tv Worldwide Exchange CNBC November 3, 2015 5:00am-6:01am EST
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>> hello, everybody. welcome to worldwide exchange. >> here are your headlines from around the world. >> a great start to november. u.s. stocks closing higher lead by the small cap index. while the nasdaq hits a 15 year high. >> call of duty meets candy crush. activision buys king digital for $5.5 billion. >> healthy earnings for fitbit but the stock sells off in after hours as a wearable device maker
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lifts early lockup restrictions on more than 2 million shares. >> and ben carson cements his lead over his republican rivals in a new poll but president obama takes aim at all the gop candidates criticizing their reaction to the recent debate. >> hello, hello. good tuesday morning. thank you for tuning in. let's check in on the u.s. futures ahead of the u.s. market open. we're looking at declines being priced in after that rally that we just saw yesterday. not a bad start to november. the russell 2000 being the best performing benchmark. the nasdaq with a 15 year high. we're 2.5% away from the all time high back in the bubble years of 2000s. now let's check in on the small cap index. as we just mentioned the nasdaq already.
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let's talk about technology first, guys. i thought we were checking in on small caps first off but as you see 2.5% from record territory and that's the intraday because we did close above the highs of 200. >> a great start to november given the gains in october and the gains in october for european equities were even more pronounced than they had been in the u.s. the dax was up some 12% yet yesterday we kicked off positively in europe as well and indeed today we were in positive territory. we lost a little bit of steam but nothing too serious. germany down about a quarter of a percent. let's also check in on markets in asia. sri is standing by for us in singapore. >> the mood is risk on out here thanks to the mood on wall street overnight. all the major indices turning positive for the year.
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and tech stocks were in favor of a 15 year high. it's quite a risk on mood but sentiment can turn quickly as we know. it's down to the data state side. the payrolls will be watched very carefully for what it means for the fed and the higher rates environment for emerging market asia. we got the rba earlier on today maintaining the benchmark steady as expected at 2%. that's a record low but they did strike quite a dovish tone so they're keeping the door open to a rate cut. exactly when, we do not know. so that really lifted the sentiments in the australian equities closed up by 1.4%. the narrative is going to turn to the data watching state side and the jobs report at the end of the week and what it means for the fed and the implications and the higher rates environment for asia which largely priced in
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despite december seems like a lock but if it does come in december, we'll probably see a degree of headline or volatile associated with that move but i'd say it's largely priced in at this juncture. that's where we stand. back to you. >> all right. sri thank you so much. let's talk about m&a and pfizer holding talks about a takeover before and a deal was discussed and confirmed last week. and talks are now dead. discussions did not continue long enough to include price negotiations. just a reminder that cnbc will be speaking to the ceo in a first on cnbc interview coming your way tonight. >> staying with pharma philidor
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that faced backlash over it's relationship with valeant is closing it's doors. last week some pharmacy benefit managers including cvs cut tie with the company. they claimed they propped up it's sales. it will continue to fill prescriptions while helping patients transfer their prescriptions to other pharmacies. >> we'll break down the numbers from standard chartered and ubs and we're heading back to hear more from ubs's ceo.
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>> let's remind you of the headlines. u.s. stocks close higher lead by the small cap index while the nasdaq 100 hits a 15 year high. call of duty meets candy crush. blizzard is buying king digital for $5.9 million in a deal it hopes will expand it's mobile footprint and the pharmacy operator closes it's doors amid the fall out from its relationship with valeant. >> lots of m&a news today.
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a huge one when it comes to beers. molson coors in advanced talk to buy sab miller's advanced stake in it's joint venture. a move that could help seal the takeover deal of sab. the ft is reporting that it comes just ahead of wednesday's deadline for ab inbev to make a former offer for sab. last week it emerged that ab inbev hired bankers to explore the sales of miller assets. and i guess this was the knock on the deal. what kind of regulatory hurdles do you have to two through to merge up the maker of miller and budweis budweiser. >> we always knew there would
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have to be divestments and this is obviously one of the big parts of that and they're getting closer to it and they're going to make it happen. let's talk about another m&a deal. it's game on for activision and king digital. they're buying the london based group for $5.9 billion in a bid to tap into one of the largest group of mobile gamers in the world. the all cash transaction is at a 26% premium to the closing price yesterday below the level at which king went public last year. the mobile gamer has been struggling to recreate the success of candy crush saga which still akounlts fccounts f than a third of its revenues. overall spending fell 13% year on year last quarter. >> you know this deal would be one of the most transformative reactions since the tie up with blizzard and in the second quarter just 5% of the
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california based company's revenues came from mobile so you know where the strategy is heading and that is versus a 54% gain from its console games as you see call of duty being a $10 billion franchise. world of war craft. tons of people are addicted to that and destiny as well. can you believe they have a combined, if they do get this through, combined active monthly users of 550 million on candy crush, bubble witch. i know that's one of your favorit favorites. clearly it's fair to say versus the likes of call of duty. >> it's hard gore gaming in combining the two sides. >> it's interesting because clearly they're buying an area that they do not have coverage on already but they have access
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to mobile gamers. they're too complicated to use on that level so a very interesting acquisition. i wonder if they can make that work. >> they have come out to say this transaction will be their 2016 revenue. it could represent per share earnings of around 30%. that's not bad because they are offering a 16% premium here to last close for king digital and since it ipoed at 2250 that stock price has gone one way which is down because of slowing revenue growth and people are thinking it's a one trick pony. they don't have much of a hit after candy crush saga. >> this is a 25% premium to the share price. but let's bring in a real expert
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on this. good morning to you. thank you for joining us. on the face of this, pretty interesting deal. two very different type of games these guys have in their portfolio but also different types of users they'll bring together. >> what's interesting is the fact that they have got a very strong business in consoles and this represens a huge play in mobile and as you say, 90 million play ace day candy crush generates whether it's still as successful as it was going back to 12 months that's quite questionable. >> but do you think -- okay. so if -- taking it from your perspective, king digital, the stock price is still below their ipo price and people are thinking about slowing revenue, slowing user growth, do you think they sold themselves too cheaply since candy crush is still one of the top and most
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profitable apps on the apple store. >> i don't know. it's interesting. they. >> got a lot of battles to fight at the moment. facebook have just turned off the mechanism allowing people to invite through facebook as well. one of the main sources is on decline as well. >> how is activism going to use this because it's all about the graphics, the experience, the sound effects you can't get that on a mobile phone. >> you can and with the technology moving the way that it is absolutely the power of the phone and capabilities there we're heading in a way where they're converging and it's all about having users in different places. >> so to you, this deal makes sense, right? act vision is making a smart move because not only are they going to mobile but they get more female users.
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>> absolutely. >> predominantly play candy crush and casual gamers. >> you look at the numbers last year, all of their revenues was coming from consoles so they have to be in mobile. this is where the world is going. >> now, in your previous jobs you have been creating entertainment apps and games apps for sometime. what, in your eyes, is the key behind the successful gaming or entertainment app. >> it's successful because it's relatively, you know, not too involved. you can pick it up. you can play it at any point. that's their success but still wants you to come back and play more and more and more. so it suits, you know, those little breaks in time that you have. >> people forget that games are now as big as movies. call of duty, the franchise is worth $10 billion. halo sells 100 million dollars in it's opening weekend. people forget about how much
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money games generate. candy crush has sold more than the star wars franchise which is a phenomenal amount of money. >> much appreciated. that was dan from puzzle. you can catch a first on cnbc interview with the ceo of activism blizzard at 7:00 a.m. eastern time. >> let's turn our attention to standard chartered bank. the lender has announced plans to raise $5.1 billion in capital so the asia focus bank will also slash 15,000 jobs and close 10% of its branches. it also follows a third quarter loss. described as being disappointing because they haven't reported a loss in any quarter since the asian financial crisis back in 1997. >> sticking with banks, ubs
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third quarter numbers were in line with forecasts but softened it's profit targets for the next few years. let's get out to carolyn live with more. >> good morning to you. it was a pretty mixed bag for ubs this morning. we saw disappointment on the wealth management side of the business with lower inflows from asia. on the other hand, the investment bank, that did surprisingly well and that is a little bit at odd with what we heard from major competitors in the u.s. and europe so providing a tail wind for the u.s. the main takeaway is they had to push back the profitability target because of tougher regulation and that interest rates are going to be lower for longer. we also got the chance to speak to the ceo and talked about the
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fact that there was an internal management reshuffle. >> i'm glad that we achieved the 5% under the current regime which is a demonstration that we never had a capital problem but rather a definition problem. our policy is not changing. we're going to pay out at least 50% of net profit attributable to shareholders and we think that we have all the time available -- we're going to take all the time available to implemented the new regime while maintaining our superior capital position. >> you're replacing your cfo. you're making a number of other management changes. what triggered that? >> the current cfo is fantastic and i want him to take on a new challenge. he's taking on president of the americas and we have a very strong successor internally for tom. and i'm very glad that i have a
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strong team like the one i had before to take us into the next chapter. >> that was the ceo of ubs speaking to me a little bit earlier. shares are underperforming today. why? in part because numbers were mixed. because the delay of the profitabili profitability. shares have done well so far this year. we have seen a rally of 15%. that's on the part of investors. who can blame them? back to you. >> thank you so much. coming up on the program here on worldwide exchange, healthy earnings from fitbit but the stock sells off in after hours. why investors turn sour later on in the program. if you can't handle debate moderators good luck with the kremlin. why president obama is blasting gop candidates. that comes your way. stay with us on worldwide exchange.
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dr. ben carson surges into the lead of the republican presidential race. the latest nbc wall street journal poll shows the retired neu neurosurgeon getting support from 29% of gop voters. that's the highest percentage any candidate has received so far. let's bring in tracie potts that joins us from washington d.c.
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it looks like it's working for dr. ben just to hold back while the rest of the candidates duke it out on stage. >> seems to be. now he is taking a leadership role with the campaigns and trying to make changes with the next debate but the numbers are supporting what he is doing. 29%. that's higher than any top number we had seen previously from donald trump in this election cycle with the polls. he has surged ahead. and taking a deeper look at the numbers in our poll, if you add up the percentage of people that think he's either their first of second choice he surges to 50%. to way out there, 6 points ahead of donald trump. way ahead when it comes to the 1st and 2nd numbers combined. so certainly a good sign for ben carson. speaking of the debates, the next one is coming up in a matter of days. he is leading the charge to try to change some of the
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contentions back and forth with the moderators that we saw in the last debate. most of the campaigns agreed to sign on to this list of requests or demands. they have decided not to. donald trump says he will negotiate on his own with the networks. so we'll see what happens with that. people are just frustrated with washington. more than a quarter said they don't believe the country is headed in the right direction. even more than that, half of the deck economically and otherwise is stacked against them and well over half said if they had a chance to fire or rehire their member of congress, they would get rid of them. >> tracy, thank you so much. i'm surprised that marco rubio only has 11% given is that it seemed like consensus was that he stood out in the debate. >> the extraordinary thing from all of these debates, which ever
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u.s. politics man has done well and you think this guy really stood out, the up tick if the polls is .5% here or there where as when carson or trump has done well, it's 5% swings. it's an astonishing swing. we thought there's no way that trump could stay there for that long and carson has some to the front. it's hugely surprising. long way to go. >> we haven't started the primaries yet but i should note that we are one year to go. one year. 12 months until the actual election and the vote for the white house. now, apparently, you know, speaking of the debates, if you can't handle debate moderators then good luck with the kremlin. this was the sentiments from the u.s. president speaking at a democratic fund-raising event last night. he lampooned the candidates following the party's grumbling over last week's cnbc debate saying their overreaction
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demonstrated their potential inability to influence global powers. >> have you noticed that every one of these candidates say obama's weak. putin's kicking sand in his face. when i talk to putin, he's going to straighten out. just looking at him -- and then it turns out, they can't handle a bunch of cnbc moderators. >> so there we go. he thinks he can talk down mr. putin. >> when he looks them eye to eye. >> i didn't know in the middle of that -- when he said when i talk to putin -- was he trying to make fun of the fact that he's much taller. >> it's tall man syndrome. >> tall man syndrome but mr. putin has small man syndrome, doesn't he? >> you think?
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>> he doesn't like to be pictured by people. >> those are fighting words. >> i think that's fairly common knowledge that he does. whenever you do get to see a picture of him stood next to someone you see he's quite short which is why he often likes to show -- do you remember the video we saw of him working out in the gym. the topless one. >> and bear wrestling. you name it. >> who do you think would win in a bare knuckle fight? obama or putin. >> too many hypotheticals. >> i think putin would win it. there we go. that was fighting talk from mr. obama. still to come on the show, we'll head back to the web summit in dublin. much more coming from there and more on worldwide exchange. hello, watson. you can see now? i can recognize people, analyze images and watch movies.
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stock sells off after hours as the wearable device maker lifts early lockup restrictions on more than 2 million shares. >> ben carson cements his lead over his republican rivals in a new poll but president obama keeps aim at all the gop candidates criticizing reaction to the tv debates. >> thank you for joining us. let's check in on the markets. we did have a pretty strong session. good volume as well. we have the fair value though. trading in line with fair value for the implied open. down maybe 2 points or so. pricing in losses of 9.5 points and the nasdaq should be seeing decliens of 4 points or so. i want to show you what happens with the nasdaq yesterday.
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guess what folks? yeah, 15 year highs once again. that's the highest close we've seen since the bubble years in the 2000s as well. not intraday just yet. also we'll focus in on king digital today. king digital shares called higher by 14.5%. this is because activision bid a 20% premium for the last close of the making of candy crush and also farm heros as well. >> fitbit has reported better than expected third quarter results as sales of its wearable fitness devices more than doubled. the company also issuing an upbeat outlook expecting very strong demand but shares fell in after hours as fitbit agreed to lift lockup restrictions early on. more than 2 million shares. the company also announcing a secondary offering of 21 million
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shares. let's have a look at price action in german trade. we're down some %. the selling of shares. insiders when they're selling no one likes it. particularly in an early stage company. >> this is a lockup that was agreed to during the ipo. a strong quarter so they beat on revenues, they beat on profit and i think this also indicates that maybe fitbit surviving in a world where people were concerned that the apple watch would take over. doesn't this say to us if they're still continuing to dominate this market maybe the apple watch is a dud? >> i'm not sure the apple watch is a dud but this is a strong contender in it's own right. when this ipoed and we were discussing it then i got this wrong. i didn't think fitbit had a long-term market. not because of the likes of the apple watch. i just felt there was so many others coming out. >> yeah. >> and i don't know what they were offering.
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personally if i want to exercise i don't need an electronic thing on my wrist to tell me about but the underlying results very, very strong but the share price reaction a little bit put off. intrigued by fitbit because the stock price more than doubled since the ipo and still strong sales of new products like the fit surge, charge -- i'm getting one. they're pretty nifty these days. we're looking at headlines here. can i just, again, confirm that with our producers headlines and this pertains to i assume a lot of m&a activity that we have been seeing a lot of. so we're looking at broadcom headlines. i'm trying to find it right now. we will have to get back to it but a lot of m&a activity including king digital and activision and also sab miller and ab inbev. they're going to sell off that joint venture in the u.s. so
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they can merge the two beer companies together so here we go. it looks like hurdle that's been cleared and without conditions as well. so that's another thing to watch for. also in after hours yesterday we heard from aig swinging to a third quarter loss on lower investment income and excluding items profits fell 60% to 52 cents a share. revenue also missed forecasts. aig also announcing a round of cost cuts including plans to eliminate some 300 to 400 senior management positions. aig fell nearly 2% in after hours and in german trade we're down some 2% as well. >> shares of royal dutch shell trading in the green after the company announced plans for additional cost cuts aimed at making its take over of bg group work. it now expects them to increase by $1 billion and for the takeover to be completed early in 2016. as you can see shares up .6%
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today. >> transcanada, that's the company behind the controversial keystone pipeline asking the u.s. government to stop it's review of the $8 billion project that's now sparked a political war between the oil industry and environmentalists. it's seen as an attempt to avoid rejection. postponing the decision until after the 2016 election. hillary clinton also says she opposes the pipeline while many republican candidates support it as a way to make the u.s. less reliant on foreign oil. transcanada also trading in frankfurt down some .5%. we'll stay with the commodity story. alcoa planning to idle 3 of the 4 active u.s. aluminum smelting plants. the move will smash capacity as the company contends with metals prices which have plunged by a third in the past year.
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alcoa trades in germany. we're not going anywhere today. you know, today has been deemed national sandwich day in the u.s. where fans can celebrate the so-called original convenience food. sandwich lovers will appreciate the world's longest baguette baked in italy last month. not in france. you would think it would be baked in france. >> italians have taken credit for it though. >> okay but it's no consequence that today is also the birthday of the fourth earl of sandwich and he's been the originator of the modern day sandwich, wilf. >> right and as we celebrate national sandwich day in the u.s. we're asking what is your favorite sandwich? we have been discussing this early in the show. susan made me something. what's in this? >> i baked the bread myself. >> did you.
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>> no, no. >> so it's got avocado, chicken, mayo. >> i'm just going to give it a go. do you think this will be my favorite sandwich of all time. >> it already isn't. >> well, i haven't tasted it. let me give it a go. >> so it is national sandwich day. you might want to do a little -- >> no, i'm going to have another bite. >> so we're asked you what your favorite sandwich is and apparently we already have some viewers writing in. the italian sub is the best. the one with all the processed meats like salami and high fat cheese and add in the yellow peppers as well. he is sending us the blt. not a bad choice. >> not a bad choice at all. >> the chicken avocado is up there with the best. i don't think it's my favorite but thank you. it was delicious. your disappointed obviously. >> you're supposed to say it's the best. >> i didn't want to lie on air.
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this relates back to the acquisition attempt to buyout sabmiller. we have a lot of regulatory issues in the u.s. can you combine the makers of budweiser and molson together? the answer might be no since they're buying out the joint venture they have with sab so they can get the deal through. when you dominate so much of the market the u.s. justice department will be taking a closer look at this and how anticompetitive this deal will be. >> absolutely right. massive deal. it needs divestments but they're making progress there it seems. a smaller deal, still a big one within the own sector but smaller in the grand scheme of things and it's game on. activision blizzard is going mobile buying king digital.
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the maker of one of the top smartphone games candy crush saga. landon has all the details for us from cnbc hq. >> it is game on. this could be the biggest takeover since hp bought autonomy. it will pay $18 a share. a 26% premium to monday's closing price but that's below the level at which king went public last year. the combined company will have more than 500 million monthly active users in nearly 2000 countries. activision expects to complete the deal next spring and to add to its 2016 earnings. king was founded in 2003 and created more than 200 games but candy crush launched on facebook and smartphone still accounts for more than a third of its revenues. spending fell by 13% in the
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second quarter. this is the biggest deal for activision since the merger with blizzard in 2008. in 2013 activision bought itself out for a billion dollars. the company known for its call of duty franchise is a relative late comer to the mobile gaming. net revenues came from mobile versus 54% for console games. a hand full of titles including candy crush and minecraft account for the bulk of spending. but the maker of angry birds struggled to build a steady business. king is up 20% while activision is up 3% today. bobby kotick will be on squawk box at a interview at 7:00 a.m.
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eastern time. >> thank you so much. landon dowdy at hq. ge completes it's purchase of alstom for $13.6 billion. the american industrial c conglomerate taking steps to expand into the cloud industry. karen is catching up with the vice president. >> thank you very much. it's this pivot from ge we want to talk more about. this move into the internet of things. joining me now is the vice president and cto of general electric. nice to see you here today. >> likewise. >> you are an entry veteran. the industry press went wild with speculation that ge was becoming involved in a technology vendor. is that an apt description. >> it s. but we focussing on
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industrial internet. it's really using and inventing internet technologies and internet protocols to support the industrial ecosystem. it's all of those things that keep operating that our lights are depending on. >> we keep looking up that when the cloud keeps changing it's formation the industrial internet seems like a much bigger cloud. how is that different than the cloud that the average customer at home uses? >> if you thaink about it first you have to make sure that the information is secure. most of our devices are considered a critical infrastructure by governments. we want to make sure that nobody can get in this data in an unauthorized way. the amount of information that is getting generated by those devices way surpasses what we have with consumer devices. those machines are operating 24/7, 365 days a year. so we have to make sure that we
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invest information and can compute that and make sure that we have a recommendation for the makers. >> you have this platform you have been using. how can that deliver efficiency for companies using the platform? >> so when companies develop software they don't have to worry about the underlying platform. they develop on top of the platform and once they develop the application or use other people's applications they can improve their operating margins. they can get much more intelligence to the operators so the operators will be able to get much better insight into how to use those devices and alt the end of the day we're going to minimize downtime and improve the devices. >> we have so many conversation with those you operate in the cloud. seems to be fiercely competitive. where do you see consolidation happening in this sector and how will it play out? whether you'll have one big player or a whole bunch of smaller players across the
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industry. >> the internet in general is a business where you cannot have 15 different companies. you have the leader, the co-leader and everything else is trailing very quickly. we have leaders in consumer internet, enterprise internet. believe attend testify d end of will have to manufacture their own devices. so you have to figure out how to calculate and compute the information. ge is well positioned to be the leader and there will be a lot of consolidation from companies that are going to realize their value is going to be application layers. >> can i ask you about disruptors because he needed to be aware of the type of software being offered instead of handing down a whole suite of products to the customers. how aware are you that disruptors can change in industry? >> well, the industry is being disrupted as we speak and we see how industrial companies that
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were focused on building the devices are starting to get really, really digital about that. so i was amazed at how much digital attention there is within ge but we also see that in the eco system which is why we're talking to a lot of people about how to create a much more efficient ecosystem to manage the devices. but the industry as a whole has to come together or else it's going to cost us a lot of money to operate those machines. >> great to have a conversation with you. the vice president and chief technology officer at general electric. a lot more conversations coming up. you heard about disruptors there. we're going to be speaking to a lot of big names in the sporting industry who are live on the ground here including the san francisco 49ers and the miami dolphins. those conversations coming up a little bit later on cnbc. let me toss it back to you in the studio. >> it's a tuesday. so they have some time to get out to their games on sunday.
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thank you karen. now speaking of football we got monday night's game for you with carolina's star linebacker intercepting an andrew luck pass and the kicker drilling a 52 yard game winning fieldgoal in overtime as the panthers top the colts 29-26 to move to 7-0. the colts trail 23-6 in the fourth quarter. rally to score 17 straight points and just force overtime but they couldn't finish the job. the panthers join the patriots, broncos and bengals as remaining undefeated teams. you have four teams made it to 7-0. some have had easier schedules so far though. anyways, good tuesday morning. here are the headlines for you today. a start to november to remember. u.s. stocks closing higher lead by the small cap index. the nasdaq hits a 15 year high. call of duty meets candy crush.
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these epa accusations which is something they did with the smaller engines before they were found to know about these emissions cheating devices. >> now there have been flashes as well from angela merkel in the last few minutes. she's saying that made in germany is still a good label and the vw scandal has not changed that. >> delivering a surprise 21% jump in profit in core european markets. europe was back once again.
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europe sales are now coming back from the fray. >> tesla is out with third quarter earning afs the bell. focus is likely to fall on the production ramp up of the model x as well as the auto makers delivery targets for this year and 2016. >> they're expected to top the annual sales pace of 17 million vehicles. some are calling to sales of close to 18 million vehicles. the record was 17.4 back in 2000 and a good case and good points for higher sales is we still have cheap oil prices. >> cheap oil and cheap money. >> they like the suvs and cross overs in this environment. >> so we had a lot of positivity from this sector in recent weeks and months and i just wonder -- in the short-term it sounds like that will continue but i wonder whether it's been perfect conditions for the auto industry.
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>> consumer spending has been so people are concerned consumer spending isn't going to translate into the strong 18 million that some have predicted. >> but i wonder how much longer if we look forward to next year, how much longer this type of strength in the auto sector can continue. oil prices, interest rates, if those start to go up the pressure will be on. >> tesla is the one to watch after the bell and will they have to reduce their forecast for 80,000 sales once again for the new model x. that's something to watch for. >> that's it for today's show. thank you so much for watching. >> next up, u.s. squawk box. we'll see you tomorrow.
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good morning, activision blizzard is buying the making of candy crush. >> and the epa accusing the auto maker of cheating for a second time on pollution tests and they found a porsche with one of these things? and google co-founder makes a rare public appearance speaking out on what was behind the big change at the tech giant. it's tuesday november 3rd, 2015. i think it's an election day. and squawk box begins right now. live from new york where business never sleeps, this is squawk box. good morning, everyone. welcome to squawk box here on cnbc. andrew is reporting live from
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the new york times conference today. he'll be joining us later in the show. in the meantime let's get with the markets and check out what's been happening. a strong start in november. the dow moving back into the green for the year. you saw a gain of 165 points yesterday. nasdaq and s&p also higher. closed above 2100 for the first time since mid august. the nasdaq 100 is made up of the 100 largest non-financial firms. it topped a record close. we haven't seen in more than 15 years before actually pulling back to end the day at a new 52 week high. this morning the u.s. he i wasty futures look at least at ts
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