good morning. it's a new week and a new quarter on wall street. we'll tell you why the markets could be in for a wild ride. behind the wheel, tesla poenss new records for vehicle production and deliveries. plus a big win for the usa. the americans beat europe to cap thursday the ryder cup. typical headline for me to read. it's monday, october 3rd, 2016. "worldwide exchange" begins right now. ♪ a very good morning and welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside

courtney reagan in for sara. >> good morning. happy to be here on this monday morning. >> we'll kick things off and see what the futures are doing at this hour. a roller-coaster ride, particularly the last couple of days of trade all resting around what was happening in germany with deutsche bank. we ended friday up about 1%. but for the week as a whole, largely flat. and we are looking pretty flat this morning. the s&p just below and the nasdaq slightly higher. it was all about the deutsche bank rally on friday that allowed 1% of gains. we mentioned the fourth quarter open for trading day. we could be in for a choppy octob october. stocks have surged every year there's an election year since 1992. we'll see if volatility picks up at the moment. right now it is down with headlines around deutsche. no confirmation of what the doj

found, but we have a long way to go. the ten-year treasury note saw sentiment improve and ticked back up from 1.5% to 1.6% where we are right now. now we'll look at the global picture this monday morning. germany is closed for german unity day. other european equities are in a mixed picture. france is just slightly positive. italy and spain are seeing some slight decreases here early morning on a monday. now in asia we'll check out mainland china which is closed for the golden week celebrations, but markets are shut down for national foundation day. holidays around the world, there are some asian markets that are open for trade. so check out the japan nikkei. higher by about a percent. the hang seng, the bombay sensex and the australia asx200 are up by a percent, give or take

there. >> the japanese tanker in manufacturing survey coming out broadly in line. that's helping the nikkei. also, asian markets are playing catch up with friday. they have not enjoyed the post deutsche bank rally we saw around lunchtime in u.s. trade. we'll have a look at broader markets quickly, oil prices are having a good morning. getting close to $50 for wti, we are at 48.70 plus 1%. there was some up and down moves after that deal early last week in algeria. but the conclusion one week later is oil prices are much higher. the dollar, let's have a look at that for the course over the whole month. we were down about .6% and down .5% for the quarter over the broader index for the u.s. dollar. today the bigger mover is the pound slipping 1%. it's at 1.2874.

theresa may over the weekend saying the brexit will be invoked by first quarter next year. oil prices right now are a little higher, plus 0.09%. >> just a bit higher. among the top corporate stories, deutsche bank has rumors swirling about a possible settlement deal between the u.s. and the lender. we are joined from outside the bank's headquarters in frankfurt. what a busy week for deutsche bank. >> reporter: absolutely. there's a sense and long determined push by the deutsche bank execs to come to some kind of settlement with the department of justice as soon as possible. i think the hope from investors is that this is less even than the 5.4 billion dollars that lifted the abr markets with the u.s. in friday's session. remember under german law, if that sum has been agreed, deutsche bank would have announced it almost instantly.

so you have to assume that the negotiations are ongoing. and deutsche bank execs are in washington for the imf meeting. so at least the geography works. but guys, i can tell you there were spicy headlines here over the weekend. one, in particular, the united states declaring economic war on germany. and guys, i have to say, if you look at some of the other settlements made with big banks on the mortgage-related issue, then you have to wonder about the mathematics to show you the numbers. goldman sachs just over $5 billion. morgan stanley just over $3 billion. and remember, these are a kind of comparable in terms of consumer related businesses for deutsche bank. obviously, some of the u.s. banks have far greater sums, but that's a different story. there were other battles going on here. we saw a whole host of big german businesses bashing deutsche bank over the weekend. the chairman saying he actually bought deutsche bank stocks, a brave man, given the volatility we have seen. but then comes the politicians,

the deputy chancellor over the weekend saying he doesn't know whether to laugh or be furious at the fact that a bank that has made a business out of speculation is now being concerned about that very issue. guys, the only way to shut the speculators up is to come to a settlement. that's what we wait for. back to you. >> julia, touching on the political fallout, what does it mean for angela merkel? is it something she could use to her advantage to try to do something to save germany's inquiry, or is it too hot for her to handle ahead of the election year? >> reporter: i think she's between a rock and a hard place. obviously, at some point if it's needed, but it's not needed yet, they will have to back the largest bank. they have to. the fallout will be politically damaging to her anyway. but on the other hand, you have politicians here sticking the knife in and saying, do not break your promise to taxpayers here and force money to be injected into a bank.

so quite frankly, given the pressure she's already under with the likes of the refugee crisis, this is pretty toxic either way. >> absolutely. because you want a deal, i wonder whether she's got involved with any pressure on the doj. no confirmation of that, but one can only wonder. >> reporter: i'm sure they're talking. >> exactly. live in frankfurt, thank you, julia. in other corporate news, tesla posting 70% rise in quarterly deliveries. here's a look at how this stacks up against expectations with landon dowdy. >> good morning. it's a strong number that tesla will vu positively with the best quarter with 75% rise in deliveries. that's a key metrics for the manufacturing and performance. and they are now at 24,500 reaffirming expectations to deliver 50,000 in the second half of the year. and suggesting that they have not been hurt by the tesla crash

in june as the automaker missed the targets in the previous two quarters. and maybe they talk about the priority for the firm raising additional cap that they need. the 3000 model is slated to be released next year. the market is up 2.5%. back over to you. thank you, landon. good morning to you. it's a busy week for economic data ramping up to the jobs report on friday. today look for september ism manufacturing, august construction spending and september auto sales. on wednesday the september adp employment report and the ism services index. friday we get september non-farm payrolls along with august wholesale trade and consumer credit. in news this morning, fund management firms janus capital henderson global agreed on a merger. the company says the combined firm will manage more than 320 billion in assets. the group will apply for a

primary listing in new york keeping the australia listing also. henderson is currently listed in london. that one to be wound up. but a big move as you can see in henderson share prices this morning. janus has not opened yet, but the market generally welcoming the deal. >> that's a good one for all those involved. coming up, theresa may is filling in the brexit blanks. we'll tell you what she says about when the uk may start its departure from the eu. stay tuned to "worldwide exchange" on cnbc. audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology is found in the audi a4. with one notable difference... ♪ the highly advanced audi a4,

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welcome back to "worldwide exchange" and a happy monday to you. we'll get you up to speed on the market action. we ended 1% higher for the week on friday. deutsche bank's reprieve allowed a risk on sentiment to end the week. for the week as a whole, we were pretty much flat. we're looking -- we haven't got the futures here, but we are looking at a mixed open for u.s. trade today. the s&p is just below flat. the dow and the nasdaq just above flat. so we got oil prices for you, here we are up 0.8%. so a week on from the start of the meeting, certainly a positive price to oil. although the latter half of the week we have volatility around it. we have the ftse 100 suffering 1% because the pound is falling. the reason being the british prime minister theresa may started the firing gun on when brexit may actually happen.

for an update on that and the latest on the team, we'll go to jeff gutmore -- geoff cutmore at the worldwide conference. >> reporter: theresa may is starting to talk about when brexit may happen. the so-called article 50 which starts the two-year process of removing the uk from eu legislation. we'll listen to what theresa may told the conference. >> there will be no unnecessary delays in invoking article 50. we will invoke it when we are ready and we will be ready soon. we will invoke article 50 no later than the end of march next year. >> reporter: so clearly we now have a timetable. we also heard that there will be

a great repeal act that rolls back the 1972 european communities act under which uk legislation ultimately follows european legislation and which gives the european court of justice privacy over uk courts. so we have a program rolling back as well. two critical points here, though, the one piece that was missing, we do not know at this stage exactly how negotiated access to the single european market will happen. we also are still unclear as to what extent there is a red line over immigration controls. and as you know, this is a key issue when it comes to negotiating with brussels over future access to european markets. so we have the sandwich, but we're a little short on the filling as far as the real meaning of this process is

concerned, wilfred. back to you. >> yes, the very fact that the bread is on the table for the sandwich is one of the reasons the pound is selling up again this morning. but one of the other reasons cited is that phillip hammond due to start speaking any moment now, in his prepared remarks, suggesting the rebound in the economy's performance is not as strong as some of the measures may have suggested. >> reporter: yeah, i think there's a nervousness still over the real impact of the economy of difficult negotiations. and it's been something of a phony war so far. we know that there will be some tough discussions. but those are all ahead of us. so for the time being, things like this drop in the pound and business people like carlos gohm coming out to say we would like guarantees for compensation if we lose money as a result of the brexit negotiations. all of these things are swirling around in the midst of the

moment. damaging confidence around the uk economy, but i think people have been surprised that the confidence numbers are still quite robust. we saw a services number come in for july, which was above the line. so that was a positive figure. so things here still feel relatively good. but you have to say there's still quite a bit of nervousness about what might happen to business confidence if those negotiations with europe head into choppy water, wilfred. >> geoff, thank you for the update from birmingham from the conference. phillip hammond will be joining me for an interview in new york on thursday. >> lovely. i'm sure there are a lot of answers to questions we all have. and colombia referendum voters reject the farc peace deal. it took more than four years which would have ended five decades of war.

when michelle cabrera interviewed the president of colombia, he was extremely confident voters would approve the deal. when asked what would happen if voters rejected the deal, he said it would be a return to colombia's civil war is considered to be the longest running in modern history. back to global markets, joining us is the managing director and chief economist, paul, thank you for joining us. i want to kickoff on the main factor that drove sentiment last week, which is deutsche bank. to what extent are your clients concerned this could be a really big fine, too big for them to handle? >> i don't think it's seen as a systemic risk at this stage. we have to remember, you look at the german bank lending numbers, for example, they are still positive. we are not seeing the real economic contagen.

in europe, the banking system is not as robust as the other economies. it is not just the issues, but it is the german banks and we also have issues with the banks in italy as well. so there is a concern about the strain of the situation. but at the moment i don't think people are looking at this to be in systemic shock. >> we heard a little bit last week that, in fact, it was not on the front page of many newspapers over in europe or even in germany specifically. what is sort of the on-the-ground sentiment with the deutsche bank concern? >> well, i think in the real economy this hasn't come through at this stage. i mean, obviously the muted fine has only been raised as an issue, but bank lending remains relatively positive. as long as you can go along to a bank and get a loan on reasonable terms, there is not a motive, what seems to be

obsessing the financial market. ordinary citizens in europe are not perhaps as obsessed about financial markets as those opposed. >> paul, what is your view on the economy particularly with swing factors like what the fed does this year and with the election. can we see a real concerted effort for gdp growth to improve? >> well, i think the fundamental underpinning of the u.s. economy at the market remains the labor market. the labor market is really quite strong at this stage. if you look at wage pressures caused by the labor market, they have really started to build up, at least for semi-skilled labor. the fed tracker, one of the best indicators of the labor market, is showing wage growth up 3.5%. that's pretty robust. and we have started to get really something of an inflation issue in the united states. most inflation measures in

america are running at or above their 20-year average. the headline isn't, of course, that's just the oil price. every other price in the united states is rising among the average. and that is something which the feds should get around to addressing. >> so the fed hike rate later this year? >> absolutely. then the question is going into next year, not whether the policy will tighten in the states, but how it tightens. because there are three pillars, not just monetary policy, there's the issue of quantitative policy, does the fed perhaps accelerate the process of quantitative policy tightening. and then the issue of bank regulation, which has come up before congress, which is something of an issue in the presidential campaign. bank regulation is another tight anything of policy. >> paul, thank you for joining us from london. coming up, the top political

stories and controversy over donald trump's tax returns. this woman owns this house, with new cabinets from this shop,

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welcome back to "worldwide exchange." a potential devastating hurricane is touching down in the caribbean. hurricane matthew has caused flooding in gentlemjamaica. this could devastate parts of haiti. the winds kicked up in haiti yesterday and matthew could pass over near haiti's southwestern tip later today.

hurricane warnings are up for jamaica, haiti and part of cuba. now on to today's political news. the story dominating the head lions. donald trump's taxes. "the new york times" reporting that canada's 1995 returns show he could have avoided paying taxes for nearly two decades. tracie potts is joining us now with more. tracey? what a blow. >> reporter: well, it's a bombshell. the clinton team says, anyway, but keep in mind he could have avoided paying taxes for that long, not necessarily that he did. trump's team says he paid plenty of taxes. but we do start today, courtney, in ohio because some people there will be voting in just over a week. early voting starts next week in battleground ohio. donald trump's leading state polls. hillary clinton is there today endorsed by nba star lebron james signing up new voters one day after addressing racial tensions in north carolina.

>> not everyone can march, but everyone can talk. and everyone can reach out. and everyone can vote. >> reporter: trump's in colorado today where polls are virtually tied. he's going after clinton's character. >> she is crazy. she should be in prison. i don't think even think she's loyal to bill, if you want to know the truth. >> reporter: trump is defending himself against "the new york times" report showing he declared a $916 million loss in 1995. that could have allowed him to avoid paying federal taxes for 18 years. >> the reality is, he's a genius. >> don't hate the player, hate the game. >> reporter: trump tweeted he knows tax laws better than anyone who has run for president. his campaign says he did pay hundreds of millions of dollars in taxes. plus, we still don't know for sure because he's yet to release the tax returns. >> ah, trump, trump, trump. the headlines just keep going. what are we going to do after november if it goes the other

way? no more trump tweets. >> i imagine he'll still be busy on twitter. >> 3:30 a.m., we'll still see it. >> it's a long way to go, he could still do it. >> thank you, tracie. ompbl on thement c menmen campaig, hillary clinton will make or outline a plan to curb the balance of con tratractual clau. >> the question really from here, and i the we underestimated what happened after the senate hearing, senator warren and others really left it to the department of labor. that has led to a labor department investigation. there was a lot of heat still in the house hearing. the question is, what comes from that? do they get together in a

concerted way to encourage further investigations or is that the end of the real public attacks? one feels like it is not easing up at all, potentially with presidential candidates weighing in as well. >> this could be the beginning of more investigations into other banks. otherwise, it does seem with the mylan, congress is paying a lot of attention to what is going on in corporate america right now. >> absolutely right. we'll have more discussion on that and the global market picture this morning, including deutsche bank, tesla and the uk's prime minister theresa may. stay tuned to cnbc. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit sprintrelay.com.

behind the wheel, tesla poses new numbers. and video going viral. man's best friend catches a wave. it's monday, october 3, 2016. you're watching "worldwide exchange" on cnbc. welcome to "worldwide exchange." i'm wilfred frost alongside courtney reagan filling in for sara. we are mixed ahead of the open. slightly positive as you can see now. the s&p, dow and nasdaq all expected to open up by 18 points

to be specific for the dow. european trade is pretty positive this morning. both europe and asia playing catch-up to the risk on sentiment that we saw on friday after wall street as deutsche bank soared, particularly the abs in the afternoon. but germany is closed for the unification holiday. the ftse 100 is up because the pound has fallen from brexit headlines we'll get to in a moment. asia certainly is playing catch-up missing out on almost all the european and u.s. positivity on friday. and it is up by about 1% to say china is closed for golden week holiday. we'll get manufacturing data out of japan, which was pretty much in line with expectations. lots of holidays around the world. as for the broader markets, we'll take a look at what is going on with commodities. wti crude up just under $49 right now. lots of action after news that opec will make the production

cuts. still a surprise, i can't believe that's where we are. we have brent crude just above 50 but still below 51. and rbob gasoline is trading marginally higher. if we can take a look at what is going on with the treasury with gold, flip it over here. the ten-year note, the yield, 10.6. and then take a look at currencies here when comparing the euro to the u.s. dollar as well as the yen and the pound. we got a little bit of a mixed picture. gosh, marginally moving across the board on this early monday morning. and if we can take a look at gold, we weren't moving very much earlier on. we'll see if we made any movements in the last couple minutes. just barely. gold here at 1320 and change-up $3 and change here for that contract. it's a fairly busy week for economic data as we ramp up to the jobs report on friday. today look for september ism manufacturing, august construction spending and september auto sales. auto sales have been a little

disappointing. on wednesday the september adp report and the ism services index. friday we get september non-farm payrolls along with august wholesale trade and consumer credit. the jobs report also always a big talker in the election cycle. absolutely right. that's the focus on friday. to today's top global headlines, britain's prime minister theresa may plans to trigger the process to leave the european union by the end of march next year. this is the first glimpse of a firm timetable given by the prime minister. it also means the uk will be out of the eu by april 2019 at the latest. may addressed her timing announcement on the andrew matt show yesterday. >> it is important for europe as a whole that we do this in the best possible way, so we have the least disruption for businesses, you were talking about investors earlier in your questions, and when we leave the eu, we have a slow transition away from the eu.

>> phillip hammond commented on timing today saying he's in favor of getting a deal done as soon as possible. and he said the british will face economic turbulence. and tesla posting a 70% increase in quarterly deliveries. among the drivers, production improvements and cheaper discounts on vehicles. tesla is backing the second-half delivery guidance and bullish notes out of that automaker. and deutsche bank is among the biggest questions, can the lender reach the mortgage settlement with the u.s. government below the $14 billion proposed by the justice department a few weeks ago. this weekend german economy minister accused deutsche bank of crying foul of speculators even though as he says the bank pushed a business model based on speculation. lots of political comments weighing in on this development. of course, the way the market

moved on friday, the u.s. abr, in particular, it's priced in on a deal coming soon and at 5 or so billion or less. so i think there's scope for this to rare its head in terms of shares selling off again if we don't see a deal quickly, or if it is bigger than the 5 billion number. don't forget, german trade is closed. but we'll see the adr move today. and i think the market moved in such a way on friday they expected it to come perhaps over this weekend. so still a lot -- >> didn't get that. and deutsche bank's executives supposedly coming to the u.s. >> a lot of them are coming for the imf meeting. they will have fierce meetings with the doj and whoever else to try to get this over the line. >> and if that settlement is much higher than what we're expect right now, we'll see what happens there with it. >> it's like time is the bigger factor. they need to draw a line in this. analysts forecast about two months ago, they have 2 to 3 billion in for this. now 5 billion would be a win. they just need to draw a line urn it and move on.

but much more than 5 and they are under pressure. but time is really the key factor here as opposed to the size. >> this is really -- lots of big numbers here. a lot of stocks to watch with shares of twitter jumping on the report that google is working on a potential bid. this could pitch the search giant against disney and salesforce.com. and bass pro is reportedly close to acquiring cabela's. it would unite two of the largest sports equipment retailers. reuters reports that cabela's is expected to be valued over $4 billion. and shares of broadcom could rise 20%. higher than expected demand for the iphone bodes well for broadcom that supplies apple with the chips. one of the halo stocks when we see apple announce a new product. and barron's says the movie

theater operator amc entertain could gain nearly 30%. and facebook is launching a messenger app today called messenger light. this is a move by the social media giant to expand the international footprint. ing is cutting 7,000 jobs. the lender aims to cut $1 billion in annual costs by 2021. no move in the share price today off that dutch lender. the ceo also commenting he didn't feel there were systemic risks to the european banking at the moment. the reaction to deutsche last week. now to today's top trending stories. fashion week for kim kardashian making a turn last night as she was held by gunpoint by two men inside her paris hotel room. she is safe and will return back to the u.s. soon. she is said to be robbed of millions of dollars worth of jewelry. that's actually pretty frightening. and netflix sending bingers

into a state of panic over the weekend. the streaming service reporting bigger than expected outages across the uk for nearly two-and-a-half hours. the exact cause is unknown but the release is believed to be the culprit. netflix fixing the issue tweeting, not all heroes wear capes. engineers to the rescue. we're back. >> anyone that hasn't watched it yet, you have to watch the amanda knox one. >> they produced a nice promo for that. the election year often generates plenty of material for "saturday night live" and it started with a unique take on the first presidential debate. >> good evening, america. i'm going to be so good tonight. i'm going to be so calm and so presidential that all of you watching are going to cream your jeans. >> that was alec baldwin as

donald trump and kate mckinnon as hillary clinton. she got a shimmy in there. she did a nice job. and this video is along the san diego coast. 80 dogs hit the water at the dog beach in del mar. the animal center hosted a competition to raise funds for orphan pets. how do you teach your dog to surf? if it comes natural to canines? look at this. >> i'm so bad at surfing, i have tried. >> i have not even tried. >> if the dogs can do it -- it's just -- kudos to them. good stuff. >> who wasn't want to see a dog on a surfboard? still to come are the must reads, a hot off-the-press endorsement from lebron james endorsing hillary clinton. the details of his emotionally charged article and the market analysis is coming up next.

now to this morning's top reads, the stories catching our attention. the business insider writing an op-ed by lebron james who is endorsing hillary clinton. he wrote, i support hillary because she will build on the legacy of my good friend, president barack obama. i believe in what president obama has done for our country

and support her commitment to continuing that legacy. the king is endorsing her. >> i wonder how much more effective this is than the various republican leaders from bush senior to others to come out to endorse clinton. the sport star with a massive following probably a little more effective. >> the kids listen to him. i know my nephews do. >> but david beckham came out to say -- that didn't work. we'll see. deutsche bank shattered reflecti reflection, ambition and schadenfreude. this is in "the financial times." this is talking about how in 1990 shortly after the fall of the berlin wall, which is why there's a national holiday in berlin today, it was worth the combined totals of lloyd's and

hsbc. that's how big it was relatively in size compared to banking now. it's a look at that over the history and it puts it down to the way they have not been able to merge the investment banking cultures of deutsche bank and the sort of more stayed cultures of the retail bank in germany. but it's a good analysis of it, not so much of last week's developments, but gosh, it's gone from one of the biggest to some really struggling at the moment. >> but still 100,000 employees. >> it's still a massive bank. the size of the market cap now relative to its assets and its operation is why it's capital position is so weak and so hard to raise it. that's one of the factors it's up against at the home. coming up, futures point to a higher open on wall street. but this has surged every volatility since 1992. john manley will join us to talk markets straight ahead. you're watching "worldwide exchange" on cnbc.

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welcome back to "worldwide exchange." we'll get you up to speed on the market action. strong gains in asia overnight, the main reason because they missed out on the risk-on move on friday when we saw deutsche bank start to rally from the reprieve over whether or not we'll see a doj settlement. that's playing catch-up in terms of risk-on sentiment. and we have reasonable manufacturing data in japan. 1% of gains. china and korea closed for holiday today. in europe germany is closed for the unification holiday. no trade there. we won't see trade in the main listing of deutsche bank, but we'll watch stateside when they open in a few hours type. you can see decent gains for the ftse 100 because the pound has fallen below 129. theresa may will tell us when

she'll file it by, tend of q1 next year. we have seen softness in the pound on the back of that up 1% for the ftse 100. france is up slightly, italy and spain soft. we have the futures over here. we saw about 1% gain on friday, but the week as a whole was pretty much flat and we are pretty much flat here to the open. we have 21 points higher for the dow. but 0.1% in terms of the open. when we get to the open, well, we are approaching the top of the hour. and that means "squawk box." joe is joining us with a look at what is coming up today. joe's mike is not working, now it is not working. joe, do we have you now? >> what is the problem? my mike isn't working? >> we got you now. what is going on? >> i was looking for a quote to read you about theresa may. she's doing the things that i've been trying to convince you of for a while, but basically when

they try to analyze it -- here it is. here it is. which is what i've said to you how many times and you resist, you resist, she seems to be saying that we're gaining sovereignty and is so valuable she's willing to pay a price in terms of economic disruption that you mentioned with the british pound. sovereignty. >> you're saying that i'm against british sovereignty. >> i guess from your body language and past discussions we have had about this, i'm able to did certain your true feelings. very intuitive. did you see scientists have discovered an intuition gene? i think i have two copies of it. when you get in here today, be prepared for just a few "i told you sos." if you just want to say right now you were right, joe, and i'm young. you know, wisdom prevails a lot of times. >> wisdom does prevail. but on this particular topic, i

won't be saying that. but i tell you what, joe, as always, i will be very much prepared for a couple of hours on "squawk box." >> did you know the employment report is on friday again? >> it's on the first friday of the month. >> i know, can you believe it, again, that it's happening? >> i can believe it. i can believe it. we are talking about brexit and deutsche bank. >> brexit is going to happen now. congratulations. single market. you'll have your own courts back and can make your own decisions. it won't be the unelected bureaucrats. i have been dancing around the whole ryder cup thing. that's probably a sore spot, too. but you're a soccer guy. did you know that there was a golf tournament over the weekend? >> i didme. i'm disappointed. i like golf always but particularly like the ryder cup. >> it's unbelievable. i'm rooting for the americans in two years because i think there's going to be payback for

the heckling. i heard a lot of things said to rory and sergio. >> it gets aggressive, doesn't it? which is unlike golf, typically. >> unlike golf. but, did you see much of it? patrick reed, this was great. these two guys are good friends. that was the best part -- >> how about the 19 birdies? >> unreal. i mean, sergio and phil had 19 birdies. >> that's what i mean. >> i don't know how many patrick -- there were eagles -- it was really, really great. it was pretty amazing. >> joe, we'll leave it there. but look forward to "squawk box" in nine minutes. >> i know. i'll be back 25 minutes into the show. >> thank you for the warning. right. it's a new week and new quarter on wall street. let's discuss what to expect with john. how much of your clients and the people you have been talking to are worried what it means for u.s. equities?

>> you don't know how bad it will get. lehman will never have this big of problems. we know if lehman doesn't handle it a certain way. i think the capital structure is better, not worse. i don't think these were necessarily true rumors. if they are, and i say if, we would know how to deal with them better than before. it is always easier to go through it the second time. >> clearly, the sector over here is the most effective against the banks, which is understandable. is that a buying opportunity? >> i think so. the banks are not the most popular institutions in the united states these days. nor are they going to be in the election year. i have my own opinion on that, which is my opinion alone. i think as an investment vehicle, they are very well valued. they are doing better and are learning to live with all the environment they have to live with. and i think it is still a very important part of the american industry and american society. >> very well valued meaning they are attractive. >> yes. >> we are hearing an election cycle we are less than 40 days

until the election. and according to october over the last 20 years, the s&p is up 70% of the time with average return of 1.9%. even though we are looking at a number of volatile sort of assets ahead of the election. where are you advising your clients to go in these 40 days of uncertainty perhaps? >> i tend to have more than a 40-daytime horizon. so you're asking the wrong person. 70% is okay, that's about average over the long period of time. but this election is like any other. we have the first woman running on a major ticket. we have donald trump who is like a box of chocolates, you never know what you're going to get. and it's hard to say the historical precedence or this -- i think the wonderful thing is our founding fathers who drafted the constitution, they draftd it so the united states inherently moved showily. government was designed to be extremely inefficient. that's good. you don't want to live with a

very efficient government. it doesn't matter who gets elected, but all the stories of how bad he or she will be, they are exaggerated. i think more interesting to me is, no one is paying attention to, from what i've heard, the chance the republicans hold in the senate has actually gone up a bit. and that may mean more for corporations and law than anything else. >> john, as joe mentioned, we have another jobs report on friday. what is your expectation on that and what the fed does for the rest of the year? >> well, the job situation is getting bitter. better. one of the things that got the economy going again is people feel better about their home. number two, the job market is getting better. there are all sorts of ways in looking at that directly. people are willing to leave jobs the look for other jobs. i see it in my industry and other places. that gets consumer spending. over the last eight years, they have been an aberration for american consumers. we are spenders by nature. a need for spending, more spending plays into our strong

point. so i think what's happening is the job situation is getting better. i don't know if this week is going to be good or bad, but i think the trend is still towards more employment. and then that's where the cycle starts up. i'm a 20th century guy. in the 20th century, the consumers start to act better and producers produce more, hiring more producers, and you get the fed jacked up. that hasn't happened in the last 15 to 20 years. people think it's dead, i'm not sure. >> what did you think of theresa may over the weekend and the timing of the brexit? >> it's a little later than i would have thought, but people know the dangers. it is one thing to know that you have potential problems. to me the whole thing is ironic. i think back to 50 years ago when general degaul wouldn't let the british into the markets. and i think you see the markets

today. sure, the currency is down. sure, that makes britains poorer, but the stock market is up meaning they will do more business. so these things have a way of balancing out. i think people in authority will not deliberately do anything that is suicidal. the old ben franklin, we must hang together or law hangs separately. >> just 30 seconds left, do you like banks? what are your other sector picks? >> energy is still big, high quality energy. technology, business technology will do well. and i'm a big fan of health care. that's me being old, but you have a great business here. an ageing population. you have new technology. and you have government spending. i can't think of a better collision of three very powerful positive forces. >> joe manley, thank you for joining us from wells fargo funds. about 20 seconds left, main things to watch today, deutsche bank, the abr trade, not trading in europe, germany is closed. but that's a key factor for sentiment as it was on friday. that's it for "worldwide

exchange." "squawk box" is coming next. have a lovely morning. things ab. all the networks are great now. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit ntrelay.com.

good morning. it's a new week and new quarter on wall street. we'll tell you what to expect as we count down to another jobs friday. and tesla posting new vehicle production. they actually did better that expected. as well as deliveries in the stock as the boost get in the stock this morning. and the u.s. gets a big win in the ryder cup. it is monday, october 3, 2016. "squawk box" begins right now. ♪ >> live from new york where business never sleeps, this is

"squawk box." good morning, everybody. welcome to" squawk box" here on cnbc. i'm here with joe kernan. andrew ross sorkin is off today. last week we saw the markets eking out a gain. the dow was up 46 points for the week. this morning you see some green arrows. these are pretty modest advances, but the dow futures are indicated 20 points above fair value. s&p futures up by less than a point. the nasdaq up by three. overnight in asia, you had mainland china closed for golden week celebrations. markets in south korea shut down for national foundation day. you can see that the nikkei was up by close to 1%. the hang seng up by 1.25%. by the way, when you're looking at the european numbers, germany is closed for german unity day. other european equities in early trading, the ftse is up by 1.1%. the cac