good morning, everyone. welcome to squawk box here on cnbc. i'm becky quick with andrew ross sorkin and brian sullivan. joe is off today. paul ryan running for house speaker. announcing his bid in a letter saying he is ready and eager to be speaker. we'll talk more about this with john harwood coming up later in the hour. right now though a check of the markets. after yesterday's 320 point jump in the dow mario draghi lighting the fuse with his dovish comments about extending europe's quantitative easing program. that's what kicked things off. the idea that the central banks are here and here to stay for quite awhile. you saw the euro under quite a bit of pressure. this morning you can see green arrows for the equity futures. the s&p futures are up by 15 and nasdaq up by 91.

check out europe in the early trade. at this hour similar gains once again there. in fact the dax in germany is up by almost 2%. the cac in france up by about 1.9%. the ftse up by 1% and in italy those stocks higher as well. as we mentioned at the top of the show it was the tech trio giving markets a boost this morning. let's start off with microsoft. the stock surging on better than expected results. first quarter profits of 67 cents a share. 8 cents better than the street was expecting. revenue at $21.6 billion. that was also better than expected too and here are a few quick statistics for you. office 365 subscribers up in the quarter. the big story, what happened with cloud. cloud revenue rose 8%. company also planning to shed about 1,000 additional jobs. the stock topping $50 and that's up more than 50% and that's a dow component that helped every one of these indexes.

>> amazon surprising investors with an unexpected profit. reporting profits of 17 cents a share. expecting a 13 cent loss. revenue topping $25 billion ahead of estimates and the stock soaring on that news. up as much as 10%. added about $25 billion in market cap. >> and 4.6 for jeff beso himself. >> and a huge buy back for google as well. >> the alphabet -- alphabet the parent company of google reporting strong profits. the company stopping estimates on the top and bottom lines. also planning a $5 billion stock buy back. that's the first time they tried to do that. the stock trading near an all time high. 28% year to date. we'll talk more about this with a couple of tech analysts in a couple of minutes. >> while that trio is powering ahead facebook hitting a milestone of its own.

check this out, after hours facebook shares topping $100 a share after hours at 101.73. that's up about 2%. that's a new all time high for facebook. up about 30% this year. just took a look facebook now the 7th biggest company in the united states. $280 billion market cap which now makes it bigger than both wells fargo and johnson & johnson. i'm trying to look at zuckerberg zuckerberg's stake. he's probably moved up a few spots on this move. also shares of apple because apple being removed from the focus list at citi group. citi group saying they don't hate the stock. this just happened a few minutes ago. they don't hate the stock. it just met their milestones. they released the iphone 6 and other things so citi group removing apple from its focus list. i'll bring you more details. meantime a few more earnings

reports to tell you about on this busy friday morning. at&t reporting profits of 74 cents a share. that tops a consensus forecast of 69 cents. revenue didn't miss consensus but at&t raising it's earnings forecast. that's something we're going to talk about with cfo john stevens at 7:40 eastern time this morning. we'll also speak with john moeller at 7:30 a.m. you didn't tell me it was going to be this busy. >> i'm glad you're here because there's some heavy lifting to do. we need help today. >> more controversy in the world of valeant. we'll turn our attention to that company. what a saga it is. planning to hold a conference call. that's going to happen on monday. valeant plans to refute the claims that it used specialty pharmacies to inflate revenue.

at least ten of the executives will participate on the call and valeant already denied the claims as the stock loss 25% of its value since the story broke on wednesday. of course bill ackman doubled down on that stock. >> i don't know if he doubled down but he put some additional. >> it's now his biggest stake. >> i thought it was his second biggest. >> i thought it was now his biggest. >> it's big either way. >> he told scott he bought 2 million shares on wednesday. yesterday the stock got whacked again. two quick things here guys. number one, the what they call the insurance to ensure the debt, the credit default swaps on valeant are bad. whereon the exact price but they continue to rise. the bottom line with that means the market is betting the odds of valeant defaulting on debt continue to grow. and number two, the news of this conference call broke during power lunch, the 2:00 show.

my initial reaction was why wait until monday. >> that was my reaction. >> viewers wrote in and said they have to legal up and make sure that everything is right. here's the reality, you can do a conference call monday but what you need to do is come out, come on cnbc and say listen we don't need complex slides to justify our business model because if you're that sure about what your company is you come out and hit back hard and say this is us. we're fine. this is dpashgarbage. >> the idea that there's the sound of silence or it's going to take us five days to see what our response is seems crazy too. especially when you're watching your stock drop by as much as 40% before you saw this step in. the other thing i thought was interesting today guys there's a story about the short. >> andrew left. >> andrew left is the guy from citron that came out and wrote this report. very interesting where with it talks about why it's so loud.

why he writes the way he does. why he tries to get people's attention. he has gotten a lot of attention. the one thing missing in the story though it doesn't say if he covered his shorts. >> i don't think he has said if he has a position himself. i don't know. could be wrong about that. >> that's how he makes his money. he comes out with these things ahead of time and makes money by shorting it ahead of it but i'd like to know what his short position was and if he covered it. if you're short this stop and watch it drop 40%. >> and he has been right and wrong. he writes his reports in an unusual way. they're not super data heavy and the one thing that he put throughout that people are focussing on is that there are these -- two specific specialty pharmaceutical companies basically claimed they didn't know each other but they have the same privacy hotline phone number. which i called by the way and it doesn't give a company name.

it just says thank you for calling the privacy hotline. please leave a message. >> those seem like things you could clear up easily. >> that's why the ceo of valeant needs to come out. i understand they have to lawyer up and get their ducks in a row because andrew left of cifrtron used valeans own slides against them as part of the short presentation. he said you guys got this wrong or at least you didn't clear this up. this is a big story because it's not just bill ackman it's john paulson, it's shaw at least of the last filing date. there's big hedge funds which if they did not either get out of this trade, buy puts or short the stock also hedge. >> which they are not. >> their investors are not going to be pleased. >> bill ackman has not heblged the stock. >> he could have bought puts. >> i wondered when he was doing

this if he pauth puts. >> that's the whole ideas of a hedge fund. you should be hedged. >> that's not what it is anymore. that's what it used to be. >> this is at 6:08 on a friday morning. >> when is the last time a hedge fund was ever a hedge fund. >> your new show on showtime is coming out soon valeant could provide you with a whole new story arch for season two. >> not a bad idea. >> let's get a check on the markets. the futures are indicated higher once again. take a look and see what's been happening with this. yesterday it was the ecb and mario draghi that gave things a boost. you saw really strong earnings that prompted things across from the technology sector. this morning the dow futures up by 91 points. if you were looking at the low we've seen a massive move. up 11.2% for the low back in august. that's a very quick move to the upside. people waiting for that dip

makes you wonder if we've seen the bottom. what any of this is telling us. tals s&p futures up by 17 points this morning. in europe as we showed you before there's similar trends there. green arrows across the board. you can see the tax continues to pick up steam. up by 2.2%. the cac is up by 2% as well. you said the nikkei closed higher. up 2.1%. stocks in china as well up at the shanghai composite. if you want to check out what's been happening with oil prices check out wti this morning. slightly higher up by about 16 cents. 45.54. around $45 barrel for wti. take a look at the bond market today. the two year is yielding at 2.055% and in the currency markets this has been a lot of activity. the euros have been the number to watch since draghi started talking yesterday. euro fell 2% to a two month low

yesterday. that was at 111. it's sitting there today at $11107. down at 12051 and take a look at gold stocks. you'll see that right now gold is up by about $6. >> let's get back to the tech earnings parade. we've got amazon and alphabet and microsoft all spiking after reporting earnings here on the set is the internet analyst and covers alphabet and amazon. i'm wondering how you're suffering with this issue and then covering microsoft is the managing director of software research at griffin securities. i want to do microsoft in one second. to me what is interesting is connecting what's happening at google -- at alphabet the idea that there's going to be buy backs. the maturing of these companies and the fact that amazon has real profits and whether you connect the two ideas.

>> yeah. to a certain extent. but what you're really seeing is both of these companies able to navigate the most challenging issues for quite sometime. amazon on the margin side and google on the mobile side. for the first time we're seeing amazon able to produce record profits and google starting to see stabilization on mobile which we haven't seen to date. >> does it make sense that we could add $25 billion in market cap after they made $79 million? does that math add for you? >> has any math ever added up for amazon anyway? >> what you have to do is look at the future potential of the business. what we're seeing is that their north america business is a path toward a margin double what it is today. it could go up to 8. they're taking their learnings from china and applying it to india. that's phenomenal growth there so you can see a path way there and aws which is their cloud, their core their flag margin so you

can get there. >> i get the path but the question is we've had these moments, these inflection moments where they show profit and people think this is the beginning and next quarter they're supposed to keep doing it and they go right off the path again because jeff pbesos wants to invest again. i'm just wondering if you think the investor community understands what's going to happen next. >> amazon does check in to show they're able to deliver what people think they should be able to deliver. that's what is happening now. so obviously we'll go through another investment cycle where there's a possibility of disappointment if they decide to enter into another category that's going to be dilutive over the coming horizon but at the same time what we are seeing is their ability to do it when they want to be able to do it and i think it is that belief that helps you reinforce the longer term potential of the consolidated business.

>> microsofts revenues are down. they continue to fall but everyone seems to love what's going on. >> they out performed andrew. it was clearly above consensus. certainly above my number. that's with adding back the deferal for windows 10. the adoption there is doing well. we thought the total windows business including sales to the research factor and corporate customers and retails would be down 20%. it was down 7. it will get better for the rest of the year now that you get a full quarter of windows 10 effect. office 2016 is in the market so they are clearly also doing well on executing on costs so the margins are expanding. the cloud profitability is expanding. we mapped that out for awhile. they talked about now becoming break even. remember the conversations that this was a several hundred

billion dollars a quarter loss business. that's no longer the case. >> what about the idea of the cloud overall? if you look at amazon and microsoft and see what's happening versus what has been happening with ibm. it's an interesting to story to find out what shaping and what is not. >> there's some companies that can werejuvenate. they continue to be very strong in terms of the operating system business with windows. maybe it was down. put it will get better. office is still a predominant product and the overall strategy of opening up to other platforms, putting their products on ios. >> finally. >> i don't know that the numbers are tremendous in terms of

revenue but it makes a lot of sense. >> you used to buy it. pay $125 and buy it one time and put it on your computer and that was the last check you would send to microsoft. now you download it for $100 but it's $60 a year per user on the personal level. is this going to work? >> yes. it is work. you can see in the subscriber ads and historically one key number that you would look at is retention rates. return. how many customers are you keeping? how many are you using? overtime you will keep more in your revenue stream than you had before. to your point, one and you're done is no longer the case. now you are building revenues overtime and we'll see this in cash flow. they just put up a $29 billion annualized free cash flow number. that will get past 30 billion very soon which will add to i think the free cash flow yield value of this company. >> we got to go but real quick if you had a dollar to put into

any one of these three companies your pick would be. >> microsoft. >> no question. >> amazon. >> no question. >> no question because you know when you put them head to head it's advantage amazon all the way. they have the direct relationship with the customers and mobile figured out and google has a long way to go. >> quickly before you go how much of this is him. >> some of it is what he inherited from before. he has been ceo not quite two years but a lot of it is him clearly and the cfo. you have to give a lot of credit to the financial execution of the company here but -- >> none to bomber? these plans were put in place a couple of years ago. >> he inherited a lot of this but he brought a new emergency in focus to what i have been calling the three part strategy that's been executed very well. >> okay. thank you guys. appreciate it very much.

>> coming up we're going to continue to talk about a blue chip surge. the dow soaring more than 300 points yesterday. we'll let you know how today is shaping up. it's looking good so far. at least in nasdaq. nasdaq futures are way up after last night's tech boom we justlked about. we'll sort out the crazy friday markets for you. and what is jack dorsey doing with his stake in the company? it might pay to be a twitter employee right now. that story coming up in chairs but as we head to break check out this day in history. ♪

pandora matching estimates with quarterly profit of 10 cents a share and the company also announcing a $90 million settlement involving recorded before 1972. also skechers under pressure after the latest sales figures came in well below street estimates. bottom line hurt by higher legal expenses and earnings coming out from whirlpool. quarterly profit of about 16 cents above estimates of $3.45 a share and revenues coming in short of street forecasts and the company cutting the top end of its 2015 earnings outlook mentioning challenges in various

emerging markets. >> gnc finds itself in lee fwal hot water. the state of oregon accusing the dietary s'upupplements retailer of putting illegal substances in some products. gnc says the charges are are without merit and it will fight them vigorously. the stock tumbled 15%. >> wall street on the verge of the first four week winning streak of the year. can stocks keep the mojo going after yesterday's 30 plus point gain of the dow? here to break it down phil good morning, thank you for joining us. we have the fed in a couple of days. also the same day as the gop debate. back to school out of the way now but christmas is on the horizon. we have a few weeks until a jobs number as a strategist what is the most important thing approximate for you to watch right now? >> there's no single smoking bullet. it's more of a bass et and we're

moving in the right direction here. from a technical standpoint we think the market successfully retested that august 24th bottom about three weeks ago so we're feeling good about a year end rally sbup rally up into the 2200 level. the consumer portion of that was very encouraging. we think corporate earnings season is coming in better than expected. we think we're going to have an up tick in core pce inflation a week from now. we think the eci is starting to move up so a number of things are falling into place but i think giving the market some confidence. >> a month ago we were all doomed. china was going to doom us all, bring down the world. we had a lot of volatility in the stock market. now we're on the verge of a four week winning streak. what changed? >> psychology has changed. >> that's about it. that's everything i guess though right. >> psychology is everything at this point and october is the month that bear markets go to

die. that's what happened this year. if you look at what happened last year it was exactly the same thing. we had a very powerful 15% rally over the last 2.5 months. we bottomed at about october 5th or so. this year we bottomed october 2nd or so. >> is it not problematic there's no fundamentals. >> fundamentals are fine. the issue that caused the 12% correction over august in our view is concern about china. the domestic economic fundamentals were fine. look at the market split. manufacturing isn't great and that's been a problem all year but the consumer portion of it. auto at a ten year high those pieces of the market are doing fine. >> but we're talking about look we had a lousy jobs report. worse than expected and suddenly everybody thought okay there's no way that the central bank is going to raise rates. if you look at fed futures they're not expeckingting it to happen this year. they could lower rates. to me it feels like a market

taking it's queue from central banks. >> certainly i think what draghi's comments that were extraordinarily dovish created yesterday's bump. ly concede to you that the odds of a december hike from the fed are hoe. an october hike in our view t odds of that are diminishing but you can make a case that december is not completely off the table. >> but if we thought the fed was going to raise rates in december would that change the mentality. >> in near term you probably see that brief near term sell off that we talked about. that knee squerk reaction but if investors think about it they say look if the fed is tightening normalizing policy ultimately that has to be a good thing in terms of their level of confidence in terms of how the market and economy is recovering getting back on track. stocks rip on that and some of that may be starting to filter

into the thought process of investors now. >> we all know the fed is going to raise rates. may be next week. may be december. may be march. but it's going to happen at some point. when you invest you think this will happen. that's why i'm not as much in the camp that the fed is going to destroy the u.s. stock market. >> very important slide we show to clients. right now the weekly initial jobless claims are running at a 42 year cycle low. we went back and looked at other point where is the claims data was good. what was the comparable feds fund rate? 5% 7% 8%. the fed knows it needs to tighten policy. they just have to figure out where's the point where we hold our nose close our eyes and get the ball rolling and go to one quarter. >> we don't think the fund rate is going above 1% a year from now and that's not enough to derail the economy or the financial markets.

yellen is a dove. he's going to keep rates low. it will be lower for longer. anything that the fed does is not going to derail. >> the federal reserve raised the federal funds rate by 3.5%. the dow jumped 43%. the second biggest gain in 40 years. an increased fed funds rate has not meant the end of the stock market. >> no, but a softer take on things. >> 32 around the world. central banks are easing. >> thank you. >> thanks for having me. >> when we come back this morning you'll pay more for that thanksgiving turkey this year. plus twitter founder and ceo jack dorsey is trimming more than his beard this morning. that's coming up in the next half hour and take a look at yesterday's s&p 500 winners and losers. squawk box will be right back.

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all right. welcome back to squawk box everybody. some thursday night football if you missed it. the seahawks regaining their winning ways beating the san francisco 49ers 20-3. nice touchdown there. 49ers just a massive disappointment this year. i'm sorry to say. >> all right. so that kind of flows right into my chairs segment so i'm going to jump the gun here in the new

york times they talk about how advertisers are flocking to yahoo! because they are live streaming the nfl game from london on sunday morning. bills, jaguars. it's the first time they have streamed on yahoo! and the article is about how toyota and others said we want in. it's the nfl. maybe a turn for yahoo! >> and a huge turn. i remember talking a few years ago with the nfl where they toyed with considering a google and yahoo! or somebody and goodell told us we're not there yet. now they are this and it's a game changer and probably going to drive up the rights again. if you have money from deep pocketed players like a google who are going to be involved in bidding against the broadcasters already putting massive money behind this stuff it makes you think the nfl is going to become even more valuable. >> the winner to me is the nfl. not yahoo! >> although it's a big deal for them. >> the nfl may have already had

a winner. they have this thing called game pass. it's 100% and you can watch every game the minute it ends or -- and this is genius. or a 30 minute condensed version online. if you don't have 3.5 or 4 hours they take all the key plays. it's an nfl game. i'm not trying to give an ad. listen i have a 1-year-old at home now too. you have limited time. i want to watch some chargers in 30 minutes. boy they run fast. >> can't you watch it in fast forward? >> i've done that too. >> you mention that advertisers were flocking to yahoo!. i'll take that for my queue which is what is going to happen when we get the turkey this thanksgiving. the flocks have been thinned substantially by what's happened with bird flu. you'll see hens which is the typical centerpiece for most

thanksgiving meals, down 30 million pounds. it's a decline of 20%. you're going to pay more. >> can i say something that's probably a little bit inappropriate? i got -- a couple of years ago we decided we were going to go organic and we got a turkey from a farm raised and super -- the thing had only been massaged and eaten like kale it's whole life. it was terrible. >> really? >> i felt like i was eating a body builder. it was too healthy. i want the giant fat turkey. i felt like i was eating an olympic track star. it was all leg and muscle. >> i would have thought it would have been a little thin scrawny thing. >> it was too good. too healthy. >> i'm not a huge fan of turkey anyway to tell you the truth. >> as a virginia tech hokie i'm always mixed. >> there's no segway here except

for to say who is the turkey in all of this. i was going to talk about the front page of the wall street journal, prosecutor pulls plug on insider trading charges. this was a huge story we talked about for years as they went after so many different members of the hedge fund community and now basically after the supreme court didn't take the adeal on one of the big cases he has now dropped the case against seven different people. >> you have to. >> from the guy that was probably the biggest. these are people by the way, that pled guilty. so it's really remarkable. but a huge turn of events. >> they pled guilty. >> yes. >> a lot of times you're going to plead guilty if you think you're going to lose and try to mitigate your sentence but the new rule or interpretation, not direct rule which is the quid quo pro aspect has to be

stronger. what are you getting for this information? and the supreme court threw a hand grenade into common law. >> are we going to see not necessarily insider trading cases but more of what we thought used to be considered insider trading. the whole game has changed and whether ultimately we need con depress which is probably the answer to create an insider trading law. now there's no law. >> there is. it was written in 1934. >> but that's sec. >> yeah. >> i'm saying there's no criminal law on the books that says this is insider trading and this isn't insider trading. they have used fraud. >> there's a civil -- >> but i'm saying on the criminal side. >> fair enough. >> the way that others on the criminal side prosecuted these cases there's no law that says this is insider trading so the real question to me long-term is whether congress has to create a

law. >> prosecutors have always been very happy that there has been no line and that allowed the goal post to move overtime. >> it kept potential insider traders on their toes not knowing what will get them in trouble. >> a lot of my law school buddies are now -- it's been ten years out so they're ats of power and i talked to a few of these guys and not only are there going to be fewer cases but a wave of appeals. >> that's what this is partially. >> can i say something? you guys have long legs. i'm trying to figure out where to go. we're all squished in here. >> not my fault everybody else is short. >> we're going to talk about what twitter ceo jack dorse why is up to. we'll tell you next. plus what the leading republican presidential candidates have to say about marijuana. john harwood can vances the field ahead of his big trip to colorado next. then procter & gamble ceo on his

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u.s. equity futures at this hour as we see what's going to happen. dow would open up higher. s&p 500 up about 16 points and the nasdaq would open up about 95 points higher. also twitter ceo jack dorsey is providing a new incentive for employees to follow his vision. he is giving a third of his

shares he owns to an employee pool. dorsey's only comment came in a tweet in which he said he wanted to reinvest in our people and said he wanted something that he was going to own that's smaller that could become bigger rather than owning a bigger share of something that's smaller. >> if they were to dull out the shares evenly it would be about $55,000 per employee i believe. which is not bad. we should tell you that cnbc's republican debate is fast approaching. it's coming up on wednesday october 28th. in the meantime we have been trying to drill down where some of the candidates stand on a lot of issue and since the debates in colorado we figured the marijuana issue is one place to start. john harwood joins us in washington and he has more on that. >> >> our debate takes place at a time of rapidly changing attitudes on social issues as well as criminal justice. it takes place in a state that's the first in the country to

legalize recreational marijuana. that brought out the divides in the republican field. let's start with rand paul that says what colorado has done is okay by him. >> i personally think that this is a crime for which the only victim is the individual and i think that america has to take a different attitude. i'd like to see more rehabilitation and less incarceration. i'm a fan of the drug courts which try to direct you back toward work and less tile in jail. but the bottom line is we say we like the 10th amendment until we start talking about this and i think the federal government has gone too far. i think that the war on drugs has had a racial outcome and really has been something that's really damaged our inner cities. >> but on the other hand the republican party has been a law enforcement party for decades and that brought out the side of chris christie former u.s. attorney in the state of new jersey who says not so fast on this move toward make it easier to smoke marijuana. >> if senator paul thinks that

the only victim is the person action look at the decrease in productive. look at the way people get used and move on to other drugs when they use marijuana as a gateway drug. it's not them that are the only victims. their families are the victims too. their children are the victims too and their employers are the victims too and that's why i'll enforce the federal law. >> there's a third position in the race articulated by carly fiorina which is that she respects the 10th amend lt but very aggressively said that it's a bad decision to legalize marijuana and she told a very sering personal story to make that case. she lost a step daughter to drug addiction among other illnesses becky. >> all right john, thank you. this is just one of many issues that we're going to be digging into and continuing to watch. john, thank you, we'll talk to you again soon. >> coming up on squawk box, wall street reacting to earnings from googles new parent company alphabet. we'll have all the abcs because

it is as easy as 123 with the top analysts coming up. and then at the top of the hour, three men that understand the tech revolution better than most. get this line-up. steve case ted leofsis and dan gilbert joining us for a very special conversation. you're watching squawk box. thanks for being with us. we're back after this.

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welcome back. shares of alphabet hitting an all time high after google's parent company posted a beat on the top and bottom lines for the third quarter. alphabet's board authorizing a $5 billion buy back of the stock. in fact it's a little more than $5 billion. the exact number is 5.09901951359 billion. that number minus the billion of course is the square root of 26 and that of course is the number of letters in the alphabet so a nerd is celebrating everywhere about this. joining us is rob sanderson. he is the senior research analyst and what happened in this quarter that really surprised the street? what was better than expected? >> well the pie back is one of the headline items. the other on the fundamental side for the business was a strong acceleration inution and, you know, the shift to mobile has been diluted for sometime and

we're turning the corner and getting better pricing and that's a trend that's sustainable for sometime. >> is it that so using things though not necessarily mobile people are more likely to be on? >> no. i think that the volume contribution's been there for some time and that's something that continues. here at google really turning the corner in terms of identifying consumers that are mobile and when they are intent to purchase and they are able to serve better ad and get better pricing for it p. >> what did the company break out. moving to alphabet changing the parent company on these and lines of restructuring allows analysts to get a better feel for whastzt's happening in each of the division. what do you think? >> the disclosure's on the other bets outside of google inc. that's going to be a q4 disclosure. we did not learn anything

incremental in terms of how profitable the core business is versus investments in other bets. we look forward to learning that here sometime soon. >> a longer term question. in terms of the investments made and ancillary businesses do you think that by making them, this more transpoirpt, they invest more in the businesses or leaving investments in those companies? >> you know i think it's probably higher investment is what will come at the end of the day. how the street takes that? i think being able to assign the value of the core business, the margin contribution from, you know, the business they have, and making a determination of what value we want to put on these emerging opportunities in things like energy or fiber or life sciences, you know, that's something that i think will we'll have the opportunity to do for the first time, but i do think as you pointed out that they're probably going to contribute more to the investment opportunities. >> you've got a price target of

$805 and a buy rating on the stock. watching moves made are you mapping on raising the price target? >> we have to reserve comment until we do something official. >> what are you kind of watching into? what are you digging into? >> you know i think the -- how sustainable the acceleration in the mobile search business is is the number one item. now, on top of that, you know where we are in youtube, you know, and incremental dollars, and third is double click, you know the automating of ad buying is another giant opportunity for the internet sector, and, again, another cornerstone position for google. they've got three big end gingines of growth in the core business. that's what we are watching for and what investors should be excited about. >> rob, you cover facebook? >> yep. >> what do you think of the

valuation now? >> 18 times revenue. >> exactly. >> are we on facebook? >> yeah. >> yeah. >> really giant margin profile of the company, and they're in -- if anybody's in a better spot than google it would be facebook. you know incremental dollars from the branded piece of the marketing bucket are going to the on line channels quickly and facebook's, you know in the best position of all for long duration of growth. you know the multiple of revenue is you know worth pointing out, but the margin contribution is, you know second to none and that's really what matters at the end of the day is the cash flow dynamic. >> you know funny andrew brought that up. i was working out a valuation thing for the 2:00 show talk about the difference in valuations, and, again, you got facebook at 18 -- these are proximate numbers, 18 times revenue. google afterlphabet at six and a

half times revenue. are they fairly priced? facebook deserve a two and a half fold revenue to stock price valuation gap over an alphabet, a google? >> well again, the two things to look at that there are the margin contributions, and facebook is better than anything i can point to and the second is the, you know, the growth adjusted valuation. they are growing faster. they have a large opportunity in front of them. i think the market is fairly pricing facebook. >> all right. rob, thank you very much for joining us today. a pleasure talking to you. >> sure. when we come back, more of the morning's top stories and we welcome three guests, american business legends, steve case ted, and dan gilbert, creating jobs disrupting technology sports media, and much more. there's no topic the three can't handle. first, though, as we head to break, check out the futures this morning. they have been sharply higher again this morning after the

strong results we got from not only alphabet but also from microsoft and amazon. you can see now the dow is indicated up another 80 points after a 320 point gain yesterday. s&p futures up by 16 points nasdaq up by 65. stick around, we'll be right back.

>> tech stocks soars, amazon and microsoft driving premarket gains. full story and reactions from the street straight ahead. plus, inside look of earnings from at&t and procter & gamble both companies' ceos

joins us on cnbc. >> we have three on set for the show, joining us for jobs, tech investing, startups and the second hour of "squawk box" begins right now. ♪ ♪eth beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" here on cnbc first in business worldwide. joe joe's got the day off. markets in asia, tended the rally overnight, rising 2%, and shanghai were up 1.3%. what's going on overseas in europe? flipping that board around you're looking at green arrows cac up 2% ftse up over 1%.

this is what's going on over at home, dow opening up 80 points higher about now, and s&p 500 up 15 points, and nasdaq up 93 points. look at the percentage move in the nasdaq boosting from big earnings beats by tech companies. brian? >> a big morning. let's do this alphabetically, pun intended because we start with google the parent company now, of coursing called alphabet. announcing earn eings of $7.35 a share, beating expectations by a full 14 cents, and revenue also topping the consensus. the company announced share repurchases of more than $5 billion in the class c share that trade under the goog ticker. that stock, be trading at all-time highs, up more than 35% year to day-to-day. meantime meantime, amazon with a surprise profit earnings of 17 cents a share coming in. get this analysts expected a

loss of 13 citizen a share, and revenue tops expectations thanks to the amazon web services business. that stock rising sharply on the news. microsoft reports earnings of 67 cents a share, topping by 8 cents, and revenue higher than expected, and boosted by increased demand for cloud products office 365 suite of products, a company, though, announcing 1,000 job cuts. today's, show, guysing brought to you by the letter a. >> nice. >> all right guys quickly, i want to look at what's happening with procter & gamble. looks like the company is coming out with first quarter earnings of 91 cents a share. i don't know it's a clean number waiting to call up the earnings. adjusted basis is 98. that's good news. the stock looked for 95 cents a share. the revenue numbers coming in that were -- sorry -- things are going by quick on the screen. the revenue for procter & gamble

disappeared off the screen slightly short of expectations. we'll get more about this in a bit, and we'll have john moeller, the ceo of procter & gamble joining us in minutes, but in the meantime though we have three special guests. joining us new the next two hours, talking job creation, the economy, housing. the future sports rebuilding america, and much more. steve case, former chairman of america on line the founder of investment firm revolution, and cofounded aol back in 1985, the first internet company public in 1992, and he's one of the largest land ordinary persons in hawaii. good thing to be. the form r vice chairman of aol, first to send an aol instant message all the way back no 1993. he's the owner of the washington capitals wizards, and the mystics, and dan gilbert founder

of quicken loans, starting the company more than 30 years ago, owns more than 80 buildings in detroit, and brought lebron back to cleveland. he openwns the kavcavaliers. >> congrats on 20th. happy birthday. >> thank you. we've been celebrating for several weeks at this point. >> i know. >> maybe longer. we want to start the conversation off at this point, not just your view of the economy, but jobs. it's an important time now. they are trying to figure it out, and you three have a good idea. dan, starting with you because quicken loans is the largest online mortgage company and second largest mortgage originator at this point too. you have a good idea about what's happening in housing. where do things stand? >> i think housing is stable. certainly, it's not on fire or booming by any means or crashing either. it's not -- we're just chugging along. i think the millennials are a group or generation that's a little bit behind you know

four five years behind previous generations as far as when they buy a house, but sooner or later biology kicks in you know and they are going to be having families at the pace of every else, just later. that drives a lot of it net households, formations of net households households, that's immigration and new nolhouseholds minus deaths. that drives housing and new construction, and we've been below that significantly for years now. since the housing armageddon if you will. >> first happened back in 2008-2009 when we saw this fall apart, and at that point, it took time. means people have to live with their parents because there's not jobs can't build up for a down payment faster. is that happening or deciding not to be married and have kids? >> it's both. you know, they definitely are scare, not like the depression era, afraid to take on debt.

i think this is hey shocked in their college years on what happened, so they are leery, but i think it's a lifestyle thing, moving to the urban cores. we e know that, i mean, in droves, not just the coast, but central part of the country. i heard yesterday about tennessee, urban core, things are going great over there. it's a country wide thing, maybe it's a worldwide phenomena. >> overall, the economy gets what kind of grade? >> 5.5. >> steve -- >> out of 10? >> yeah. >> that stinks. >> that's average. >> that's right. >> i don't know i want to bring a 5.5 out of 10 on my report card. >> c is average. >> 7 out of 10. >> c stinks. >> 5.5? >> like average is 2 or 3. >> drink your coffee this morning. >> 5.5. >> 5.5. he grades --

>> maybe i'm a hard grader. >> that's a tough grader. >> i never want professor gilbert. >> economy's improved job creation is strong. the four years ago, and the present of the jobs council, the unemployment was 8% so it's dropped substantially. there's still work to be done. the other part we have to recognize is the way we track jobs. it needs to be updecade the. there's a traditional view plagued for decades, full-time employment, part-time employment, and millions of people are part of the gig economy, driving cars or cleaning houses or delivery groceries. nobody's figure out how workers who have flexibility to work with multiple companies and set their own schedules, how exactly they should be count the. there's going to be a new class of worker emerging in the next few years to track as well. overall, compared to five years ago, the economy is stronger clearly, you know the job creation and we need to focus on startups around the country

because the job creation the last three decades or cough fip foundation driven by young high growth starts 43 million jobs and we can't just focus on new york, san francisco, or boston but focus across the country, places like detroit and des moines and many others because that's the hope for job creation something that communities all across the country can benefit. >> i'm up to a 6 now. [ laughter ] >> which is a b-plus according to you. >> steve, do you look at the rise of the gig economy as a good thing? >> i think it is a good thing. i understand it's complicated. there's issues to be wrestled with. there's a new year to get our arms around it but people have flexibility, decide when to work and if they want to work for multiple companies, they can do that. having the tools to manage that in the right way, figuring out the right strategy on health plans an other things -- >> health plans, retirement. >> there's a lot of issues, but it's a new concept emerging. >> it's it just continued

fractionalization of labor, and, therefore, effectively, the margin compression on wages? >> in part there's that aspect, but people working, for example, a lot of companies we back make more per hour than working for another cleaning company because the infrastructure the overhead associated with that was pretty high. the consumer is paying a higher rate. handy is less and i think there are dynamics that are positive, but the more important thing is just inevitable how technology is impacting our lives and creating new opportunities, but also with it new challenges. >> it's a fun conversation here ted, i'll do the best to ruin it. >> every party has a pooper and that's why we invited you. >> i'm the pooper. nice. great label. micro microsoft, amazon, google, whatever we call it now, all doing well. is technology that strong? are you happy with what you've seen? how do you define the market right now?

>> i think what people misunderstand is how global the phenomena has become and how small the u.s. market really is right now of the 4 billion people on line less than 400 million are in north america, meaning we're exporting, autobiography to reach those audiences, and so i think it's very, very good sign that google and amazon had big, big numbers, and -- >> are you surprised? >> i'm a little surprised that amazon had ebeda. they want to pour it back in. jeff's done a great job of managing wall street that way. >> follow up on that. i thought this morning that amazon is a -- and, by the way, we'll do the segment in the 2:00 show "cheap tease," is amazon a different company than years ago? bought stuff, get it cheap, make no money hardly, and all the sudden, they are taking on

oracle, an enterprise software company. >> the web enterprise business is real and it's one of the new developments that makes it the greatest time to be app entrepreneur. when we were early on in the internet, it cost a lot of money to buy servers and connect, and now, you know, $50 a month, you can start your business. >> mail out cds, steve? >> worked well. you're 20 years old, we started 30 years this summer. amazing. >> first aol instant. so bell wrote watson come here i want to see you, what was the first aol message? >> insubstantiate message -- >> i was addicted. >> '85 we launched it, but launched a service without subscribing called aim. >> that was -- >> i was addicted. >> we all had it. >> really started like texting.

skbh >> what was the message? >> i sent it to my wife. >> oh. >> and we didn't say, don't be afraid, this is really cool. >> first time i met mark zuckerberg, he said, i want to let you know i was 12 or 13, i was hacking into the aol aim system. that's how i learned how. he wanted to get that off his chest. he mentioned the hacker group. i remember it. mark was a clever difficult child. ? forgive him? >> obvious i forgave him, and proud of what he's dope. >> ted, you got a grade too. >> i'm more bullish. i actually think job creation i've seen a movement to made in america, assembled in america. there's this real positive feeling of wanting to buy and having transparency around who's making your products where's the food being grown, and i think that will help to create a new sector of jobs rather than going overseas.

i think crafting this maker kind of economy is a big trend. ? you know, steve mentioned this before and i'm curious about this. the jobs' denominator, i guess, or the people they count the percentage of unemployment underneath, does that include people working for ubeo or are they not included? >> it's the six people under employed, at some level. it's -- i think the question is do you want more hours, or do you not? that's probably why the jobs number is hard to figure out. >> it is hard. people in washington work on natural advisory council and innovation for entrepreneurs looking at the issue, and labor department is looking at the issue. there will be at some point reclassification to better track what's happening in terms of -- baht testimony line it's bet e but there's a lot of people left out looking for jobs who need more of a helping hand particularly in the parts of the country like a detroit that suffer the greatly. i think the bet we're all making is the place to focus on

entrepreneurs startups and if you get that going like dan is working on that's the best hope for reviving detroit after a half century of losing of 0%60% of the population because innovation was lost. it's fighting back. you have to focus on startups, and ultimately that leads to the jobs, ultimately leading to economic growth. >> okay. >> this generation, too, talking about it earlier, they want flex the. people say it's under employed. they don't want to work but they have to do it. >> it really is tough to figure out. some want, others don't. i can't get my head around it. >> it's lifestyle for them. it really is different. a lot of people you know i don't know the age group here there's a range, but it's something different. we talk to kids in the 20s or people in the 30s. this is just as important to them as how much they make a year and everything else. >> we have to go, but, quickly, at different ages but we have young children as well, and labor rate participation force

is way down viewed as negative and i have another theory the cost of child care is so stupidly high in america that if you do the math as a working mom or dad. i have friends who stay home and the mom brings home the check. if you do the math on child care, it doesn't pay to work if you make under x. factor in the costs, commuting costs,s hassle, people i know decided to live a smaller life because the -- what do we do about that? the president -- or biden mentioned that this week. how do we revolutionize to use your company name, this so we can get people back in the work force. >> leave cnbc and start a company. babysitting. >> nobody wants me raising their children i assure you. >> there's appn interesting trend with the millennials putting lifestyle first and family first. they are choosing where they want to live detroit or new orleans or denver and then figuring out what their career is. you know when i was coming out

of college, figure the career wherever i had to go cincinnati, wichita, driving on job opportunity. people who i rode around the country, chose that city and trying to figure out how to make a go of it. that impacts family too, spending time with kids, sacrificing some on terms of the salary potential. >> we're going to continue this conversation with our trio of guest thoess this morning, talking guest valuations future of media, and, of course sports. proctor and gamele out with results. the cfo, john moeller. revenue light, stock is down by 60 citizen. talking to the cfo after this on cnbc first. later, at&t's cfo is joining us to dig through third quarter earnings report. the earnings beat estimates, revenue short, but that was because of the accounting issue.

they thought direct tv was there in the month of july, but they were not included until july 25th. they have a pass on that. stock's up 30 cents. we'll be right back.

quarterly results moments ago, the products titan, household names of more than 180 countries, basically all the countries, beat on the bottom line, but revenue came in below consensus, largely because of currency head winds. breaking down the numbers is the cfo of proctor and gambleeblegamble. was the miss on revenue because sales were weaker or was it literally all because of currency conversion? >> there was a big currency impact, but sales were a little bit weaker. we're expecting them to accelerate to give back to organic sales growth and strength p in the back half reinvesting in consumer value equations and sampling a trial of consumer preferred products and innovation and sales coverage so we're in really decent shape there, and importantly, even with that light relatively light sales number very strong earnings in

cash constant core up double digits, gross margin up 250 points operating margin up 270 basis points $3 billion in cash in the kwaurdquarter. >> what missed then? what products missed john and why? >> we are taking a bunch of prices across the world working to offset the impact of weaker currencies and volatileityies are introduced as we do that, and it's not always possible to know exactly how competitors respond or even how consumers respond. there were some -- more softness in the markets, but we're taking pricing, and some of the markets -- >> are you in pricing? >> no, no no just a question of how much competitors are increasing, and, of course you know we compete with companies that have yen functional currencies euro functional currencies so people take

different amount of pricing based on their needs, and that takes some time to sort itself ourt out, what we look at on a weekly basis, make adjustments as necessary, but nothing that reflects long term underlying strength of the business. >> given currency moves seep this year john, how much more difficult is it for you guys to forecast how much more confident are you in the ability to forecast or less so on what's going on? >> less so. you know, the volatileity is significant. we had, you know two years ago, 1.1 billion dollars after tax currency impact. last year there 1.5 billion, and this year 6.5 after tax, up 300 million entering the fiscal year a quarter ago. we are working hard as seen reflected in the margins on cost savings and productivity a way to manage currency impact while investing in the top line. >> all right. john, two things real quick, you have a new boss coming up

starts in november 1st i think, mr. taylor how do you think the company's different or will it be? >> well, i certainly don't want -- david starts the job november 1st, and i don't want to front run his thoughts, but i worked with david for 27 years now, app we worked in china together, and david has consistently delivered top and bottom line cash, and i'm very certain from a result stand point that's expectations going forward, both in himself and the team. balance growth and value creation. >> okay. the other question i had is on marketing spend and how to spend the dollars. what we had a lot of conferrings about when we talk about the digit companies relying on advertising, you guys have really changed the balance of how you're spending and amount you spent. can you speak to that? >> we are taking advantage of really what is a wonderful array of tools, both from a targeting and communication stand point.

we're shifting portions of the media from digital search and social, 25% globally higher in the u.s. and china, up from five points of last year. that gives us unique capability in terms of targeting certain consumer groups. we're taking full advantage of that. >> looking out 12%, that number becomes 50%? >> i think it will continue to increasement i don't think we're ever going to be in a bore world relative to traditional media and digital media. they have their place, but i do expect an increase. >> okay. >> all right, john moeller, john, good morning, thank you, a pleasure, thank you for waking up early. we appreciate it. >> steve case worked proctor and gamele. >> oh, that's right. >> a lot of footings for the trial, aod -- >> as well as steve ballmer. >> and jeff too.

when you're not confident your company's data is secure the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.

at mfs investment management we believe active management can protect capital long term. active management can tap global insights. active management can seek to outperform. that's the power of active management. welcome back to "squawk box," everybody. mexico bracing for a megastorm hurricane patricia now a

category 5 storm. that is scarry video called the strongest ever recorded. the storm has maximum sustained winds of 160 miles per hour. it's currently moving north by northwest along the mexican coast. thankfully, it will weaken when it lands this afternoon and this evening, guys but that radar screen. this is a big one up the west coast. we are going to watch this for you closely. coming up we'll talk tech valuations with our awesome line of guest hosts today, dan, ted, and steve, and then an inside look on at and t's earnings from john stephens. a big friday morning. we'll be right back. time now for the trivia question. about how much do millennialsing the for in u.s. consumer spending? the answer when cnbc's "squawk box" continues. -flac! aflaaac. aaaa-flaaaac.

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now the answer to the trivia question. about how much do millennials account for in u.s. consumer spending? the answer? $1 trillion. all right, everybody. breaking news for you, china just announced a cut in the

bench mark lending and deposit rates, cutting them by a quarter per accept taj point, prompts action checking out the stock market. remember, yesterday, the dow was up 320 points largely because of draghi and ecb saying it's likely you could sigh additional stimulus coming from the ecb. this has been this gain that the central banks played around the globe, and now china joins in jumping the give up on us saying they are going to cut lending deposit rates fuelling rallies for the stock market. we were already looking at dow up by 80-9 o this morning, but on this news you are now looking at the dow futures up by 181 above fair value, and s&p up by 27 points and nasdaq up by 132 points and, remember this is after big gains yesterday. news from the technology major technology companies, microsoft, alphabet amazon better than expected numbers, so between the better than expect numbers you are hearing from the technology companies, along with central

banks around the globe competing to who has easiest rates, this is prompting fuel and putting some fire into the stock market this morning. now, the dow futures, even before the gapes, even before you add 180 points the dow is up 11.2% from the lows closed on august 24th. look as what's happening. the bond market this morning, the temperature-year at 2%. yields ticking up. watch what's happening in europe with the equities there, too. we were looking at the dax up 2% before we heard the news now up 3% in the early trading, cac up 2.9%, and ftse up 1% is now up 1.7%. look ag the euro sitting yesterday is dropped below, at 110 110.98. we'll watch this, but this is the game. >> are you worried this is lighter fluid, though a huge spike, and then after about a

couple seconds -- >> people if you talk about a currency war or working to see who can be the easiest in the situations looking at potential slow downs, china concerned about the economy and what's happening there, the only game left in town what people say, have your central bank lower rates. >> i'm not a china basher but i'll throw water on the lighter fluid. if they threw at 6.9%, why do they feel the need to cut rates? >> competitive game and exports are not what used to be. >> because it's not 6.9%. >> you're implying it is. >> when i say the light ir fluid, it's temporary. throw fluid on the barbecue that lasts quickly. >> pour all two gallons of gasoline on, that's not the fire, this is a fire. >> growing at 6.9, why do they need to cut rates and do you want the dollar exchange rate a

couple weeks ago. we talk about, it's not a bad thing fed raises because things are good why cut it? >> overrate the economy 1-10 you call it 8 or 9, see what i'm saying. >> and average country. >> yeah. china's, who knows, can't get good data. do you have good data? >> do you have investments in china? >> we don't. >> not really. >> which is odd, you're leaders of companies built all this stuff and ignore the greatest supposedly opportunity in the world. >> we have companies that ali ali babba and add vepture groups look at. last night at the nba owners' meeting, a discussion about new development and inventives one of the big partners in china, and so you really are seeing this. >> buying the companies, do you buy -- i'm not saying do you buy the stock, but buy the company, buy the numbers, are they real? >> very much so. >> 10 cents was 12 cents a month ago. >> 50 cents is now 48 cents with the wrapper.

>> did you hear? >> the contract for the beijing dragons are cheaper. >> denies that. seep the money all over his body, sends out pictures. >> i see all kinds of stuff. instagram, my kids. >> do you care dan, as a developer in detroit, owner of a basketball team in america, do you care about what happens to china? >> do i care? well, to think i care about human beings -- >> no, no the economy if it slows down a lit. bringing us douwn? >> we're so immersed in what we do every day, and i would say i'm not paying attention to that. >> we have to be careful not to be come place sent. there's a since that america is the most innovative entrepreneur nation, and china is not innovative. that's why they said about japan 50 years ago, why detroit free fell and japan took the market share. china, first phase 10-20 years is finding ways to knock things

off and do efficient manufacturing, through there's a lot of smart people with engineering p ddh.d.s, and we have to be careful not to presume we have the secret sauce and nobody else has access to it. the world is globalizing, entrepreneurship is alive and well, but we have the lead. we have to double down on it and make sure we do everything we can to maintain that. >> putting 500,000 math ph.d. into the market place every ye. we put about 30,000. >> how many? >> 30,000 to 500,000. >> where are they educated though, ted? >> here and they go back. >> exactly. >> we kick them out. >> another thing to talk about. >> which, by the way, to be clear, no contract law enforcement, no ip enforcement. it's why ebay struggled. people don't want to buy on credit in china because you don't have a legal means to get your stuff. let's just -- china has a lot of

work to do to build up a structurally sound -- >> no question. >> it's not about billing buildings. >> look at the last 25 years, it's amazing, and so if you fast forward 25 years, it's likely that there'll be a lot more things happening there. not saying you have to be petrified on china, but play off and not just play defense, but recognize there's a lot of smart people there starting some really interesting valuable companies including some of the ones that ted mentioned that's going to accelerate in the next you know next few decades, not deaccelerate. >> the secret sauce here right now, this is called the year of the yun con, 2015 and others think it's the year of the unicorpse. in the private market valuations have not moved. they don't have to move. we don't know they are moving because we have not seep the down arounds yet, but we have seen the tech market in the public space move down, though, actually begin what happened in the stock market in the last couple days maybe not.

do you have take on valuations? >> we see softening valuations in the private technology. in the last few months, what happens in the public markets, for sure, you know lowers the standard into the private market, but the other thing is innovation, i mean, one thing this economy has, the good -- where we are at 9.5 or 10 is innovation. most innovation in the world happens in the united states. that's the great news in my opinion. steve, he's an evangelist of this wherever it is middle of the country, coast, around the world, whatever country or city innovates innovates, it's innovation. too many guys in the business focus on except reduction, you're in trouble. >> yous lived through bubbles before? are we in a bubble? >> correct, we have. >> yes. >> the value of was 70. we saw this. it's different now. dynamics were different. there are a lot of structural reasons why it's different.

in couple years, valuations late stage, private markets have been frothy and companies looked to go public and couldn't because it was down, and as a result, investors are correcting as it should be, coming down a bit in the late stage private market in the participation of going public. >> has that changed how you invested? are you holding on to cash? >> we have been very cautious. we have not chased the hot unicorn companies. >> probably a bunch of fallen angels in the next couple years. >> you want to name names? >> no. i do think it's a very odd time when companies want to stay private because they are valued more and raise more cash than going public. >> i don't know if you saw yesterday, nasdaq bought second market, the market place that's effect evidencely a private market place. does that speak about being publicly traded today? >> speaks to the revolution in

financial technology and crowd funding is a bigger deal. second market is doing a lot of things, and there's a software platform to manage secondary transactions, but companies can stay private longer ways to access capital, and we went public we raised 10 million in the ipo, and the time amazon microsoft, and others are public raising temperatures of millions of dollars, not hundreds of millions of dollars, so you can stay private longer than many choose to, but the nasdaq move is a recognition the markets have evolved in figuring out ways to serve investors and entrepreneurs with the internet platforms is something to focus on. >> reluctance too, and rig story front, but on the entrepreneur being in the kind of environment. when you're public and high profile, i mean, they come after you because of your size alone. >> right. >> whether it's right, wrong, they come after you. a quick break, but a quick question. jack dorsey gave away 1% of

company to the employees, just unilaterally. this is -- we decided it was $200 million. do you do anything like that? what do you think of that? >> we have 3,000 millionaires at one point at aol, and, you know they were all in it together, and i think what jack did was very very smart because he really needs everyone in that company in lock step and execute, and they took some very very tough decisions in cutting back and you know he wants to edit and get the company refocused. >> our focus at aol was to be inclusive so all the employees owned stock. i never owned more than 3% of the company. everyone had meaningful stock, which is why a lot of people within the company and early investors in the company did well. >> on twitter right now? >> i'm sure. it's amazing company, and them what they built, again, in the last five to six years is astonishing, really is a global platform and global utility.

we don't focus on public companies so i can't say we took a hard enough look at it but i wish i was in the early stages there, that's for sure. >> i believe in founder led companies. i think the best companies, best performance have that dna of the original higher calling for the enterprise. i'm a jack dorsey fan. i'd bet on him. >> i would too. i think the company is just outstanding, and they are probably in the innovation technology, on the technology side, is coming still, and, you know, it's got to do -- how many eyeballs a day are using that? sending out tweets. >> right. >> billions. >> that's amazing, though you know 300 million users, now that's small, right? less than 10% of the overall market. >> right. >> okay. well, thank you, guys. by the way, there's a drinking game going on on twitter with the show today. apparently, any time there's a mention of bubble they drink -- they say coffee. we'll see. >> champagne or something? >> bubble.

>> bubble. >> hawaii. >> it's early. >> bubble. >> have another mai thai. >> you quoted don. >> i did. >> wow. >> folks, a quick look at the futures again because after china cut rates by a quarter percentage point, you saw major action step into the futures. we were already looking at positive numbers this morning based on strong numbers we got from several tech companies last night, and you can see this morning, at this point, the dow futures are now up by 165 points. that roughly doubled the gains we looked at before the china central bank made this move. you can see the s&p futures are up by 25 and nasdaq is up by 125. this came after a day of big gains yesterday. the market up 320 points yesterday because the ecb said it might add more liquidity to the markets as well. when we come back this morning, talk about at&t the stock moves higher in the after hours as well after a 5 cents earnings beat in the third quarter, first quarter report since acquiring directv. we have the cfo, john steechphens,

next.

welcome back. at&t posted third quarter results, reporting earnings of 6

74 citizen a share. john stephens is here. good morning to you. let's walk through the earnings because there was a bit of noise, dare i say, in how people were thinking about these number, and, specifically, in the directv component in the idea of a month move or a different period that people had not adjusted for. >> yeah. well, first of all, thank you for having feme this morning, congrats on 20th anniversary of your show. looking at our revenues for the quarter, and we compute similar to the analysts did, we had a beat on street expectations rereport revenues the day after the transaction. that's the difference. looking on a comparable basis, and in the call yesterday, we beat. overall directv impact it was positive. the business is turning out to be everything we expected and,

quite frankly, more. the opportunities to cross are greater than expected. so we're very pleased with the directv impact on the quarter, and what we're looking at going forward. >> all right. now that you're in the tv business, there's a lot of questions about what you're going to do with the tv business and how it's going to let you ultimately change what kind of programming you're offering on mobile and what kind of deals you make like with the nfl. can you speak to that? >> well, i'll tell you this looking to mobilize everything. give video just like we do the other communication products to customers the way they want. today, they want to mobilize everything, and we're in the unique position to do that not only with our dtv customer because, but with our great wireless networks that cover the entire country. >> and what do you think of this -- i don't know if you saw a parent company, comcast, getting in bed, can i say, with ver ryeson a little and

ultimately, i don't know if you think it's going to happen ultimately offer mobile service and how you see this whole world consolidating? >> yeah. i won't comment on that specifically but i know that agreement has been out there for five years, and i'll leave it to you guys to discuss how much progress has been made, but i will tell you we're the unique competitor that has the assets with owners economics today. we have the mobile network. we have a deep fiber network. we have the telephone relationships, the content relationships, and the distribution capabilities. if you saw what happened at our third quarter earnings, margin caption, earnings growth and tremendous flow growth we're well-positioned to compete and deliver and please our customers. >> and what do you think about consolidation? do you think, well, this is a regulatory question. when you think about the other players that are still left out there that are independent, thinking now of sprint and t-mobile, do you think there's any opportunity for them to merge in this environment?

>> yeah. i'll leave that to the regulators to answer and to the companies themselves. once again, i just really am please with the assets we have and, quite frankly, the people and customer base we have. >> the other thing that obviously, people are trying to understand is the relationship with at&t iphone sales, obviously, a huge driver of the business, this model has changed in what that's going to do to your business. >> yeah. we had a great wireless quarter. we set record margins. we like the ability to give customers choice in the phones they buy. the apple products has certainly been a key part of that and we continue to is a good relationship with them. we leave the volumes commentary to apple for their earnings release, coming up next week. >> so can you give any expectations year over year in got to try. >> i can give you expectations for the remainder of the year for us and that is continued earnings growth and continued strong cash flow growth. >> okay. leaving the conversation. any question gentlemen? >> bullish.

i mean, hearing and seeing green arrows. sounded very very confident. >> there you go. you got kmep tearcommentary. >> thanks, congratulations to the mets in the world series. we wish you good luck. >> hold on. ted is bullish on at and t but doesn't your team play in the verizon center? >> they do. >> i smell a deal. >> john thank you. >> thank you very much. all right, a lot of big movers ahead of the opening bell today, folks. full list of stocks to watch of the busy on this friday. here's something else we're excited about. astrophysicist tv star neil degrassetyson on set for a reality check, stick around, a big show ahead.

>> that was a nickel better than the street expected, and revenue was in line, bottom line helped out by the significant drop in fuel costs, you can see the stock up by 3.8%. df corporation short of estimates on the top and bottom lines, but maker of northface apparel and other popular brands point to a mixed retail environment. that stock's down by 1 preponderate 6%.

also whirlpool earned 3.45 a share for the latest quarter, 16 cents better than expected. revenues below forecast but the company pointed to challenges in symptom of the emerging markets. they trimmed the top end of the full year forecast but, still, stock's up by 2.3%. >> watching shares of pandora, folks, could be a tough day. company matched estimates by 10 cents a share, but revenue short of expectations, anoupsznounceing a $9 $90 million settlement for loyalties. that's not a misprint. the stock after hours down 32%. just 13 bucks a share. watching shares of sketchers. the company's revenue missed consensus analyst forecasted stock fell 27% overnight. they were hurt by the strong dollar, worse than expected comparable sales and legal costs related to a lawsuit with nike and personal injury cases, however, don't feel bad for

investors because as of before yesterday, stock had gone up 150% this year. social media giant, facebook hit a milestone after hours. it is above 100 bucks a share for the first time ever. a new all-time high for the stock. as you pointed out earlier, facebook now the 7th biggest company in america with a market cap of 280 billion, and that my friends, makes facebook bigger than wells fargo or johnson and johnson. when we return, more from the guest coast, steve, ted, and dan, and, plus we have famed astrophysicist astrophysicist, this is why you are here this morning, right? >> the whole thing. >> neil is going to join us on set to talk about the new season of his show "star talk", and we're going to get his take on the new "star wars" trailer, the new film, back to the future day when we return. hi watson. annabelle, your birthday is tomorrow. i'm turning seven.

what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you.

sipping on alphabet soup news of a buyback and earnings beat sends shares to record highs. are buyer today? breaking down results straight ahead. from housing to the future of sports, media, to motown's

road to recovery. a trifecta. we break down all of it. washington caps owner. >> all that plus in an all-out war, who would win? the star wars or federation in "star trek"? >> risk is our business. >> we go glata lat tick as we hit light speed right now. ♪ ♪ live from the most powerful city in the world, new york this is "squawk box." >> welcome back to "squawk box," everybody, cnbc, first in business worldwide, i'm becky quick. we are less than 90 minutes from

the opening bell in wall street and the futures are jumping after some big news out of china. china cut interest rates by a quarter point, in turn setting off a real action in the stock markets. the dow is up by 167 points up anyway, but only up 7 80 points before the news. this is double what they were before. s&p up by 25 and nasdaq's up 131, and this came after the dow gained 320 points yesterday because of comments from the ecb. look at the markets in europe in the early trading there. again, you are looking at major gains. dax up 3%. cac up 2.75%, and ftse up 1.5%. we have a list of guest hosts here, steve case, dan gilbert, and ted here talking throughout the morning. >> in the meantime larry for more on the news and markets this morning. managing partner and portfolio

manager at mayflower advisers, and, larry looking through the notes, you say don't drink the kool-aid? which are you referring to in this instance? >> well i never drink it this early in the morning. look, we can all pretend that the mop ter rally in the last three weeks is improving fundamentals in the economy, and terrific earnings, but that's the the case. yesterday, for example draghi's dovish tone spark eded the market. it was not earnings. today, bump in the futures, again, rate cut from china. we have central banks driving the dialogue getting us away from fundamentals in the economy. that's not healthy. look when we see where the action in the rotation in the market is it's the companies with the worst fundamental outlooks leading, it's energy, emerging markets. that's short covering to me not improvement in the economy. we want to see that fundamental improvement, but what in fact we see is a political impact on

the economy. again, we're away from main street and real economy, and that gets us back to central banks driving a conversation that's increasingly driven by politics. >> yeah, but how do you fight the fed? we're talking about a global fed now. how do you fight it? >> sure. sure. well, you know we all learned the lesson is you don't fight the fed, but be sensitive to the market. we don't pretend, but are realistic and honest. what we know is that chasing stocks up 10% overnight is not a really safe investment strategy and we want to take a step back and not chase in the market, but we also know the end of the third quarter was driven by factors like window dressing really depressing certain areas of the economy, and it was not the end of the world, but, likewise, we're not off to the races in the economy now. end of the year there's one phenomena that's reliability, and that's the tax loss selling. you get one more shot at the apple, right, one more bite. you get to look at the areas that have been weak whether

it's energy whether it's commodities, whether it's emerging markets, and they get selling pressure very technically driven but that gives us the opportunity to be an opportunity. i think that's what we want to be. >> do you believe china cutting rates stems this massive deflation spiral commodities are? >> sure. i don't, actually, but the free market cares for that, not central banks. it increases capital flows. look, i'm in boston. everywhere i look there's chinese investors buying property in boston. is that fundamentally driven? they don't live in them, but park capital to get it out of china. we see the limos in the street and say, oh great, you're buying a condo in boston. moving here? no, no no but parking the capital to get it out of china. there's more of that trend. great for miami real estate as chinese money flows there, but that gives our fed dovish cover ahead of the political election so they don't have to take action. >> with the market opening higher this morning, would you sell into what looks like an

early rally? >> sure. we don't want to lose our heads or panic or panic at end of the third quarter, certainly, when it looked the world would end and pessimism was the highest level since the financial crisis. likewise, look at earnings now. companies have a free pass blaming currency. that's not fair right? they did not attribute gains to currency, why have that excuse? see that time and time again across the board. earnings are good immediate yolk ir in some cases, but those a broad reflection of the u.s. economy are not necessarily showing broad gains. get back to growing the economy, and then not just seeing stocks boosted because of central bank actions. >> okay, larry, thank you. great to see you this morning. >> my pleasure. >> in the meantime stories in addition to what we talked about. the united auto workersupon sets sights on new contract with general motors after agreeing to a new contract with fiat chrysler, and union leaders think gm is the best opportunity for a quick deal. paul ryan now finishly running

for speaker of the house after he got backing from both con sfrtive and moderate republican factions. the house speaker election set for next week. there is drug maker, valeant, a stock under pressure, set a call for monday to address allegations of inflating its revenue, and charges came from a short seller sit troen research. names on the move this morning. busting through them. microsoft reported better than expected results after the bell earning 67 cents a share, and that was 8 pennies ahead of the consensus forecast. revenue 21.86 billion, and also better than expected. microsoft stock up 10% now in the premarket. amazon reporting profit of 17 cents a share, a surprise for the street since they were expecting a 13 cents loss of of 30 cents gap, wow, stocks over 600 bucks a share on the news, amazon up 10%, up $56 a share to $620 becky? >> brian, thank you.

alphabet google's parent company, a beat after the bell. josh lipton has the news and numbers, josh, take it away. >> well, becky remember when ruth became cfo of alphabet the new parent company of google wall street cheered because he was steen as an executive who could introduce improved cost controls, greater tranks paraphernalia si and a capital return program. she's doing all three. alphabet reported results beating on the top and bottom revenue rose and total cost and expenses climb less than 10% to $14 billion, a year ago, costs were 30%. the big news though becky, alphabet is repurchasing more than $5 billion shares. the company's first buyback and they talked about the decision on the conference call with analysts. >> caller: as we announced today, our board has authorized us to commence a repurrchase of

class c capital stock up to $599 million. this decision is consistent with our overall capital management frame work and compliments a disciplined capital allocation program. our primary uses of capital will, of course remain cap x and m&a across the breath of our businesses. now, the amount the board authorized sounds strange until you realize this that number is the square root of 26 which is the number of letters in the alphabet. that apparently is what passes for humor at alphabet headquarters. more importantly said that the next time the company reports, it will provide additional details for google on the one hand and all the other alphabet businesses as well. alphabet bulls like suntrust bob peck argue when that happens, investors are going to be pleasantly surprised by how profitable core google is and bid up the stock even higher.

guys, back to you. >> all right, josh thank you very much. well coming up we'll talk more about realize with the special guest, dan gilbert, ted, and steve case send us stories buzzing you this morning. our keep squawking segment is minutes away. you still got time to submit thoughts own suggestions. tweet us #keepsquawking. #keep #keepsquawking. #i'm tired of hashtags. back after this. ♪ ♪ today, we're seeing new technologies make healthcare more personal with patient-centric digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care to cloud platforms that invite providers to collaborate with the patients

they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts technologists, digital and data specialists clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪ ♪

welcome back issue everybody. this is "squawk box" watching futures. check this out. dow futures up by 165 points this morning after gaining 320 points yesterday. yesterday, it was the ecb. draghi saying they may end up with more liquidity and cut rates. this morning, china outdid them the central bank cut rates by a quarter percentage point, fuelling things today. the dow futures up by 168 points above fair value, and s&p up by 25, and nasdaq up 126. a check of the health of the real estate market. we saw a big jump in mortgage applications this weengk, saling

surged 5% in september. what drives the market from here? dan has been snapping up a ton of office space in detroit for several years, in fact i understood may be renamed gilbert town confirm or deny that here. >> no no no. >> dan, and steve case chairman of revolution the largest land owner in hawaii. come buyed detroit-honolulu trip at some point for sure. people call detroit the new brooklyn, right? people moving from here because land is cheap. easy to grow off a low base. is detroit entering the next harvest phase of real unsustainable growth? >> i believe so. downtown, midtown, the river, commercial part of the detroit is in the most optimistic biggest momentum in 50-60 years. is 00% residential, in all of downtown so now there's new construction, buildings converted, and still, it's still relatively inexpensive, so i talked to real estate guys

here in new york and 4500 a foot to purchase or the high end condolence do min condos, near 400 in detroit is good, that's less than 10% of the cost. >> you get a house for the same price for the same 1 square foot of space in new york city. >> it works. economics works at those levels. you got that and a very educated work force and the midwest work ethic, and you got, you know a momentum and soul in detroit like never seen. >> love detroit. got a lot of friends from there. love what you're doing, pushing back on what people criticized you for. what they said is this you do a great job with downtown okay which needed help. how does that help the outer city? 8 mile, how does that help -- >> yeah, why haven't you saved the rest of the world? >> yeah! >> the context around the city government or business community or the foundations, but what people don't understand is there's a lot going on in the

neighborhoods as well, too, so you got blight that is being taken down to the tune of 800 to 1,000 homes a month, unprecedented, and the blight is coming down in neighborhoods, various initiatives going on not just in the residential part, but commercial part. there's cheap home loans that are being offered, and there's construction loans or remodel remodellingremodel remodelling loans now. it's a financing and appraisal issue, and the issue in detroit is there's still many good solid neighborhoods in detroit. you can be beamed in not know where you are turn around and think you're in anywhere any nice neighborhood in a city or in a closed suburb, and you don't believe what the prices are. in great neighborhoods. the reason for that is because the appraisals on the homes, they can't get values because some of these foreclosures going on, and some of the prices you know, talking about, you know 5 cents on the dollar and 10 cents to the dollar. we try to create a bridge to the market place, and by financing

remodelling ahead of people buying the homes, and then getting some comps. you got to get comparables, three or four in a certain area of the neighborhood, and go from there. people there want to refinance or making the payments they have a problem because there's not a home loan. that's the issue now. the mayor is focused, doing a great job as well as council, and the neighborhoods will feel it. they are already feeling the comeback. >> i have to ask this, though, safety in the city. at the time of the bankruptcy stats back then not so great, and i don't know how much they improved. homicide highest in 2013 highest in 14 years, named the most dangerous city in the country for 20 years. how has that changed and changed the psychology of living there? >> downtown and commercial district is safe as new york boston, chicago, look at the

numbers, and detroit safe as any of them. the bad stuff and crime happened in the neighborhoods. a lot is because, you know you are running off a population that is way less and comparable to previous generations, and the numbers, the wrong numbers are lower percentage wise per capita, the way they do it it looks higher. you know it's -- crime is coming down throughout the whole city. look at any numbers, neighborhoods and cities they are coming down. high in certain areas, and, again rs the again, the mayor and place chief, through bankruptcy -- that was key, that was the overhang to everything. now it's behind us. confidence is up across the city. we have big challenges, but i think, like never before you is everybody swimming in the same direction. that was detroit's problem, too much infighting from all the sects. >> the real challenge in detroit, as dan said millennial population as well as the people that were working at the general motors and ford, they have skills in manufacturing.

working with digital, working with glass working with leather, three of us have been supporting great entrepreneur in detroit who started a company to -- >> watch maker. >> well really -- i would say more high craft, high quality goods company, and it's really hit a chord with a broad audience, creating high quality manufacturing jobs in detroit. >> let me ask you guys about that, though made in america. it's a little difficult when you look at the dollar skyrocketing as it has. the ceo of harley davidson said the biggest problem is that the japanese importers and other foreign companies that he's competing with are able to offer big discounts to what he does at this point because his currency has fallen so much against the dollar. what do you do with that? >> that's fair but all assumed manufacturing moved offshore it

democratic but now it's coming back, the regular in addition the cost differential differed because the technology, you need less labor, and as a result bring manufacturing back, not as many in the hay day of manufacturing, but more than we would have had. the story of detroit, resurgence of detroit, there's a broader story, 75 years ago, detroit was silicon valley hottest city in the world because the car was the hot technology of the time but it lost its way, now fighting back because of what the entrepreneurs are doing in downtown detroit. pittsburgh, same thing. it was powering the steel industry, lost its way, fighting back. the middle of the country that led the agriculture revolution louisville, st. louis, fighting back in entrepreneurs and startups. there's a reason to be hopeful, rise of the rest detroit, des moines new orleans, katrina devastated the city, and now it's rocking on education technology. teach for america, they stayed there, most innovative,

technology companies are in new orleans, and they are rocking and rolling because of startup, not just mardi gras but entrepreneurs. >> cities are left behind in baltimore. i think of camden new jersey is it easy to take that blueprint? >> actually -- >> i was there under armour dan and i were there, and i think kevin and his company plays the same role that dan played in detroit. >> yep. >> it's not only bringing in millennials and bringing in talented people, but he wants to manufacture there as well. i mean, you're seeing a trend of this. i mean kevin plank in baltimore, you know tony shay with zappos in las vegas, and jack dorsey interested in st. louis. you are seeing company-led, you know, bring back urban cores. i was no dayton ohio wednesday and there's a company there called marsden lab going to light the world on fire. augment reality and virtual

reality. it's -- >> a great city. my wife's high school. >> they installed virtual reality. have you done that? do i have competitive advantage over you? >> talk exactly how you are installing it, like, are you talking about for kitchen cab cabinets or -- >> talking about for playbooks, being able to -- >> oh, for your team? >> yeah, yeah. >> i can't comment on that. [ laughter ] >> but going back to baltimore, three weeks ago, there was a rise of the rest bus tour across america in cities like baltimore, philadelphia, buffalo, manchester, portland, and baltimore, not just what kevin is doing with under armour, phenomena, health tech around that but john hopkins, biotech there, sense of hope and possibility, and baltimore, entrepreneurs are moving there, seeing this all over. >> is des moines really the new -- some say des moines is new -- >> i'm not kidding you, it hot millennial startup. des moines?

>> silicon valley but des moines and other parts of iowa are growing. what happened structurally is easier and cheaper to start companies, amazon, web services, you can start with smaller teams and people, younger people deciding where to live. geographically, they want des moines. i want to start my company in des moines, and then it's harder to raise the capital, trying to change that. harder to track the talent, but the capital goes further and talent is longer so in the long run, build intern nearly company in the next wave of innovation. >> cleveland, ohio. they are booming. downtown is booming. the residential population is booming. all kinds of construction. the republican national convention coming there. >> right. >> a basketball team that's going to compete well. >> and the stalemate is over. >> wages are increasing. >> buy up all the downtown cleveland next. >> we'll continue with the guest hosts here the rest of the program, but next programs that

have you buzzing, and keep squawking is next. later, america's faif ri astrofizziest, the host of star talk on gnat geo joining us talking science and pop culture. check out the futures if you are waking up just now, they are big, dow up 153 points, and s&p up if. we'll be right back.

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time for weekly keep squawking segment. a look at stories having you buzzing this morning. we mentioned it earlyier, conversation aboutup unicorns, a drinking game on twitter in the last hour. squawk viewer and sometimes guest counting how many times we mention the word "bubble", and he took a drink each time of coffee, that is. those of you playing at home, bubble, bubble, bubble, bubble bubble. he is a trader ill. >> i know mike well. fill up that caribou coffee and get the shakes. >> bubble bubble bubble bubble, bubble. >> bubble, bubble bubble bubble, bubble bubble. >> another buzz story this morning, authorities have seized at least 10 tons of marijuana in a tunnel discovered along the u.s.-mexico border in california. homeland security officials raided the secret tum overnight,

and that tunnel entrance was reportedly hidden inside a fake carpet store south of san diego. >> fake carpet store? >> maybe you need that after the coffee. coming up street talk with neil degrasse tyson. all this morning's special guests, is there a streaming bubble, bubble bubble, bubble brewing? we head to break. let's look at u.s. equity futures. i just had a horrible nightmare. my company's entire network went down, and i was home in bed, unaware. but that would never happen. comcast business monitors my company's network 24 hours a day and calls and e-mails me if something, like this scary storm, takes it offline. so i can rest easy. what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business.

surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?

welcome back to "squawk box" this morning. here's what's making headlines this hour. some m&a rumors that are swirling this morning. tree house foods set to be in talks to buy rail corp.s snack units from conagra. kimberly-clark in talks to buy the diaper manufacturing

ownership owned by brazil. the reuters report does not mention a price tag, and kel lock trying to strike a deal for diamond foods. that according to the new york post. >> all right. talking about microsoft, guys if we can. the results, eps, revenue, a bunch of metrics in better than expected. bank of america, streeting the, getting on that band wagon today, and analysts raising the price target on microsoft to 63 a share. i tweeted this out, back in the commercial break. they've have never been above 60. bank of america out this morning saying that microsoft shares likely will touch a record high. when i say record high, look at that. that's aol time warner days there in 2000. that's dial up stuff. >> what do you think? are you a believer in windows 10? the surface pro? >> i think it's done a great job in refocusing the company on the

strength the enterprise business side of things. success on the consumer side but struggled a little bit, and it's amazing to see what happened all the way with with amazon and other momentum there. amazon started 2 is 11 years ago, google and facebook all together worth $1 trillion and it's all happened in the last 20 years showing pace of innovation entrepreneurshipings what's possible, but there are large incumbents that figured out a way to move through this chaotic world. >> do you think microsoft is cool again? >> cooler but not going so far to say they are cool. >> i want to say they were lost for a while. now they seem to have raa purpose, doing a good job, underrated as a leer and there's a lot of confidence in the company. >> it's been an impressive turn since taking over there. >> very much so. breaking news earlier this

morning, china announcing a cut in the deposit and benchmark rates. china often does not telegraph what they are do and this caught market the by surprise. dow was up 200 points, up by 150 now. >> reporter: yeah, definitely. the timing of it was an entirely surprising here actually only because of the fact there's a big economic conference that's come k next week with a lot of speculation that the government might want to do something to shore up the economy or show investors there's strength in the economy. ironically, though could have an opposite effect. this week the gdp was 6.9%, and people wondered at the time if the data is actually reflective of the activity here on the ground. it's been raising a lot of questions as to why the government has to be so aggressive by cutting interest

rates by 25 basis points and cutting the rrr, reserve requirement ratio, by 50 points why do you have to do that if the economy is in fact growing at around 7% which is the government's target. >> all right. thank you very much. zblnkts well, the golden age of tv disrupted by streaming contact and dvrs to a point, but a segment of programming that's king is live sporting events. >> the nfl is the greatest tool you have for getting your network renewed by all the mvpds, cable and satellite systems, et cetera. people can't live without the nfl on sunday. >> that was cbs chiefless les moon

moonves. let's get the opinions of our panel. we have two sports team event owners here as well guys. ted, first to you. i mean yahoo! is stream inging an nfl game for free for the first time. how do you see is shaking out? >> the only thing consumers seem to be willing to pay for are movies and sporting event ossevents. the more realtime, more data and a movement to over the top. i think you're going to see an expansion of the pie. we, at the nba, there was a big, big deal with espn and with turner and i think that showed the power of realtime sports programming, and you know certainly, the nfl is powerful but the nba and nhl and major league baseball, the big sports programming areas have a lot of value to consumers. you know there is a sleeping issue, though, that we all have to face which is habits are

formed on college campuses. >> right. >> not getting cable at college campus, knock looking at the big tv, they have an ipad or iphone. they graduate. they move into an apartment. they have wireless and no television. so everyone talkings about this cord doesn'ting phenomena. that's not the issue. the issue is the people who never get on. they just never sign up. so how rewe going to reach them. >> let me connect it back to your sports worlds, which is, dare i say a bubble for the drinking game, but is there a bubble in terms of the pricing of your teams based on regional cable networks and carriage fees that ultimately get unbundled, if you will in the new world? >> how do you think i'm going to answer the question? >> just curious. no, look, you saw esp, what

happened valued. >> what kind of question is that andrew? >> we have ongoing reoccurring revenues 20-year deals with media media, 20-year deals with name rights, and suite holders, and season tickets renewing every year at 90% rate and so sass companies trade anywhere from 6-12 times top line and most sports team trade four, five, six times top line. >> a carriage fee business, and if they were there, the economics of espn are fake for example. >> which you will never make live sports on ghantd demand. this is the last rights to get big audiences in one way, and so, you know except for competition within sports and we heard yesterday about e-sports, and you know what's going on there, i mean, that thing is really taking off in a

big way. people are going, you know up to staples sentcenter watching people play video game against each other and selling out, drawing huge audiences. >> 100% of people who have cable at home pay for the rights to watch your stuff, and only a smaller percentage, not saying it's a tiny percentage but tiny bit a sensibly watching it this is the economic argument about the issue that faces espn. isn't that the same issue that you face? >> i think there is -- the espn dynamic, first of all, they are the best run media brand in 20 years, and early investor in the internet. they have been smart about kind of grabbing up -- >> having layoffs. >> there's some yeah but they are -- it's amazing to see what -- most in 20 years ago, you got started, most of the media brands are hot, 20 years now faded in prominence but esn

rose. there are going to be charges for things, but it's still not much watched tv from a consumer stand, but must-have tv from a consumer operator point, but the internet puts pressure on it makes sports interesting, fantasy leagues engaged a whole generation of people in a much more significant way than they were engaged before going to the live events are more valuable opposed to a competitive dynamic. >> cnbc get paid -- >> by the way, i have to say -- i -- the argument that i just made about sports i think is absolutely true of the news world, whether it's all -- i think it's true, by the way, of most of cable today, and i wonder how it shakes out ten years from now p. >> there's a technology about it, but the device on, and sony has some competing. think about the arena with 20,000 seats, limiting factor is no matter how many people come to the game you can't sell

anymore seats, except now, you put these 3-d things on and sit and sell a seat at center court. for any season ticketholder. >> i think the bubble is not in tv and economics will change, but i'm worried about staiddiumstadiums building huge million dollar stadiums, and to me with a 12 year old daughter, i can't go to a football game. it's expensive, nasty language and drunk. that's just me. >> this communal feeling and experience you get can't be replicated by television. >> virtual reality is one thing, maybe it's much better, but if i want to be there and be a fan, i want to be there. >> do they still? >> yes. >> it's expanding, 20,000 seats. you know that was an issue for somebody who operates that kind of business. you can't sell more tickets. so now you sell not only world market but worldwide.

if they want to sit at a game in china, put on the lenszdevice, and you're there. >> are you investing in the company? >> yes. >> in dayton ohio. >> that's the one you mentioned before, how much you believe in it, you invest in it? >> i think the stuff is going to change the world. i do. >> there is something to physical space, and sense of community. 20 years ago, e-commerce picked up, all the malls would go out of business, but they repositioned for the experience and many of doing well. people want to be there, even though they could buy online. they want to go to the movie theater, although they could watch at home, and they want to be in the sports arena to be part of the action now more than ever. >> see which color combo the wizards wear this week. >> exactly. coming back this morning, squawking with the stars, world's most famous astrophysicist, we talk back to the future day, to talk about that themartian and who wins.

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♪ ♪ welcome back everybody. america's best known astrofiz cyst is here on the squawk set,

neil degrasse tyson is the host of the star talk and season two starts on sunday night, and, nemo, thank you for coming in. >> happy to squawk with you. >> what i love what you do -- >> what's that? >> you bring science and blend it with pop culture and make it something everybody wants to be excited about. >> turns out, that takes less effort than you might think. >> you make it look easy. >> take the universe, find places where it plugs into into what people are already doing. >> case in point -- case in point, what you tweeted out 2011, the bengals, going in hit the post and fell in. >> the overtime kick that won the game, sudden death overtime, i saw the kick and there it went tumbled, and hit the left upright, and went in. wait a minute, calculate, aided by a one-third inch drift from earth rotation and so yeah earth rotation.

>> for real? >> yes, yes. >> that used to be what the bengals needed. >> do you think that's true? >> no i don't think it's true but if you have a round tumbling object hitting a round pole fractions of an inch make all the difference in terms of how it reflects >> it's not round, but oblong. >> well round and oblong at the same time. it's not a sphere sure but a curved surface against a curved surface, as baseball players no and a fraction of app inch is a different between a popup, a home run, or groundout. >> you are going to argue? >> so yeah so yeah i don't have to teach what football is or what it's about, but i brought the universe to this immensely pop culture thing called football and that was fun to do and do it any chance i

get. >> dan gilbert is here, mad you're not on set with us. dan, go ahead, jump in. >> neil i'm shaking here my hero, i didn't know you would be here. let's talk quantum entanglement. >> this early in the morning? >> really? >> it's a crazy thing, entanglement, right, particles together separate them move one, the other moves. ceo plain that. >> turns out that the quantum physics, which is completely weird, it's the behavior of matter on the smallest scale falling outside your life experience outside of our senses, which is why you can't go to quantum fizzphysics and say it doesn't make sense and use that as an assessment whether that's true. it's brought to you by telescopes, they don't have to make sense at all. they are under no obligation to do so. entanglement, a particle is like a wave entangled with another. the waves comingle.

as they do they know of each other's existence at great distances. you mess with one, the other is messed eded eded simultaneously faster than light. awesome frontier -- i love that music. >> sounds like new york dating quantum entanglement. >> the frontier is what is the greatest distance you can have two partals entangled. i read a kilometer recently. it's getting longer. as that happens, that changes how we communicate with one another perhaps. >> did you see "the martian"? >> of course. >> science real? the water thing -- >> no spoilers please. >> no spoilers here. the movie's got enough in it to give pieces of it and you don't try anything. i think it was first movie ever where science and engineering are, themselves characters in

the film. they are responsible for the suspension, the joy, the missery, what makes people anxious. all the things normally the interplay of human emotion flow through whether or not science and technology problems are solved, and it succeeded at this, it was brilliantly done. >> the guy who wrote it was a science geek. saying it was the love of his life. >> i want to know on the water thing. >> can you make water that way? chemically chemically? you can, not that easily, but that's fine. mark twain get the facts straight, then distort them at your leisure. so there's enough facts straight in the movie "the martian" where they take liberties, i give it to them. >> twain would have been a great blogger. >> neil, talk about "star talk," interesting people, again, outside the field of science, people who are -- >> so, yeah first ever talk show based on science. >> yeah.

>> but the guests are never scientists, hardly ever and i bring science to their world, and then we explore all the ways that science touched them. >> what did the ways science has touched them. >> what did you learn with bill clinton? >> i wanted to see what were you thinking back in your administration how did you value science relative to diplomacy diplomacy. under his watch everybody joined the internet. most people got their first internet connections in the 1990s. i noted in that same period we lost the super conducting super collider. that happened under his watch. so we talked about decisions he made and contests within congress to get -- so that's an interesting important other side of how science gets done. >> what do you think about national funding right now for the science? >> i don't think enough people recognize how fundamental science is to what we call civilization. innovation in science and technology are the engines of tomorrow's economy. anything that's going grow in

our economy will derive from innovations in s.t.e.m. fields. we can't continue to look at sipes as a subject that some special interest group of scientists that are just trying to beg for money like everybody else, it's your turn now. here's some pennies. no it's fundamental to the future for how we've dome define civilization. if you don't recognize that if you think science is for cherry picking what result satisfies your social cultural political philosophies then you're not entering the 21st century in a competitive posture. >> thank you for coming in. >> is pluto a planet? >> we've been talking about bubbles. >> what's a bubble? you know i think of bubble the possibility that things can grow in dimensions yet to be discovered. or yet to be manifest.

so a bubble is yeah too much investment and not enough stuffing to keep it going but maybe you need that whatever is there to find a new place. maybe have to go through the failures to find a new opening where other growth pads can unfold. >> thank you so much for coming in. be back soon. >> we got to go. jim cramer when we come back. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle

i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean you...us. (vo) go national. go like a pro.

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and drive forward with broader possibilities. cme group: how the world advances. we'll get some final thoughts from our guest host this morning. we've been privileged to have dan gilbert here and steve case. we cast this as a conversation about 20 years from now and i'm curious if you look at your business where your businesses will be 20 years from now. like sports business or detroit for your. >> detroit 20 years from now will be one of the greatest urban cores in america. i really do. i believe that. i think you have people coming from all over the united states including college students.

we have 1300 interns came from 200 colleges with 27,000 applications, could only fit 1300. i say that because of the interest in the millennial generation. detroit will be one of the great stories. it's not just us and what we're doing. so many other people who are investing there and coming from every where. i'm excited. i also think, though this may be a multiverse entanglemen and we can go either way in time. you know what i'm saying. >> can we go back in time and figure out how to do that and buy facebook and google. >> google. >> in the next 20 years it will level the playing field in terms of places not just silicon valley. it will be a big phenomenon. the businesses they are focuses on. key problems. education. health care. more inclusive. what where and who are going to be changing a lot in the next 20 years. right now it's limited to a few places and white guys.

that will change. >> sports is more valuable 20 years from now than it is today, it will become central to what a city is all about and what a community is all about. >> gentlemen thank you very much. right now it's time for "squawk on the street". ♪ good friday morning. welcome to street. i'm quinn with jim cramer and david faber. we're looking at the best week for stocks since the february as the s&p will go positive for the year at the open. work in the bulls favorite a surprise rate cut in china. decent pmis in europe and earnings from google amazon and microsoft. germany is leading a charge of green