. good morning. the number two vice presidential candida candidates tim kaine and mike pence square off in what call a measure d debate. and twitter sale. the company set to field offers this week. su suitors and speculation straight ahead. >> win and move on, lose and go home. the american league wild card game goes to extra innings. we'll bring you the late night thrilling finish. it's wednesday, october 5, 2016. "worldwide exchange" begins right now. ♪

good morning. welcome to "worldwide exchange." i'm sara eisen. >> i'm wilfred frost. what is that song? >> you know this song. >> i do not know that song. more importantly, welcome back. >> thank you. >> nice couple days off? >> missed you. glad to be back. >> good. good. great to have you back. let's get into the market action. yesterday we saw some softness around about half a percent down for the dow and s&p, a quarter percent for the nasdaq. only financials outperforming. banks leading the way up around 1%. it was the regional banks that did best of all. equities expecting a positive open, but only fractionally about points higher for the dow. let's look at the ten-year note. that's a big fact tore watch over the past couple of days. yields have ticked up significantly.

1.68%. just four or five trading days ago we were down 1.5%. lots of factors being cited, partly rising european yields, talks of tapers on ecb trading. >> i can't believe i leave and we get a historic move in the british pound. >> we have not even got to that yet. let's talk about bonds first. >> all right. >> everybody citing this ecb report. the bigger factor over the last couple weeks is risk sentiment easing off the fact of no longer having fears of a contagious banking crisis in europe. >> we'll talk more markets in a moment. if you fell asleep early last night, you missed a lively vice presidential debate. it was tim kaine and mike pence's one and only chance to defend their running mates. that's how this was framed. many articles this morning noting that republican vp candidate mike pence was able to

stay cool under pressure in the face of frequent interruptions by democrat tim kaine. here's an example. >> gentlemen, the people at home cannot understand either one of you when you speak over each other. i would please ask that you wait until each other is finished. >> pence was asked to elaborate on some of trump's policies. >> kaine said he could not answer some questions regarding donald trump's comments. >> did donald trump apologize for taking after somebody in a twitter war and making fun of her weight? d did he apologize for saying african-americans are living in hell? did he apologize to say president obama was not a citizen of the united states?

>> he also went after the refusal to make donald trump's tax returns public. >> we have a tax code that's designed to encourage entrepreneurship. >> why won't he release the tax return. >> we're answering the question about the business thing. >> i do want to come back on this. >> his tax returns showed he went through a difficult time, he used the tax code the way it's supposed to be used. he did it brilliantly. >> how do you know that? >> because he's created a business worth billions of dollars. >> how do you know that? >> much more on the vp debate when tracie potts joins us later. two points i would note, number one, vp debates rarely determine outcomes of the election. number two, the "wall street journal's" take was that pence did a solid job debating the issues without having to dive too deep into defending trump. trump himself would be wise to take notes from pence during his

next debate performance on sunday. >> and is this going to move the needle in terms of who will win, but does it draw a line under what has been a tough week for donald trump. >> let's look at markets, trade. european equities performed very well at the start of the week. monday some easing deutsche bank fears and tuesday weak euro helping export names. just taking profits from two strong days of european trade today. not so much that the euro is bouncing more strongly, it is up fractionally, just not markedly weak. 0.6 declines for germany and france. the ftse 100 which has been on a tear hitting a 17-month high is softer today, only by a third of a percent. most eurozone bond yields rising to two-week highs because of

taper talk. ecb media official responded saying there has been no discussion of reducing the pace of monthly bond buying. this is interesting. i didn't think there was news in this report, it was subjecting if and when there will be an end to bond buying, it will be tapered. we were in positive territory for the german ten-year a couple weeks ago and moved just back below because of the deutsche bank factor the move yesterday was based on this but the move over the past couple weeks has been more risk related to deutsche bank. >> and more talk of fed easing its money policies, that impacted asia overnight. the japan stock market, the nikkei was a bright spot, up a half percent on the back of that japanese yen. the hang seng and hong kong

reversed earlier losses to finish higher by 0.4%. financials and energy leading the gains. shanghai composite finishing higher. the u.s. dollar has been a bit stronger lately. we are watching that much the euro is stronger this morning reversing the trend from yesterday. the strength is really coming in a pronounced way against the japanese yen. strong dollar, weak yen. japanese like that. we're back above 102. 102.90. we'll see how the jobs report reflects the economy. today we get the adp jobs numbers on private sector as the fed inches closer to an interest rate hike. the british pound up today, 127.41. a new post-brexit low against the euro. five-year low against that currency. 1985 low against the dollar? we need to go to the uk immediately and go shopping. like tomorrow. >> we are flailing with the 126 handle overnight.

127, it's fallen sharply. additional fall yesterday and this brexit timeline over the weekend i put down to two factors. one, phillip hammond speaking of potential fiscal easing, more fiscal easing than people expected. the currency usually reacts to monetary easing, not fiscal easing, but this is more of fining a range. we have broken below 129, now the market is trying to find the fresh new range where people will trade around the news story. >> it's fascinating the strength in the ftse 100. you see the pound plummet and the british stock market rise, they benefit from the weaker pound, that helps them. at some point, if it is going to

hit the economy as british pound is reflecting, that will be painful. >> the smaller companies were underperforming, the ftse 200 is doing well over the past week. the fundamental data on the uk is doing good. >> for now. >> i think overall this is a fear over the funding of britain's deficit and whether it will be bigger. we'll have to keep an eye on that. just finding a new range for the pound. 127 handle is where we are. oil prices rising on a surprise draw down in u.s. inventories. the latest report from the american petroleum institute showing crude inventories dropped for a fifth straight week. oil prices, as you can see, higher 1.6%. 49.48, highest since june. gold prices were soft yesterday. >> what happened to gold? worst day in years.

>> because we had such a strong dollar. >> 3% move lower. looking at 12..274. >> tomorrow morning we'll have phillip hamm on. fed speak continues to dominate the global market conversation. chicago fed president charlie evans telling journalists in new zealand today that he's fine with raising interest rates by the end of the year if the u.s. economic data continues to come in firm. he adds further moves would need to see enflainflation. evans has been a dove on the sideline waiting for better data.

>> jeff gundlach, whose firm oversees 100 billion in assets, spoke yesterday at a conference. he told the audience for the first time in years he favored t.i.p.s. which he has in his core fund over nominal treasuries. i mentioned the private sector the jobs report, adp, out at 8:15 eastern time. forecasters are calling for a rise of 173,000 jobs in private payrolls. at 8:30, august trade deficit numbers. then the september ism services index, and factory orders. kashkari, lacquklacker and evan be speaking. and then monsanto and con st

constellation brands, and yum brands will announce earnings. constellation has been doing very, very well on the results of corona, its mexican beer. it also bought a whiskey brand. >> which one is that? you know more about beer than whiskey? frnlg>> among the top corporate stories, twitter, the "wall street journal" reporting that the company will field offers this week. salesforce.com's marc benioff has been building a case to investors that they should be the buyer. among other names looking at twitter, google and disney. jim cramer capping up with venture c venture capitalists like chris sakka last night.

>> twitter would sh complimentary to many of those companies. it has a unique set of data that nobody else has in the word it has it faster than anybody else in the world. their problem is not the input, their problem is making it useful, easy, fun for users. so the good stuff is in there. >> who buys it? which guy? >> i don't know who. i can see why google finally has -- i think google has stopped thinking about it as scientific and not computer science enough to, wow, that's the world's best data, if we don't have that our search results won't be as good. and facebook saying we tried to copy it over and over, but we need it defensively. satya understands it well, too. i don't know about apple's ambitions. they have never been good at social. benioff loves it, it may be too expensive for hip. >> shares of twitter again up to

date. great run since this takeover talk has really crystalized. up 3% in the premarket. let's wait and see. the "wall street journal" saying we could see firm offers soon. a special report surfacing from reuters that does not bode well for yahoo!. the company secretly agreed to search all users incoming e-mails on behalf of the nsa or the fbi for specific word or phrases according to that report. this comes on the heels of yahoo!'s disclosure last month that information had been stolen on 500 million customer accounts. yahoo! has not confirmed or denied the report but it did say it did to the break laws. clearly one to watch. just to confirm, i was reuas rit bought high west management, the whiskey distillery, for 150 million. >> what are their brands? >> high west. it's a whiskey bottle. i actually like it. still to come, gold prices

rebounding from three-month lows. we'll talk about ways you can trade that particular trend, all that and market news still to come on "worldwide exchange." r'd things about the network. all the networks are great now. we're talking within a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit sprintrelay.com.

now to today's trade of the day. talking gold. it had the worst session yesterday since 2013. hitting the lowest level since the brexit vote. so which company and etfs are most affected by such metal

volatility? our data team crunched the numbers and found when gold falls like this investors hide in defensive safe havens, like bond etfs and consumer staples. as for which companies suffer, freeport mcmok mocmoran has bee the hardest. if you want more names, go to cnbc.com. still to come, vice presidential candidates tim kaine and mike pence square off. highlights from the debate coming up. like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome. so, fedex helped simplify our e-commerce business and this is not a passive aggressive environment. i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex.

helping small business simplify e-commerce.

. welcome back to "worldwide exchange." hurricane matthew is heading towards the bahamas after it left a trail of destruction in haiti. reynolds wolf is in ft. lauderdale and joins us with the latest. >> this thing is just a giant atmospheric sawblade. a true beast. where we happen to be in ft. lauderdale, it's hard to believe we have a hurricane watch. what's interesting is that yesterday we had a gorgeous day, plenty of blue skies, dotted with some clouds here and there. no sense of urgency in terms of the forecast, but if you lock down the road the next several days, condition also fall apart as the system edges closer. yesterday governor rick scott was imploring people to take this seriously.

to prepare best they can. to get those items, the batteries, water, food. anything they possibly could and prepare for the possibility of being without power for several days. what we can expect, even if this were not to make a direct hit on the florida coastline, expect conditions of strong winds, expect erosion on the coastline, heavy rainfall, storm surge a possibility. and there is a chance we could be having rough stuff. not just here but further up the coast, georgia, carolinas, maybe virginia. we're in the early chapters of a story that could last into the weekend. what they're doing here in ft. lauderdale is their best to get ready. back to you. >> we'll continue to watch that as the threat goes in the southeast, thank you. now to politics, last night's vice presidential debate. joining thus mous this morning e highlights, tracie potts. going in, we thought two older gentlemen, both governors, both

congressmen, it will be civil, but forget it. gloves came off. >> fireworks here. the cnn poll proves it. looks like mike pence won by 48% in the poll. 42% think that tim kaine won. interestingly with more democrats polled than republicans there. there were definitely fireworks. they did talk about sensitive issues, but a lot of it was hard to hear. >> i don't have much of a voice left. >> reporter: here's why. >> let's -- >> reporter: back and forth for 90 minutes, at times impossible to hear. >> gentlemen, the people at home cannot understand either one of you when you speak over each other. >> reporter: tim kaine interrupted frequently to bring up donald trump's tax returns. >> why won't he release his tax returns. >> we're answering the question about the business thing. >> reporter: mike pence on hillary clinton's e-mails. >> if your son and my son handled classified information

the way hillary clinton d they would be court-martialed. >> reporter: each accusing the other of insults much. >> you can have somebody at the top demeaning everybody. >> reporter: pence repeatedly denied trump's comments. >> more nations should try to get nuclear weapons. >> he never said that. >> reporter: they talked about the economy, russia, immigration, police shootings, and abortion. >> what i can't understand is with hillary clinton and now senat senat senator kaine at her side to support partial birth abortion. >> why don't you trust women to make this choice for themselves. >> reporter: a contentious debate, america's first and last chance to see the vice presidential nominees on the same stage. now, the fact checkers were busy overnight. tim kaine, according to the fact checkers at nbc, oversimplified what trump said about nuclear weapons, and mike pence

understated how much money the clintons were giving to charity and denied some things trump said. >> is this now drawing a line under what has been otherwise what has been a tough week for donald trump? >> it certainly is helpful to him inasmuch as mike pence this morning, from the one poll we've seen, some social media reaction, won this. will that have a long-term effect? how long and how much is it going to counter some of the things that donald trump has said? some of the challenges that he's facing on the campaign trail? that, we don't know yet. but certainly mike pence made a big splash. some analysts are saying he may have set himself up for a run in 2020. >> because we care a lot about the issues here, especially the economy, you mentioned that was discussed. did they actually get through some of the divisions that they have on tax plans and how they're going to create jobs? was there anything to glean from that? >> probably not a lot we haven't

already heard. they recounted their tax plans, what they thought was wrong with the other guy's tax plan. we heard more about donald trump's tax plan benefiting the rich and heard about hillary clinton's tax plan adding a lot to the debt but not a lot that we had not heard before. >> defending insults it sounded like was more prevalent. tracie potts, thank you. to sports and the major league baseball playoffs. the orioles facing the blue jays last night in the american league wild card game. win, you move on. lose, you go home. the game went into extra innings with a thrilling finish. teams were tied at 2 in the eleventh inning. then edwin encarnacion hit a walk-off home run. the jays won it 5-2. they now head to texas. that one finishing late. when we come back, a bid for twitter could be around the corner. we'll bring you the latest on this story.

stay tuned, you're watching "worldwide exchange." good m.

tweet all about it. a social media bid could be around the corner. details on a possible twitter deal coming up. oil prices are on the rise. we have the reason straight ahead. and your money your vote. the vice presidential candidates squaring off tonight. but it's trump and clinton everyone is talking about as usual. it's wednesday, october 5, 2016.

you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome to "worldwide exchange." i'm sara eisen. >> i'm wilfred frost. good morning to you from me as well. let's get to the market action. yesterday we did see declines about a half percent for the s&p and the dow about a quarter percent. financials the only outperformers up 0.3%. banks within financials leading the charge up about a percent. regional banks in particular doing well as yields started to tick up again from the lows we saw a couple weeks ago. we've seen gains in the premarket but fractional gains. we are essentially flat. the dow higher by 1.5 points. european trade is soft today. two strong days on monday because deutsche bank fears eased somewhat. on tuesday because the euro was

particularly week. exporters were doing well. the euro today bouncing back slightly, but we're still taking profits following two strong days. the dax in germany, the cac in france both down. the ftse 10 0 whi is seeing pro taking. asian trade mixed for the most part. stronger for the main indexes. the nikkei up a half percent. hong kong up 0.4%. shanghai up just a quarter percent. >> as for the broader market picture, strength in oil after a surprise draw down in api inventories. that's ahead of a report today from the u.s. government which is expecting a build in inventories could see a surprise draw down. that's giving oil a bit of strength. wti trading just below $50 a barrel. 49.51, up 1.7%. brent up even more than that,

1.7%. up 51.75 right now. so we're flirting back with that $50 level on oil prices. gas prices higher as well. as for the ten-year treasury note yield, higher yield, stronger dollar is a theme. we get economic data this morning in the form of adp, the private sector jobs report. the big government report is out on friday. we have seen yields tick up higher here into the 160s. the dollar has been stronger. it is a bit weaker against the euro this morning. it continues to strengthen against the japanese yen. almost -- there we go. 103. love it when we hit a round number. strong dollar, weak yen. that reflects those higher yields. better economic data, more prospects that the federal reserve will raid interest rates. >> could not have hit on a pair or asset class that you love more than dollar yen. >> it's the most important currency pair. >> i think janet and haruhiko

were watching and saying let's give her that thing she wants. >> as for the pound, i don't want to leave that out. that's the mover over the last 24 hours or so. weak, getting weaker. weak against the dollar into the 127 range. back to new lows since the early 1980s. five-year low against the euro, back to a post pre-brexit low. >> you know the 30-year low everyone is citing, just a month from the day i was born. >> so we're back to -- >> the lowest of my lifetime. gold is bouncing back a bit after a brutal session for gold yesterday. finished lower by 3.4%. had the worst day since back in 2013. up a little less than half a percent. >> today, the september adp employment report is out at 8:15. forecasts call for a rise of 173,000 in private payrolls, slightly lower than in august. at 8:30, august trade deficit

numbers come out. at 10:00, the ism september services index and august factory orders. later in the day, minneapolis fed president neel kashkari, jeff laker and charles evans all speak. in earnings news, monsanto and constellation brands report results before the open today. yum brands out after the close. twitter is expected to field bids this week. that is what we've learned. among the possible suitors, of course, salesforce. the "wall street journal" saying marc benioff has been building his case to investors. google and disney also mentioned addre as possible buyers of twitter. twitter shares get another boost on word that this is all happening this week. it's up more than 3% in the premarket. getting more expensive by the day. >> we'll have to see if anything materializes. in financial news, the fed and fdic say they will review

updated living wills submitted by eight of the largest u.s. banks. these detail how the companies would be dissolved during a financial crisis. in april, jpmorgan, wells fargo, state street and bank of new york melon were told their plans fell short. the ruling is that updated living wills be updated by the end of the year. if you're looking for market action, look no further than the currency market. the plunging british pound falling to a three decade low. a wilfred frost lifetime low on brexit concerns. joining us is kathy lee from b.k. asset manager. the plunging british pound. why and what sort of ripple effects will it have? >> well, there's one primary

reason. i think that's pretty much what everyone has been talking about is that the deadline for article 50 invocation for brexit is nearing. and everyone is worried that we'll be in a scenario where the economy is going to feel the shocks just as it did initially when britain decided to leave the european union. all the fears that comb in june are basically appearing on the forefront again. we had good pm irksis in manufacturing an service. the market ignored the report and took steriling to 30-year lows. this is the beginning of a sharper decline. at the minimum sterling at 125. i don't think it will reach parody. the weakness of sterling brings a lot of positive implications for the uk economy. the market has to get to that. right now we have the fear element driving investors out of sterling.

once we start to see the data improvements, they'll come back in. >> kathy, you don't think it's going to meet parody, i don't think many people do. that would be a massive move from here. i mentioned the 125 level. is that the next level of support? is there going to be softness until we get to that level? which important level do you think there is support? >> i think 125 is next level support. i think it may be a one-way move down there. we may stabilize there. the next level beyond that is 120. you're right, we've never seen parody in sterling. the point to realize, even though this provides significant shock to the uk economy, the weakness of sterling is going to provide stimulus for the uk and for uk corporations. they're not just going to leave immediately. uk taxes are 40% lower than german corporate taxes. it's going to be falling again. so i think that the government is going to try to preserve as much growth and as much business

in the country as possible. >> american countries that do business in the uk hate this. it makes revenues worthless when they bring it back home but not as key as the euro which has held up. are we on the brink of a change where the dollar will strengthen into the year-end especially as it is expected the fed will raise rates? >> i think the euro's resilience is shocking. it is natural for tapering to happen before the conclusion of the program. it's not as if they're saying anything particularly novel. the banking crisis in the eurozone is still an issue. non-farm payrolls this week will probably be strong. you're right, the fed is on track to raise interest rates in december. so eurozone should be trading lower not higher. the main reason why euro is seeing resilience is investors

are looking at a safe haven from uk's troubles. a lot has to do with euro pound flows, as euro pound is trading firmly. is a december hike priced into the moves? are these moves over the last 24 hours all weakness on the other side of these pairs? >> i think the flight to quality is driving a lot of the dollar strength. the dollar has further room to rise. dollar/yen could get to 105 before december. >> nice one. thank you for joining us. kathy lien. back to the corporate news and earnings reports, constellation brands reporting second quarter results before the open. this has been one hot stock. landon dowdy has three things to watch. >> one to cheers to. the street is looking for constellation brands to post earnings of $1.65 a share on revenue of 1.9 billion. beyond the numbers, here are the three things to watch. fair rel canada listen for an update on a possible sale of its

canadian wine business which would reap $1 billion this comes after constellation explored an ipo for the business back in april. the proceeds would be the same regardless. second, watch beer depletion trends to determine whether sales continue to grow. this is the rate at which beer is shipped from distributors to retailers. beer makes up more than half of constellations revenue. analysts expect rates to increase. and wine and spirits, while it's brands are struggling, constellation premium brands continue to perform with expectations of a 7% increase in sales in wine and spirits. investors think the stock is worth toasting to. shares up 17% year to date. back over to you. >> one other factor that could help constellation is the decline in the mexican peso. they have a lot of costs over the border. >> constellation has whiskey going for you, the peso going for you.

>> mexican beers are a huge part of the revenue. >> never too early for wine and alcoholic video covering a story. early in the morning, but nice to see. top trending stories, the gop releasing a spin on the vp debate before mike pence and tim kaine even hit the stage. a series of articles were posted on the republican national committee's website an hour before the debate began declaring pence the clear winner. the articles were taken down quickly. gop, how does "game of thrones" end? that one coming -- that was funny. not only did they say he won, which you know the party would spin that way, but they gave a five-point plan on he won on the economy. he won on insulting hillary. >> all sorts of early posts from papers as well. >> in case there was doubt that the parties spin these things.

>> of course. they have spin doctors, highly paid spin doctors. donald trump also tweeting regularly throughout. roughly one tweet every two minutes apparently was the analysis. among his posts, he proclaimed mike pence is doing a great job so far. he also said mike pence won big. we should all be proud of mike. hillary clinton also tweeting, i wonder if trump has shown pence his secret plan to defeat isis. still weighing. that was one of the other areas of contention over the course of the evening. >> when we come back, today's must read stories. as we head to break, check out european trade at this hour or check out the countdown to the september jobs report. it's friday jobs day this week. we're counting you down. two days, two hours, 47 minutes, 37 seconds. >> european trade, the dax down

0.8, the cac down 0.8. >> we don't even need a board. >> i just know it. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com.

we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. welcome back to today's must read stories catching our attention. my pick in the financial times, another article on deutsche bank, a detailed one from martin wolf. he offers three big points of view, the first one he says the

banks remain very fragile. the second one, the one i find most interesting, the way in which all the regulators have gone about punishing banks. interesting this point on deutsche bank, because it also relates to wells fargo. he said it is always slammed on shareholders, like clearly deutsche bank share holders getting hit, not ever on management, not the people at the top taking the money. the share holders get hurt. if you had a bail-in or a bailout, they would be wiped out altogether. the third point is that the banks are still undercapitalized relative to the scale of the balance sheet. >> european banks. >> globally banks in this case. going into detail on it in terms of the lessons from deutsche bank over the last week. martin wolf in the financial times. >> always nuanced. very academic. >> the point about regulators punishing the banks when they do

do wrong and it's overly put on the shareholders as opposed to the executives who made the decision to take it there. >> we're still waiting on the dodge deutsche bank deal. >> the share price moved it the most. the people who led the bank into those positions have long since left. >> do we know when we will get that agreement? >> we don't the talk over the weekend was that it will come in a matter of days. the bank guided it will come in weeks. so we're in between that. it didn't come over the weekend. maybe next week or so. >> my pick is in the "wall street journal." it's titled how to make trade work for everyone. i picked it because it's a rare op-ed effort by imf managing director christiris christine l. how to make trade work for

everyone. with open markets more people benefit from open access and goods and services, ideas spread, and firs access larger markets abroad. this is their way of stepping into politics, injecting themselves in the key economic issues shaping this presidential election. donald trump has been out front calling on bad trade deals, saying he's not against free trade but he wants better trade deals, like a better nafta, against tpp. now hillary clinton is out against tpp as well, the transpacific partnership. so now some major global institutions are fighting back saying there's a real economic benefit. >> when you have both sides of the presidential debate united on it, hearing from the insider institutions doesn't likely swing the point of view. >> correct. that's not working in the election. approaching the top of the hour, the team is getting ready for

"squawk box." joe kernen joins us with a look at what's coming up. >> i think we'll keep trading either way. you know? i know they talk about it a bit. i think we'll be okay. i think we'll be good. i love the meeting of the elitist globalist minds all in one place. the latest prediction was christine lagarde talked about brexit. we'll see. >> the imf had to upgrade its forecast for uk growth this year. >> i did ask her about this. i would agree, she needs to come out and say i was wrong or it will take longer. her answer so far is well the bre british pound plunged, and the other defense is we have not seen brexit yet. >> we can only hope it turns into a disaster so she's right. you know what they say about 100 economists, you can line them up

end to end and they won't reach a conclusion. i've been sitting here thinking about i love halloween, my wife's birthday, it doesn't necessarily make her a wicken, but it's a spooky time. we have when a quarter ends, companies need six, seven, eight days to cook -- to put the numbers together, to get the numbers together. we'll have earnings, a good look at that. we have this jobs number on friday. then we have this election. then we have the fed. we may get a decent look at where we stand, a snapshot of where everything stands. i don't know how the market which -- i won't call it boring, but we haven't really resolved which way we'll break out of this. i thought goal was interesting yesterday. not sure what that means. larry summers will talk about this today. he's -- he doesn't pull punches, but he doesn't overtly criticize

the fed much. you will see a bit of that in his comments today. senator governor judd gregg will be here to talk about the debate. i remember where lloyd benson said i knew jack kennedy, you're no jack kennedy. then i think quayle won any way. you do remember some moments from previous debates. >> what does that have to do with halloween? >> on top of all of that -- let me speak in your language. remember mcbeth, fair is foul, foul is fair, the three witches, portending weird things? >> so you're saying halloween won't disrupt the markets? >> i'm saying it's apt. it may be coinciding with these

things or causing these things. >> we look forward to "squawk box" in just nine minutes. i look forward to my first new york halloween. u.s. stocks dropping in three of the last four trading segs, we will get more from jurrien timer in the next fi moment few moments. wouldn't you love more customers? i would definitely love some new customers. sprint will help you add customers and cut your costs. switch your business to sprint and save 50% on most current verizon, at&t and t-mobile rates. don't let a 1% difference cost you twice as much. whoooo! for people with hearing loss, visit sprintrelay.com.

welcome back to "worldwide exchange." futures are flat following declines yesterday. joining us is jurrien timmer. the big mover in the last couple days has been bond yields ticking up. what do you make of that? >> yes. good morning. so, we have still some residual taper tantrum effects. the big one was in may of 2013. the unique thing about that experience was that stocks when down while yields went up. usually if stocks go down, it's because of a deflationary shock,

bond yields go down, and they protect you against the shocks. once in a while we have an occurrence where a few weeks ago it was the fed sort of guiding towards a september hike. that made yields go up. now it's more about the potential tapering in europe. but essentially we have a taper tantrum. the reason we have this is because when there are no earnings growth, and there isn't really in the s&p for earnings growing at minus 1.5% year over year, in the absence of earnings growth, there is an impact. if the ten-year were to rise 100 basis points from here into the future without earnings growth, the market would be about 20% overvalued, the s&p 500. if that same move happened at 6% earnings growth, the market

would be 10% undervalued. that's why i important for the fed to wait until we have earnings growth before they tighten further. >> what does that mean for december, where they might raise rates, which is the current betting. >> the odds now are about 60%. the fed made it year in september that even though while the burden of proof was on the data to be strong enough for them to go in september, it needs to be weak enough in december for them not to go. i do think they're guiding the markets towards a hike in december. the good news is that earnings growth, we'll get a taste of this in the next week or so, earnings season is about to begin. there are definitely green chutes on the earnings front. when the quarter ended last friday, the estimate for growth was about minus 1.5%. typically that number bounces

300 basis points. >> jurrien, we're out of time. jurrien timmer, thank you very much for joining us. "squawk box" is next.

good morning. jobs in focus. we'll get an early read on friday's big number from today's adp payroll report. twitter for sale. the company is set to field offers this week. suitors and speculation straight ahead. and the battle for the bottom of the ticket. vp candidates battle it out on taxes and immigration. was there a clear winner? who should be a heartbeat away from the presidency? it's wednesday october 5, 2016, "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen. andrew is at the cambridge cybersecurity summit today. he'll join us at the bottom of the hour. >> two out of three ain't bad. >> took me a while. >> i didn't pick up on that. andrew will be joining us. all three of us in a half hour. u.s. equity futures at this hour are indicating a flat open. if we were to open right here. you can see that the dow futures are down slightly. s&p is really flat. it's up by 0.