipping at their heels. so i asked jassy how many

competitors at scale he thinks amazon will have. >> this is a business when you're talking about infrastructure technology that is very capital intensive. i don't think there will be only one successful player. if you look at the market segments, this touches infrastructure software, hardware and data services. there will be more than up with successful player, but there won't be 20. it's going to be a small number. >> one of the things that i am watching especially is how all of these big cloud players expand. will they move further into applications? will they start to get inquisitive? i talked to him about that as well. hear more of our conversation coming up next hour on "squawk alley." >> all right, thank you. up next, republican senator bob corker joins us live to talk about everything from housing reform, the iranian deal and cybertheft. (vo) what does the world run on?

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market, look at sectors moving. energy is one of the top performer performers. >> good morning. energy stocks continue their bullish run standing out as one of the top performing s&p 500 sectors today. this as crude oil is surging back above $49 a barrel. oil just this week has gained 8.4%. among the stocks powering today's gain, console, halliburton, baker hughes and schluberger. >> energy on fire today roaring

back. thank you. over to chicago now and rick santelli. good morning, rick. >> good morning. thank you. i would like to welcome my special guest, senator corker. before i have you start to describe the issues on gscs, i want do a premer here. 2008, the gscs, freddie mac, fannie mae, taxpayers backsed a conservatorship. in 2012 they started making more than 187 given the guarantees by the public. hedge funds -- i'm not trying to name them, have taken a big presence in their preferred shares. the real issue is twofold. are we going to reform freddie and fannie after all these years or is the taxpayer on the back of the liabilities they accepted going to divvy profits to hedge? senator, that seems to be the lay of the land. tell me your thoughts. >> first of all, these hedge

fund folks, which, by the way, they're doing what wealthy, connected people do. they're sitting around as congress is inept in dealing with this, they're going to at some point try to fleece the american people. they were talking their book yesterday. but there's no -- there's no -- no factual background, whatsoever, to this rumor they're putting out that the white house is consider iing -- >> senator -- >> major bs. >> that rumor -- let me interrupt you. that rumor forced those share prices to spike up yesterday, did it not? >> yeah. i don't know, but people should be shorting it. it's major bs. it's not -- there's no factual background to that. none. just talking your own book. let's go back to what you're talking about -- >> for the public that's watching. why is re-ipo'ing versus reform the linchpin in understanding what's going on with the government-sponsored enterprises?

>> first of all, what's going on is congress has been totally inept. republicans are in the majority right now. i don't know of a republican senator during the crisis that didn't believe that fannie and freddie needed to be wound down. the american people understand they have $5 trillion in liabilities. the government is backing them. now the government owns them. and we need to reform them. what's the purpose, rick, of having a republican majority if you're not going to deal with the basic issues that need to be dealt with? i know the american people are angry. this, to me, is exhibit 1. we talk about xm bank, $130 billion. and act like that is some big reform deal. yet we're not dealing -- majoring in the majors. so we need to reform and -- >> senator, let me interrupt you again. indecision is a decision, okay?

congress, through their indecision, and through the lobbying pressures you described by hedgies who have positions in the conservatorship relationship, that is the decision. from what i'm hearing, the lobbyists are winning over the reformers. >> well, actually that is not true. but here's what i would say to the american people. if congress continues to be inept on an issue -- there's a majority of people here who believe they should be wound down and replaced so that the taxpayers are not backing them up as they are today, over time these well connected people that again, i don't fault what they're doing. you and i talked about this. they will eventually take advantage of the system. they will eventually re-ipo them, be back like they were before this began. they will be way too big to fail. the government will back them up again when they fail. private profits, public losses, we'll return to that model.

the fact that congress is so inept, the american people should be irate about this. because we are so inept in dealing with the issues that matter here, there's some people that over time, not any time soon, because i don't think they're gaining that much ground. but they're beginning to win over a few people. that's inappropriate. we should do what we were elected to do. that is to wind them down and replace it with something that is much more dynamic and that the american people do not need to stand behind. >> well, thank you so much for your thoughts, senator. it just seems to me that many in government including the administration would rather tackle easier jobs like mother nature and climate change. thank you for taking the time today. back to you, "squawk on the street." >> thank you very much, rick santelli. up next on the program, the inside track on how german business feels about the vw scandal. and why china's markets are now so volatile with the move online

they need to be managed in realtime. the co of henkel will join us for an exclusive interview.

a crisis meeting at volkswagen's full supervisory board about fixing the start of the massive wordwide recall for january. tomorrow v.w. executives answer questions for the first time on capitol hill. here now exclusive insight into what's happening inside the german business establishment from the ceo of its answer to proctor and gamble. casper ross said it's the $40 billion giant that sits along side vw in the dax 30. >> good morning. >> how worried are your colleagues that the made in germany brand has been seriously -- >> the made in germany brand has been built over many, many years, and i'm sure vw will do whatever it takes. while there's concern, i don't think that anybody really questions what germany has known for -- for your and my lifetime, swrerm anne has been extremely concerned about its own power

and the misuse of power given its history. you look at the history of the european union. building it around swrerm anne as it came back and alternatively pushing the deutsche mark around reunification. does that mean that the contradition now. >> i think an incident has hurt, and i'm certain that they will do whatever they can to change it, but i don't think so. >> it's not just the day to day, real-time response. while we're down compared to october -- no, august, we're

still up 25%. >> it looked rough to me. >> we're seeing a volatility in china that we haven't seen before, and the latest data is now showing that for the first time the service part of the overall economy in china is bigger than the manufacturing part. >> we've never seen -- i have been in business for 11 years the immediate wrum term volatility. we're seeing i'm still, i believe, a lot of ceos very large and bullish in china. >> that means you can't use your traditional power of shelf space or promotions as you have done before, and that's clearly caught you all off guard. what is the correct response to that now, do you think? >> to be very specific, the

industrial business is slightly inclining. the consumer business is double digit growing. >> button line and, therefore, challenge potentially on margin. >> that is correct. what we are seeing is we are seeing the three and four cities allowing a consistent long-term growth rate also taking place, so we are investing a lot in our own digital capability. to build the brand awareness that you can't do physically through the shelf. >> personally, your laundry detergent is everywhere in the world. you recently tried to introduce it here in the united states with an exclusive deal with wal wal-mart to take 10% of their shelves. how is that doing? are you able to challenge successful p & g's stranglehold on this market in this country? >> the u.s. is our single biggest market in the world. we put our brand in place in 51 countries. we are now doing it in the u.s. we are 130 years old. we have a lot of patience. >> does that mean it didn't work? did the exclusive deal with wal-mart not work?

>> getting there. we're now in the process of rolling out to kroger and other retailers across the u.s., and we are very confident the start we had with wal-mart will allow it to be successful in the u.s. also. >> do you think that the skills of a fast-moving consumer goods company are lies taken over to sports wear? the reason i ask you is because it's reported that you have been talking to adidas about becoming their ceo. it's reported. it's just a question of salary and your notice period at henkel. how are those reports? >> i'm happy. i'm the i'm very committed to the company. i read the article also. there's nothing to on to it. >> you haven't been talking to adidas is? >> there are many people within your company that -- >> i actually have the same love for the same football club, bayern munich. we'll see each other on the football clubs. >> i know you're going back to china. it's clearly a trouble spot for you. thank you so much. >> let's send it over to kayla with a look at what's coming up

next on squawk alley. >> hey, sarah, we are going to check in and tell what is plaguing the ipo market. we'll go to the web services event which has become the can't miss event for the cloud computing industry. four square has a new big data product. we will talk to four square ceo dennis crowley and hollywood legend brian glazer live from "vanity fair" new establishment summit. all that and more coming up on "squawk alley. " you pay your car insurance premium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again.

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. >> we want to show you what's going on. throughout the highs of the day. at the point the dow was up 173. s&p also off the highs. still, though, in rally mode with the dow up 78. at the peak, simon, dow and s&p were at the highest levels in about three weeks. right now leading the charge. commodities names. we're seeing crude oil nearing that $50 mark as a materials. energy stocks leading the rally. >> let's go over to squawk alley on cnbc. >> guys, good morning. it is 8:00 a.m. amazon's reinvent congress. it's 11:00 a.m. on wall street. "squawk alley" is live.

♪ welcome to "squawk alley." welcome to the summit. "new york times" columnist nick vilton with us as always kayla townsend. john is giving us a fascinating inside look at amazon's plan for the cloud business. amazon web serve is the conference in las vegas. john is live where he spoke to the head of web services andy jassey this morning. john, good morning to you. >> good morning, carl. yeah, it's kind of amazing. when you think about the