thanks for hanging out this morning. >> thank you for making us smarter. been great having you two. >> congratulations on 20 years. >> thank you very much that does it for us today. we've had an excellent week so far and it's only wednesday. >> come to the plaza tomorrow morning. >> throwback thursday we have all the guys coming back joining us. you can see them right now on "squawk on the street." we can't wait. good wednesday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. earnings season now at full blast as the banks roll in, the pre-market unimpressed with weak inflation data out of china and now the u.s., retail sales were nothing to write home about. ten years barely holding on to a two handle. this morning, big bank results.

bank of america and wells fargo beat, jpmorgan falls short. >> results from delta and intel. both coming ahead of consensus. and the read on retail sales slightly below expect tatioexpet doug mcmillan giving a rosier assessment. bank of america had good third quarter results. wells fargo had a beat as well. its loans helping to lift profits. and jpmorgan missing with its quarterly results. jamie dimon spoke about his bank's expenses on last night's conference call. >> i spoke my whole life on good expenses, bad expenses. bad expenses are waste, things you don't need. we want expenses go up. we find marketing opportunities, we'll spend it. if the investment bank does better. that's how we run the company.

that won't ever change. once again, jim, story is loan growth is good, but the trading revenues are challenging almost everywhere. >> yeah. people will say when they listen to bank of america, which was an excellent quarter, okay? bank of america is making money in that business, why shouldn't jpmorgan. bank of america has little loans and taking very little risk. bank of america trading 24 cents above its tangible book value. the cheapest it's been. i did some work on that. it's the cheapest it's been. >> really? >> yeah. you have to recognize all the banks are good. but jpmorgan, marianne lake put that one caveat in that maybe the weakness could continue. in that one line, that one line of q4, i thought jpmorgan undersold themselves. the loan growth is sensational. bank of america not as good loan growth but really growing and doing much better than i thought

it would without a rate like. all of these, if you sell them here and get the rate hike these people are clamoring for and you sell them, you will miss out on what will be a re-rating of the whole group. bank of america will be in there buying stock aggressively as much as they can. the regulations, they are almost through with the fed. almost through with the federal reserve justice department issues. >> your favorite has typically been wells fargo. i don't want to speak for you, but i do listen to what you say. they were out this morning. interestingly, jpmorgan morgan reported after the close yesterday, which they haven't typically done. 5.8 billion in net income. 1.05 in diluted eps. >> what people will be focused on, debt interest margin was down. that's not good enough. john stumpf made you feel like

they would invest more around the curve, so to speak. so therefore net interest margin could have a runway higher. wells fargo, i would say, is the weakest of the three, but that all three are good if you think there will be a rate hike. i want to caution people from selling these things. they are dirt cheap. jpmorgan is incredibly cheap. wells fargo not as cheap, but it has better growth profile. i like all three. because we are going to get a rate hike. when we do. we will eventually get it. rick santelli told us. >> others seem to think otherwise, but you think it's coming next year? >> if you get a rate hike -- jpmorgan said something on the call which is amazing. the first and second rate hikes will be huge. jpmorgan settles down 58, 59. you can buy it at 3% yield.

we wells fargo, we have to hear more from because i'm not impressed. >> on the call they did say positive things about the economy overall. >> the macro picture was amazing. we would say the economy is doing well. this is the cfo of jpmorgan. seeing good demand for loans, reasonably good sentiment in the business banking space. she says i take a slightly different perspective on the jobs report. >> she didn't sell the story the way i would have sold it. >> lake, you mean? >> yeah, she didn't. she's conservative. you have a stock yielding about 3%, correctly forecasting trading weakness earlier. i think they flagged it, 15% loan growth, better vig on the deposits. the people who did the jpmorgan conference call, you know you could have told a better story,

you chose not to. you emphasized perhaps this one division could have weakness. that overshadowed everything else you did. i would not have done that. i could have made the announcement better. that's what the wife wants know, i look at that quarter and i say guys, i would have reversed it entirely. congratulations to larry lynch who got bank of america through this period and is still oversee overseei overseeing. we had the problem with mo green. >> yes. >> that's over. with the justice department. >> that shot in the eye must have hurt. >> it was business. >> david mentions this twitter news, jack dorsey tweeting they named omid kordestani as executive chairman, pioneer of netscape back in the day. considered to be a billionaire

maybe two times over. well known within silicon valley and tech circles. jack saying he will help us recruit the best folks to twitter. a great share person is the first step to making our board one of the best in the world and purpo help us recruit the be. >> comes in guns blazing, rebuts this -- this jpmorgan downgrade on twitter on limited visibility of growth. wait a second, did they get google clicking? you sell twitter. again, selling it at a level that i think makes no sense given the fact that we're all on twitter and we see the changes. people are not -- >> he's not on twitter. he tweeted ten times. >> really?

>> yeah. if that were the metric by which we judge twitter board members, half of twitter will be gone. >> i guess his tweets will increase in volume. >> i hope. >> he has about 900 followers. i love the tweeting about kids, fabulous, great athletes, how about a bit about the business. >> the journal argues that layoffs are not what you do if you are in true growth mode, even if you are trying to streamline -- >> how about if you inherited a company that was bloated from the previous ceo, maybe the previous ceo -- i had some harsh words previously about the ceo that company was poorly run. the idea that you should keep everybody around in a new regime, is that what you do? because we're in growth mode, everybody stays? terrific. no? >> no. >> not everybody works. the moments guy, let's give him

a little wage increase. some shares. the other guys who created nothing, i don't know, hey, here's your hat. >> it will be interesting to see what he does. executive chairman. he has an executive role. he will be very much involved with square with the business. we knew this was coming, mr. dorsey, also ceo of square, they wanted someone to take over the chairman position. >> the s.e.c. will love this. they say you can't do square and twitter. jack, i got an executive chairman. >> i have omid here. buy some stocks. >> tweet a little more. >> really. >> yeah. >> up to 11 now. >> omid's shirt is tweeting more. >> your shirt, david's hair. >> i say up periscope. i get a periscope yesterday of the earl schibe paint job, booming. >> anyone wanting to know what

it's like for jim to get his makeup yesterday, go back and look at his periscope. >> it's an actual krylon, tuesdays i use krylon, wednesday i was the behr. >> mission impossible. making me look 48. >> we got to the banks and twitter, now intel. profits fell amid weaker demand on pcs. dow component cutting their current quarter guidance for the chip business. delta beat the street. richard anderson on squawk today saying they're buying on the open market now. conservative when it comes to fuel buying. >> that was an unbelievable quarter. free cash flow is extraordinary. the capacity, going 0 to 2% next year. when i listen to delta, i said this should not sell at ten times earnings. the first quarter you have huge

fuel. 40% of this is international. surprised this did so well. this is a strong buy right here right now. intel, once again, the narrative, stacy, i love you, brian, you're fantastic, guys, get the story right. pcs might be bottoming. the data center, the gross margins. when you get those factories working, the yield is better, you could get up to 67, 68 gross margin margins. brian, just get more excited about your business. >> the worry is that there's weakness in the enterprise. >> 15% growth down to 12% for data center. if it was at 25 where it was august 24th, the stock would be up 3 bucks. stacy, i think stacy should h e

have -- i was going over my notes. if you get everything right, right at the end he buried the lead. he said if you get pcs flat, because of windows 10, and you get the data center curving up, you have very fast growth. he said it at end. anyone who has been a cover porter -- >> pcs will get down to flat again? we had that little blip -- >> not this quarter. >> no? >> no. >> there's an expectation there of an endless klein. >> when max poleski, professor of logic at the university of chicago, when he said to me we're not going into the gaming business, the fastest chips, nvidia, i thought it was a major miss. they're going into the gaming business which gives them a richer mix. stacy, gaming, gaming, gaming. fastest part of the economy, and x-box. there was much more of a story to tell on intel. they focused on the negative and not on the positive.

>> sandisk will open up almost 12%. >> bloomberg and ft reporting that western digital and mu looking at the company. as carl said, the stock will be up. you have to wonder on the western digital side, taking that money from china that could help them. >> i have to wonder about the national security implications. when you talk china, you have to keep that in mind. >> i think micron would be a swell business because they have demand already. high-end nand, intel, another story they chose not to tell. i will have to slap these guys around. the enterprise nand was amazing. >> when we come back, wall street taking a beating during last night's democratic presidential debate. you'll hear what the candidates had to say. also ahead, tom brady on the

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. wall street among the major topics during last night's presidential democrat iic debat. listen to this exchange between bernie sanders and hillary clinton. >> in my view, congress does not regulate wall street. wall street regulates congress. we have to break off these banks. >> so -- >> say please do the right thing. >> that's not -- i think todd frank was a good start. i think we have to implement it, prevent the republicans from ripping it apart. >> a fairly robust conversation. one thing that did not get mentioned was drug pricing, which only got a passing mention. >> unbelievable that the drug stocks and biotechs which were hammered before this debate -- >> nothing happened.

>> no. sanders mentioned -- >> she was proud that farmer was one of her enemies. >> this interchange, thank ha heavens, this interchange about glass-steagall did draw a viewer tw or two away from the mets game. the sixth inning, i think. that debate was boring. shocking. i had two dogs watching, both asleep within the first ten minutes. >> now you sound like trump. >> i do. trump was more entertaining, but bug and everest told the tale. >> our debate on the 289th. >> that's going to be different. >> it will center even harder on the economy and some of these financial issues that they touched on last night. >> our questions are basically going to be about -- where is

your money? where is your corporate health? the debate about banking was a reprieve of 2008, t.a.r.p. the things we'll ask about are current, right now. >> there are issues here in terms of the general populous -- >> they didn't ask the right questions. >> we we stand right now. plenty of people don't have investments. i think ours will be high-end, pointed. some fun. >> you guys are leaving me here, alone. it's during the world series. you'll be at game two. >> if only. >> we're working on the questions. i submitted a list of 437 questions. i think it will be boiled down to three which is probably the air time i will get. >> how many you can get to is a challenge. cramers mad dash as we count

down to the opening bell after the break. a look at premarket. six sessions now of sub 1% moves on the dow and s&p. we have not done that since china went crazy in august. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

>> it's huml day. time for a mad dash, we are we starting. >> you asked about oracle and s&p, jmp comes out says sell the stock of oracle. i know oracle is being aggressive. i know they're not that crazy about how sales force has done.

everybody is still surprised about the strength of sap. this is a call that says, hey, look out it is a battle and oracle may be losing. ellison and safra would disagree with this call. >> not affrraid to do mma at oracle if they have to. >> would they ever do something big? >> you can't say never. >> they have the cash. not afraid to go hostile if they have to. remember peoplesoft? >> yes, i do. neil bushry. mark bennihoff, likelihood? not the cubs. i don't want to go in. i don't think it's going to happen. >> where are we headed next? >> you will see trip adviser up. this is interesting.

priceline merges a part of its -- of its booking with trip adviser. >> look at that move. >> trip adviser, people have been short trip adviser, why? they thought the priceline would come in against them. >> what's happening? >> being able to use the booking system, which is important. i like this in, so i then buy -- i get this airline to the in. seamless. seamless! >> people hate trip adviser. that's a mistake. i didn't get to csx, talking about coal, head winds. coal is gone. i don't know if you listened to that debate. >> i listen to you. >> coal is finished. >> you've been saying that for a while. >> when you're csx, you ship a lot of cole. trip adviser probably goes higher because people short it. oracle lower because people long it. >> and csx. >> i couldn't believe how well

they were able do with the headwinds of coal, but they say that will continue. you know what? if coal goes away, you cannot give the rails the same multiple. you can't ship coal by truck. the only way to ship it is by train. you will see coal plants shut by 2018 that you thought would last until 2020, 2025. the jimmy carter coal plants gone. gone. see you later. be careful. >> okay. that's just the start on "squawk on the street." we have others to talk about and looking at the stocks as they open. some we have already talked about. dell, intel. >> we are getting started. we didn't go to jostens yet. class rings. >> we cover it all. [announcer] through sunday at sleep train,

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you're watching "squawk on the street," live from the financial capital of the world. the opening bell in about a

minute and a half a busy morning as earnings are coming at us fast and furious. economic data, retail sales, 0.1 was not only below the estimate but autos up 1.7 month over month. it's as if everybody spent all their money on cars and had nothing left. >> phil has been unbelievable in this group. i think the story here is china, where mercedes-benz has had a traumat dramatic comeback. you cannot trahave auto zone bu stock. hard to want to raise rates on this number, but the people who wanted to raise rates will say this is just another reason to raise rates. everything is another reason to raise rates. >> china's cpi also slightly below, sequentially down. ppi -- 43 months of negative

ppi? >> it's time for them to start building a sewage system in major cities. >> yes. >> right? >> don't they already have one? >> it's about 100 years old. >> there is the opening bell a look at the s&p at the bottom of the screen. at the big board, the national committee on u.s./china relations. at the nasdaq, northerntrust celebrating their recent listings of two new etfs. you guys covered csx. we will watch the banks closely. bank of america, employees when they bought merrill 300,000, now closing in on 215,000. almost 85,000 people gone. a lot of that by the way, we did not taulk about mobile adoption

of bank america, jp morgan, when you have mobile, you need fewer branchs. bank of america is rationalizing a lot of different businesses, i including maybe not needing as many lawyers. this bank is on the mend, they're making far more money from less and hiring. hiring in wealth management. they're bringing in people who are producers. they're eliminating people who are not producers. we did not call them not producers, we had other words for them. goldman reports tomorrow. >> citi and goldman, and ge on friday. as they sell assets to wells fargo. a piece today about regulators didn't know what to make of this

weird animal and all sorts of conflict. >> they came in with forms, fill out the form and tell us about the risk. the inability do that when behind a tanker or whatever it might be. it goes to the level of complexity that took place at ge capital and certainly a result of it being a systemically important financial institution. why they were so anxious to finally get out and get out almost entirely -- almost, but not quite. there is this idea perhaps of some -- i wouldn't call it tension, but at least a point of contention down the road between trian and immelt about the fact that they are at least keeping the businesses that fips tnance current businesses. even united technology has that business. depends on how you lend short or lend long. peltz wants to buy back more

stock. they will bt able able to leverr they lever back. wells fargo not going down much because the growth is good. expensive stock, but warren buffett's favorite. >> as is ibm still. >> you did a terrific interview with ramedi -- >> a while ago. not recently. >> i felt at one point a watson pr blitz turned into a ratson line item. >> health care oncology they pushed. i wanted to come back to trip adviser. you know more about that. >> it is up a full quarter of its market value. just to give you more. this had been discussed as a possibility, now it's about 22%. what's happening is priceline is agreeing to list some of its travel websites on trip adviser's instant booking.

so you'll be on trip adviser, you want to book a room at a hotel? you can get instant access to some of priceline's services. i think they're starting with booking.com, that's in europe. priceline is huge in europe. that's a big deal for them as they try to make robust their own interest. >> they use hotel tonight or priceline. people come in, they get off at newark airport. it's all seamless. trip adviser, people just book rooms off of trip adviser. this makes it seamless. >> four star. >> seeing what people had to say, you want that, and you want to book it. then you have to go -- it's more friction. >> that's why yelp has been left out of the discussions. yelp is orphaned.

>> expedia up 2%. >> gopro, two months ago at $64 this morning at $26. piper takes their price target down. morgan stanley did that a couple days ago. they say the price cuts, holiday season is not shaping up well. >> you called it go amateur yesterday. >> piper's survey, they did a big survey of teens. teens are notoriously fickle including mine who said they're not coming home, coming home, not coming home. they talk about vf corp, doing quite yell. and under armour pausing. people are stunned about the high level departure of under armour. i think the gopro call is devastating. it's being revealed as a fad. a fad. it's a fad. that's what you think it is? >> i don't know. everyone who has a gopro -- the

good model -- >> why did we consider this anything but a device system? >> the peak is when i saw the goat with the gopro on its head on the surfboard. i came back from hawaii. >> the one with 16 different cameras? >> no goat wore 16 different cameras. that was a human. they did the goat with the gopro to go past putting the pig on the gopro on the surfboard. that was it. you want bear on a surfboard? there was nothing more. that was the top. that was october. there wasn't any other animal left that you could put a gopro on. >> good lesson for the market. next book you write, that will be in there as a sign, whenever you see a goat wearing a device, short the stock. >> i was going to write about how to do a quarterly earnings call. we didn't do intrexon. >> no. >> cloning of successful

kitties. bill miller talked about it. intrexon, my favorite speculative stock for 2016, they cloned kitties. there's whole sites -- are you n in sweet cool kitty twitter? oh, my, the breeders will go nuts for this one. stock is down 10 from 45 po 35. bill miller says maybe the most exciting speculation in his holdings. >> we are seeing some renewed interest in biotechs, even lilly, jim, up 2.5%. >> i've been loving lilly because of the alzheimer's formulation and diabetes. everybody decided that this one drug that wasn't really important was important. the stock is up 7 from where it was in the premarket hours. it was always and diabetes. you did say that. >> that thing was looking down 10% that morning when they stopped the cholesterol -- >> that was so silly.

then the analysts didn't come out and defend them. >> blackrock with a nice beat, $5, well ahead of 4.57. revenue up. assets under management came back is a sequentially. stock is up 2%. >> that makes sense. well-run company. does a lot of good things. i felt that stock has been cheap for a long time. down from the high like many financials. pretty good company. >> omid kordestani getting a lot of followers quickly. >> is he? >> thank you adam bane for responding. >> when you become executive chairman of twitter, you get more followers. stock is up not much. >> you say it there, it comes out here. broadcast news. >> is broadcast -- we're just back to the '80s. >> what goes around comes around. >> the number of your tweets says nothing about -- he could

be on the platform 24/7, we have no idea. it's just that he's not contributing to tweets. >> he has to periscope. periscope him. >> you know who watches every periscope? john ledger. >> ledger. >> yeah. >> yesterday he tweeted his e-mail address. >> he's really out there. he's out there. have you seen valeant up $8? >> i did. valeant up over 6%. as we said, a selloff that took place at 3:00 yesterday afternoon. >> i tweeted this. >> everybody anticipating more rhetoric about drug pricing and what conceivably the democratic candidates for the nomination for president would do were they too actually become president. all started by mr. -- >> martin sprelli.

>> he is still in peoples sights. >> he is. >> he will be in the next bond movie. he will be the next villain. >> is he. >> he's been cast along with daniel craig. got what he was after. >> gold finger. no, mr. bond, i want you to die. operation grand slam. wrecked four major biotech companies. >> we raise prices to $10 million. >> he's going to blow up ft. knox. >> raise the cost of your cholesterol drug. with that, the dow is off about 14 points. intel the biggest lager this morning. let's get to pisani. >> good morning. important thing about today, either side of positive or negative, put up the sectors, health care is the big winner for obvious reasons.

discretionary, industrials and financials bringing up the rear. pharmaceutical here doing well. not just little li, merck, pfizer, bristol meyers on the upside. there was not as. emphases on reducing drug prices in the debate last night. people were surprised that that wasn't a big issue. there were some wall street discussions. yesterday we saw pharma and biotech nosedive going into the close on concerns that this would be a big issue at the debate. bank earnings for today, big four bank earnings today. bank of america, pnc, wells fargo in line, jpmorgan a miss there. we know net interest margin was nothing to write home about. we didn't get the increases in interest rates, but the loan growth was not bad. i want to concentrate on wells fargo. i do year over year.

some people use month over month. 7.7% total loan growth, commercial and industrial up 15%. everybody knows they're in the mortgage business, this is mortgage fees i'm using here, down a bit. not a big surprise there. overall this was good. month over month, their numbers were very good. my point is this is the great consumer bank in the united states. and the consumer is not looking bad in terms of loan growth. we did have disappointing numbers on september retail sales. we lost 5 points in the futures immediately as it came out at 8:30 that number. that's why we moved into negative territory at the open. we just turned positive a short while ago. even here, if you look year over year at the health of the consumer, numbers are pretty

good. jim, you were emphasizing the auto dealers. look at these numbers. 9%, year other year in the retailers. people are drinking more, going out more. the restaurants and bars -- that number has been good for months now. furniture sales are also strong. and, by the way, online all the stuff people are not buying when they go into stores is reasonably healthy, up 5.7%. there are aspects of the consumer doing fine. apparel sales not doing well. some other issues are not. if you look clearly, other parts of the consumers are doing well. ipo news overnight. neiman marcus withdrew their ipo. it will be out in 2016. th and station casino just filed. that will happen in a few wiks. maybe $3300 million. biggest ipo of the year, pricing

tonight, first data, you all know them. at the mid point, $3 billion deal that would make it the biggest one of the year. they maintained these prices, 1 60 million at 18 to 20. not cut there yet. we'll see what happens on that. among the biggest, albertson's. the third largest food and drug retailer after walmart and kroger which is number one. both of these are pricing tonight. we'll dump two of the biggest deals in 2015, right on the market tonight. what the trend has been is price cuts for those that have gone and havenrecent cancellations. we'll see if these two big prices can get through the door at the prices they're offering now. >> normally at this time we would go to chicago and check in with rick santelli, we don't have to go far today because he's here at post nine.

>> rizzo's ball hit out at wrigley field landed in new york. >> congratulations. >> unbelievable. i know you're a phillies fan, jim, you have to let us savor this once every 108 years, we're due. >> i think it's fabulous for the year. >> i suffered with you. david t would be a big deal if you guys get it. >> i hope new york wins that fist game. >> '59 all over again. >> didn't go well for you. >> no. we can talk about how bad numbers were, but suffice to say that gdp now, atlanta fed will get downgraded. the response in the markets was fast and furious. look at ten-year note yields, the way they dropped, flirting with 2%. since the end of april we had

two settlements under 2%. the last one, if you blinked, you missed it. more important is the damage to the dollar index. dollar index getting the stuffing kick the out of it. does that mean the fed and turillo were right? and bund yields getting closer to 50 basis points. we can talk about all the fancy issues that make interest rates move, but remember, we're linked with those bund yields to some expent. assume a spread differential of 150 basis points, and oh la la, there you are. >> exciting stuff. >> really is. exciting in a perverse sort of way. the cycle of americans liking cheap products, things come from china, cheap prices, in the end, they have to reconcile what they're going to do. >> i was thinking of you when i

went over the calls of jpmorgan, bank of america, wells fargo. the macro numbers are so bullish. i see your side. it makes sense if you listen. >> later on you will interview art cashin at the floor. >> in chicago he's a ledged, i'm really looking forward to talking to art. >> he and i are on the debate. there's more kinship than people realize. >> we'll see you later on. >> thank you. it is the best performing stock on the s&p 500 so far this year what to expect from netflix after the bell tonight. ♪

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>> netflix results after the bell tonight. goldman's upping its target from 1.35 to 1.40. expect strong results driven by content. looking for 2.8 million international driven ads. "narcos" -- >> "narcos," unbelievable. they're making big inroads in mexico latin america. stock up 15 from when last reported. bill miller reported something out earlier. he said $47 billion market cap, that's way too small versus the opportunity. that's what people have to recognize. if they report some number that doesn't shock you to the upside, don't give up is the ship. they have pricing flexibility. he was comparing it to hbo. >> but they pay an awful lot for content. the stock trades at 66 times

2016. 66 times. it is growing 64% a year over a three year ebita growth. that is incredible growth. deserved perhaps with that multiple, but it's not like they're not getting rewarded for it. >> you raise a good point which is what's happened is if you're a growth stock manager like bill miller, he has value, he has delta, they're not constrained by that. i don't mean to say that investors in 2,000 dotcoms, but bill miller is saying the enterprise value of this company is higher. not looking at earnings per share. >> right. >> that's something you can do with only a handful of stocks. >> more "squawk on the street" continues in a moment.

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time for cramer and stop trading. >> mcdonald's hitting an all-time high. i've been a huge backer of steve east easterbrook. stock seems to be ahead of its. i believe inest easterbrook.

>> where were these guys when he came in, said i will turn everything around. i know mcdonald's was not thinked when i compared their big macs to truck tires. >> what's on "mad money"? >> i didn't say car tires, truck tires. we have martin franklin on tonight. they bought an outfit, class rings, jostens was going private, you probably remember that in the sold days of squawk. he's adding it to his roster of household name products, martin is always fun to talk to. can't wait to see him. >> good read on the consumer as well. >> the best because of those products. exciting show tomorrow. i see you guys early on. >> yes. >> on squawk. >> 7:00 a.m. on "squawk box." >> we have to get up early. >> the three of us, three of

them. >> no spencer askoff, no ad adam bane. when we come back, as the smart watch competition heats up, we want to know which one will tom brady wear? >> am i supposed to say i saw a prototype of it? yes, i did. it's magnificent. i'll be wearing that one. >> a lot more on that when "squawk on the street" comes back. you pay your car insurance

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good wednesday morning. welcome back to "squawk on the street," i'm carl quintanilla with simon hobbs and david faber. sara eisen is out in oregon nor nike's investor day. we'll hear from sara in a bit. dow is not moving a lot, that belies a lot of news today, retail sales, news on intel, netflix tonight. >> shares of trip adviser rocketing on the announcement that it convinced priceline to give it inventory. trip adviser becomes one of

tree. >> business inventories, santelli at post nine with us today. rick? >> unchanged, which is close to expectations. and last month we went from up 0.1 unchanged as well. but sales down 0.6%. even though we didn't get negative numbers, on business inventories the last negative number was in january. they're few and far between. this may make a subtle difference. many are much more concerned about how the fourth quarter is stacking up considering some of the recent weak data. >> good to have you here, rick. >> great to be here. earnings clearly are in full swing. banks front and center for many, both wells fargo and bank of america beating earnings estimates. not all of the banks have beaten the street. jpmorgan reporting an earnings miss yesterday amid weak trading. jamie dimon addressed the expenses in last night's

conference call. >> i spoke my whole life about good expenses, bad expenses. bad expenses are waste. but we want expenses to go up. when we find opportunity, we'll spend it. so, you know, that's how we run the company. that's not ever going to change. >> joining us now for analysis, gerard cassidy, bank analyst at rbc capital markets. what is the advice now on jpmorgan, now that you had a chance to dig through the figures. >> i think we still think over the long-term jpmorgan chase is a strong company and the earnings in this quarter were impacted by the disruptions in the global capital markets. but the core banking business, especially the focus on expenses is very positive. >> but at what point do the shares start moving significantly higher? we're still down for the year. >> that's very true.

where we see the benefit for them and other banks is when the federal reserve starts to raise rates, let's assume next year, and you get a recovery in the capital markets, that's when the stock really starts to make a move. >> those are big caveats. if you say, yes, the franchise is strong, yes, it's a good business, those ifs and buts, will they fall into line. >> even if the fed doesn't move on rates and the economy remains moderate growth, you will see stronger returns of the excess capital that they're generating. this company's capital ratios are at where they need to be. we anticipate we will get higher dividends and buybacks next year. >> we have bank of america and wells fargo. all three of these very different stories. what do you think of bank of america and merrill lynch? >> when you look at bank of america, you are absolutely right. it's a different story. as we all know, this company struggled the most in the

downturn. it's now in recovery. the recent move by the -- to put moynihan as chairman and ceo is the last piece of the problem. as we go forward, bank of america should benefit from the growth in the u.s. economy. >> of the two, jpmorgan and boa, which is the better investment? >> i think because of valuation and how inexpensive bank of america is at this point in the cycle, we would be a buyer of bank of america over jpmorgan today. >> gerard, moynihan said he would trim some operation if results did not improve. were you impressed by them at all and is a turn coming? >> i think we will see a trimming across the board if results don't improve for all the capital markets players. as you might recall, under the new dodd-frank regulations, the industry is somewhat hamstrung

in trading regulations because of this, and it's all about driving up the return on equity, then we will see more trimming from these companies. >> the stress test on the conference call, the cfo saying it has their full attention. we'll find out what the fed thinks. you assume they'll not mess this up again? >> that's correct. when we have seen others go through the same process, you might recall jpmorgan chase and goldman sachs had to do this as well last year. they passed after they resubmitted. we expect bank of america to be in the same position. >> let's not forget wells fargo. what's the view there? >> wells fargo is probably the most profitable and best managed large multi trillion dollar bank in the country. they did have extra gains in private equity, overall a well-one company with the

highest return on assets of any of the big banks to own. >> when i asked you who was better to own, bank of america or jpmorgan, you said bank of america. how about in terms of bank of america and wells fargo. >> sometimes the less well-run company is the better investment, that's the case with b of a. when you compare wells to bank of america, we would still put our money in bank of america because that has the best upside from here. >> fair analysis, gerard. another mover this morning is delta. the airline's third quarter profit did top expectations, helping it shrug off a slight revenue miss. phil lebeau has the details on that. >> that's why shares of delta are moving higher, doing better in part because it beat the street by 3 cents. look at delta's earnings for the third quarter, 1.74 per share, 3

cents better than the street was expecting. you look at the revenue, in line. a little over 0.09% at $11.1 billion. when you look at the third quarter, look at the operating margins, up to 21% in the third quarter. passenger unit revenue down 4.1% in the third quarter. more pressure there. lower jet fuel costs, all of that setting delta up for what richard anderson told us on "squawk on the street" this morning should be a strong 2016. >> the economy in the u.s. is very strong. the economy in western europe is doing well, mexico, caribbean, central america, china. we take the conglomerate of all that and the bottom line is we're setting up for a stronger 2016. >> you look at shares of delta. shares over the last month, because really like the airlines

it struggled. delta and many other airline stocks have found their legs again, so to speak. they are all moving higher. shares of delta up more than 2% today after it beat the street with 1.74 in third quarter earnings. carl? >> it's a busy day, thank you very much. let's get over to kate kelly and she has caught up with mylan's ceo. >> yes, i caught heather bresh in the hallway here. she was questioned on stage on the hostile takeover of perrigo. i had a couple of follow-up questions. perrigo shareholders have been offered 2.3 shares of stocks in mylan if they go through with the deal. a call was held last night at 5:00 p.m. i asked her if it was effective in convincing people to support the deal. she said i think the call went great and we were able to do

what we set out to do, and i think we were able to get the noise off the table and put the math that shows just a clear and compelling offer to perrigo shareholders. she also said i think there's going to be a lot of volatility in the health care market for a while. so i think as shareholders step back and say it would be better to be part of a larger base that could absorb that volatility, i feel confident we'll get the tenders. so feeling good about this vote that needs to come together. and finally a shout-out to cnbc in there. she spoke a bit about the company's inversion from being pittsburgh-based to dutch-based, and a funny call called sticting. >> there was a little known law in the netherlands called

sticting whistic sticting -- >> which became the favorite word on cnbc in the past three months. >> yes. >> some funny words for cnbc. i know you follow that closely. >> i'm glad to hear health ser watch. i did enjoy saying that. the math would seem to be in mylan's favor because you have 25% of shares held by hedge funds, 30% plus of overlap in terms of shares in perrigo and mylan. also now a spread between the two. if you get in there as an investor, in a little as a month if you tender, you will get a

nice return. that said, i don't think, kate, they did much today in the presentation from yesterday, another one today. a life one at the hemsley. i don't think they put forward anything new for investors to take into account other than the same value proposition. it will be one we follow closely over the next month. >> i wonder if it's more question of just repetitive messages. sticking to the script, but just getting the word out there with as much volume as they can. >> they need to do that and explain irish takeover law to the shareholder base of perrigo. perrigo has until october 23rd to do a frustrating transaction, that would require a shareholder vote. we have to pay closer attention. that's a good note to me. i have to pay closer attention. interesting to hear from her. we want the company's chairman to come on with us right here.

kate, thank you. all right. when we come back, the democrats taking the stage last night for their first debate. who came out on top? we'll talk about that when "squawk on the street" returns. good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*trade opportunity is everywhere. go to ziprecruiter.com and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to ziprecruiter.com.

the democratic presidential candidates gathering in vegas for their first debate last night, so who won and who lost? john harwood is live in las

vegas with more. good morning, john. >> reporter: good morning, carl. winners and losers alike agreed on that stage that wall street deserves tougher regulation, but nobody put it more bluntly than bernie sanders. >> in my view, secretary clinton, you do not -- congress does not regulate wall street. wall street regulates congress. and we have to break off these banks. going to them and saying please do the right thing is kind of naiv naive. >> hillary clinton actually said that her plan was better targeted to regulate wall street even though she doesn't favor the reinstitution of glass siegel. but she also said she wants to help capitalism, not get rid of it. >> when i think about capitalism, i think about all the small businesses that were started because we have the opportunity and the freedom in

our country for people to do that, and to make a good living for themselves and their families. and i don't think we should confuse what we have to do every so often in america, which is save capitalism from itself. >> but the most emotional moment in that debate is when bernie sanders lent hillary clinton a hand on the question of controversy over her e-mail. >> let me say something that may not be great politics. but i think the secretary is right, and that is that the american people are sick and tired of hearing about your damned e-mails. >> thank you. me too! me too! >> now, that line may have helped bernie sanders as well as hillary clinton because it's consistent with bernie sanders theme of sticking to the issues of income inequality and the gap between rich and poor. hillary clinton was the clear winner of that debate last

night. went a long way towards calming the fears of supporters after a difficult couple of months for her. >> that moment, we're told by twitter, the most tweeted about moment during the debate. we are joined this morning by former democratic presidential candidate, retired four star general, wesley clark. good morning. >> good morning. >> john makes the point about clinton getting this massive assist from sanders. were you surprised by that and did it help. >> i think it kept the focus on the issues, it was a smart move by bernie sanders. a lot of people have worked very hard to keep hillary clinton from following through on the popularity and the claim and the stature she has duly earned. people all over this country --

as she said, she never got respect from the republicans. i think it's great bernie sanders would show her that respect and say let's get back on the issues. >> as you look back at your time behind those lecterns, and prepping for something like this, what lessons about you take and how do you think those might apply in the debates to come? >> first of all, you have to be yourself. i think hillary was herself last night. she was relaxed, poised. right on target. she was emotionally connected to the audience and they responded. that was the big thing. i saw her make no mistakes. she made lots of good comments. you know when she says she's a progressive who knows how to get things done, that's at the part of this. not only are you outraged at wall street, a lot of us are t outraged at wall street, the financial collapse, yes, but how will we fix it?

hillary's plan is a much better plan than simply reinstituting glass-steagall. she talks about the shadow banking sector, insurance companies like aig whose collapse was what really spread it. it was the accelerant that spread the lehman brothers problem across the world. it's larger than glass-steagall. hillary shown she is the candidate who best understands the issues. the art of the debt baits is to show your understanding in a clear way with an economy of word words. and some humor, good humor, good nature. hillary did all that. >> general, the e-mail question has clearly captivated a lot of people and given the gop a lot to play with. it has hurt her standing in the polls. it won't be resolved as a result

of what was said last night. where does that issue go and the more interesting question for many on the middle ground of trust in the clinton campaign. >> she has already said she could have made a better decision on this thing, but she didn't do anything wrong. she didn't take any e-mails herself that were classified, try to hide them. there's a lot of people who had done that in the past. they fired cia directors for this. she didn't do any of that. there's a lot of smoke here, not much behind it. i think when the hearing occurs on bengahzi next week, a lot of this will come out in the public and say stop, stop fooling with it. talk about the issues, get on with it. the republican party is scared of hillary clinton because she's smart, competent and represents a real force in politics. she will help lift women up all over the world. it's a huge thing to have a woman who is that confident that dedicated, that experienced as hillary clinton in this race. if you were in the other party, you would be doing everything you could to stop her.

it's time to stop playing games, start talking about the country. >> it's been said as people await joe biden's moves, that last night's performance by client clinton closed an avenue for him. you sound like a hillary backer. would you not want to see a more robust process? >> i am a hillary backer. i have endorsed, given her money, i'm not a neutral observer of this. >> we got that. >> i think president biden holds a revered place in the party, but i for one did not see that there was an opening that came out of last night's debate for vice president biden. i didn't see it. nobody stumbled. there wasn't a single point where you would have said, god, if only the vice president were here, he would clarify this or lift us up.

no, we had five pretty good candidates on the stage last night. >> general, good to get your take. appreciate you coming to the phone. >> thank you very much. >> a reminder, cnbc will host the next gop debate, two weeks from today, live from the university of colorado at bolder. we'll moderate along with becky quick and john harwood. coming up, nike, the best performing stock in the dow so far this year. up about 30%. management meeting with investors today. find out how they say they'll keep that momentum going a live report from the nike investor day after this break.

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nike hosting an investor day for management to explain to investors how it plans on keeping the momentum going that sent its stock rocketing. sara eisen is at nike hq in oregon where she joins us with more. good morning. >> good morning. here at nike, which has set a high bar for itself, the stock

is up 30% in the dow, coming off a strong quarter when other companies are struggling with economic weakness and the stronger u.s. dollar. nike management will be talking to investors today. here three things investors want to know more about. first of all, china, china what slowdown? nike posted 30% revenue growth in its most recent quarter in the region at a time when the chinese economy has been slowing down. is that sustainable? especially can it continue to be a growth driver for nike at a time when the emerging markets results and even north america have been disappointing. north america is a core market, the growth there has been subdued. digital is a question mark. nike has talk about the growth of e-commerce on mobile, but what is the strategy with digital? they have a good relationship

with apple. but the companies have been quiet about what they're working on as far as wearable digital. and the targets and the numbers. can nike continue to hit them. one thing is tpp, the transpacific partnership, remember the trade deal, i was back here in may when president obama was talking about it. nike manufactures its footwear oversees, 40% made in vietnam. how much is that tariff relief if it goes through help margins and the bottom line? one number to keep an eye on, nike said by 2017 it hopes to hit 36 billion in revenues. perhaps we'll get an update on that now that nike is above 30 billion in revenues. the ceo will talk to investors at 1:00 p.m. and we'll sit down with him at 1:45 eastern time. >> best dow stock of the year.

that's big. thank you very much. when we come back, mixed results coming from the big banks. we'll get the latest headlines from all these conference calls going on. why pause to take a pill when a moment spontaneously turns romantic? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction

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good morning, i'm sue herera. here is your cnbc news update.

russia says its military airplanes made 41 bombing runs in the last 48 hours target iin isis. more violence in the middle east, clashes breaking out between palestinian protesters and israeli security forces in bethlehem. palestinians threw rocks at israeli forces who responded by firing tear gas. an israeli armed vehicle burst into flames and at least one palestinian was injured during the clashes. the israeli military has begun deploying troops to stop the violence. at least three have been hospitalized after a shooting at the tennessee state university campus. shots were fired during a midnight off-campus party attended by more than 100 people. and former nba basketball player lamar odom has been o hospitalized after being found

unresponsive at a las vegas brothel. now back to simon. bank of america and wells fargo have come through with results this morning kicking the earnings season into high gear. we have more details and highlights now from the conference calls. >> thank you. the wells fargo conference call has been underway for quite a bit. just now getting to the q & a portion which is oftentimes where things can get fiery. wells fargo, as you know, is the bright spot in the sector when other banks see weakness in trading portfolios, but not so today. this bank is hurting from its margins. they're hovering near the all-time low levels. the majority of wells' income is interest rate based. the margins are getting squeezed. part of that, too, is rising

deposits. it's also the fact that the bank said its efficiency ratio could be rising. it could be at the upper end of its range. that is something that the cfo and john shrewsbury has been talking about. he said until rates rise, they will be operating at the higher end of efficiency. efficiency ratios for jpmorgan are on target to improve. for bank of america, despite turning in a solid quarter, the cfo 5:nacknowledged that difficulty. >> revenue growth remains challenging in this interest rate environment. we are focused on those things we can control and drive. >> for b of a those things look

good. two quarters in a row of real loan growth and a loan runoff is still happening, but loan growth is not overshadowed by that. consumer loans up 4.5%, wealth management loans and global banking up about 10%. four straight quarters without legal fees totally wiping out profits. there were concerns, you have weak trading, not enough data to predict how q4 will turn out. and donofrio said 40% of its portfolio are not tied to oil, but 60% is. moynihan said the transition of executives will continue as planned until the next resubmission. they said there's no radical change in the management style with the new executives. people are watching ccar, how

the fed will look at bank of america's processes and how much capital they can give back to shareholders. >> particularly with the problems in the past with the same view. let's get down to rick santelli, on the floor here for the santelli exchange. rick? >> listen, in chicago, there's two legends. one is ernie banks, the other is art cashin. >> thank you. >> absolutely. art, when you look at the data, i see a trajectory of less than stellar data, not recessionary from a national standpoint, your thoughts? >> you're dead right. the concern is not so much you slipped into recession but that this recovery, this take off is still around stall speed. we have not gotten a trajectory to take us up. so people are concerned you get the wrong bump in the road, you might accidentally slip back towards recession. >> art, let's say the fed

normalize s rates and we're at 2%, it gets lowered to 1.5. would the markets have a problem with 1.5%? >> no, it's all a matter of context. the fed pretty much has painted itself into a corner. it missed its opportunity, now they want to justify things by saying it will be data dependent but the data is not coming in the way they wanted it to. after you heard turillo, and branard say, they are losing out on the hope of doing anything. >> when stan fisher came on board, many were optimistic that he would bring a credibility and a new atmosphere to the fed. here's what i see. he tells us the door is open. i don't think he believes it. i don't think anybody at this point believes it. wasn't that contrary to keeping everything transparent in a

straightforward way? >> i think -- you're right. when he came in, he was the dean of central bankers. everybody was looking forward to it. i think he -- he objected to the fact that in their sense of being transparent they had virtually told the market what they intended do two months out, three months out. he thought that was denying the fed a chance to see what markets feared. so he wanted to reintroduce doubt, but not in a helpful sense. they are playing with investor psychology. >> look at what happens in china. they say they're liberalizing many large hedge funds, different descriptions force their actions. no matter how they turn out, they will be reluctant go back to that well and drink that water. isn't the same dynamic there with the relationship between the omniscient fed and the

psychology in the markets? >> i think that's the problem. the fed was worried if they lifted off too early and then a had to reverse, they would lose that omniscient sense. people would say these are fallible humans, they don't know what they're doing. so they wanted to hold on to that. in doing so, they have run a greater risk is if they fail to get this thing moving, are they going to do qe 4? >> i tell you what, art, let's be real here. their toolbox now truly has two tools in it. they're not a screwdriver and a hammer. it's negative interest rates and quantitative easing. it will come down to making a decision on either one, in my opinion. >> yeah. and while they have done experiments in europe with negative interest rates, if you do it with the number one economy in the world, can you imagine what joe six pack on

main street will think with negative interest rates? >> no. crazy. >> we'll leave it there. that's a thought in peoples minds that they're not going to relish. back to you. art, you're the man. >> my pleasure. thank you. >> thank you very much. as you may know, it is walmart's investor day here in new york city. we are getting head lines from the company. david, you want to get in on this. sales expected to be flat in fiscal '16, which is where i think the street already is. stocks got a mild intraday pop on some news. they say investments in tech will continue, but also that earnings will be pressured next year. mcmillon on "squawk box" earlier this morning said back to school was okay. he said the holidays would be fine. the u.s. economy was steady. even decembspite low gas prices it's seasonal bumps. >> it's a challenge all the way as we watch the stocks sink a

bit as we get more detail. you spoke to mcmillon a few quarters back when they made the big announcement on wages, that was moved in to the cost structure of the company, not in a positive way for those looking for positive margins. he also said they are evaluating their portfolio in case they exit some businesses. no clarity on that. >> he made no secret of how much this wage investment is going to cost. >> no. >> i think he said 1.2 billion next year after doing 1 billion already. it's the worst performer on the dow this year. funny nike is the best and walmart is the worst. >> one is an innovation, one arguably isn't. >> yeah. walmart trying to change that. >> that stock picking up to the down side, now down over 3% this is all in realtime. we'll bring you more as we get it. a major break through today for trip adviser.

trip's stock soaring after finally persuading one of the two big online travel agency groups to list hotel inventory on its platform which is transforming trip adviser to a major competitor executing online bookings. booking.com, agoda and priceline will offer product. pcln and expedia have previously resisted participating, not wanting to encourage a competitor. trip adviser's instant booking flat form has gained too much momentum to be ignored, especially after marriott broke ranks to offer its hotel rooms. th the d.o.j. green lighted expedia's $1.3 billion takeover

of the orbitz brands a month ago. at the time i asked if the p prospective growth had saved expedia's deal. >> if you look at consumers now, they are so much more fluid as far as moving across didnfferen devices, moving from pc to tablet to phone. they are fluid about how they move across the internet. they will be going to a supplier direct site, to trip adviser, to google. >> we have some news from the "seattle times" that amazon has shut down part of its travel website, according to that report. the destinations travel sometime which aimed to give you vacations within driving distance of your home. david? >> simon, i want to revisit walmart if we can. when carl and i were talking, we were talking about the stock not

seeming to be down much. now it's down almost 6%. 5.5%. having their conference call and analyst say. cfo saying 2016 could fall by 6%. flat sales year over year. that 6% to 12% fall because of increased waniges. this is a significant decline for a stock that has not had a good year to begin with. picking up there as they have this conference call with their presentation to the investment community. there's a look at walmart shares. all right. up next, tom brady is getting into the wearable space. can't really hear him. we'll have more details and we will, i promise, here from dapper tom brady.

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. >> here's a look at walmart shares. down, as you see. when the cfo began to give three-year forecasts that included significant decline in eps, as much as 6% to 12% for fiscal year '17, that fiscal year does start next year. stocks started to slide dramatically. talking about wage pressures, something we were talking about here. you can remember when carl first started to mcmillon. they are talking about seeing an increase in eps by fiscal year

'19 by 5% to 10%. that's got to be one of the worst stock declines. >> i was looking at estimates for '17, as david said, this is the next fiscal year out. the street was at $5, off a 4.72 number in '16, about 5.9% growth. this is where wall street was. they're talking about the same number on the opposite side, 6% decline to 12% decline. that's a remarkable turn in guidance. off of a flat sales number and given these investments they're making. 1.2 billion next year as they take their minimum wage to 9. that grows to 1.5 billion as they take minimum wage to $10 an hour. complete -- sales side getting completely blind-sided. >> tifinally a release came out announcing a $20 billion share repurchase over the next two

years. this three-year strategic framework that they introduced 10, 15 minutes ago when the stock started to sell off. i have it on paper here. capital investments about 11 billion for 2017 will remain flat. in '18 and '19, net sales growth expected to be in the range of 3% to 4% annually over the next three years. net sales growth. technology will drive strong shareholder returns, but the key in the release is, again, the one that the market is keying off of, that decline in earnings per share that will take place over the next year. where they're talking about sales growth again over the next three years, estimated 3% to 4%, adding 45 to 60 billion in sales but seeing the cost increase as a result of wages. as a result of investments, they expect earnings per share 6% to

12% by '17, and by '19, to increase. >> each percentage move is worth about $2 billion. that's $16 billion that >> stock reaction is obvious, about the they are making a bet. a very big bet. long-term. if they pay their associates more, they invegs in technology at the casheer, then the experience of shopping there is going to improve, but the short-term -- >> criticism.

as we said earlier, doug mcmillan was on ""squawk box"" and said little about this angle of guidance, but he did talk about their level of investment. >> we've got a source business that needs investments, and the investments we made in people, in training, in stocks. faster check-outs. those things are starting to pay off. in stores we've got fast, clean, and friendly stores that we measure from customers. we've seen them go from 16% favorable to 70% today. our customers are telling us it's working. >> let's bring in courtney reagan who covers the retail settingor for us as wal-mart continues to fall now currently down 8%.

mr. mcmillan started off the show talking much more investing for the long run. talking about different investment whz it comes to the stores, to digital, to international. he kind of gave us foreshadowing that they were probably going to take down the estimates. i just don't think the analysts saw it by quite this much. then the cfo got on and began to go through the details, and he classifies this as an investment phase. he says that the decrease in eps for 2017 of 6% to 12%, he says 75% of that is because of the investment in waejz. 785 prz of that decrease for fiscal 2017 comes from those investments. he did say they will add $45 million to $65 million in investment over the next three years. $20 billion in share

repurchases. they will continue to generate $8 billion in cash. in fiscal 2019 they will grow to a level to where they are today. that is quite a number of years out. it's about investing in the long run, and we only got just a little bit of a hint that something like this might be coming. not this dramatic. i'm a little surprised they would. he was on interview on our network this morning. i'm a little surprised they didn't have this as a press release this morning prior to the investor meeting. it's been disseminated in the market many in a strange way given everything they had planned today. >> exactly. wal-mart is a very, very big company. we went through sort of all the statistics earlier on ""squawk box"" and so because of that they are very careful with when and how they were they release information.

this was i am sure thought through. for some reason these were the decision that is were made. mr. mcmillan was on ""squawk box"" and decided not to go into the detail other than saying he was going to provide us more guidance for the next three years. we knew that was coming. he didn't at all foreshadow what was coming. if you watch the stock initially when mr. holly was giving some of the numbers, it was bouncing around a built because i think the market was just confused about what we were hearing. especially because we got the numbers in a format that were want used to seeing as far as comparing it to an analyst number. when we see a down 6% to 12%, and then another arrow going up 5% to 10%, it was hard to follow loi low their presentation, admittedly, and i am glad we do have a press release now. the market is not happy. >> the initial move off the sales guidance was not as dramatic as when they got to the actual eps. by the way, if you are trying to put this decline into some perspective, we were being told this is the single day decline in wal-mart in 15 years.

got to go back to 2000, and s&p capital says this would rank in the all-time top 25 worst sessions for wal-mart. it's been public for a long time. >> it's been public for a long time. sam walton took the company public back in the 1980s, right? dividend yield now 3.2%. that may be something that perhaps at least will put some sort of bottom. i don't want to cover up the news here, which, of course, is the decline they've seen in eps. it is interesting. again, we think that they would put a release out and then have a position to defend it and defend it in an articulate manner with their ceo and various ways. in this case instead it's -- >> i don't want to confuse what's going on here, but i wonder if it's something more in the language that they are using here where they talk about their ability to jeb rate free cash flow. then they talk about strategic opportunity. within that they're talking about the share buy-back.

i wonder if knee left unanswered questions about what that cash could be used for. >> the file hour of the day is when the question and answer session will come from mr. mr. mcmillan, mr. holly, and the other executives that are present with the analysts in the room. that should be, i believe, between 12:00 and 1:00 p.m. eastern time. i don't even know if an hour is going to be enough to answer all these questions because as far as i can tell, no one knew that these type of numbers were coming. i'm sure that the analysts are right there scrambling with their models, you know, potentially to have their associates helping them to work through it to ask questions in that hour. >> courtney, we're running out of time. real quickly, they announced the wage increase some time ago. one would expect they would have had a sense as to how much that was going to cost them. did they not message on that front? >> the numbers -- courtney, from what we talked about with doug back on that day, the numbers

aren't that different. it's just a matter of the consumer is not powering through maybe as much as they thought at the time, but -- >> >> there's a lot of questions we have to get answered here. >> with wal-mart almost down 10%. let's take a break.

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welcome back. breaking news. a huge move in wal-mart today. john fort and kayla joining us here at post-nine. s&p capital tells us one of the top 25 worst sell-offs ever. you have to go back 15 years to see a decline like this one. >> they're doing that in the face of a relatively flat sales outlook for the current fiscal ye