"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 is up .03%.

crude oil prices last week was a big mover for oil prices up by over $3.50 by the end of the week. wti up another 1%. you're getting close to $49. right now it's at 48.74. here are the stories we are watching today, it's a busy week for economic data. today we have september isf manufacturing, august construction spending, september auto sales. and tomorrow we get the paychex small business index. on wednesday we get the adp employment report as we always do and the ism services index. on thursday we get jobless claims, weekly jobless claims. and on friday we close out the week with the september jobs report again. not again for september jobs report, but another -- well, again if you talk about last year's -- >> fast and furious. >> it went quickly once again. here we are counting down to the -- >> it's the ultimate release

before the election. >> before the election. so is german unity -- >> it has to be east and west junety. i was thinking about it last night. i meant to look it up, but my guess it has to be the coming down of the german -- of the wall between the east and the west. >> i was going -- >> i should have looked this up to be sure. but i was in bed. >> i was reading about the auto pages. >> about what? >> the nobel prize for medicine went to a june neapanese scient. the way cells die, the way you eat yourself and you get new cells. they break up -- >> sounds good. >> a lot of the work was done in the '70s, the '80s and the '90s but just now getting recognize.

germany is celebrating the reunity case of the east and the west. tesla posting a 70% rise in quarterly -- people hear that and it drives them nuts. the best sales quarter ever for the electric car company. tesla missed the delivery target the previous two quarters and the shares are rising nicely in pre-market up 3%. and fund management firms janus capital and henderson global have agreed on an all share merger worth $6 billion, which i don't really believe. i was trying to -- it's hard because it is an aussie firm, but i think janus, the market cap is like $2.5 billion. >> so they are putting the market caps together between the two? >> i don't know. the companies say the combined firm will manage more than 320 billion in assets and apply for

a primary listing in new york. hinderson was also listed in london. now to today's political news, the story dominating the headlines over the weekend, donald trump's taxes. "the new york times" reporting that the candidate's 1995 returns show that he could have avoided paying taxes for nearly two decades based on the law, the way things are set up and how he lost that money, how it would be played out. former new york city mayor rudy giuliani defended trump yesterday on "meet the press." >> this points out within of the reasons why releasing tax returns is so bad. "the new york times" writes this long story and then somewhere around paragraph 18 they point out there was no wrongdoing. people have a hard time understanding how taxes work. if donald trump hadn't taken those losses, he could have been sued by his investors, he could have been sued by his business partners. >> we're going to have much more on this story in a few minutes unless you want to comment on it

now, joe. >> it's the word -- journalists lead editorials on this. it's the word in every seasons legally, legally, legally. let's go back to when ge got hammered for supposedly not paying taxes. ge has certain finances during the financial crisis. citigroup which didn't have to declare bankruptcy but was able to keep the tax loss carried forward. who knows. and then "the new york times" in 2014. didn't pay any taxes because of losses. >> two things i see in this are hypocrisy. because trump has gone after people for not paying taxes before when he's talked on the campaign trail or when he tweeted back in 2012. about 50.4% of americans not paying anything in taxes. that's a shame, deplorable, that is somebody else's word, but it's a disgrace when looking at the deficit here today. so the hypocrisy from that. second, he says he knows the tax

law better than anybody else, which is why he's the guy to fix it. but if you look at the tax foundation, it's a conservative foundation and how they have scored it, the biggest percentage tax cuts go to the wealthiest people. so look, if he does this legally, so did the people not paying taxes, the working class of the poor who aren't paying federal taxes on these things, too. if you don't like it, change the tax code. the question is, will he change the tax code or not? it's not a huge change based on how the tax foundation scored it. >> people go back -- i found a jpmorgan quote. and then what is his name, learner hand? the supreme court justice that said it is almost your duty as a citizen to minimize -- >> i'm not going to blame anybody for not paying taxes if they're not supposed to. but he's said similar things about the -- >> that's not the point he's making. the point -- he's not making a point that they are somehow evading taxes. he's making the point that it's

the 47% romney point, the 47% that are not only paying taxes, but benefits are accruing -- >> the question is will he change the rule. >> to say that you want -- you're not saying that you're -- you're not criticizing him for paying taxes, you're wishing that you could have an economic system where everyone was earning -- have a productive job to be part of the system where you are paying. they are paying social security taxes probably. >> as are the people not paying federal taxes. >> those are the people i'm talking about. >> you're talking about the 50.4% he quoted. we'll talk more about this when we have time a little later. >> this is just what rudy giuliani was saying, he said real estate people pay anywhere

from 5% to 35% depending on what interest and depreciation, mortgage, all that stuff. so you release your tax returns and have a 5% tax rate, you're going to have a story about it between now and the election. rumors circulating about a possible settlement deal between the u.s. and deutsche bank. julia is joining us from outside the headquarters there in frankfurt. good morning. >> reporter: good morning. you're right. good morning, guys. speculation here right about a possible settlement deal. but i think we can debunct the hope, the rumor we got on friday's session of the $5.4 billion settlement. under german law if that has been the case, deutsche would have had to confirm it. of course, they haven't. so talks continue. deutsche bank execs are in washington this week for the imf meeting. so the talks there will be ongoing. but you guys were mentioning

that it's unity day here in germany. i can tell you, let's talk about some transatlantic disunity. all the talk in the press here is that this is the united states declaring economic war on germany. where did this $14 billion settlement number come from? and if you look at some of the other settlements that have been made, look at goldman sachs and morgan stanley, the biggest between $3 and $5 billion. so you get a sense of why deutsche and investors here were pretty shocked and hoping for a smaller number. but it's also the politics here. we know this is politically toxic for angela merkel. get this from the deputy chancellor. he made comments this week saying, i don't know whether to laugh or be furious that a bank which turned speculation into a business model now declares itself the victim of speculators. guys, the message there, angela merkel helped this bank at your peril. so now we'll look at whether

investors, spectators, politicians here or anyone else, deutsche bank primarily needs clarity on the settlement. we wait for that. guys? >> thank you, julia. you are in frankfurt -- >> is that sign still there? >> i just saw that big ugly sign for the euro that is falling apart, literally and figuratively. >> maybe that is why we don't take shot there is. it's a little too beat up. >> it's 5/8 of what it used to be. on the front of the "wall street journal" there's a settlement about the deutsche bank. there's still a lot of haggling going on. on friday deutsche bank shares returned around on this report that the settlement was closer to $5 or $6 billion. sounds like things are still in flux. it will take a while to work that out. >> we'll talk to the former german minister of economics and technology later this hour. >> yeah, he's coming pretty frequently. the former defense minister

and -- >> oh, that guy. good. >> and he's still in contact with all the leaders who were there. so we'll get good insight as to what he thinks or how he thinks this will play out. >> he's nice. >> he is. the fourth quarter officially begins today. and if history is any guide, there's a very good chance we could finish out the year in the green. since the 1950s the s&p has never ended the year down after being positive for the first three quarters. and so far this year the index is up by 6%. as well as the s&p. joining us for more on this is ian shepherdson and steven reese and jpmorgan bank. steven, let's start with you. an interesting statistic, we have been up for the first parts of the year, but there's another statistic that i saw, october, even though great the last 20 years, positive the last 20 years, in an election year, october tends to be pretty volatile and has been down. >> yeah, i think we should be

prepared for range-bound and volatile markets through the election. >> shouldn't it be the opposite, range-bound and volatile? >> range-bound is a nice word for volatility until we get final news on the election. but looking back over the years, election years are largely positive for u.s. markets. so i agree that we probably end the year positive. in terms of the election or in terms of the -- >> what is it looking for? >> i think the market is looking for clarity on who it is going to be and what the policies are going to be. but more importantly the policy wants certainty of earnings. this is a terrible year for earnings. we haven't seen any growth with the third quarter reports starting in a next couple of weeks. but reports into january, we are looking much better. >> they are looking for who it's going to be -- >> clarity. >> and what their policies are going to be. you have clients on both sides of this.

>> 6% to 7% earnings growth next year -- >> you are trying to figure out who it is going to be. one of the two. >> i think the market is priced in to status quo. the market likes certainty. i think that is probably what we're going to see. next year, 6% to 7% -- >> but he is not running. >> policies similar to the last eight years, divided congress, not a lot of change. >> it would like that. >> i don't know if it would like that, but it is comfortable since we have seen that already. so not a lot of surprises. surprises are bador markets generally. >> in terms of economic news, what potential surprises could we get or where do you see things working out? i see earnings are pretty concerning. >> i think the term is coming through. q3 will hit the bottom and we will start to get better. i do think we are finally through the downdraft. >> why? >> we have seen a huge hit here. i'm pretty optimistic looking at

the rate activity. so the capex is up and the price has done so. >> but if the count is back up and numbers are starting to churn, that's good for capex, but once we get to high prices, that is going to bring more floating under the market. >> i'm not looking for oil to go back to 100 or 60. we still have an excess supply. domestically, things look okay between now and the election, it's not long. we haven't gotten that much for big surprises to shock everybody between now and then. >> the surprises will probably come from overseas somewhere. whether china slows down rapidly, whether europe takes a bigger hit, are you convinced that we can go it alone, at least for the next few months? >> yeah. it's okay. you know, china seems to be getting better. things have bottomed out there after a grinding slowdown. things have turned up there. and that will pull up export activity from there. europe is still a structural mess that we know about, but it

does have a cycle and the up re speaking. between now and november, big shocks from external forces. i don't know, they carry on with the economic scene and the background vote. i don't see any big changes between now and then, but the core story is getting a bit better. >> if ian is right, earnings will pick up in this quarter. would you be telling people to buy on dips if we'll be range-bound and volatile? >> we continue to do that. >> how big of a dip do you need to say? >> 3% to 4%. we shouldn't be waiting for the 10% share square. any sort of scare around the fed hike and volatility is better to be bought particularly in the sectors under valued. the health care, consumer technology, the big parts of the market still look attractive. it is the smaller bond proxies at risk here. >> steven rees, good to see you.

i just heard about this -- just go with it. kim car dash ykardashian was ap held up by armed then in her hotel room. she was shaken up but not harmed. she's in paris for fashion week. in new york her husband kanye west stopped the concert mid-song when he got the news. i'm sorry. i have a family emergency. i have to top the show. >> kanye was performing at the meadows music and arts festival in queens. supposedly, they got past the concierge at the hotel. he let them in. then they handcuffed him --

continue know if nbc has confirmed this or this is from the newspaper report. and then five guys dressed as cops stole $8.5 million pounds worth of jewelry, something like $11 million worth. >> wow. >> and then she fled on a private jet shaken. >> but okay. coming up by the trump campaign, responding to the new york types report that the candidate declared a $916 million loss in 1995. that could have allowed him to avoid paying federal incomes taxes up to 18 years. details are straight ahead. squawkers, look who is driving into the halftime report today? >> what are you doing? >> joe takes over the halftime report and talks "fast money" with the fastest traders. >> for more on the global market sell-off, whoa, look at that.

look at that. >> grab a beverage and get ready to trade. >> that's what i say. >> kernan is coming today starting at noon only on cnbc. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪ yoyeah, i do.e? you guys are working on some pretty big stuff over there, right? like a new language for crazy-big, world-changing machines. well, not me specifically. i work on the industrial side.

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an extremely dangerous hurricane threatening to pound parts of the caribbean. hurricane matthew has already caused flooding in jamaica. it's a category 4 hurricane and on track to devastate parts of haiti. the winds kicked up in haiti yesterday and matthew could pass over or near haiti's southwestern tip later today. hurricane warnings are in place for jamaica, haiti and parts of cuba. voters in colombia yesterday narrowly rejected a deal with farc rebels that aimed to end five decades of civil war. it was a shocking peace deal negotiated by the president juan manuel santos. michelle cabrera interviewed president santos last week and

every poll showed it was going to be two-thirds of the people voting in favor of this deal. when asked what would happen if voters rejected the deal, he said it would be a return to war. colombia's civil war is considered to be the longest running in modern history. it's been going for 52 years. also, british prime minister theresa may said she would formally begin the brexit process the end of march next year. may confirmed the deadline for triggering article 50 of the lisbon treaty that sets in place the two-year process of withdrawal from the european union. that means the uk is out of the eu by april of 2019 at the latest. >> some people, that was the way the stories came, people were -- >> it's against the polls. trump's campaign playing defense after a new york times report said that trump's $916 million loss in 1995 could allow him to avoid years of federal incomes taxes. john harwood is joining us now with more. good morning, john.

>> reporter: good morning, joe. donald trump has been pressured for months now to lease his tax returns. he's not done so saying that he's under audit and son saying they are too complicated. well, somebody mailed the new york times three pages of a 1995 return that indicated donald trump, after the collapse of his effort in atlantic city with casinos, had taken a loss in excess of $900 million, which the times then extrapolated and said if you take a loss of that magnitude, you can then claim it against income for three years before and 15 years after you claim that loss. now, this is something that put the trump on defense and surrogates were out on talk shows yesterday saying, actually, what they showed was that trump had fought back from a severe setback to the present position of wealth he has and deserves credit for that. here's rudy giuliani on "meet

the press." >> with the reality is he's a genius. what he did is he took advantage of something that could save his enterprise and did something we admire in america. he came back. the art of the deal is all about that. he talks about it. >> reporter: now, we don't know how voters are going to see this and don't have polling since then. there weren't big national polls over the weekend to show either the impact of the debate or this particular story. of course, it's too soon. we know that trump had lost some ground after the debate in some polling we had at the end of last week. but we'll have to see the impact of this. there's a new ap story out today alleging that donald trump mistreated women on "the apprentice." the trump campaign is pushing back against that. and "the new york times" has a story about the subject that donald trump eluded to last week, which was that he might make an issue of how hillary clinton had reacted to some of the women who had been involved or claimed to have been involved with bill clinton.

don't know how that is going to play. it's a risky issue for trump to bring up, but that is out there as well. a lot of material and mud for voters to sift through right now. >> there is. yeah. and the whole -- how either candidate, trump tweeted women or how a candidate's husband treated women. it's going to be a lot of tit for tat, as you can imagine. >> which is why if you look at the front page of "usa today" their lead story is, many are asking if it's ethical not to vote. they looked around at the choices, aren't thrilled with it. the highest voter tunout we have seen was 63.8% in 1960. that was the highest voter tunout since world war ii. >> it dud noes not appear we ar headed for a high turnout this year. >> that's why 10% of americans say they are going to throw

support behind gary johnson when he can't name a single world leader and doesn't know what aleppo is. >> it is kind of interesting, i wonder the bernie sanders basement dwellers, the deplorables versus the basement dwellers. when you see a candidate like clinton in front of a group of reasonable individuals saying a lot of bernie sanders proposals are pie in the sky and ridiculous, and she's sort of had to give them and respect them to bring in sanders' voters. >> bernie sanders was defending it yesterday saying it's true. >> that's my point. when i heard that, maybe it was like maybe she does have some sense to not embrace a lot of those bernie sanders -- i mean, i was -- >> she did run against him. >> i was gratified to read maybe she's not as crazy as he is.

did you see it that way, john? >> well, i didn't see the hillary clinton comments as particularly significant one way or the other. they were pragmatic. >> yeah. it's like -- >> she wasn't mocking sanders' supporters. >> they don't need to be mocked. they are what they are. i don't know if they are in the basement or the upstairs. anyway -- joe, are you riding on becky for this vote? >> no. that's why they have a curtain, john. >> thank you for joining us. seal you soon. when we come back this morning, german politicians accusing the u.s. of waging economic war against germany over the future of the biggest lender, deutsche bank. former german economics and technology minister karl-theodor

zu guttenberg will be joining us.

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the stocks to watch today, shares of twitter jumping on a report that google is working with lazard on a potential bid to pitch the giant against other possible suitors like disney and salesforce.com. and bass pro is close to acquiring cabela's. that would you nigunite the twot sports outdoor equipment businesses. >> i love both the stores. >> i do, too. when you're driving around in the middle of the country and then you see -- >> what is the crowd over there? >> there's a city. it turns out it's hazy and -- oh, my god, it's a cabela's. i just want to go in, i haven't gone in, but you need a day. >> because you get to see the live fish and stuff. it's pretty cool.

and barron's suggesting that broadcom could see shares rise more than 20%. or not. the financial paper says higher than expected demands for the iphone bode well for broadcom that supplies apple with chips. shares of deutsche bank bouncing back after last week's concerns over the stability of germany's largest bank and a key piece of the european economy. karl-theodor zu guttenberg is here with us today. >> thank you for having me. >> we saw a $14 billion number that the u.s. threw out. last week things calmed down on friday when there was a report that it was going to be closer to $5 or $6 billion. but today "the wall street journal" says nothing is done yet. what is happening? how big of a deal is this? >> it is quite a big deal. and it has raised an enormous

amount of nervousness in the political spectrum in berlin. we are in a pre-election phase right now. it is a quite toxic combination for angela merkel. if she offers a bailout too early, it could backfire from the german public. if she doesn't, she could sacrifice a german symbol. so it's and awkward position for her right now. if she offers a bailout after her stance toward italy, it could undermine european structures again. so it is highly complex. it is not overly a good story. it was a settlement with the u.s. on the horizon. however we have not heard news today with a holiday in germany as reunification day. it's going to be a tough week. >> the best solution, i suppose, maybe what a lot of people are crossing their fingers hoping for is that the number comes into roughly a number that deutsche bank can handle by

itself and nothing else is needed to raise capital. they can do it through asset sales with what they already have. >> right. but you have to ask the question as well, what assets to sell? the bank they just acquired a couple years ago is obviously not that attractive. they are already trying to sell it. and they are not willing to get rid of their asset management component. so we'll see what is there. as this share in a chinese plan, that may be an option. however, we are talking about a compromise with -- the reserves are not at the level we remember so it will be tough. >> so you said something angela merkel doesn't want to give a bailout at this point, but what if she offers one later? is that where you see this playing out? she won't give one right now but eventually germany will step in to take care of deutsche bank? >> from political perspective, she has to be careful not to

send a signal right now. but honestly what i hear from mid friends in berlin, she would be extremely where he isless not to plan a part b. but they are working on it. they are asking already for option. they are asking for certain ways to go. and i think they are better prepared than they pretend to be. >> these things have a self-fulfilling prophesy sort of way of going. if deutsche bank executives believe that germany will eventually bail them out, they will be much less willing to sell off assets or to take a worse deal or to raise capital when they know that they think they are getting it under these pressured prices and washing out shareholders as a result. we watched that with lehman

brothers. he said no to deals he should have taken along the way. what is the message being sent to deutsche bank officials at this point? >> i have the impression they are playing with different roles right now. angela merkel tries to stay as quiet as we saw momentum from last week. that's usually a signal. usually you don't think that. and we had the vice chair from the democrats blaming deutsche bank, actually, accusing speculators to bring them into that situation and telling deutsche bank, you have brought yourself into that situation by speculating. how bizarre is this? so that's the blame on the sword or die by the sword. what is the worst case scenario?

>> the loss is probably -- the best scenario is they are keeping their feet on the ground. the worst case scenario is a panic reaction of the markets. there's a panic reaction in germany. is the government stepping in too quickly because they would put europe at risk again? >> although the panic situation would be the type of thing to force merkel's hand. >> it would force merkel's hand. but at the same time merkel's hand would be that you see the italians, they are like, what the hell are you doing? you just breaking european loft? you are doing exactly the same. in the situation in europe right now, pre-election in france, pre-election in germany is a toxic combination. >> particularly when you think about just how the world has gone in terms of trade and the

bailouts and the political sentiment is around the globe. who has protectionism? >> it is on all sides. now you have german politicians accusing the u.s. of bringing deutsche bank into that situation. talking, mumbling about a new trade war scenario. >> do you think the $14 billion was payback for the eu clamping down on apple and ireland? >> no, i don't think so, that's a ridiculous connection. which is something they love to use in both ways. you can see the tendencies in europe. and we have to be aware of the elections. >> very quickly, what would you do with any of these financial stocks in europe at this point given the situation? it looks like the americans took their pain a lot earlier. it looks like there are many many troubled situations when you look at these.

>> you look at a banking union and the ecb policy of europe and the new interest rates. so looking at all these stocks currently, i'm not sure. >> we appreciate your perspective. thank you very much. it's been a rough month for wells fargo. another state wrecking business with the bank. and hitting the campaign trail hard. details are next. >> still ahead, black rock's chief investment strategist will tell us where the firm is investing nearly $5 trillion in assets. richard turnhill is the special guest at the top of the hour. "squawk box" will be right back.

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welcome back to "squawk box." joining us for the rest of the show, wilfred frost. first it was brexit, then the ryder cup loss. but i think -- >> did you watch over the weekend? >> i watched clips of it.

>> just take some of the edge off of it. >> it takes the edge off anything bad in the world. i watched arsenal over the weekend. >> the way you're saying arsenal. it sounds like you're saying -- >> it does have the first four letters as the word. >> yes. you flaming arsenal. >> you're allowed to say that word. so you won't get in trouble. >> i'm not going to the other word. gotten in trouble for saying the other word. yet i had no idea -- it's not a bad word. >> please don't go there again. >> you're a 2-year-old wandering around saying curse words but you don't know it. time now for the -- i think the guy who runs it over there, he's the american but knows it's bad, right? >> you've been put on warning. now you know it is bad. >> i'll never say --

>> don't. how about this? time for today's executive edge. more fallout from wells fargo. the bank faces possible bans from doing business with the city of chicago. and statewide illinois following the sales scandal. the head of the chicago city council finance committee introduced legislation last week to suspend wells fargo for acting as a municipal depository. illinois and chicago doesn't accept any scandal or any graph in any of the political elected officials -- >> that's why most of them wind up in prison. >> they only have six former governors that are in prison right now. but they aren't going to stand for this. anyway, this person said he'll announce plans to suspend billions of dollars in investment activity with the bank later today. in california's treasurer, he's already halted the state's business relationship with wells fargo for the next year. and banks are facing pressure from oregon's treasury. >> this is very small in terms

of earnings for wells fargo. 0.1% of the total earnings. >> but it's a statement. >> it's a statement. but i think the bigger question, there's still political fallout to come after the senate hearing, and we have glazed over this a bit focusing on the house hear coming up, but after the senate hearing the, letters did lead to a labor department investigation, which will now take place. clearly, the anger is still very high in the house here in the last week. the anger really in terms of getting a meaning fful stocks io the investment of the company, i'm not sure what we'll see from the house congressman calling for otheran to be dragged into it. a the moment it is just rhetoric -- >> well, lawsuits could be filed by former employees, too. noom house issues. >> i love that the elected officials give 7% approval. at the hearing where they are

yelling at stuff and go, oh, yeah, thank you for -- it's some other bank sending them political contributions. or it could be wells fargo because they have all had contributions from there. >> the congressman had a strong performance answering the criticisms there. listen, criticisms deserve -- >> off camera we were -- do you remember when he left? >> it was funny. >> because he started with some gratuitous trump reaction, like they better get their act together. off camera i said, geez, i hope wells fargo wiped off their servers. he laughed so hard. >> there's a little bit of theater. coming up, the third quarter is in the books with the dow and s&p 500 posting four straight positive quarters.

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welcome back, everybody. today kicks off a new quarter in the markets. >> if you look below the surface of the s&p 500, which has been flat since july 15th, if you look at what has been working and what has not been working, it's the riskier stocks, the ones that have been in the lead. if you look at the s&p high beta, those are the dividend yield plays, and if you look within the riskier groups, it's semiconductors, and transports and emerging markets, all of those have been relatively

strong, and on the downside, you had utilities and big pharma markets. is it just a rotation into some groups that have not worked so well and lagged for the year at the end of the quarter. i think it's a different tone in the market that warrants attention as we go toward the end of the year. >> warrants attention. that's what we are going to do. is joining us, good to get an update from you katie, and we have been getting these updates for six months and maybe longer, and because the s&p has not gone down or through resistance, it has not -- we don't know yet about, you know, what we talked about three or four times, and by not doing that, do we have a

better time of how it resolves itself. >> it held up well, and we did see a pullback, and this saw a pretty major breakout in july, and september it was flat for the s&p, and some of the long-term falling gauges turned positive, and it's really a big deal. i think that 21.94, the minor resistance from the summertime high is here as it continues to prove. >> even though we did not make any headway by underlying trend lines, as you said, so you stay flat long enough some of the negative trend lines turn positive and this has been productive the churning around and not going anywhere. >> like a digest chun thing.

>> yeah, now you are speaking to me. >> mike mentioned the transports are doing well, and that's interesting, too. >> it's definitely on my radar right now, and it tends to out perform in a strong bull market, so we have those down trend lines in the relative strength ratio markets starting to turn and i think that's promising, and as mike alluded to, the leadership has been on the offense since the brexit low. >> they did well in august, but pretty poorly in september. what does that tell you? >> the banks are off on their own and i don't think they are sending a particular signal about the economic out look as they did in pastimes, and obviously you have the systemic threat and the deflation, and

you would normally expect the dividend trade to come back so it's not happening this way, but it's hurting the banks. i think that's how you enter rhe interpret that. >> how about the tenure, are yields in an up trend or -- >> they areery much a down trend from a long term perspective and we have seen backing that could be start of a basing phase, and it's too early to suggest it is a reversal, but if we see the ten-year day trends clear, and it would be a big deal to suggest it's more. >> thank you. when we come back, an exclusive interview with richard turnill. stick around. now.

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another quarter in the books. jobs friday is coming and we have an exclusive view in the markets from one of the largest money management firms. what does small business want from the presidential candidates? find out what matters most to pop and mom stores. shutout at the first time ever at the gillette stadium, and the u.s. winning the ryder cup, and the second hour of "squawk box" begins right now.

>> announcer: live from the beating heart of business, new york city. this is "squawk box." >> welcome back to "squawk box" here on cnbc. i am joe koerner along with becky quick, and you made up pretty quick. >> less than 40 minutes. >> it was a flying drone? >> they are not quite strong enough to carry me. >> you are too tall. they are going under wires and stuff, and you have to duck down. 6'6". right? >> 6'5". >> only 6'5"? >> i know, pathetic. >> i saw him stand next to rory, and rory is about 5'11" or something. >> is he 5'11"? he looks shorter than that.

>> peters, you saw him, and he -- and then i started looking at what the club looked like in his hand and it was like a little stick, he's huge. and futures at this hour should be up more than this based on the pay trtriotism on display, the snedeker, zach johnson, and it was awesome. must be something in the water down in georgia. >> has not happened since 2008. >> yeah. tom watson, and fill mickelson. >> still backed it up, too. big time. >> 18 birdies, right? >> between bill and sergio, i think there was 19. >> sergio hit at least eight. >> eight or nine.

>> here's what is making headlines, prime minister may confirmed the deadline that sets in place a with draw from the european union, and that means the uk should be out of eu by april of 2019 on the latest. >> she was also in the interviews over the weekend, her language was strong with what she is suggesting. and then the best sales quarter ever for tesla, and as far as deliveries, it more than doubles it when they were still missing. and tesla did miss the delivery target in the previous two

quarters as a result the shares are up over 4%. >> shares of twitter are jumping -- >> why does he do that? >> you did the american version. do -- don't hold back. >> i said that normally. >> you said twitter. you said twitter. you have to say twittar. >> now i can't do it without thinking about it. >> you sound like a hick. are you from southern england? you sounded like a hick. >> you sounded like joe. >> yeah. >> you like the british one -- >> shares of twittar, and the move could pit the giant towards

other twitter suitors, including disney. >> you are good for putting up with us, will. >> i don't mind at all. >> my entire career as a single person could have been -- >> so much better if i could talk like that. >> when i was there in february i took a picture othe sign on a subway, and it was an ad for las vegas, and it said go somewhere from your accent is not an of-- >> you sent me a picture of that. and then warnings are in

place for jamaica, haiti, and parts of cuba. black rock which is one of the world's largest money management firms is out with its key themes that investors need to pay attention to, and joining us now with an exclusive global investment look is richard turni turnill, and we know this could be volatile and we have seen volatility, and we have seen in an election year this could happen, and what are the key things that could happen as we are in the final trading kwoequr of the year. >> we have been in an environment where growth is

still slow and pressurers are picking up, mostly in the u.s., and we are seeing in other parts of the world like china as well, and it has important implications like investors, and still no return environment, but investors have to be careful about where they are taking their risk, and they are being paid to take risk outside of traditional fixed income, and looking at dividend growth stocks, and it's time to focus on where you are taking your impor imports. >> it's not what the federal reserve says, below 2% target so they don't need to raise -- >> it's rising, but from a very low base. one of the factors creating the regime shift, exsphres identifily or implicitly, they

are ready to tolerate, and they feel much less confident about tackli tackling exphreusit. the banking system faces a number of big structural head winds, and the most important being very low growth, and cost structures which have not adapted to the new environment, so these are big challenges for the banks particularly investors in the banks, and you look at what a risk of a repeat in 2008 is, that looked very low. this looks mainly a profitability issue for the

bank, so a return issue for the banks and doesn't look like a solvency issue for the banking system, and the banks remain structurally challenged but we don't see that having other affect on markets. >> the deutsche bank story and the government over the weekend, it does put focus back on the political situation in europe and markets have rallied significantly from the brexit lows and is there a sense of over confidence in terms of what the political fallout could be in europe particularly with elections coming over the next year? >> a very notable feature of markets, it's how low volatility has been, and you have a contrast uncertainty of being high, and you speak to clients and investors and many of them will talk about political uncertainty is a large part of that and that's not matched to

the low levels of volatility, and we see some currency pickup in volatility, and equity volatility has been low. and we think of the risks going forward for investors and one of the risks is the heightened political uncertainty, both here in europe and the u.s., and it starts to invest itself in higher equity markets. >> what would you be telling people to do if this is a change in how we are viewing the markets? what do you think people need to do to get their portfolios in place? >> well, they need less risk in long duration bonds, and they should think about the way you are being paid on the relatively value bases, and where you are being paid for taking risks, and

there's a price for low returns and what you need to focus is where you being paid to take risk. start with investment grade credit, and investment grade, and moving from government to investment grade, you diversify your risk. that's a combination of duration risk and credit risk. your diversifying your risk from duration risks. that's the firsthat makes a lot of sense. secondly on the equity side, we think the equity risk premium to take the risk of equity, attractive to bonds, largely because bonds are unattractive, and it would focus on dividend growth. the yield plays, we have talked about in the past, areas of utilities, they look unattractive right now and very

exposed in a modest rise in bond yields, and still looked very attractively compared to other areas of the market. that's a theme we think will run and run. and the last is emerging markets. both debt and equity, and they have done well this year and you have seen money coming back in, and when you are looking at value, it's not just relative but absolute value, and they still trade at a 24% discount to developed markets. >> here's the question i asked people, though, when they talk about emerging markets, if the fed raises interest rates, and they start to see higher interest rates, isn't the emerging markets that will get hit the hardest? >> you have two short-term risk emerging markets, and one could raise interest rates aggressively, and the second is

you get a big oil price. let's start with the fed. we think the fed will be gradual going forward, and it has done well in gradual rate rises, and second is particularly with opec announcement at the end of last week, the risk award for the price is much more favorable going forward, but for em to do well from here, it's going to be much more about a simple story about oil prices being stable, you have got to see fundamentals within emerging markets starting to improve, and this is what is encouraging us, and what is different than what we saw last year on the previous upticks in the end, as interest rates have come down, and the first upgrades to gdp growth, you have seen the most positive rescissions to earnings growth,

and so we are starting to seat domestic fundamentals coming through. >> can you tell what part of england he is from? >> no. >> richard, when will speaks, he's not from liverpool, but can you hear the oxford with will? >> i can, and i would point out i have from a little part known of england called scotland. >> so you couldn't pick that up? >> i think richard would admit he doesn't have a hard scottish accent? >> i would have to admit that, will, yes, and so that would have been an incredibly good guess. >> it's so cool. i peck up every fourth word, and -- >> richard, thank you very much for joining us. up next, germany's largest lender is reaching to reach a

deal with the department of justice, and what the ban sbg doing to reinsure investors. look who is driving in the "halftime report" today. >> what are you doing? >> joe takes over the "halftime report" and talks money with wall street's fastest traders. >> for more on the market selloff, whoa, look at that. look at appear. >> grab a beverage and get ready to trade. before taking his team to state for the first time...

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welcome back to "squawk box," everyone. we have been watching the futures and they have been slightly higher as we start the first trading day of the last quarter, and scratch that, dow is up, and nasdaq up just over a point and the s&p turned negative. deutsche bank throwing its energy into reaching a settlement before next month's presidential election. julia joins us now from frankfurt in germany. >> reporter: speculation here in frankfurt clearly right, but i

think we can make basic assumptions. the talks with the justice department are ongoing, and deutsche bank will be making a determined effort to provide the market with clarity as soon as possible. we should address the rumor on friday that gave investors greater confidence, and the prospect of a settle of the of 5$5.4 billion, and under german law deutsche bank would have had to confirm it, and it has not so it takes us back to where we started, the talks are ungoing. it's a national holiday here in germany and we saw plenty of unity from big corporatecorpora the likes of bff gets the strongest support saying he bought deutsche bank's stock last week, and they will have to wait and see what happens when

the market opens tomorrow, and just to get a sense if there's any disappointment that rumor from friday appears now debunks. we will wait and see. back to you. >> thank you for that. and guys in terms of the size of the doj fine, about two months ago analysts built in the models 2 to 3 billion. >> you are still talking about a number disturbance -- >> because of the way the leak came out and because it came so early in the proceedings when there was so much uncertainty, they need to draw a line under this and need to settle quickly. >> we had the german finance minister, and his point was, that's still a big number, even if you are looking under 5 and 6, but it could raise an issue for the bank to still come up

with that kind of money. >> they have 5.4 in litigation reserve, but they have a lot to cover in the litigation, mostly the money laundering issue in russia, and you look at the share price rally on friday, and that's based on that expectation, and if we don't get a deal announced in the next 24 hours. >> the journal seems to be knocking it down today suggesting none of those numbers have been talked about at the highest levels. >> exactly. they will use the meeting as a veil, and it doesn't look like we will get something overnight and we could be in for more volatility until we get some other deal. coming up, kanye west happens to be married to a kardashi kardashian, kim, and he bolts

off stage after his wife is robbed at gunpoint in paris. where would they get the gun? very strict laws. "squawk box" will be right back. these goofy glasses. yeah. well, we gotta hand it to fedex. they've helped make our e-commerce so easy, and now we're getting all kinds of new customers. i know. can you believe we're getting orders from canada, ireland... this one's going to new zealand. new zealand? psst.

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kim kardashian was held up reportedly by armed men in her hotel room, and she was shaken but physically unharmed and she was in france for paris fashion week. back here in new york, husband kanye west, abruptly stopped a concert mid song when he got the news. ♪ i'm sorry. i have an emergency, i have to stop the show. >> kanye was performing at the meadows arts music in queens. >> was not a good video, was it. >> still to come on "squawk box," what main street wants from the new president, and we look front and center for small

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♪ ♪ >> welcome back, everybody. among the stories front and center this morning, a number of key economic reports on the agenda, september ism manufacturing, august construction spending and september auto sales are all set to hit the take. and janice capital and henderson global will manage more than $320 billion in assets. and the eu is resuming its review of the deal setting a deadline for early kweb, and the eu previously halted its review because of missing information. and then over the weekend, donald trump's taxes, the 1995

returns show he could have avoided paying taxes for nearly two decades. and rudy guiliani defended trump yesterday on nbc's "meet the press." >> this points out one of the reasons why releasing tax returns is so bad. "the new york times" writes a long story and somewhere around paragraph 18 they point out there was no wrong doing. people have a hard time understanding how taxes work, and if donald trump had not taken those losses, he could have been sued by his investors, and he could have been sued by his business partners. >> we will have more on the story coming up in a few minutes. on the campaign trail today, hillary clinton expecteding to after mylan and wells fargo. this plan who curve contractual clauses that would require other

people to resolve disputes, and this is something that is expected to get push back. >> and that speech comes about 1:30 eastern time today. partisan and nonpartisan groups alike have spoken out about the lack of detail from donald trump and hillary clinton on the campaign trail, and kate rogers is here. >> rising cost of health insurance is one of the number one costs, and small businesses, they find themselves at the 50 employee full time threshold had to offer coverage this year under the affordable care act.

>> it created more work as a small business owner, and maybe an hour and a half additional work on my part each week, and i have to pay strict attention to payroll and insurance deductions and pay close attention to new employees. >> and even for businesses, like this one in washington, d.c., they were already offering coverage and had an increase. >> we had a 10% increase in costs that jumped last year, and so we have been impacted from all angers when it comes to the affordable care act but right now for the next decade, we are taking the hit. >> what is important though, both businesses say they do want to continue offering their workers coverage and they don't want to see the aca repeals has donald trump has promised to do, and that could make things worse

because he has been offering his employees insurance and doesn't want to stop. next week we will hit on wages. they don't want to take it away from the workers, so totally repealing it and getting away from -- >> but streamlining the process. the idea of spending an hour and a half week extra on keeping up on this, that sounds insane. >> and pedro, the second man he had he had to bring on a new employee, and he had to uproot his accounting system and get new software and he supports -- >> you don't want to rip out what you now implemented, and that's more work if we repeal it, it's a bigger mess. what you said in the beginning, more details from candidates would be great to hear. joining us now, a former trump employee and supporting him as president, and you have

been in the business for a while, in the real estate business. >> 15 years. >> you are also -- your philosophy is basically liberal in most respect? >> in many respect, i am an immigrant, obviously a woman and i came from bosnia in 1996, and my political views, i do believe in american democratic process because we have it way better here than where i grew up. >> you are supporting trump. you worked with him and knew him for how long? >> i worked with him for four years at trump international, and during my tenure there i never witnessed mr. trump being inappropriate to me or any other woman and i wanted to staten though i am liberal in my political views as a former high

ranking female executive at trump international, he was very fair. >> do you agree with his tweets last week relating to the former miss universe? >> during that time when that was happening, i was dodging sniper bullets and i felt terrible for miss universe, and those body shaming comments could impact any woman severely, and women nowadays want to hear how how their businesses are going to be supported by venture capital money, which is now 7%, and the women want to know how they will be empowered is through education and career opportunities where the intelligence is going to be idealized and applauded rather than just how they look. >> the whole, you know, the beauty pageant industry is built on maybe not body shaming but anybody subject to body shaming is not a contestant but by

definition those are -- >> as a businesswoman, i have to say that many of the beauty pageants or archaic, and one dimensional. >> as a businessman, what was he like? >> he was really tough. he was very disciplined. he worked really hard and only demanded the best. if you did not perform, you would get fired. he didn't care if you were a man or woman or where you came from, and he just wanted results. >> i mean, it is -- well, if hillary clinton had not figured out a way to bring that up in the debate, and then the enablers and the guard that is the media, they immediately -- >> he did it himself. >> by not -- >> he didn't bring it up.

but he alwaysays if he is attacked he will counter punch him, and the war on women, for four years we have not talked about it, and the last time we talked about it was when romney apparently was here, and then we talked about mccain and he was a racist, and this is from the democratic playbook. go ahead. >> it talks more to him shooting himself in the foot. >> he can't seem to resist. >> yes, that is the problem. >> but the stuff he was tweeting in the middle of the night. >> i am not applauding the comments. >> nobody is applauding the comments. >> i am just making the.the. >> in the entire debate, no issues were discussed. >> he could have swatted it away when he was asked about it the next morning and he didn't. >> he's the type of businessman that doesn't apologize, and he's not diplomatic, and we know that, and when he has a point to make he makes it and he is not

sensitive or diplomatic, and -- >> people may have not maybe his opinion had changed over time. >> those were different times also, and, again, i am telling you, as a businesswoman that worked really hard to where i am today -- >> that's the narrative. the deplorable, racist, sexist, that's what you are going to hear for the next 37 days, and anything that runs counter to that is not going to be good. >> and so many of the women i speak to, be it my clients in florida or young mothers at boys and girls club, they tell me, look, it's election time so everybody is so worried what mr. trump may have said here and there, but what we really care about is we want equal pay for equal work, and great job opportunities, and we want great health care and great child care, so i think it's a little

frustrating that during this process these issues are really important to women are not being discussed, and again we acknowledge the comments about miss universe, and at the same time if you choose a career where you have contractual obligations to look a certain way, that's how it is. >> but your point on the real issues affecting the race, we do have a couple debates left and i think there are people that do want to hear more. >> women represent the majority of the electorate in the united states, and i think the women are going to decide the out come of the election and my point, let's talk about the real issues and what is important to us, particularly in my case as a businesswoman, am i going to be paid as a male in what i do in real estate and what kind of job opportunities will i be able to offer to people i help, because

there are a lot of young women out there that want to get educated and want really great jobs. >> and if it was reverse and the parties were reversed, if, i mean, you are talking about trump making certain comments about women and then you have bill clinton on the other side who is not running for president admittedly anymore, and you have actions alleged by literally dozens of women and you have some of them saying hillary was complacent in, you know, referencing them as bimbos, and we are talking about comments 20 years ago, rather than actual assault. >> i wish we would talk about issues that matter. >> yeah, i keep telling everybody that i -- >> who treated women worse donald trump or hillary clinton and bill clinton. but we are not going to talk

about that in the mainstream media. >> i think we are going to continue talking about the issues that are really important to women, and i think -- >> he enabled his action. >> it's a risky proposition to go down that road. people look at it in different ways. week four of the nfl, and the ryder cup, and "squawk box" will be right back.

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welcome back. a consortium is close to acquiring kau cabela's. reuters is reports cabela's is worth more than $100 million. >> how many stores are there? >> i think -- >> super stores. they are super stores. >> looks like you are driving along on an empty highway, it looks like an oasis in the distance, and --

>> it's like oz. >> it was a big weekend in sports, week four in football. the u.s. taking home the ryder cup for the first time since 2008, and the blue jays and orioles wrap up the wild cards. and we will talk about ory in a second, and make it's my perception, watching the clouds and listening to the crowds and watching the coverage and excitement and i remember the ryder cup from 20 years ago, and i look at it now, and i think the ratings would be up 60% or something, but they never are. why did it appear to me so monumental? >> because it was huge. it was definitely the biggest and loudest crowd i have ever seen -- >> and you won. >> that helped. yeah, sorry about that. but the commentators and everybody recognized that the crowds -- there were about

50,000 people out there every day, huge galleries. this was not a shy crowd. this was not a golf crowd. this was a football crowd that showed up at a golf event and they acted like football fans, and what was interesting is you just saw the clip of rory, the players got into it and really responded. rory and reed, especially in the first match yesterday, they were playing off the crowd, and sometimes a little too much and rory got a little into it and it got a little distracting for him, i think. >> there were things happening that reminded me of "caddyshack," where there was a higher power going on when rory hit the 60-footer, and then patrick hit that 35-footer. patrick and rory, it looked like they were not human. they had the other thing that

rodney had, that thing that showed how to exactly hit it. >> they were possessed. you are not supposed to see somebody play golf the way they d. and then the finger wag to rory after he makes this putt. >> that was after they exchanged five or six birdees. >> eight birdies and an eagle between the two of them in the first nine holes. >> and it was 18 or 19 between phil and sergio. and rory is only 5'9", but i can't believe he is only 5'9" and 165, and he hits it better than anybody. see, if he was in hollywood,

will, he would be 6'1". that's what his resume would say. i am george clooney, and i am 6'1", but he's 5'6". >> they were making a lot of comments about his height to rory. >> what did they say to sergio. >> yeah, they made a few comments about his ex-fiance. they had to come out and say, hey, folks, this is a golf tournament and let's dial it back. >> that was fun to watch the razzing you never see. >> that is what requires a different still set, and they are facing situations they don't normally face. >> it was a team event. >> that was a question that was raised a lot in the run up to the olympics, and it was an

issue of logistics to a large degree and how many countries could field teams that would be competitive in the olympics, and that was the reason they could do that, and -- >> yeah. >> europe just lost to the u.s., though? >> but there were not british players playing. they were not picked, were they? >> willett, he got -- >> well, i don't know, should they play? just kidding. >> who was the kid? he was 22. he has a huge future. >> sorry, peters, peters -- he is a rookie. >> the kid from the uk? >> sorry. it was a very inexperienced team they put out there and that was one of the things that hurt them down the stretch, they loaded --

the captain front loaded the team yesterday with all of their veterans and best players and when they could not get all the points in the first five or six matches, that was it and the u.s. rolled. >> start.

>> my producer thinks the giants are great. i would say right now if i had to pick who i like in the super bowl, i would pick new england given the fact they are 3-1 with

brady coming back, and i like minnesota, and minnesota is and they are off to a great start. >> and dallas. >> tony romo, he's too fragile. e and the nfc east is looking stat. the cowboys and redskins and eagles and giants are all playing well right now. >> wilford thinks in football they should change it so you can't use your hands. >> no, i don't. i just think it's good in soccer you can't use your hands. you say soccer is so boring they should use their hands, and it would ruin it. >> i think the nfl would be -- >> it was just an idea. >> i just pushed back to wroer

soccer suggestion. >> it seems so difficult to move the ball and get it in the goal, and -- >> it's an nbc sport. it's an nbc sport, and you are going to get in trouble. cabela's has 99 stores. >> they have one awaii. when we come back, stocks you need to watch at the open. it's the first day of the trading for the fourth quarter. don't forget the jobs report that is out this friday. let's check out the futures, relatively flat. we will see how it goes as it gets towards the open. "squawk box" will be right back. >> joe takes over the "halftime report" and talks fast money with wall street's fastest traders. >> whoa, look at that.

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still to come, former governor john sununu here to tell us why he is supporting donald trump, and we talk with johnny bench, and he joins us

next, and "squawk box" will be right back.

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welcome to the fourth quarter. are we in for a surprise? we have your playbook. >> he has not released his tax returns, which means he is

not -- >> wrong. >> not that charitable, or never played taxes in his life? >> warmer. >> and john sununu will tell us why he is throwing his support behind donald trump. >> plus, tales from the bench. johnny bench is here for a new app for schools. the final hour of "squawk box" begins right now. >> welcome back to "squawk box" here on cnbc. i am joe along with becky quick, and will frost. and the futures had been positive, and now it's kind of the same, down less than a point

and the s&p down on a regular basis, and european markets performing okay for the devastating loss on the ryder cup. >> germany is closed and that was a mistake, because that was friday. >> the pound is sinking quite a lot. >> the clock starts ticking -- >> it's two years from there. >> the real move -- we knew it would be invoked next year, and because of the strength of the rhetoric over the weekend, probably going to be a single separation. >> it's an acknowledgment of reality of what the eu is willing to offer. let's talk about other headlines this morning. we are watching shares of deutsche bank.

"the wall street journal" reports, no deal has been presented to senior decision makers for approval on either side, and with german markets closed today you will not see action on that, and tomorrow when the stocks start trading again, we will see. and then tesla more than doubled deliveries from a year ago. in the meantime, microsoft increasing the cloud investment to $3 million, and it more than doubled the cloud capacity in europe over the last year. and then columbia voted to reject the deal, and it was a shocking deal, with 99% of voting stations reporting the margin was less than one quarter of 1%. and the president there was

extremely confident it would be approved and if not it would be a return to war. >> a quarter of 1%? i would go for the hanging chads on that one, wouldn't you? >> for a recall, yeah? and teresa may says she will formerly begin the brexit process by march of next year, and may confirmed the deadline for triggering article 50 of the treaty that sets in place a two-year process of the withdrawal, and that means the uk is out of the eu by april of 2019, and this referenced the weakness in the pound, and you can see it there at 128. some stocks to watch this morning, the eu setting a deadline for early february. the eu previously halted its

review because of what it said was missing information. the companies say the combined firm will manage more than $320 billion in assets. shares of twitter jumping on a report that google is working with others, including disney. political news, the story dominating the headlines, donald trump's taxes, and the candidates 1995 returns show how he could have avoided paying taxes -- could have, for nearly two decades, but rudy guiliani defended trump. >> the new york times writes this long story and somewhere around paragraph 18 they point out there was no wrong doing. now, people have a hard time understanding how taxes work. if donald trump had not taken

those losses, he could have been sued by his investors and he could have been sued by his business partners. >> and we are joined now to explain how the tax loopholes work, and zero hedge pointing out that the clintons have the loss carried forward deduction used. >> it's a fairly common tool and guiliani is absolutely right, this is 100% legal, and this is new to people so i want to explain how it works. his tax year holiday was legal and highlights one of the luke r -- lucrative sections, and he could erase up to $916 million in income over 18 years, and why does it exist and how does it

work? it only applied to two years in income, and in 19 stphraeuf when he took that loss it was only 18 years, and now you can apply it to more than 20 years of income. the idea behind this is to help companies ride out the economic cycles and you can only apply it to companies you own, and your loss cannot exceed your bases or the amount you invested, and if you are a designated real estate professional like trump, you can deduct business payments and depreciation on your real estate, so you can report very large paper losses while making large income, and while uses of nol's are not uncommon among the wealthy, i talked to cpas for wealthy developers, and they

have never seen one north of $100 million, so it's the size of the loss that is unusual. but lots of wealthy people use it. >> but his prevails in the '90s were -- >> well documented. >> and part of his whole narrative of the art of the comeback, because he almost went under in the '90s. >> yeah, people forget, he personally guaranteed over $800 million in loans, and part of this loss, you can attribute any loan that you owe personally as a loss, so my guess is that a big part of the loss is the $800 million in loans that he secured as part of that deal. >> the greatest thing to me is the way that citigroup was handled in the financial crisis, because if you declare bankruptcy, your operating loss and carry voids are null and

void, and they were bankrupt but didn't have to declare it and -- >> yeah, they should have gotten washed out. >> it's aur kaying areas of the tax code, and the question is what becomes of the tax code? >> over the next few days you will see some member of congress, probably a democrat, saying this needs to be restricted and paired down so somebody can't take $900 million in losses over 20 years, and that's a long period of time. in 2008, when this expired, and we think he started in '93 -- >> because it's three years behind -- >> it's two years behind, and then the existing tax year you file it, and then -- it expired in 2008. he started to do all the other tax strategies, like donating land which gives him a break, and he lost this -- >> that's why the tax code

should be trimmed and simplified and made so that everybody can understand it. >> absolutely. maybe not ever going to happen, but that's what should happen, absolutely. >> robert frank, thank you. >> you just know all the stuff about rich people? >> yes, that's my job. >> somebody's got to do it. >> somebody has got to do it. still to come on "squawk box," why investors are doubling down on the chinese version of twitter, and louie navillier joins us with that topic next. t, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov

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welcome back to "squawk box." the futures just below flat at this hour, and only small declines, and 1% of gains on friday, and similar amount for the week as a whole. and the oil prices, much of what they were like this time, and some production freezes, and some likelihood they will be carried out. making the headlines, ong cutting 7,000 jobs, and the dutch lenders aims to cut the

costs by 2020, and he was not concerned about contagion against financial systems. facebook introducing a new service called marketplace, and the goal is to help users discover, buy and sell items in their community, and facebook says marketplace will roll out in the u.s., the uk, australia and new zealand on a facebook app. what is working on the what's working segment. the platinum portfolio up about 10% this year, and it's great to see you, louie. >> great to be here. >> you say there are a couple things happening that we're in the midst of a quality.

>> as far as the polite to quality is concerned, we had some price anomalies several weeks ago, utilities traded at a higher rate in text stocks, and finally the financial stocks remain a mess, and wells fargo did not help that sector, so really the best sector heading into the third quarter announcement season is tech, and what we do at our firm, we calculate risk, and a lot of the text stocks are under buying pressure, and a lot of them buying their stock back, and they are safer than some other stocks. we had facebook safer than kroeger not that long ago, and we are looking forward to the announcement season, and

earnings don't always work, but they should work in october and early november, and we should be rallying for much of october, and even though it makes people nervous this month because in a normal presidential election year you rally going into the election, and they say they are going to talk about a cap -- >> opec, you mean? >> yeah. it's just a way the futures and traders and everybody tries to manipulate markets. all the folks at the algeria meeting had to go home and say they did something, and that's what they did. and also the economies are not strong worldwide. we have manufacturing and recession in america, and consumers seem happy, and we want to see them spin. so you know, we're not hitting on all cylinders right now. >> the theory you just laid out

for technology, and is that why you have companies like applied materials and nvidia? >> yeah, because they have earnings, and i like my earnings to go from profit market expansion. we had record bond issuance, and companies will take their new debt and buy stock back, and so tech is going to lead us. no doubt about that. >> is apple included in your basket of tech stocks you like? >> it buys back a tremendous amount of its stock, to, and we have a war between europe and america, and what president obama has done to germany is shocking and we first took out volkswagen, and now deutsche bank, and if i were angela

merkel, i would have a talk with him. you know -- >> apple was before deutsche bank. >> that's true. that's true. but that could be the tip of the iceberg. but, trust me, i have a lot of german friends down here, and they don't know what we are doing to their country, because we are imposing big fines and breaking their banking systems -- >> you can set the banks aside, but volkswagen, they did that to themselves. >> yeah, i am not denying that, and it's not resolved yet, and we did take out their stock market at 8%, and we have economic wars under way. the other theory, the ecb is doing it with a negative interest rate policy. obviously there's an italian banking crisis, and now we have a german banking crisis, and what they can do to help the

situation is highly questionable. >> what about bank stateside, is that another example where politics is getting in the way and you don't want to touch them given the wells fargo story? >> well, the yielding curb, it does not -- you know, it's just unfortunate. but a flat yield does not overtake bank profits. >> can we talk about you mentioned you like bio names, and this is one that pops out. >> this company historically had a currency risk, and the year to year comparisons on the dollar are getting more favorable so we expect the currency losses will not be as extreme, but they have an extremely strong numbers.

>> and waeb yo, weibo, and that is doing good over there. >> thank you. it's official, and bass pro shops is acquiring cabela's, a total transaction value of $5.5 billion, and it is entering into a multi-year credit card partnership with capital one. >> yeah, we like him and he likes us. >> yeah, he says cabela's is pleased to have found -- that's tommy, the ceo of cabela, we found the ideal partner in bass pro shops, and then there are other comments as well, and i guess there's a third company sort of a boating company that

may be -- white river marine group, which is a johnny morris company as well, and that's all three of them getting together. >> makes sense. >> for outdoors men everywhere -- i was going to say red necks, but i won't say that, but it's a big deal. >> are they changing the brands? >> i think the same. >> cabela's, a great one. >> i am not aware. >> we don't expect you to be up with the bass pro. >> well, good. still to come, kim kardashian apparently robbed at gunpoint in paeuris, and the details after the break.

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today. a potentially devastating hurricane touching down in the caribbean. the category 4 hurricane, and it could devastate parts of haiti, and the winds picked up in haiti yesterday, and hurricane warnings are in place for haiti and jamaica and parts of cuba as well. kim kardashian was reportedly held up by armed men in her paris hotel room, and she was in paris for fashion week, and she was locked in the bathroom while robbers dressed as police officers took two cell phones and millions in jewelry, and kanye west abruptly stopped a concert mid song when he got the news. ♪ ♪ to a woman so heartless -- i'm

sorry, i'm sorry, i have a family emergency, i have to stop the show. >> kanye was performing at the meadows music and arts festival in citi field in queens. >> this is the most significant thing ever, because -- >> it's something we would report. >> are you suggesting the rest of the kardashian series is not -- >> this is the kind of thing that would be interesting -- not interesting, but it would be significant enough to hear about in their lives -- >> that you would have to cover. >> yeah, anything else that has happened, o.j., that's the original thing and then the sex tape, and everything else is contribed or done for just the art of playing, you know, the

reality -- >> works. >> yeah, this is -- armed people dressed as cops, $10 million stolen, and this was actually -- it's really surprising that it's significant, that this is something significant and we will follow it. the top spot at the box office, "miss perfgrine," and also "deep water horizon," brought in $20.6 million, and that's based on the 2010 oil rig explosion that killed 11 men and spilled millions of barrels of oil. >> looks good, though. >> i am seeing it in seeing that story given how much we covered it. >> exactly. when we come back, sounding

the alarm on deutsche bank, and we will tell you why former hedge fund manager joins us next.

welcome back to "squawk box," everybody. here's what in the headlines this morning, voters in columbia narrowly rejecting a deal that would end the civil war, and it was a shocking defeat. 99% of voting stations reporting the margin was less than one quarter of 1%. and the president was confident voters would approve the deal, and polls were shoeting two-thirds of voters would approve and when asked if it was rejected, he said it would return to war. the civil war is the longest in history. and september ism

manufacturing, august construction spending and september auto sales. in political news, hillary clinton is expected to go after mylan and wells fargo, and the presidential candidate will unveil a plan to make it easier for consumers and employees to take action against what they are calling bad corporate actors. the most coveted baseball card of all-time has seen its value skyrocket, and the card sold on saturday for $3.12 million, a new record for a trading card at a public auction. i don't know that much about him. >> you call yourself a sports fan? >> i heard of him -- >> major league baseball, 1917, played for the pittsburgh pirates, short stop. >> 1917 was the operative, and the previous owner purchased it

for $2.1 million, and the card was released by a tobacco company, and only 50 known still existing, and johnny bench, you know, he gets mad if you ask him, though, and he might sign one for us. johnny bench will join us in about ten minutes. our next guest has been sounding the alarm on the european banking system, and deutsche bank in particular, since 2013. we have more on the future of the bank and the systemic problems, and raoul pal, and he co-managed the microfund, and i think before we talk about the warning signs that deutsche bank

flags for the european banking system, and does its short term future show anything, and what would be a win for them in terms of size. >> the share prize has been falling significantly over an extended period of time now, and the fine was just one of the elements in the journey, so i think, yes, you know, they will, if you look at most of the history of the fine announcement as the payment, and they won't pay as much as people first announced but might be higher than the market was hoping for, and if it comes in at 6 or $7 billion or so and maybe even up to $8 billion, and that's not the key issue, i think, and i think, you know, yes the shares might bounce, but the problems are endemic in deutsche bank and it has to play out some other way. >> what is the endemic risk here? >> the problem is, a, to have an

enormous derivative book, and the problem isn't the size of it that is so big, it's difficult to unwind and difficult to get rid of, and meanwhile there's a bigger problem, and that's the problem of negative rates in europe, very, very flat yield curve in europe and rising libel rates which is causing the starvation of funding for the banks, and deutsche bank has a number of issues at play, and so it's kind of the epicenter of a storm of a number of things. >> so does the pact that negative rates are affecting all banks in europe, do you think the turmoil that faced deutsche bank this year will start to affect other european banks, too? >> i think it has but nobody noticed and i kept an eye on the spanish banks, and they have been in a free fall or at a

all-time low, and big banks look problematic and it's all from the same issues, basically a lot of the bad loans in europe, whether it's italy or spain, didn't go away, and there's the problem of how banks now fund themselves and the yield curve, so the whole thing is grinding the whole sector lower over time and clincluding the uk banks as well. >> one factor that investors, i suppose, take some heart on the states side, you think they are not going to let the banks go bust because we all saw what happened when the u.s. authorities let lehman go bust, and what do you think about the bail other? >> germany sets itself up to stop any of the taxpayers from

bailouts, and deutsche bank is too big to bail in. you can't take all of the deposits money at deutsche bank, and it's between a rock and a hard place and merkel has to deal with it ahead of the election if she can. and many are going to come and complain to the eu and a lot of lawsuits could come, and they could start to get really, really angry about what is right for them versus what is right for germany and it's a political hot potato as well. >> what are the chances of a sweeping crisis to the scale of the 2010 euro crisis or greek crisis? >> crisis only come in a recession, and europe is heading in a recession, and the u.s. is flirting with a recession, and i think there's a probability if that's the case, and first we need to see how they deal with

deutsche bank, and my guess is deutsche bank will not be the one that causes the problem it will be somewhere else because everybody is focusing on deutsche bank and somebody will have to do something somehow and there's a problem in the european banking system and a crisis awaits in the next session. >> thank you for joining us there on deutsche bank. when we return, baseball legend, johnny bench is here, and he's in the house today, and he is launching a new app that disrupts the way teachers and students communicate. there he is. "squawk box" will be right back.

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welcome back to "squawk box," everybody. the futures have been down. if you want to take a look at the dollar, there are markets closed around the globe including in germany, and right now the dollar is down against the yen. oil prices picked up by $3.50 last week are adding to the gains. october is national bullying prevention month and a new app could change the game for students across the country and baseball legend, and i will let you know, a lot of times i don't like to use that word, but baseball legend, johnny bench is teaming up to launch a platform

designed specifically for schools and we'll talk about that, and joining us now is johnny bench, former catcher for the cincinnati reds. he thinks if you don't have the stupid flat bat -- >> are you talking cricket now. >> he has no idea who you are or what you did? >> he has the one-day test, and -- >> they had a game over here recently. >> yeah. there we go. >> we are going to get to your bullying app, and i watched and saw the defense that way you played and you were a great offensive player, but the crouch to first and third, and you threw to second in the crouch. >> yeah, sometimes if you had to be quick. >> do you remember? >> no, she was not born. >> i was. >> did you have a pass ball? i don't think you had a pass

ball? >> of course you have a pass balls. >> yeah, but you never -- >> you have ever had a pass ball here? we all make errors at this point in our life. >> smithfield came to you? >> we were talking to them, and i have been around them and involved in apps and we talked about an opportunity to go into schools and give schools an opportunity to provide all information for every student and teacher and parent and alumni and all the parents and achers and alumni could be downloaded to the platform for schools and they said they wanted to be involved, because they talk about cyber bullying, and we know that affects their school -- >> that's all we need in eighth grade, ninth grade or tenth grade was a more efficient way to bully, or a more despicable

way -- >> yeah, back in school, we went out back and fought and it was over and everything else, and now they carry it on, and their views are so different because we are bombarded socially by something politically, and when they get a view from somebody they are giving it to somebody else and once they feel they have a different view than the other, it's like the democrats and republicans, we are going to argue about it and we are going to argue that global warming is here and we are going to argue about the price of everything, and it leads down -- i think we say it in our living rooms and the kids hear it and they go back and forthwith each other and then their hair is not right and they have the wrong shoes and their fingernails are the wrong color and as minute as it is, it's sense tv. >> i can't imagine having it come at you 24 hours. >> yeah, going to school as you ran down the block or whatever,

then it was over, and now, it's just, ping, ping, ping, and girls do at least 100 text a day. >> i watch it with our kids. how does the app work and let you know this is going on? >> you will be able to relate to it, you will have crime, threats, graffiti, and you can take pictures and the school board will be responsible for all the things they received. i got a problem, and this person is bullying me and they can go to it address it and stop it at least to the point where they can stop some form of communication that is not there, so we just want to make the school aware, and more importantly, you will get notifications from your school, you are a parent and you are going in and you will be able to find out when all test schedules are and where the calendar is and if there is an event coming

up, a bake sale, and you say to your kid, when is your test? i don't know. so you go in and you say, here it is. it's free to download to all parents, students, alumni and kids and anybody can download it from their school and it's free to the school and they will pay a nominal fee per month. >> how many schools are signed up? >> this is it. we are starting out right here, and this is our first announcement -- >> i want our school to sign up for it right now. >> go to smithfieldschool.com. contact the principal and your i.t. guy, and get it out there. the first 5,000 schools, and there's 128,000 schools in america, so we would like to go across america, but at the same time if we can prevent somebody from bullying somebody else and it can be reported and addressed, then we have done a heck of a job, but more importantly every parent now

knows what is going on with their student. >> we bullied a lot of opposing pitchers, so i am not sure you can be objective. we have known each other a long time, and played -- i played 18 holes at tradition with arnie. last time i spoke to you you said you had been up to see arnie and you were concerned. >> very concerned, and had lunch and then i called him a couple weeks ago for his birthday and he was frail, and said he was getting better and the last time i saw him he was not, and you knew the time was coming, and my 10-year-old palmer, met him in 1971 and played in the bob hope tournament with him, and played 15 rounds with him. >> you know the plays i am

talking about, the nest? >> yeah, the night before last i went there in honor of aurpb kwruld. arnold. >> i felt how lucky we were. he was an incredible man who did so much. >> you know, i was nobody, and i played and interviewed with him and he has his arm around me and he was like that with everybody. >> yeah, we were blessed. >> is ohio going to go for trump? >> i don't know what ohio is going to do. >> i am going for the donald, and that's basically i think -- >> you know him? >> i do know him, and i don't know that i am seeing everything right now, and i think he can change washington more importantly, and it's more against what the machine has been. >> you are talking about the government? >> yeah, and there's too many things that we just sort of become too comfortable with and allowed things to get away with, and i think it's time to have a

change in washington and i think what donald has gotten away from is he is now talking about issues of personal stuff rather than issues with the country, and now -- >> you can't blame him, the media brings it up and he will address it and he can't go on with something else. >> did you see what happened to jay bruce when he came back here? >> this is a hard town. >> yeah, and he finally hit three home runs in three games, and he's a great kid, and he's a special man. >> who do you like coming up? it's happening, isn't it? >> the last time, it was two years ago, they said pick signal segments and i picked and missed them all. >> remember the stock picking contest? >> i was really good. you gave me no insider trading, which was really disappointing. >> yeah, what is my inside

trade, i comcast. >> what about cabela? >> you know johnny morris? >> yeah, i do. support the schools and be involved with them and everything else, and smithfield is one of the great made companies in america, $14 billion company, and can't say enough about what they are involved in and their belief in the school systems and how much better it is and how up-to-date it is for our kids and ourselves and i have boys, too, and a 26-year-old -- >> that's insane. 10 and 12 -- >> thank you, and send me pictures of your girlfriend. >> your hands, though. put your hand up. >> yeah, and wait -- i don't want to be -- you are going to accuse me of the donald trump thing with my little hands. hey, i'm just fine, all right.

i want you to know i am fine otherwise, i am more than fine. >> yeah, we're still holding nine burgers. >> yeah, thank you.you. good help to you, too. >> maybe you can catch. stay over there. >> that was what was cosby figured down in position. i'm ready. i don't think the producer -- >> get us out of here. >> here we go. coming up next, more market analysis. >> amazon, walmart, cnbc -- what the? retail giants to the test. we'll bring you the results right after this. courtney and i have been discussing this. as we head to break quick programming note, don't miss a special edition of "power lunch," brian is live in detroit speaking with top business leaders like gm ceo mary barra and ceo bill emerson.

we'll break away.

welcome back everybody. results are in fro cnbc's first-ever shipping test. courtney reagan joins us right now with the winners and losers.

courtney, lay out how this whole thing work. it sounded complicated. >> it was complicated. we ordered the same set of eight goods, all virtually isle fr-- used standard shipping and no memberships, no prime, no red card, we shipped these items todayton, ohio, san francisco, california, rockville, maryland, trying to span the country. the first we looked at was speed. target was the clear winner, by day two target had delivered nearly half of all the items. >> wow. >> by day seven target had fulfilled all items from all orders. all of those items delivered either ahead of or within the shipping window target gave us. now, it did take another five to six days for walmart and amazon to deliver all the items, and some were later than the given shipping windows. next is cost. we took out tax because of course that varies. walmart the clear winner.

it was the least expensive in all four cities. and because our order was more than $50 for each, shipping was free. third criteria, accuracy flt target wins here because there were no mistakes on any of the orders which wasn't the case on every item for the other two sites we did get some wrong items. last criteria, and at least quantitative so we waited at least for our all-around score communication and item tracking. walmart took the top spot with fewest amount in clearest e-mail shipping notifications and not a lot of unsolicited marketing or viewer request e-mails after all was said and done. so waiting, speed, cost and accuracy 30% each, communication at so 10%, amazon came in behind target and walmart each time. and the all around gold for our test goes to target by a hair. >> that's shocking. >> i was surprised too. >> but what you took away from amazon was the advantage, with prime. if you're a prime member and you are guaranteed -- because i

don't buy a lot of stuff on amazon that's not prime that's not going to be here within a couple of days. if you buy some of the stuff it gets shipped from china or south korea and that stuff takes forever. i've fallen into that trap before. >> right. >> but if you're a member and you do just the prime stuff, i can't imagine amazon wouldn't come out on top. >> what was really interesting is was because we were logged into non-prime accounts, many items we were not able to choose amazon fulfilled items because we weren't prime members. we couldn't see them, choose them, we were pigeon holed into the third party. >> i've had experiences with that too. >> 49% of all items on amazon are third party sellers. it's a big part of their business model and can very much vary your experience. but target and walmart had impressive results. >> that's not what i would expect to see. courtney, interesting. >> we have a lot of pillows and bookshelves. >> that explains why there were those bookshelves stacked in the office. >> that's why. that's why. >> now i understand. >> thank you, courtney. >> you got it. coming up, some movers ahead

of the opening bell. stay tuned, "squawk box" will be right back.

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now by 60 points, dow by 8 s&p by 12 follows a percent gain on friday. quick look at currencies, the main mover is the pound below 1.29. it's down 0.87. >> that is one of the movers. i promised them movers. >> "power lunch." wi wilf, thanks for being here today. joe will be here for halftime. >> out in englewood. >> stick around. >> take a nap, i think. >> join joe today, make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with melissa lee and michael santoli at the new york stock exchange. cramer and faber are off today. this week alone brings job number, fed speakers, still waiting for clarity on deut's