♪ >> live from new york where business never sleeps. this is squawk box. >> good morning and welcome to squawk box here on cnbc. andrew ross sorkin reporting from the opera house here in new york because tonight he is performing -- no, i'm joking. you knew that though because everybody knows he can't sing. actually that's where reason barron is holding court with his investors today. he'll join us in just a minute. looking good there andrew. first let's get up to speed on this morning's top headlines. the october report due at 8:30 a.m. eastern time. the economy likely gains 183,000 jobs last month. meantime the unemployment rate

falling slightly. big fat round number here. 5.0%. the futures ahead of the report, remember everything could change though between now and then is indicating flat. feels like the market is waiting. >> no doubt. although did you see that the chinese stock market -- >> is a bull market. >> 20% from the lows. up again today. among other stories that we're watching today, syngenta is reportedly talking to dupont about a combination with that company's agriculture division. in the meantime they're set to be exploring a different deal with dow chemical. so it could be a three way thing which we have seen. >> had trouble keeping it all together when i was reading through it. it was so many companies involved. >> different operations may fit in better and rationalize certain things which is not

surprising given that commodity prices are so low right now. people are looking for ways to keep margins at least stable. and takata is slashing it's annual earnings view. the japanese auto parts maker hasn't yet determined the impact of a global safety recall, the air bag inflaters. and lufthansa will be forced to cancel it's short haul flights this afternoon and evening. the cabin crew union announcing a walk out on flights. >> other stocks on the move this morning, shake shack shares get a boost. beating the street and offering upbeat revenue guidance. cites robust traffic growth, price increases and innovation. monster beverage topping estimates. the company says sales got a boost from advanced purchases made by customers due to a reannounced price hike of some beverages and weight watchers beating consensus.

the stock has been rising since oprah winfrey disclosed a 10% stake in the firm last month and joined the board as a company. and shares of men's warehouse getting slammed right now. blaming slowing sales within it's joseph a. bank division and a transition away from its buy one get three promotions. >> it's tough to run a business like that. >> when you're buy one get three free. >> yeah. better to do something with the first one where people want to have it and you're not buying your main product because you get three free ones. >> not a good idea. >> yeah. >> why not just charge less for, you know, each thing. >> what's up. >> how are you doing? >> i'm good. >> is that the friday look for you. >> yeah. >> my new media friday. >> because you're a new media

guy. you're a new media guy. so everything except netflix. >> that's not true. >> let's talk about it. >> all right. disney posting mixed results. profits rising on stronger revenue in the company's resorts businesses and media networks. in an interview with bob iger out thing the health of its tv networks after setting off concerns last time about traditional platforms earlier this year. >> we are continuing to do what we can to make the traditional platforms as successful as possible in this era. we feel good about a number of the steps that we're taking in that regard. we think that there will be more to come but gerally speaking, as we look at the media environment, the opportunities that we have today to distribute our product to reach more people are greater than we have ever seen before. >> no tie. anthony. >> he surveillance thaw that in

decided to do this. >> shares of disney, down 40 cents, 112.60. i'm looking at it here. i have a 112.85 bid and a 112.99 ask after closing at 113. >> the stock was up a lot. >> but a different reaction than last time around. >> definitely. >> by a long shot. why. >> i think a very professional, a very balanced quarter. the numbers were quite strong in terms of media networks and overall they beat earnings. they started rolling out all the star wars consumer products and we thought that would drive them in a big way but they can't realize it until the movie comes out a lot of the revenue and profit gets pushed into the december quarter so that is to take up the earnings estimate for the next quarter so considering that, the numbers were really quite strong. it was a beat despite that and on the media network side they grew ad revenue nicely.

>> really. that was supposedly the issue. >> everybody was concerned. >> ratings were choppy in the quarter but i think there's a big difference right now in the ad environment between sports and entertainment. sports continues to see very strong pricing. the big events continue to see very high demand. >> last time, people that were selling the stock, people noted you're going to sell the stock into star wars and into disney china -- >> shanghai. >> there's all of these things coming and you want to sell the stock based on a slight tempering of growth at espn. it didn't make sense. but it's back to what it was, 115, 116 last time? >> i don't think the people selling the stock were short going into this big rally back to where it was. i don't think that's where you wanted to be. they held their cable networks last night which is comforting considering that time warner earlier in the week pretty

notably cut their earnings forecast for some different reasons but i think bob did a good job explaining the long-term opportunity for disney. what we're starting to hear is can they go direct to consumer. it goes direct to consumer and management eluded to the fact that if they wanted to do that in the u.s. they have the ability and they're prepared to do that. >> sony as well. >> that's different. that's part of an online video distributor. so that's like where espn is part of a bundle. it's just not like the cable bund bundle. >> sony bundles all the networks that you would get on cable.

>> can we go back to espn? the overarching issue last time was that beyond whether or not they can get the add revenue growing for espn was was there a long-term problem with cord cutting and was that addressed yesterday and did we see big lay offs that would suggest they're trying to manage? >> right so on the cord cutting i would say the market tends to get so emotional about it i would say the third quarter subscriber numbers were quite stable and strong. so those declines are not accelerating and that was basically reiterated last night in terms of nothing is new and accelerating declines in subscribers. on the espn lay offs i do have to say with sports rights fees going up you don't have any big steps up but remember, that's

about a year from now. it's probably working to be as efficient as it could in terms of the cost structure. >> margins and et cetera. >> so it's up over 20%. >> and what multiple you pay for disney. they grew earnings 19%. they're going to grow 19%. >> i'll give it 19 times earnings. >> so if you took calendar earnings next year, i'm saying 21. so -- >> you're doing 21. >> you got it. >> your target is 121, right? >> yeah. >> that's not a big move from here. there's other places where you can get a bigger gain. >> the multiple is not a value multiple and trades at a big premium. we know that. >> but for good reason. >> good reason. best management teams, best brands. if you compare it to things like -- >> takes one to know one.

>> oh, you're good. god, you have learned to play on the show. >> some people will look at disney and compare it to other blue chip global companies like nike and look, weak debate, people argue with us all the time whether this is legitimate but you think about things like nike, visa, starbucks, big global companies that trade in the mid 20s so it's like i get it that some other pure play media companies are trading at 12 or 13 times earnings but maybe the right multiple is in between for disney. >> he's ripped too. have you seen where you're climbing for like an hour. >> like 4:00 in the morning. >> i don't think he wants to get fat and old, right? >> none of us do. >> no.

>> i don't do anything, no. somebody was tell neg other day -- >> stop working out, why. >> 200 push ups a day. i'm not even close. do you do the abroller? >> i do all of that stuff. i was pushing some heavy thing across the floor with big weights in the middle of it. i feel like an idiot. he makes me do ridiculous things. >> now things like facebook and netflix and digital things. but you are still resistant to that. >> got to workout the thumbs, yeah. >> i don't think you want to see what i do on facebook. thank you. >> have a great weekend. >> let's get -- andrew probably missed you being here. he gets to wear his jacket and he gets to wear his little pocket thing. see look at him. >> looking nice. good call. >> and the jacket.

>> pocket square. >> i saw your obituary -- >> what? somebody is talking? >> hi, andrew. you're not -- >> we're here at lincoln center. good morning, we should tell you this is the 24th annual barron investor conference arrive here. it's the opera house. where an estimated 4,000 barron mutual fund investors will hear presentations from the world's top companies. he's the chairman and ceo and joins us with an inside look of what's to come including an interview with elon musk later today. >> 5,000. >> congratulations. we love having you on the program because you always helped us understand how to invest and also introduced us to new exciting companies.

>> you're always trying to look out far beyond the month or quarter or the year. but timing does matter to some degree. where are we now? you seem very optimistic when you come on but a lot of people look at the economy or the stock market and say that so much of what has gone on is driven by artificially low interest rates, buy backs, dividends, all of these other things so i wanted to understand how you're looking at it. >> i'm optimistic and i always have been. i believe we can be successful timing the stock market. the big picture is that the economy and the stock market are very closely aligned and if you look the stock market is 18,000 on the dow and the economy is 18 trillion. the stock market was 14,000 on the dow and economy was

14,000,000,001,9$14 trillion. and it always goes together and the big picture that we have is that the country is heavily in debt. it was 360 in 2007 and the only time it had been over 300% before was 1929. so it went from 1982 to 2007. it went from 150 or 160% of gdp to 330. so the idea about interest rates going up a lot anymore soon is not -- it's going to go up but not a lot. the only other time you were like this situation was in 1936 the interest rates went up but a little because we were afraid about inflation again. went right back down again and then the recession in 1936. so i don't think interest rates were up for a long time because they're trying to make inflation make your money work less, make the debt less burdensome for our

economy. you have 20 years where the economy is going to be doing very nicely and you're going to have inflation higher than people think it's going to be and. >> you don't look at the market and say artificially inflated by earnings per share numbers that don't make sense because of buy backs, dividends, et cetera. >> no, all of those are very short-term. the big pictures are interest rates stay low for a long time and oil prices will stay low for a long time. i don't know how high, i don't try to predict that but oil prices what happened there is that 1975, or 76, or 79, the hostage crisis and opec raised the price. and over the next 30 years, 35 years it went to $140. and because of that that was a

terrible tax on our economy. terrible burden but the big deal of it the big positive for everyone else is that when it went up so high it stayed so far above the cost of production so you have huge amounts. you're going to be net by the extra reserves. prices for energy were going to remain low for a long time. and the economy is going to grow normally and grow with the economy and stock market and the stock market is doing fine and the stock market is normally priced right now. >> one of the big themes today is culture and you actually care a lot, almost as much about the business itself as the founder or ceo. >> when i started in business in

1970 i met him in the 1970s and he was the one that got me focused on people, investing in people. so everything, it doesn't matter how great the opportunity for business, if it's not someone that's going to make it happen, it's not going to happen. you have to have great people that run these businesses and if you think about what's going on in the stock market today, it's what happened to volkswagen. 600,000 employees and biggest company germany and they do this cheating we missions and nobody has -- there's no whistleblowers. why? and the reason for that is that you read about exxon mobil. they deny any impact from the climate in burning fossil fuels and hide the evidence. like the cigarette companies in 1964 when they came one the surgeon-generals report in 1964 and they said cigarettes pose cancer. i thought people would never smoke again. for a long time they lied. how come that happens?

it happens because everyone is focused on reporting earnings or reporting something to investors so their stocks will do well and by the time people that get to run the companies get to run them, they have five or ten years of tenure and they don't want to do anything to rock the boat. so they just go along and they're not empowered to go out there and say okay we're going to take this big write off. the auto companies, this isn't the first thing they had breaks that didn't work and steering that doesn't work and they don't repair them. they do cost benefit analysis about what is more expensive. is it more expensive to recall the cars or pay 10 or $15 a car or settle wrongful death claims. it's unbelievable because the ceos that run the companies, they don't want to rock the boat. they want to do work for the short-term.

>> we'll continue this conversation and go over a couple of names and making your case again where it stands on tesla. so we'll have a lot more with ron in the next two hours. but in the meantime, back to michelle. >> going to be great. terrific. >> breaking news on the square ipo, plus there's no place like home but does your town make the cut on a new list of america's top 50 places to live? so those two stories next. plus synchronize your watches. we're counting down to the big 8:30 a.m. jobs report. it's going to be huge. we'll talk expectations and the high stakes for the fed and the markets straight ahead. first as we head to break here's a look back at this date in history. ♪

"the year of spieth comes to a close... tour championship winner...and he does indeed take it all."

breaking news from square. >> i like to be here in person to read the break news. we are getting some new details about the expecd ipo from square. it's happening in a couple of weeks. the road show will kick off on monday and expected price range is $11 to $13 per share. at the mid-point of that range or at the high end of the range, square expects to raise as much as $403 million.

that would be a little bit of an increase from the $275 million expected to be raised in the previous filings that square had put out. so what is interesting about this guys is the valuation of this company. we have a lot of debates about whether there is frothe in the private market and whether investors in the later stage funding rounds are valuing these companies accurately. the most recent private funding round valued it at $6 billion. if you use the midpoint of the range and 284 million share count you get a valuation of about $3.5 billion which is a significant cut from the previous funding round. even includes about 4 billion and they still have the right to up size the deal once they get on the road and see what investor demand is but that would seem like quite a cut from a previous $6 billion funding. >> reminds me of the art market or something.

there was a point in time when these things railroad valued. a lot of these things valued. >> earlier this year. >> maybe other ones. the unicorns we hear about. we asked that question again and again. are some of these evaluations too high. maybe they were a couple of months ago. >> maybe they were and square, i think it was april when they got valued at $6 billion. black rock and fidelity recently marked down an investment in dropbox. the value of that investment by 20% because of certain metrics that made them believe that the investment was actually worth significantliless. of course they're going to go on the road. it has a good story to tell because it's biggest competitor amazon just announced its pulling out of the market. it can't hack it. so square has half a billion dollars in revenue. they'll be telling that story and perhaps they'll be able to raise the price range but it seems to be -- so say that they're being conservative about

this i think is an understatement. >> amazon doesn't want to do it. it's that business then. maybe it's tough. >> or maybe small businesses think that amazon is a bad guy. they don't want to share all of their data with a big competitor that could take out their business. >> i assume this is where he'll have to answer questions about can he do everything that he's doing. >> yeah. i think the twitter third quarter made those questions harder to answer. twitter had come out with a blockbuster quarter. it's easier to say -- yes. >> you can do both of these. i love them. >> i want whatever time management app jack dorsey has. >> up to $13 is what they're expecting right now. >> thanks kayla. >> thank you. >> good to see you. a new report out this morning on the best 50 places to live in

america. the rankings by 24/7 wall street are basd on many factors including economic strength of the community, the jobs market, the quality of the schools, safety, culture and the weather. the top 5, hmeridian idaho, danbury, connecticut. >> that's weird. >> it's cold. >> johns creek, georgia. >> denver is expensive too. >> i have property in georgia. love georgia. >> centennial, colorado. >> i love colorado. >> eagan, minnesota. >> i watched fargo. i like the way they talk. >> it's so cold. if the weather counts i don't see how minnesota makes the list. >> the worst city in america is great. >> compared to somewhere else in the world. >> that's my story and i'm sticking to it. turn around at 70% heading in the wrong direction.

this pessimism it's a great country. >> you should be optimistic. >> we're going to come back bigger and better than ever starting with this employment today. which we're counting down to. the release of the october employment report. joining sus is senior economist and managing director, they want me to really do this slowly. the teleprompter is going very slowly. >> we can consider what you do. rbs -- when i do that too slowly it sounds like bs. but it's rbs. >> i'm the chief economist also. so you demoeted me. >> that's good. >> not that it matters. >> chief. >> not that any of this particularly matters. >> they're going to do it. >> you know why, after they din move in september changed my call to march. so yes they are going to do it in december -- >> that's why you got demoeted.

>> that's why i got demoeted. now i'm senior so that's exactly right. i'm dancing around with this fed about when we might actually do it but it certainly feels to me like they are setting the table and after doing that in september and not moving they are going to need something really -- they're going to need soft data or something obvious to point to if they don't go in december. >> 75,000 jobs might do it but there's no reason to think we're going to get a print like that. >> no, i know. >> i with yas saying earlier i s jinx myself when i say the risk is you to the upside but i tell you all the models that you run, looking at claims and various employment. >> it's looking at like 200 or 250. >> i think they'd still have to do it. >> certainly at that pace the

unemployment rate is still coming down. the other thing to think about -- >> there's an article in the journal that makes a great point t psychological 5.0%. it's only moving .1% and comes in at 5.0 and there's something about that round number so close to 4.9. >> exactly. >> when the first goal posts were 6.5 and you're hearing about it and they still haven't gone. >> still at emergency level rates. even think i the fed understands that this is very hard to justify. you know, everybody may disagree with whether the rate should be one or two but nobody believes that zero is the right level anymore. >> and because we're all big babies that can't have any surprises they felt in september that they didn't tell us definitively enough so we weren't prepared so that decided to tell us. >> janet yellen is going to be speaking in early december. i don't think that's an

accident. i have been saying i think that's when we're going to know. i don't think we have to wait for the 16th. they don't want to surprise the market twos weeks before christmas. i think they're saying very deliberately the stage. >> they started to move this time around. >> right. >> and they have actually gone down and flattened. >> exactly. >> when the fed is moving it's a problem. i think the long end rates don't have to go up very much. it's the end of the curve flattening. shorter term rates will adjust when they do move. they're not going to just go once. they wouldn't go if they just thought it was once. people will expect we'll probably get a couple of moves at least to 1% and that will have to be reflected with say 2 years yields. >> euro is 113 or 114.

it's 109. oil is -- the gold is back threatening to two under 1100. >> but these are adjustments. the point is the fed can't be spooked by these adjustments. >> it's already moved. >> exactly right. >> when they finally do -- >> move it's priced in. >> that's what the goal will be. the fed keeps going back to this idea too, i heard it talking to people this is just like the taper. if you remember when they were going to taper we thought they would do it in september and they didn't and then when they actually went in december, it was kind of an non-event and i think in their minds this is running all very parallel to that. so i think their hope is, as you said, the markets will have fully priced in it and the reaction to the move when it does occur even though it will be at year end i think they're hoping we'll be sort of a non-event. >> thanks michelle. >> coming up, we'll head back to an true at the barron conference.

and also the ceo of real estate equities and later after the big jobs report, steve joins us with a cnbc exclusive. live interview with fomc voting member charlie evans. first as we head to break, a look at yesterday's s&p 500 winners and losers.

welcome back to squawk box this morning.

we're here at the metropolitan opera here at lincoln center. big deals are taking place in the real estate market. black rock supplier of office space to the health care companies for $8 billion. and the fund has a large position in alexander real estate. it owns 1.2 million shares with the initial purchase price a little over $35. that was back in 2009. joining us to talk about all of this is the real estate equities ceo joe marcus is here as well as the vice president and portfolio manager at barron capital group and of course our guest host for the next two hours. ron barron himself. >> good morning. >> i want to get to what you're doing in just a second. but in terms of, you put this in your portfolio, where you think real estate is now. >> i think that real estate is

in the middle of a multiyear recovery. on the one hand we're past the distress phase which would be back in 2009 or 2010 when there were opportunities to buy real establi estate at 50 or 60 cents on the dollar. we're seeing tremendous construction activity. a slow down in demand. loose ending practices. the tail end of the economic cycle and other warning signs. the prospects we see in commercial and residential remain attractive and boils down to demand continuing to exceed construction activity. >> is one more attractive than the other right now? >> i don't think so. we see opportunity across the spectrum in commercial real estate and residential real estate.

residential is more cyclically depressed but we're seeing across several segment of commercial and residential. >> you like hilton hotels, correct? >> yes. >> you like mgm. >> yes. >> and cbre. >> yes. >> and alexandria. >> i'm going to go to him. >> hilton is the largest hotel company in the world. 700,000 rooms lead by a very talented executive. they have industry leading growth, industry leading market share gains. it's trading at a depressed valuation multiple at 10.5 times cash flow. if the economy begins to pick up they'll benefit and has imbedded real estate value. another one owns strategic hotels acquired by blackstone real estate. so a lot of activity there. we like it.

number two, mgm, this is an unconventional real estate idea. and speaks to how we think about investing in real estate. it's a gaming company that has terrific assets in las vegas and the mgm grand and new york, new york and luxor and others, we like it because number one business in vegas is good. just reported a terrific quarter in the prospects are very good in vegas. two this company announced a $300 million profit plan. that translates to $6 of value we think will be achieved over the next two years. $6 takes it to 30. the last reason is they just announced they're going to carve some of their assets into a read and that's going to occur in the first quarter and i think that will unlock tremendous value. 10.5 times cash flow. trading at 13 times earlier this year. black stone also bought the cosmopolitan. terrific commercial real estate

service company. leading across all geographic markets. trades at 13.5 times earnings. we think they'll grow earnings 25%. >> let's talk about your company. from the ceo seat, you obviously focused on life sciences, bio tech, pharma, huge space. what do you think is happening in that space in that we have seen a lot of bio tech come down in price. a lot of worries over regulation and what's going to happen to that business. >> you should also talk about how you started this business in the first place. >> so we started this business with the vision that no one else had really understood both the real estate underlying the sector as well as the tenants involved so we saw this gap in the market and we came up with this business plan for our start up to go after this and it's mushroomed from a $19 million start up to a total market cap company today.

>> and a lawyer. >> as a lawyer. and had a good fortune to meet the right people. jacobs engineering was our lead investor but i think answering your question in particular, i think you're talking about sentiment versus fundamentals and when you get to the under lying industry, bio tech, pharma, the product and service area, they have more cash on balance sheet than they have ever had. earnings are strong. pipelines are filled. regulator sentiment is positive for attitude. so it actually is a mismatch between what you read and what's going on on the ground. >> what's the defensive mode for you? what is it that you were doing that nobody else can do? >> we have real estate that's misunderstood. it's becoming more mainstream. look at the black stone purchase that you mentioned before. it is a mismatch of the real estate as it relates to the unusual tenants.

nobody figured that out and we control today, we have become the largest developer of ubran clusters that react as the intersection. >> once they're in the buildings what's special about it and once they're there why can't they leave. >> the best locations and best operations. we understand, most of us have 20 or 25 year histories in the industry. so we understand that specialized needs. it's a pretty unique. we developed. and give us large margins. >> thank you for the conversation and when we come back, we'll have more great guests. we'll come back to the barron conference this morning. ken moelis is going to join us, you're watching squawk box here

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coming up, don't move because we have to discuss whole foods. you're not the only game in town anymore. the stock getting crushed because there's so much more organic competition changing the grocery landscape. what are they going to do, next, we'll discuss. stay tuned. you're watching squawk box on cnbc because we are first in business worldwide.

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whole foods's once hot growth is slowing, losing business to other competitors are lower cost options. here's what the ceo said on "mad money" after quarterly results fell short of estimates. >> it was a tough quarter, and we own it. you know, we had head wind from the comparison year over year of 150 basis points, but any way you slice it, not what we want or expect and outlined the steps to take today to move it forward. >> whole foods is october the only organic store taking a hit. sprouts down 30% this year with mainstream retailers like walmart pushing deeper into the space, can organic pioneers

stand out in the crowded field? here's president of clark wolff company, a senior food retear analyst at deutsche bank. good to have you here. >> wonderful to be here. >> the specific catalyst that drove whole foods down was same store sales down since 2009. 2009, there's a pass, everyone's down, economy's horrendous, 5% unemployment now, they are losing share y.? >> part of the problem is in 2009, if you couldn't afford to go on vacation, you bought a peach. historically, the specialty foods industry has gone up in every recession. in every down, you buy olive oil, cheese, have a good time. whole foods has not kept the promise. that's the problem. they have had to recall with listeria contamination a chicken salad, an ingredient in something they call made right here, and it turned out it was not made there. you pay a premium for a quality

product, organic produce, and they did not give what they say they are giving you, and now there's a 365, they expect you to trust what's in the can, in the bottle, the bag. >> that's smaller franchises open cheaper in theory? >> absolutely. you cannot discount fine food. you do that, you discredit there, and their people told me directly, managers, they are not happy about this. >> there's basic issues you can buy organic at walmart and other places now too, right in. >> the issue for whole foods is a lot of what they sell is ubiquitous now, and at much lower prices, and whole foods hung the hat on the fact they are high quality, but now there's questions on quality that crept in. i think, in their management's view, they believe they can charge a premium price for the quality, but, again, the issue quality gap narrowed and price points have not at all. >> what's the company do at this point? >> really focus on what they are supposed to be doing, and do a better job of very good takeout

foods, don't tell people what's good, show them, prove it, and exceed their expectations. they have this ratings system, good, better, best, and suddenly they decide who practices in farming, market, and business is worth an a, b, or c. that's not for them to be doing when they give you listeria chicken salad. >> what about, karen, sticking to we're high end, wee cater to that, our stuff is expensive, and that's it. >> yeah. i mean, i think really has the end result of the strategy, but they do not have a 1200-unit opportunity nationally ape're concepts like spouts who are price appropriate for the middle income consumer have a 1200 unit opportunity because price points are more appropriate. whole foods maybe the answer is to stick to what they know. >> what do you do with the stock? >> here e would probably sideline. i mean, there's always potential of, you know, a rumor of a bid

for whole foods, a takeout. i'm not suggesting that happening, but that seems to support the stock. >> lbo or something? >> well -- >> am i correct? little debt? >> they are taking on debt to take on stock, never ends well when fundamentals implode, but, no, i think if they were private they could fix the prices problem in a much better environment. >> they could be partners with a lot of small entrepreneurs. what they should be doing in the regions is reaching out, investing in the farms, cheese makers, and all the people that, together, they give them a bigger and stronger business and make them the mag innocent for these things so they own that piece of the market. they have. able toed start to do relationships, but they have to follow through and not have 1200 stores. >> okay. that sounds expensive, one, and, two, you don't have the foot print, making the stock less compelling. >> at the high end of food, stock should not drive what they do as a company. be successful for the stake

holders and stockholders second. stake holders first, otherwise there's no business. >> so bad, karen, at some point, it's a buy. look at the one and two, the three month chart, it's so pree siptous. >> to the extent they plan to invest in price, quote on quote, kroeger did this in 2001. basically they did not recapture growth for 19 quarters. their stock did nothing for eight year, and if whole foods goes down that path, that's what happens to the stocks. >> who owns kings? >> private equity. >> that's a great place. i ignore this. >> great store. >> kings is amazing. >> you know, a lot of times i like whole organic, but where's the other stuff, that's me. i'm not paying up. >> kings is kings, but -- >> would listeria be there if there was preservatives. >> yes, absolutely.

it's a contamination, not something you control with chemicals, absolutely not. >> you know, do you know of anything that's not a chemical? >> no, everything is chemical, and organic have chemicals too. i'm not against chemicals ever, just saying it's bad chemicals. >> maybe antimatter. >> water. >> yeah, i think water is a chemical. >> whole foods opened up a black hole store. >> yeah. >> dark matter. okay. >> thank you, clark and karen. you sound like characters in superman. >> thanks for having us. >> coming up, much more from our special guest and street reacts to disney's results, talking to rich greenfield, and first as we head to break, check out the futures in whole mode waiting for the most important jobs number of our lifetime, i think, which is this month. stay tuned you're watching "squawk box" on cnbc. we're first in business worldwide. (patrick 1) what's it like to be the boss of you?

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it's jobs friday, counts down to the october employment report, we have the jobs expectations, and what the fed needs to see to keep hopes for a december rate hike alive. >> plus, the tv business is strong, content to mobility is key, and luke skywalker will be in the new "star wars" movie, according to the disney ceo, more from bob and more business news straight ahead. >> i'm live from the investment guru, bob baron the second hour of "squawk box" begins right now. ♪

welcome back here to "squawk box," first in business here worldwide, i'm joe here with michelle caruso-cabrera, and andrew is live at the baron investment conference at new york's metropolitan opera house. every time we say that, wall street journal and baron's going cha-ching. it's not. shortly, it's jobs friday. polls forecast inspect an increase in nonfarm payrolls of 183,000. they say 150,000 is enough and enough for the next two reports for the fed to raise rates at the december meeting. do we need a five handle?

that seems close to the old idea of unemployment. it's not your grandfather's 5%, obviously, with the participation rate, with all the part-time things skewed. equity futures now are waiting, waiting, watching, down a point. we heard the s&p and dow are both down, basically the same amount. you don't always see that. the nasdaq is only basically unchan unchanged. >> among the other top stories at this hour, mobile payments company, square, is upsizing its initial public offering according to a new filing, pricing shares between $11-$13 raising $404 million from the prior $275 million. this filing values square at $4 billion. that's compared to a prior $6 billion valuation in the private market. in deal news, syngenta is talking to dupont's agriculture

division. this is because of the decline in commodity prices, and alibaba is acquiring youku in cash. alibaba's bid was made public in mid-october. separately, new sales forecast for wednesday's single's day holiday in china looking good 56% of users plan to spend more on single's day this year than last year. average shoppers spend $277 on the holiday. those numbers could put alibaba on track for $10 billion in sales in a 24 hour period. >> disney reports mixed results yesterday on closing bell, and bob said the tv business is alive and well. >> we feel really bullish about our television businesses and in particular, espn, and looking back on the quarter, if we could do it over, we would not. we want to be candid about what we were seeing.

the fact remains the guidance we revised then, remains today, and esnn's future given the away of great programming they have and demand i mentioned out there in the market place for it remains very bright. >> thank you, thank you, bob. [ laughter ] joining us now to break down disney's results, media analyst, rich chicken little, the demise of old media and cable and the bundle greatly exaggerated because of you. you're a big exaggerator. you're so quick to have all the new media take over, you think -- you're chord cutting thesis takes time. >> he was bearish last time he was on. >> you were bullish. >> here's what happened -- >> right before it collapsed. >> last time rich said the cord culting things happens more quickly than people thought.

>> right. >> disney all sold off. he on twitter, taking all the victory laps, blah, blah, blah, blah, and netflix is beginnigoi get all the market cap of the media companies. meanwhile, netflix is down more in the last three months than disney. netflix is down, disney is up. >> disney's cutting jobs at espn. do they do that because it's great at espn? a substantial job cut. first time. they say there's unconnected. no connection between cord cutting, little trouble, and job cuts. >> you're calling them liars? >> yes. >> anthony was on earlier said it's, you know, programming costs likely to go up with the new nba contract. >> a lot. >> to preserve margins, they have to do that in. >> look, this is not about disney collapsing. they are the best positioned company in the entire world to deal with the changing environment. the problem is, look, bob really talked about it. you took that clip, but there's clips later on, listen to bob

saying, look, the problem is multichannel television is not a great experience. try to watch on a mobile phone. he talk about how if you use your cable operator, whether it's comcast, charter, time warner cable, watch that same programming on a tablet device or mobile phone, it's not a great experience. >> watching on a mobile phone is different than a 75-inch screen. >> sure. there's an increasing number of consumers who want to watch regardless. >> right. >> bob's own words, viewers want to watch across devices. >> they will get run over or running into people. i hate them do that as they walk. look up, the world is beautiful. >> reality is everywhere you go, mobile's taking over our lives. >> five years -- give me a relativity of time dilation. i love -- you say the cable experiences -- i don't have enough channels, like 1500, and i can't find anything.

>> you should work for comcast. >> i like all of them, i do, go through them, but ini don't want to change. people will settle for just netflix? >> hulu's amazing. you get yesterday's programming from nbc, abc, and fox the morning after it airs live and watch it without advertising and watch every episode, so, like "empire" -- >> sounds like a network problem, which we've seen the decline of networks. that's not -- i don't watch a lot on networks anymore, and i don't watch them live, but i do watch a lot of sports. >> networks is 45% of viewership. >> i know. >> the companies -- viewership behavior is changing, but the problem is the ad-free options teach people not so much to watch the content, the content is amazing, but how to get away with murder i watch on netflix, an abc show. >> they addressed this

extensively on the call, the description of the call, the vast majority is new delivery methods in the future. >> how to sell to and maximize value. >> doing things right now, participating in a smaller bundle -- >> they are. >> for a sony item you can buy, a video game thing? >> sony view, nobody's subscribe ing, but it's a great idea. >> a smaller bundle, right? >> maybe there's room for everybody, rich, thinner bundles, me who wants to keep what i have. >> 100 million people are not going way from multichannel television down to 50 million. is 100 going down to 9 o, 80, or 70? how fast will the change happen? >> i paid for that stupid fight, you know what i mean -- >> you're not an average consumer. you're yop that. the perp out there is the average consumer. >> people are willing to pay for content. final four, if i didn't have trutv or the other stations, i would pay for each individual

event. the content is not going down in value, but up in value. >> sign up for sling, a charlie dish product. >> i wouldn't sign up for that. >> sling provides you access to all of the turner networks, pay for it for three weeks in the final four period for $20, and then cancel. >> yeah, but that's just an example. then there's everything, masters -- >> hbo's even learning. >> i'm going to watch commercials too. >> you love hbo. >> i do. >> sign up, and the game of thrones end, cancel. used to be calling up comcast -- charter, beat up on charter. that's a horrible experience to cancel. you never get to. they figure out a way to keep you, michelle, as a customer. they figure it out. on your iphone, if you want to cancel hbo now or netflix, it's click, done. >> that being said -- >> that's not a great benefit --

>> but people are disconnecting. people are -- the point is, consumers are smart. if they don't have to pay for something for the whole year. >> luke sky walker's in "star wars," that has to be worth $5. . >> i want to see it. >> who aggregates the old market cap from the old media? >> maybe nobody. maybe the companies are over earning. >> the content's worth too much. >> apple tv rolls out, installed it the other day, and there's a lot of apps on there that are not tv apps. -- >> over earning almost imploys that some kind of alagopoly has -- the free market forces have not been exerting pressure on what they earned up to this point? now it's going to? >> you is app iphone? >> i do. >> when you first got your iphone, it was rolled out with three things. it was a phone you called people on, a music storage device, and internet communications device. that was the presentation on stage. >> right. >> now you barely make phone

calls. you don't store music. you stream from other services. you don't usually use the internet in the same way, but you use apps. the creation of the app store created all types of new activities for your phone from facebook to instagram to per scope, all things you never envisioned when you got your first iphone. >> right. >> as the tv becomes applefied, my guess is, you do things on tv never done before. >> i will. >> i will not. i will be sitting on the couch with a remote control and 75-inch flat screen. >> i agree with. that i don't know if you're doing linear television. >> i hate the remote control. who designed these things? >> you get one that works and does everything. you got to get the person to come in and do it, give you the universal remote. >> there's still the abcd button on it with color and shapes like your iphone. >> you're complaining about --

you're sitting there, you don't have to move to get wherever you want to go, and now i have to think too much on the remote. >> it's complicated. >> life is good. >> i know it's a champagne problem. horrible remote. >> i'm going to watch tv all day tomorrow, watch "homeland" because i didn't like the first two. >> the last episode is amazing. absolutely amazing. >> did she -- >> no, it's amazing. >> it's the only show i watch live. >> look how excited you are about comcast. i'm going to convert you. >> it's the same experience. >> coming up, much more from ron baron, joyed by ken moelus to talk about m&a. james bonds toys after filming ends. here's a hint. cnbc wealth editor robert frank has the story. ♪

welcome back to "squawk box." mixed quarters this morning, humana earned 2.16, three cents above estimates, revenue shy of forecasts. they are in the process of being bought by aetna in a $37 million deal. they beat bottom line steps by 8 cents with quarterly profits of 2.28 a share, beat came on

reduction on operating costs. back to andrew at the baron conference. hi, andrew. >> thank you. we are opening the baron portfolio this morning. this morning, m&a and a player that helped companies like heinz find buyers. joining us to talk about the state of the deal making market, the ceo and founder of the company, and, of course, here with the special guest of the morning, ron baron from baron capital. thank you, guys. before we do m&a and where we are in the cycle and what's going on, you -- this is a -- you have a huge stake in the guy's company. we don't normally -- it's funny, we talk to you, we talk about m&a, but we don't talk about the business of m&a from your vantage appointment, and i'm curious, well, how did it happen? he said to me, he came here this morning because the boss called. >> i'm not his boss, but i thought it interesting. i know ken since 19le 7, and so we met in the back of wynn

resorts of mirage, walking around, banging into walls with steve wynn, raising financing for him, we thought it a bad idea, but he was right, and steve said this the most brilliant guy he's known ever. he was a young guy working at the time, and 1984, you got steve to be able to sell this property that he built in atlantic city for $110 million, $150 rather, making $110 million a year, sold to valley for $104 million. that's how he got the money to build mirage. it was interesting what you do, two things, number one, why is this company you have well positioned presently, and number two, just a couple war stories on steve wynn, about donald trump. you saved them in bankruptcy. >> we have to be talking about that. >> he was not in bankrupt. i don't want tweeted later. first of all, thank you on that. i met ron in 1987, and, you know, you asked what i do, and the most interesting thing, i'll

say this, one the biggest climates today is steve wynn, and i think 30 years later to have the same people in the same relationships is the core of our company. >> here's the question about your company, then, curious what you think as an investor, which is to say you're in a relationship business. it really -- you talk about people, right? betting on people? this is a really people business, and what you see in the boutique investment banks, it's hard to create just a brand unto itself. it's about ken, right? >> people. >> the people. >> well, and that's the question. right? you look at greenhill, right? when robert greenhill took a step back, the company struggled. >> that was us -- >> that perception, i'm curious. >> like saying wynn resorts is about steve wynn. it's not. it's about developing a culture that i think will last for

decades going forward. i mean, i think in 1950 goldman sach was probably about wineberg, but he developed a culture that was self-rep pri kating, dif yen rated, and that led a firm to be able to rep kate over and over again the talent that goes forward, and that is what i think we're doing in moelus and company that's different than anyone else right new. >> talk m&a. >> how many people work in your firm now? >> 650 people. >> when you started in 2007, how many people? >> well, on day one, there was one, but after that, about 15. >> right. >> something important for m&a, right, what happened in the regulators is they don't let banks do some of the services that they are doing now or the banks in order to get the services were lending money they are no longer permitted to do to get the client advice they provided, and his advice is better than the bank advice. that's your advantage. >> that's what we hope. if we create the right culture,

we attract the right talent. it's hard to be in a regulated 200,000-person firm with a trillion dollars in derivatives and feel good about that. >> in terms of m&a sicycle now, what inning? >> it's still early. >> early, like, two, three, four or early like -- >> might be just be a long game. like a met game beginning to the 15th. the -- it's low growth environment out there. the shocking thing, is they expected inflation, and we have deflati deflation. that's forcing every company to think about their costs. >> right. >> in ways that they've never thought about, and that requires you to take our costs, including conversions on the tax line, but includes merging, taking out overhead that has to be duplicated. >> you said the word "inversion," so you think

washington's going to end this trend any time soon? >> look, i think they'd like to, but it's a -- washington is in a state where they cannot agree on anything, so, no. i think you can't get an agreement on one plus one equals two in washington, so how do they end it? >> in terms of sectors where the next big plays are, tell us about your pipeline. >> boy, is there a lot of distress right now. >> there's not that much. with libor effectively zero, you make your coupons. coupons are so low that people tend to make it another day. there's not a lot of distress yet other than in energy, commodities, where the pricing changed, and, look, i think it's a cross. tell you something, i thought in september when the market was volatile, volatility is the enemy of m&a. if that had gone on for a long period of time, it could have had an effect, but i'm pleasantly surprised how fast the market got back to stability, how fast the conversations have picked up, and m&a is very active, and it's

across sectors. it's not a sector. it is a general price problem. it's a deflation in growth. it's a growth problem. >> okay. we got to wrap, but real quick, you mentioned donald trump, he was your client? >> 25 years ago, i remitted donald. >> would he make a good president? >> let's put it this way, i was amazed -- it's the same guy. i called up 25 years later, nothing's changed. same guy. i never saw -- during that time period, i have to say, focused, fighting, disciplined, it was an amazing time because if you remember, it was a very difficult time for the man, and i was always impressed by how he came to the office every day ready, and willing to, you know, do what it takes to get to the next step. >> and a good coin flipper. >> that's another story. >> okay. we got to live it there. ken moelus, ron, staking around, back in a built. coming up, much more from the ron baron conference. it is the ron baron conference,

but ron at the conference, his take on tesla. we return in a moment. time now for the trivia question. how many kernels are there in the average bushel of corn? the answer when cnbc's "squawk box" continues. aa-flac! aflaaac. aaaa-flaaaac. someone's sandbagging. i'd be tired too. he paid my claim in one day when i got hurt. one day? serious hustle. serious duck. in just one day, we process, approve and pay. one day pay, only from aflac. ah!

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♪ now the anxious to today's aflac trivia question. how many kernels are there in the average bushel of corn? the answer? about 90,000. >> a bushel. >> i guessed 10,000. wrong. well, welcome back to "squawk box," the united airlines' ceo who suffered a heart attack is coming back returning from medical leave in the first quarter of next year. acting ceo, brett hart, has been running the company since nunoz was hospitalized last month. they expect to deliver 15

billion packages , and they are bracing for the holiday mail this year. 30,000 seasonal workers will help handle the holiday overload, and it will begin sunday delivery for the four weeks leading up to christmas. coming up, europe braszing for an influx of more refugees ahead of the harsh winter months. the international rescue committee joins us with a run down of the challenges ahead in the e.u.'s worst humanitarian crisis in decades. as we head to break, look at u.s. equity futures. have not really moved. the nasdaq is up 3 points. everything else is down a point or more.

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♪ >> what is this? >> broken bells. >> what? >> you're not hip. >> i'm not. >> clueless. >> i know. >> welcome back -- in a good way -- welcome back to "squawk box" on cnbc, first in business

worldwide, and among the stories front and sent e one of the stocks we're watching today is bhp, the world's biggest mining company, shares under pressure because of a major dam that burst down that brazil, incident causing damage to app iron ore operation that was jointly owned by bhp and the brazilian company vale. >> uh-huh. >> bhp stock is taking a beating because of declining commodity prices. men's warehouse, you will like how you look, same store sales could fall up to 25%. this quarter, they are overhauling the promotional strategy, and the greek parliament approved reform bill required by the country's international lenders, ahead of a eurozone finance ministers meeting next week where they will decide whether to approve fresh bailout funds for athens. oh, no, i smell a reason not to

raise rates here, what if they don't? no? i'm here, right? you're here. it's going to be a problem. >> i would be there. >> your bags are packed. >> always have a bag packed, yeah. >> that's weird. >> why? >> it's under the desk. >> amazing. >> yeah. president obama says it's possible a bomb brought down the russian air bus jetline er in egypt killing 224 people. we have the latest, hadley? >> reporter: hey, michelle, basically what we've right now is u.s. and british authorities pointing to the leek le hood this was, in fact, an act of terror. multiple reports in the british press suggest it was a result of an event that was caused by an offshoot of the islamic state in egypt, and we also, of course, know now that the islamic state claimed up to three times it was an attack on their part, that they caused the crash in the

sin sinai, but egyptian authorities push back telling nbc news that the brits and americans have no part in the investigation, no evidence yet this was an accident caused by a bomb blast or explosion, no evidence of that, and british and french and americans are not taking part in the investigation. a lot of pushback from the egyptian government at this point. you also have to remember that this is an ongoing conversation because thousands of british tourists are trapped, trying to get out on flights today, the egyptian authorities say they do not have the capacity to let that many people go and leave luggage behind. flights are going in and out of the airport, but not as many as the british government would have liked to have allowed, and, also, we understand the department of homeland security is, in fact, mulling the idea of extra security measures at international airplanes, but we have no word on when the decisions come down. guys? >> thank you very much, hadley. story connected to this, europeans bracing for an influx

of 3 million my grants and refugees by the end of next year, deepening the crisis there, worst in decades. the rescue committee and foreign british foreign secretary, good to have you here. >> great to be back. >> before we get to the crisis, if your foreign secretary now, what do you do now? all the planes flying in and out, britain was the lead in saying it's a bomb that brought down the plane, ahead of the egyptian authorities, ahead of the russian authorities. what do you do? >> two things at the moment, one, you're interior minister and other security agencies will get to the bottom of the truth. what do we know? what's the facts? foreign minister, you have 20,000 british tourists stranded. you are getting them out. the counselor services up full stretch to help them. >> this was connected to the refugee crisis? a lot of refugees come from the desperate situation in syria and the civil war going on there, and now if this is indeed a

bomb, did the rebels, are they the cause of bringing down the plane? what do you do about the migrant crisis at this point? seems just so overwhelming. >> you're right to talk about it as an overwhelming crisis. we started on the greek island of lesbos just in june, having 200 refugees a day. at the moment, it's 5,000 to 6,000 a day coming across the sea from turkey. the bulk of them coming from syria, some coming from afghanistan where there's conflict as well. 200,000 refugees arrive on the island in the month of october alone. in the situation where the prospects for ending the war are extremely limited, a restart of political talks, but no one believes they are going to bring a solution. all you do is staunch the agony, stop the bleeding, really, two ways, one much more effective humanitarian countries, syria, jordan, lebanon, a great ally of the united states, it's struggling with 700,000 ref fugs

refugees, but europe has to welcome people properly, receive them, register, proper facilities at the ports. i mean, my staff told me this week about having to give cpr to kids coming out of the sea where 40-50 people struggle to get across the water. coordinate the distribution of people because at the moment the vast bulk are in germany, where they are headed for, and germans are trying to get organized for that. there's very basic stuff to be done. >> if you're the u.s., do you embrace putin's attempts to get in there and say, knock yourself out? try to solve the situation on the ground there, boots on the ground? >> i don't think you embrace it, but there are realities now, russians at play, it is right that the u.s. and russia are the great global powers. saudi arabia and iran are the regional powers with turkey as well, central to ending the war, but the u.s. is, obviously, got an absolutely critical role, extraordinary, really, think

about it. half the syria population are homeless, 300,000 dead, 4 million refugees, and there's not a proper political process to bring the war to an end. that's why we say as a humanitarian organization, look, there are things the u.s. can do. the u.s. has got syria-american communities across the country who are successful, productive, patriotic citizen, and so the u.s. has got a role in bringing the most vulnerable here, they have a role as a humanitarian provider in supporting the neighboring states, but there's a political role as well. >> you seen criticism in european countries. some citizens do not want all the migrants coming because they are incredibly expensive, europe struggling with costs and spending right now. how do you convince -- >> well, two things. >> this is what they should be doing, they should be accepting. >> two things about that. one is that significant bulk of europe that has a problem. if you are hungary, you need skilled labor.

those fleeing are accountants, doctors, and business people. first thing is, it's wrong to see them as a pure economic drain. from this country, people who come here, refugees flees pers cushion or immigrants, they make a contribution if properly integrated into society. secondly, i don't want to put on the rose tinted spectacles, everyone is welcoming, but you're right, there's a p polarization. other people say, no, we have an obligation as a civilized nation to recognize that people who are fleeing persecution need to be treated with compassion. what i add, those with a big heart make sure government's using its head. you need competence and compassion in the way it's addressed. >> are you convinced that could possibly happen? >> it could. >> in the european union? >> it could happen. look, it's -- >> sarcasm. >> look, if i said to you 15 years ago that countries from eastern europe would come into the european union, market economies, they have become

successful and stable political countries, poland is a major part of the european union today, pull the other one, they came outside the soviet union, they will not breathe in the soviet space, brought into the union in that way, but when there's clear, competent and effective leadership, we can do things right, but it takes a crisis before it reaches the answer. >> i don't know if you saw the article in the wall street journal a couple weeks ago about how actually based on the size of the country, there's huge percentage of the my graigrants the process -- i mean, majority of the people dying in the mediterranean -- >> well, i have not seen that figure, but you're right. the people fleeing are bordering tiny countries. >> huge contributor. >> it's not a -- 600,000 people arrived in europe over the last six months. >> relative to the size -- >> no one thinks the majority of people are from there, but there's a lot fleeing, i mean,

it's fantastic, this view talking about them, the reason is we're working with air tray ya and refugees north of ethiopia. they flee religion and political persecution, they are coming out of the country. the needs there are really, but the top provider of the top country for this is syria, number two, afghanistan, number three, somalia, and then ai tray ya. >> if there was regime change in syria, and assad is gone by isis gets more powerful, and, you know, continues to kill christians, and -- would a favorable outcome in syria in terms of the regime stop the flow of refugees, or if we don't get rid of isis is it continues? >> substituting -- >> stop the fighting of the syria war, but what if isis is strong and powerful? >> they are part of the syria civil war. what i say to you is two things, one, that if you simply think

about assad and not the syria state as a whole, that's a mistake. the key thing is whether or not in your scenario, if the depart from assad means the collapse of the state, if that happens more people leave. secondly, syria's tragedy is the choice is reduced at home and abroad so either you're for assad or syria, and people we help, we have barrel bombs from assad and isis. i'm getting out. that's the tratragedy. the long eer it goes on, that's the problem. >> if russia crushes isis because they want to keep assad in power, is that a terrible outcome for the west? >> i think that the real truth is that the assad regime fuels isis. >> yeah. >> by letting people -- they are two sides of the -- >> they have an oil deal. a natural gas deal with these guys. >> the truth is, the options

have gotten narrower and worse the longer the war goes on. when it started, there was no isis in the middle of syria. >> right. >> thanks so much for joining us. >> thank you, appreciate it. >> coming up, when the latest installment of the bond series hits theaters, there's an ejection seat that's back. up next, robert frank has a look at the billionaires who buy bond's greatest toys after the films are made.

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welcome back to "squawk box." stocks moving this morning, weight watchers in consensus boosting full year earnings view. the stock risining oprah disclod a stake and joined the board. the energy drink maker topping results, and boosts from advanced purchases made by customers due to a preannounced price headache of some beverages. dreamworks with a profit, big driver? increase in licensing revenue that more than tripled. joe? >> thank you, thank you,

michelle. the latest installment in the james bond franchise hits theaters. the look at latest and greatest bond's cars and gadgets. snatching up the wonderful toys, i guess the markets probably go for something from gold finger, robert frank, cnbc's wealth editor. robert frank, it's more of a superhero than a secret agent. measure of a clark kent, but you do this -- >> i like bond. i do like bond. >> bond, james bond, shaken, not stirred? >> in the new movie, he does his martini dirty. >> no, bad idea. >> scandalous. one of the things of being a millionaire, you fund your fantasies. take elan musk, he was amazed when e saw the spy who loved me, especially that lotus that turned into a submarine, and when it came up for nux in 2013, musk bought it for under a million dollars, but it was not a functioning car, it was just

from the movie, he installed a power train and other equipment to make it work as a true sub car. he would be a good bond villaiv, rich -- >> and government subsidies. >> this guy built and operated the famous sub in "for your eyes only," builds subs like this falcon that i rode in. his current buyers are billionaires like tom perkins and richard brandson. would be good in movies too, i think. the desert family in florida have what's believed to be the largest private bond car collection in the world including, joe, you mentioned the aston martin db 5 in gold finger, the total value just of the bond collection, about $35 million worth of cars. that db5 you mentioned with the ejection seat? that's $5 billion. >> wow. >> the auto mag innocent built

and owned 18 yachts, each named after james bond movies. there's goldfiner, diamonds are for, the world is enough enough, that was 140 foot yacht doing 66 knots. he's now building spectre. >> does he keep them? >> here's the flipper. builds, flips them, and made money on all of the bond boats. >> ejection seat is back. >> so i hear. so i hear. this was a 300 million dollar bond movie. the last one grossed a billion dollars. >> i was going to say, that's a good price for what they expect in revenue, right? >> they expect -- this one's already topped "sky fall" in terms of revenue. >> i can't wait. i love james bond. >> i want the wheels that come out and shred the tires. >> yes, with the traffic in new york, that would be awesome. >> people that drive in the left lane. >> or the machine guns, that takes care of everything. >> the prius going 50.

>> a subsidized prius. >> exactly. >> thank you, guys. coming up, ron baron's take on tesla, and more, and at the top of the hour, predictions for the october jobs report. "squawk box" will be right back. so what's your news? i got a job! i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition!

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welcome back this morning, live from the baron investment conference. we're here with ron and a few minutes, you're starting the party with a special guest, the

coo of your only auto stock holdings, tesla. elon musk is here and you're interviewing him. >> yep. >> what do you want to know from him? >> hard to make a car, why are there so many issues with cars, are there the safety issues car after car after car, other than his? that's one question that i would be interested in learning, and i'd like to know a lot more about elon and why he thinks he can be successful. how does he think he can be successful in the beginning to raise the capital that he did, to do what he's done so far, it boggles the mind to be able to make cars that revolutionize, cars and spaceships at the same time. >> explain the thesis. people say the price is rich, a lot of things have to go very, very right, and it almost assumes that competitors are not able to do what he is, and there's an expectation now that apple, for example, might be

making a car. >> i think apple will probably try to have some branded car in symptom fashion, google, too, as well, and -- but the car company is 80, 90 million cars a year, 80 million parts a year, the largest car companies are toyota with 10 million cars a year. volkswagen with 10 million cars a year, toyota with 8 to 9 million cars a year, and tesla is 50,000. there's a long way to go. next year, 80,000. they growing 50% a year. they expect to be 500,000 cars a year in 2020. just the number, 200,000 cars a year in 2020, that's a business that's 40 billion a year in revenue, and then say they make $6 billion in operating profit before they spend to make themselves grow larger, and that means that's probably worth $120 billion, market value is $30 billion. that's quadruple in 30 years. is it expensive now based on revenues produced and profits?

yes. what you bet on is what you assume is the company will be larger. why can't the existing automobile companies do the same thing? why doesn't general motors doing it, volkswagen, why not? the reason they do not because the executives running the businesses, they had very great careers, and by the time they are the head of it, they are not paid to take risk and make their business to say, okay, we have billions of dollars invested in plants that make engines and make transmissions, forget it. we're going to now take $4 billion and borrow it and build a battery plant to make battery cars. how are they going to get that approved? they hope by the time they are no longer the ceo of those companies, that they sort of try to ignore it, push it aside, it's not going to happen. too bad, it's going to happen. the only way you have sustainable transport is not hydrocarbons, but electricity. >> an ongoing conversation in the commercial breaks is what happens to the automobile insurance industry?

would you ever invest in the automobile industry? >> automobile industry? the insurance business is potentially a disaster. the automobile insurance companies make money on basis of investing the float, and if the -- if there's no accidents, in the short term, they do well because they charge fewer accidents, higher premiums than they would otherwise justified on the premium, on the accident, but long term, if there's no accidents anymore, then why would anyone -- you're going to have a nominal amount of money for insurance, floats are small, and there's not a business like warren buffet. >> vw, every invest in the company? >> never, ever, ever, and it's hard to imagine you could have a company like that where hundreds of people had to know they were breaking the law and intentionally, and then there were not any whistle blower. what culture is that to have a business where you have all the people that know something is

going wrong, know they are doing it intentionally, and they don't do anything about it. that was the culture created by the people who run the company, and not the workers, workers in line did what they were told to do. >> well, it's great to see you. i know you got to get on to the stage, and the day is about culture. excited to see you excited about companies and people. thank you for doing this with us. back to the team just down the street, michelle? >> andrew, great stuff, ron, appreciate it, thanks to app drew, see you monday. up next, the countdown to the jobs report is on. after the data, reaction from chicago fed president charlie evans. "squawk box" will be right back. the future belongs to the fast.

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uh-uh. october jobs report, the number a game change forget fed? >> tasty version of stocks to watch, shake shack soars as men visit the burger chain. monster beverage with a earnings beat of its own. beginning to look a lot like christmas. retailers are getting ready, and today, so is new york, a 78-foot

spruce arrives in the neighborhood as the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe along with michelle caruso-cabrera, the october employment report comes at 8:30, and popped forecasters say the economy likely gained 183,000 jobs last month. meantime, the unemployment rate is seen falling slightly to 5%. the futures ahead of the big report have been mostly unchanged most of the morning. the nasdaq picking up a little, it is, dow up 8 points, and s&p up just under 1.5 points. it's an interesting jobs report that we're waiting for because the bar's very low.

anything we figure 150 and above is okay. >> in terms of a rate hike in december? >> in terms whether it's interesting. they seem to set us up. they thought in september, they had not prepared us enough, and, oh, my god, what if there's a surprise, so they did not do it. this time they seem to have been definitely got the markets ready for it, but if there's such a thing of murphy's law, and i don't know that that is for this, but it would be two bad months. no reason to think that given claims and everything else. looks like wii on track, we're on track. >> there's a peter principle. >> i want to see if we did 60 this month and next month, i want to see it, but -- >> you wouldn't like it for the country? >> no, no, they painted themselves into a corner, which they deserve to be in. >> after -- >> should beheart hard to get o. maybe they can. >> don't you love jobs friday? we have a final four every

month. >> it is. not quite, though, the final four? >> if you're in business news, it's the data point of the month. >> you have to be a big nerd to compare to the final four. okay, yeah, you're right. >> stories front and center other the jobs report, mobile payments company, square, upsizing initial public offering with the new filing showing it expects to price shares between 11 and 13, raising up to nearly $ $404 million up from the prior only 275 million, but the filing value square at $4 billion, remember, they were at $6 billion in the private market before this. in deal news, syngenta is talking to dupont's agriculture division, and they are exploring a deal with dow chemical to handle the situation with the decline in commodity prices and seeds, and alibaba is acquiring youku in cash.

alibaba's bid was made public in mid-october. >> a couple stocks to watch this morning, a mixed quarter for disney, earnings beat the street driven by gain at cable networks like espn, but revenues fell short. the stock right now, oh, it is 30 cents down. the last time disney reported, there was much more gnashing of teeth and angst about espn. it's recovered most of the lost ground, and nothing in this report to sort of rekindle the fears. shake shack beats the street, upbeat guidance, citing robust growth, price increases, and menu innovation, and monster beverage, the energy drink makers topped estimates. the company says the sales got a boost from advanced purchases made by customers due to a preannounced price hike in the beverages. weight watcher beat consensus and beat the full year earnings view. stock, that's the oprah effect there on the right that you can see, and it's continued to trade higher making her even richer.

shares of men's wearhouse slammed now. people get richer typically. >> it happens. need money to make money. >> the rest of us watch. slashing earnings expectations, blaming slowing sales in the bank division, slamming the buy three, get one free promotions, probably not the greatest model, sell one, give three for free? you can't do that forever, can you? >> why not just price the first one less or is that -- is the psychology it's better if there's four for one? >> who wants four crappy suits? >> if you need a lot of suits quickly, you're krouyoung, star out, your first job. >> i know. that was elitist. they are fine suits. you'll like how you look. 30 minutes from the jobs number. we'll get predictions in a bit, but, first, fed. the markets.

the economy. rebecca patterson is a cnbc contributor, jeff rosenberg, a big swinging person at black rock, a chief investment strategist of fixed income there. i think that's okay? you've been called that before, a big swinging person? >> yeah, i guess. >> swinging through the halls like tarzan. >> gary stern, former president of the minneapolis fed, and bill rogers with us in a minute. >> he's stuck in traffic. >> here's a public policy university professor at rutgers, yeah, good luck against michigan. former chief economist at the labor department as well. do you know the past revisions of both this number, the october number, and the november number? are they big? what if we -- >> september and october. >> are they big? >> yeah. >> what if it's low, and then we find out a couple months later it was not low, and the idiots do not raise because they are --

because they're, you know, because they are looking at numbers that have this huge margin of error in them anyway. >> there's a huge margin of error, about 70,000. >> 70,000? >> any reaction to the number is a little bit silly. we're going to do it, give you the forecast, and that's silly, but that's what the market focuses on. >> silly for us, but the fed is reacting. this is what the fed determines whether it hikes on, isn't it, or not? >> they're going to look at the whole trend and average, and one number this morning will not change the three-month or six-month average. revisions are important, joe, because revisions have over the last, four, five years have been hirer than expected, and that's when you get when a labor market is strengthening. when they slow, the revisions start to slow as well, so it'll be interesting to see the revisions this morning. >> bill, you made it. a huge build up before you got here. my question, just so you heard it was, there's revisions -- >> right. >> the fed is going to, you know, base what they do on these numbers, but the numbers are not

really necessarily the real numbers until three months later? >> well, i mean, they -- when you look at the revisions historically, and they sort of do comparisons of what was initially reported to what was revised, bls does a really good job. i mean, the margins of error adjustments are typically good. >> you used to work there, right? >> chief economist, almost 15 years now, but i currently serve on the technical advisory committee, and these are the issues we talk about. >> jeff got it right. i mean, the fed is not going to be that sensitive to one month's data or even two. >> right. >> it's what's fundamentally going on and what the forecast is. unless something happens to change the nature of their outlook, this is an important number, but not definitive. >> two reports in a row, that's less than 100,000, but they could have been 170,000 because of revisions, then they made a mistake based on this, right?

>> that's why you don't get too captive. >> they say they are captive with the data, they are data dependent. >> they have an exit clause. we are data dependent, but if we get three bad reports, the data could change our view. i think they've given themselves -- they are in a box. the market is pricing in a 70% chance that we get a december hike, but if we got a couple bad reports, the percentage goes down. >> close to 730%. >> the ten year looks ready. i think the dollar looks like it's ready. i think it could go up further even if we raised, do you? at this point? >> well -- >> 108, 109. >> it's a combination, we have the ecb meeting, if we take about dollar euro, it's as much about what draghi gives, setting the market up for an expectation of a bigger caption, and so it'll be a combination of between draghi and the fed, but the point is well taken that the probabilities have increased, the dollar's made a move, so you have to have a really big

surprise on the disappointing side this morning if you're going to really move the markets. >> what's the terminal pricing here? do they want 1.5? do it every meeting to 1.5? >> i don't think so, no. i think they are of the mind that they'll do it, but say they do it in december, i would expect that that would be a company, unless something changes in the outlook by some indication that they are going to move slowly over time because they're there for at least a couple reasons. the domestic economy looks pretty good, but the global economy, not so much, financial markets have, obviously, had their periods of volatility, so i think they are going to proceed slowly, and i would hope that they would indicate that in whatever language they choose to use because otherwise we're going to be in this continual game, get in march and so on, and, you know, what are they going to do, what is the latest? i would like to think they take

uncertainty out if they can. they'll never get all of the uncertainty out, but if they get some out, that's constructive. >> yeah. i mean, i think for me, what i'm going to be looking for is that is the text the language of now, what is the pace? right? and because i do feel, you know, that the market, whether it's main street, wall street, you know, people are accepting it or the increase is baked in, and so it's going to be the path of increases and there, where i get concerned is now you start to raise interest rates, the cost of borrowing for families, the cost of credit cards, you know, in terms of being able to repay, and then you also are going to have an issue -- >> what are you worried about for the ten year? 2.5 or -- >> focused on being on the fed funds rate is tied to what individuals, you know me, i focus very much on households. >> right. >> worker, and so it's been shown, and i've shown with a

variety of the federal reserve economist, when you raise interest rates, it has desperate impacts across labor markets in terms of younger people are going to have difficulty, you know, getting jobs, we have still, unprecedented numbers of people working part-time that want full-time. those individuals will have a harder time getting jobs because you are slowing the economy down. >> if they raise by a quarter point, what's the ten year do? where do you think it goes? you get a mortgage, that's what you're getting your interest rate based on, not at the short end of the curve and what the fed's doing. >> i'm not a forecaster. >> yeah. >> it doesn't do much. you know, most of the impact of the fed raise is going to be in the front end of the curve. the back end of the curve is going to be a lot more about what's going on in the rest of the world, and the rest of the world, the other story, global and international developments, that's looking a lot weaker, so you have a hard time to get big increases in the areas of the yield curve that really matter for the real economy. a small increase in the front end of the curve, yeah, the appointment is you're trying to

normalize interest rates. you have to go a long way before you see that impact. >> i think the ten year, you know, one thing that was really important to us when we lived through an august-september this year, even with china and other central banks around the world selling treasuries to pay for intervention or other things, you did not see the ten year move at all, and that's back to the point there's a lot of demand overseas, private investors, forget the banks that want treasury because we have the best yield relative to any liquid bond market in the world. that's not going to change. >> amazing, a few years ago, said the chinese dump treasuries, it's a nonevent. >> would have been a panic. >> don't say it's going have a profound effect on anything, especially on the performance of the u.s. economy. series of moves over time, perhaps, but, i mean, that's the interesting things about all this. a quarter point really is not going to have an effect. it's just getting started -- somebody used the term,

"normalizati "normalization," that's the right way to think about it. >> could lose 50-0, still kick the field goal, you know? >> to michelle's point, the reason why there's hemming and hawing because this is not about the real economy. this is about the financial economy, right? unwinding portfolio rebalance channel, right? so the whole -- >> woah. okay. >> sorry. >> told you you're a big swinger. >> what is that? >> a tough bernanke character throwing that around with ease. >> we're all just nodding like he must be right. >> my bernanke characterized the transition mechanism of zero interest rates. make safe assets unattractive to reinflate risky assets. one hike will not change that, but changing the pace of normalization and how much, if the zero interest rate policy was about reinflating financial assets, how can financial assets

react when you take that support away? that's where the uncertainty is. >> we need leisman here, and we can cancel the rest of the show. [ laughter ] coming up, the countdown to the jobs report almost over, final predictions, and we have reactions from charlie evans. before that, mary thompson is on the road in colorado with today's installment of our popular story series, "where the jobs are" right after this. thin. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.

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it is jobs friday, and we are looking at jobs positions added in 3-d printing. it's a small, but rapidly growing segment of manufacturing in need of workers who have a different vision of what the industry can be. mary thompson is live from lockheed martin space systems in littleton, colorado. hey, mary. >> hi there, michelle. we are outside one of the 3-d printers here on lockheed martin's campus, and this manufacturing has been around for decades, but as you mentioned, a growing number of manufacturers use it to save time and money. here's dennis little, vice

president of production for lockheed martin space systems. >> we often build just one part, one satellite at a time, to it lends itself well for that, but there's significant cost savings up to 50%, also cycle time reduction of 50-60%. >> another advantage? 3-d printed parts like these tanks, lockheed's testing, tend to be smaller and lighter than the predecessor, allowing for smaller payloads on satellites. engineers use software to design parts or products and designs go from the computer to the printer making them by spraying layer of thin layer on a platform building the design from the bottom up, getting clients to shift to the products, improving materials used space worthy are roadblocks to 3-d adoption, but they are anxious to hire workers who can do the job. i'm projecting 120 production professionals needed here in denver or waterton to

fill demands. >> reporter: of course, finding the right workers to do the job is a roadblock to expanding additive manufacturing or 3-d printing, so coming up on "squawk on the street" i'll tell you how some employers shift focus from finding workers with stem skills to workers with steam skills. we're not talking water vapor there. back to you. >> okay, mary, we'll be tuned in, thanks. coming up, final payroll predictions, and after the numbers hit, reactions straight from a top fed, current fomc voter, charlie evans joining us in a cnpc es collusive. stay tuned, you're watching "squawk box" on cnbc, first in business worldwide.

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we've put their faces on turkeys. it's thanksgiving. >> right. we didn't think about that. we didn't. >> going around the horn with the panel for final positions. >> was i a big swinging turkey? >> yes. your number is 150,000? >> low side. the market is -- the payrolls are slowing. i don't know if we get this big

of a slow, but that was the theme. >> stern? >> 175. >> 175,000, all right. >> where is leisman? he's 172,000. >> i'm here. >> oh, you are here. >> i do my own numbers, you know. it's 172. >> 172. we see that on your turkey. >> yeah, but the big difference between the service sector and manufacturing sector. >> we -- no nuance here, please. [ laughter ] >> i can't help it. >> rebecca? >> given the margin of error on the number, i decided to go high so 195. >> wow. >> the optimist so far in the crowd. rick santelli -- rick's here too? >> yes. i'm going 169,000. listen, i think it's going to be light. i was going to go even lighter, but we'll have to wait and see, light numbers gives the fed more flexibility, and, of course, everyone knows i don't believe

at all in conspiracy theories. >> notary public. >> bill rogers? >> 185,000. >> 185,000. >> would be higher if manufacturing were stronger. >> yeah. >> okay. all right. what are we doing here? breaking? >> i'm hoping for a strong number because it -- does the market go up on a strong number or down? the target? >> if it's not too strong. >> just right? >> we need -- >> oh, gosh. >> one other thing before we lose all sanity here, the other big number here is the average hourly earnings. market laser focused on that. cover a disappointment on the payroll figure, but if there's a .3 print on average hourly earnings, that's just as important. >> and the 4.9 or 5? >> same thing. you know, those numbers can be a little bit messy because the -- there's a lot more volatility around this. >> unemployment rate. >> you get a four handle. >> how does the fed justify not hiking? >> depends on -- >> solidifies it.

>> depends on how you get to the 4.9. >> that's the point. psychologically, there's not a four handle -- >> if you get there because unemployment is down because people got jobs and participation is up, then i think, you know, that's -- that moves you definitely into the point where they raise rates. if you get another great december report. >> rick, if you get to the unemployment rate, unemployment jockeying people people leave the labor force, that's 25-54-year-old range, not going to school, not retired. >> i get it. i just think a four handle is a powerful number. >> leisman has backup happening, but, steve, rick, just is it good news? good news or not yet? bad? steve, then you can take over. >> i've always believed good news is good news. >> i said rick! >> more jobs is better. >> i said rick! >> just the definition of good news that needs to revised. >> okay. now, steve. sorry. come in and sit on the set with

us. >> he's doing the exclusive. >> okay. oh, that's right. with evans. that's right. i thought evan was here. sorry, steve, i apologize. >> really? that's a first. >> no. [ laughter ] >> you're welcome. you're welcome. >> not really. >> moment in history. >> no, good news is good news, and i want to say that, bill, i'm not sure the fed is playing that game of how we get to the lower unemployment rate. you know, the work that we've had on from kruger, they leave the work force, can't count on them coming back, how much slack is in the economy, and i think the fed more or less and i'll ask charlie in a bit, they have to take the unemployment rate, if it's 5, it's 5, and it's not another number, which is why the six is not necessarily the focus because they are nod adding additional information. >> all right. we'll discuss after the break. we have to take a commercial because of the big number. >> coming up, we'll have the number in about three and a half minutes, it's the number of the

week. the october -- of the month, october jobs report next. we will have the numbers and the instant analysis like only we can do.

we are just seconds away

from the october employment report ahead of the numbers here, and flat for most of the session, they are marginally positive on the dow and nasdaq. we have five seconds. we got to get immediately now to hampton pierson with the numbers. hampton? >> 271,000. >> oh! >> october nonfarm payrolls increased by 271,000 jobs. the unemployment rate is 5%. average hourly earnings 0.4%. the year over year gain in wages is 2.5%, the biggest 12-month gain since july of 2009. obviously, way above the consensus forecast on the headline numbers, private sector job growth in october plus 268,000. >> woah. >> revisions, august was 136, revised up to 153, september, 142 down to 137.

a net increase of 12,000 jobs or another way to look at it, the september revised number of 137, the october number more than doubled it. job gains across the board, but heavily weighted in the service sector of the economy, business and professional services plus 78,000. health care up 45,000. retail plus 44,000. food services, plus 42,000. construction, plus 31,000. manufacturing was essentially flat. the mining sector down by 5,000. so with this spectacular october number, the average for the last three months now moves back up to 187,000. the labor force participation rate remains at 62.4%. however, the u-6 is now 9. 8%, the lowest since may 2008. quite a set of numbers, guys. >> it is. leisman, this is why i referenced that to you and rick. what if it's way above 200,

we're going to know whether good news is good news or not, and the knee jerk reaction, the clowns should be great news for everyone but stock traders worried on a quarter point. maybe come back at the end of the day, but it immediately sold off, steve. you said good news is good news, how is that good? >> first of all, if you came to me with the question, what if it's 271,000? that would have been my immediate thing to say. [ laughter ] >> of course. >> you didn't come to me with the question, joe. >> no, you stol it. i went to rick, and you stole it. >> ten year yield, guys. >> first of all, you need to know, and you know this, that you get this very strange computer traded thing in the first bit. it goes up and down. market does not settle down. the weak report, minus 30 initially on the s&ps, and we came up, closing up to on object 2. >> we close up. we close up today, then? >> well, you know, i don't know how the market closes.

here's what i know. more people working, getting more money in their pockets is good for a u.s. economy that is essentially a consumer driven economy. how that's bad, it's hard for me to know, and adding a quarter point to that doesn't seem to be the change that calculus very much. if you add a quarter point to interest rates out there, and the effect it has on consumers. >> you are the winner, rebecca, and you're the stock person on the set. the target saying it's bad news for now. >> i agree with steve to a point that the initial reaction is not always the reaction we see over the next 24 hours or the next week or two. i think this is good news. if the fed goes a quarter point, i don't think that kills the economy long from it. >> and the fed is going it a quarter point, right? in december? >> unless there's shock between now and then, but we have a strong consumer, a recovering job market, you have people with more money in the pockets. they are going to spend, go to rock center for a happy holiday. >> futures are higher, joe. >> i'm not even talking about --

i'm talking about the people that sell off are the ones that make me crazy. >> knuckle heads. >> yes. the addicts, whatever they are, they sell their stock to stay at zero, really? nobody gets jobs, the economy always stays at 2% forever? >> you talked about m&a these days, one little rate hike, maybe that gets people who may be were on the fence saying, okay, time to get the deal done, get the mortgage rate locked in, and you get a little action just on the back of that, which gives us another nice pop into next year. >> how was your hourly thing? >> it's a big hourly number. it's clearly really very strong reports. the issue is you see the currency move, a big move on the currency side, see what draghi says later, but it was one of the natural pushbacks, stronger dollar weakens, the earnings piece, may be a bit of what you see in the stock this morning. >> the six number, you have to be happy, tell people who don't know, this is when you add a much bigger component of people who would like --

>> working part-time but they want to work full time. >> you don't know whether they are happy or sad because it means they raise now. >> well, i have to come back to that, but it includes people who stopped actively searching for a job, but if offered, they take it. it's below 10%. i'm happy. >> now nay go up, and everybody is hurt. >> now i look for that language as to what's going to be that pace at which we see the increases. >> this is really good news. i mean, people should -- try to spin it another way, but it's good news. >> it is. red arrows. drives me nuts. >> rick, do you discount the number? good news is -- what do you think the market does today? >> rick? listen, the only reason we have a discussion about good news being good or bad news is because the conditioning in the market place that's perverted the way pricing and price discoveries created comes from the top down, from the janet yellens, the fomc.

that's why the programmers for high frequency trade make the programming the way it is. mid-90s in a two year, you saw prices drop dramatically in fed fund futures. the price is going down. raises the possibility at least in the investors eyes at this point that they are looking for a tightening. our one guest nailed up, up a penny and a fifth of a cents on the dollar index, and i'll tell you what's good news, the real unemployment rate is below 10%. believe me, they hold more reality. i wonder about -- >> thank you, rick, wow, we agreed on something. [ laughter ] >> yeah, no, it's good news, but the 5%, that's meaningless, and you're right, the fed has to stick with it because they can't ever admit that i've ever witnessed that they were not correct, and focusing on that, ignoring the labor force participation rate, put them in the punishmeenalty box. the next question is, do we have such a problem of participation

in the workplace that the amount of people work have enough leverage in their skacarcity values and skilled jobs, does that leverage enough to actually get wages up for everybody? if it does, what does that mean when people, if they will do, come back in the work force that are abled bodied and fell out of the system in. >> rick makes a good point on the dollar as well as you, jeff, and i think the immediate place to be looking today is european equity markets. mario draghi is doing a happy dance, weaker euro, strong u.s. consumer, better trade channel, all good for europe. investors overweight european equity risk now with risk hedged out are very, very happy. >> guys we should talk quickly what happened with the household employment. it was up good, work force growing by 313, force by 320. i don't think this is an economy with 271,000 that being the trend of the i think the three

month average of 180,000 is about right in terms of what the trend is. you know, it's nice to see the way the economy's overcoming the mining and manufacturing sector. belief in the fed is this does not continue forever. the dollar will stop appreciating. oil stops falling. from there, you consolidate on the manufacturing unemployment base as well as the manufacturing employment base and begin to rise or stabilize. >> implying traders see 72% chance of fed raising ratings in december, up 58%. >> steve, that's a good point to focus on the sort of three month moving average in that if you're at 180, you know, you'll continue to see wage gains, but not as large as they were in this report. >> 2.3% on the ten year, what do you think of that? >> curve is flattening, increases in the front end of

the curve, which you expect, but the whole curve moves higher, a higher 10 year, but the bigger impact is the front end of the curve, that's what you expect here, clearly -- >> it's not flattening that much! it's not flattening that much! long end is keeping up pretty darn well. >> it is. half the increases as in the front end, so all rates are going higher. the probability of the fed raising is, obviously, going high e and they are validated in when they said earlier in terms of changing the language and priming the market for an increase in today's data point. >> the reason they focus on the ten year is for mortgage rates that are not set at the short end. >> they'll be an uptick in mortgage rates, but, you know, from the overall perspective of the economy, and so forth, this looks to me like the economy -- u.s. economy, at least i've always thought, is very resilient. don't get too caught up about what's happening in mining or what's happening in manufacturing. this is very good evidence of that. i think steve made that point,

and in some parts of the country, job openings at this point in time are pervasive. i can tell you that in minnesota, they are pervasive. the problem isn't lack of jobs. the problem is finding people to fill them. >> yeah. >> it's across a fairly broad skill and education ranges as well. >> perhaps we're seeing that in the number today. >> yeah. >> lady and gentlemen, thank you for joining us, great to have you on, turned out to be an exciting morning today. >> if only we had a fed guy that was on the fed. >> oh. wait! coming up -- [ laughter ] the news maker -- what a show this is -- the news maker of the morning, chicago fed president, current fomc member, charlie evanings, joining us live straight ahead. stay tuned, you're watching "squawk box" on cnbc, first in business worldwide. salve is madm salve is madm ♪ ♪ sustainable tea tree oil and kale... you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing, you see what's coming next.

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welcome back to "squawk box." the futures ricochets up and down in the wake of a strong monthly payroll number. deeply negative, then positive, back to negative again. dow jones opens lores by 30 points, s&p by 6, and nasdaq lower by 10. more reaction on the jobs report, steve leisman is in chicago with charlie evans, steve? >> yeah, my shell, if only we had a policymaker from the fomc to tell us what to think about the report. oh, wait, we do, charles evans, thank you, charlie. >> good morning, steve, how are you. >> you were joking, do we have to do this? you think everyone knows how to process the jobs number?

>> oh, i didn't say that, but i said it was a good number, 271, three month average, you said it was 180. i have not seep the data carefully, but, yeah, good news. it seems to support my outlook for 2016 pretty well, looking for 2.5% growth real gdp. worried about downside risk with the weak economy, financial restrictions higher, things like that, but numbers like this support that outlook well. >> it was a strong wage growth number. does this tell you that, perhaps, you're beginning a cycle here where wages grow and grow more strongly? >> well, you know, strong wage growth would be a very helpful component to, you know, my outlook and pushing inflations up to 2%, which is what we need, and it's only one number. i have not seen the composition of this and the other measures have been weaker. they've been in the 2 to 2.25 rate. rates move down, it's helpful,

there is slack, but i want to see wage growth go up quite a lot actually. >> still slack. that's a little bit of slack. does that -- >> yeah. >> does that justify zero interest rates? >> oh, well, that's a good question, right? i think that, you know, when i said my outlook was 2.5%, that is premised on still fairly accommodative monetary policy in my opinion. my policy looks fairly accommodative right now. i think what we're likely to get into discussing before too long is what's the path of the rate increase looking like? you know, i agree with chair yellen when in the past she sort of said there's a lot of focus on one move, the first move. we need to think about the entire path because that's what's going to dictate how accommodative or restrictive our policy is. i think we need to have communications indicating the path is gradual. >> goes without saying, but see if you agree with chair yellen saying december is a live possibility for a hike. >> absolutely. for many meetings said we're

going to go into every meeting with an open mind. i've gone in open with every meeting. they've been live. >> the question came up after the wording in the last statement that changed -- that talked about focused on the nec meeting. is the default position of the federal reserve to hike in december, and does that -- what does that mean? >> look, we're going to go into the meeting, talk about the stance monetary policy and talk more broadly than any one meeting and indicated that conditions look like they could be right for an increase. now, look, i've said for, you know, quite some time that, you know, the real side of the economy is looking a lot better. we've seen substantial improvement in the labor market supported by our policy actions, and the other branch of this is do we have confidence in inflation getting up to 2%? i really think that that's where more of the uncertainty lies in terms of policy implications. my continued preference for more delay or a shallower path

continues to be my uncertainty over the fact that inflation gets up to 2% objective within a reasonable period of time. >> you look this morning with what's happening with the dollar, tends to strengthen with talk of the federal reserve tightening, and that tends to weaken the inflation numbers. is the fed chasing its tail in this regard? every time it talks a hike, there's a spike in the dollar that says to reduce the inflation rate so it never gets to the hike? >> no, i don't think that's what's going on. i think that we're kind of forgetting that when policy begins to change directions and tightenin tighten, you get a natural transition microphone where inflation rates go up, put pressure on borrowing rates that's to diffuse somewhat stronger demand pressures for auto loans, home buying, things like that, business investment. none of those things -- auto sales are high, but, you know, we'd like to have stronger housing investment and business investments, so we want to maintain the accommodative stance as we increase that, but

it's natural for the u.s. economy to be as strong as it is to, you know, see those types of restrictive pressures. we want to make sure it's calibrated to be conditioned with the strong outlook i have. >> from the dovish side, if you hike before there's sort of obvious movement towards 2% that you undermine the credibility of your own target? >> well, it's very important that we all go out and talk about the importance of our deflation octoberive. important to mention it's an objective that is 2%, average 2%, supposed to be symmetric, do not be bothered if we overshoot, as well as it's controlled, 2, 2.5, average with the 2% inflation rate going forward. you know, the ups average out the minuses, but we've had six years and more of below 2%. we averaged 1.5%, and i'm getting too many questions, frankly, from smart people who, after i give this type of

commentary, we need inflation up. they go, oh, i hear you, what's wrong with 1.5%? what's wrong is we are supposed to deliver 2%, financial conditions premised on that, and when we do not deliver 2%, that dampens demand and reenforces the fact it's a ceiling. i don't think it's a ceiling, but if it were a ceiling, we'd have less capacity, lower rates in moments when we really needed to if things were to weaken. we have to preserve our ability to respond to the economy and inflation, whether it's too weak or too strong. >> hcharlie, how do you characterize yourself right now, the last question, accepting a rate hike in december with a pledge or promise or forecast of a gradual appetite for tightening thereafter? >> i go in with an open mind. i can't say specifically. today's number was a very good one. i have not studied it carefully. we have another number that's going to come out.

it largely supports the outlook i have, and that's really the test for, you know, is the economy primed to take on board tighter policy? i do think that the path is going to be a very important component the path will be a ve important component of understanding, you know w we're going and the risk management. >> charlie, thanks for joining us. >> thanks, steve. >> back to you guys. >> thank you so much. thanks to charlie. when we return, jim cramer from the new york stock exchange, his take on the numbers and charlie evans' comments. dow open lower by about 21 points. 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.

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shares of iconix getting slammed right now, their brand portfolio is joe boxer, mudd, london fog, mossimo, sharper image and umbro. the company is slashing third quarter guidance, and plans to restate certain historical finances what is the problem? >> maybe we should emphasize mudd has two ds. >> i did emphasize that.

sharper image, home of the nose hair clipper. >> incredibly important. >> you have no idea. >> and massage chairs that you can use while you go into the store while your kids shop. >> well, well. yeah. yea yeah. like those massage chairs, do you? >> yeah, i do. what's wrong with that? >> nothing. >> you just did your thing. >> let's get down to the new york stock exchange where jim cramer joins us now. up or down? it's got to go up, please? >> banks are 20%, financials are 20%. they are all screaming. they could make up for everything else that would go down on this. healthcare goes down, this will accent wait the accentuate that. this is fantastic news for anybody with cash on the balance sheet and being able to raise

rates, because the fed is going to raise rates. it's a rotational thing. it doesn't matter what happens with the averages. unfortunately you sell healthcare, buy banks, i want to see where retail comes out. it should be doing better, because consumers have more money, but they're paying more to workers. it's a push. a push for a big part of the market a decline for a big part of the market and a up for the market. the industrials all get hammered here. look at disney or time warner. the swings in the dollar are so horrendous, if you do anything internationally you're getting off by 500 million. i think that the financials do so well. jpmorgan goes up 3, 4 bucks in

the next couple of days. >> do you know what i'm mad about? >> no. >> our governor is not in the next debate. >> and he answered my question. he gives some sanity. >> and lindsey graham doesn't make it at all. the winner of the last debate. >> awful. coming up, more market reaction to the jobs report. that's after this.

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almost that time again. the giant christmas tree arriving right across the street at rockefeller center. the 78-footer spruce comes from gardener, new york. the tree-lighting ceremony will be held on december 2nd on nbc. they always have, like, a lot of stars and -- >> big names. >> singing. it's fun. >> like rebecca paterson. i worked at "rock center." i love it. i get to see the tree from my window. >> fantastic, isn't it? >> yeah. today is just a good day. it's 75 degrees outside in new york city. we have a tree. great apparels, consumers are doing well. equities are going up.

>> you think so? >> yeah. i take the points made. the dollar is a headwind for certain sectors, but the fed won't go that fast. we're not on the precipice of recession. >> maybe these investors need to think about somebody else besides themselves. this is good news. more people are employ the. stop with the sell button on the equities. >> there you go. >> do i see 1.05? >> 1.07. >> join us on monday. "squawk on the street" is next. michelle, get some glasses. good friday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange. david faber is on assignment. 271,000 is the jobs number for october. way above expectations. best month of the year. the pre-market considering what this means for the fed next month and beyond. the dollar index behaving, as you might expect, ten-year up to 2.30. the two-year above 0.9. let's get to our road