this is the new comfort food. and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. good morning. earnings alert. deutsche bank posts a surprise profit and said it is working hard on resolving issues with the u.s. justice department. breaking news, uk gdp, the first full snapshot of how the british economy is faring post brexit. and the cubs beat the indians to even up the world series at one game apiece. it's thursday, october 27, 2016. "worldwide exchange" begins now. ♪ >> good morning. warm welcome to "worldwide exchange" on cnbc.

i'm wilfred frost alongside courtney reagan. >> good morning to you. >> sara is in cincinnati today sitting down with the ceo of procter & gamble. it is throwback thursday, in honor of the world series, we're throwing it back with some of the best sports themed songs, paying homage to the cubs with this song, they won game two last night. they tie it up. sara is also with us. tell us what you got coming up. good morning. the hometown to the global consumer juggernaut, that's procter & gamble. that traces its roots back to the city to the 1800s and is going through a transformation right now. p&g never fully recovered from the financial crisis years ago. it's brand-new ceo, david taylor, on the job exactly one year, november 1st, sat down with us. it was his first interview since

taking on the role of p&g. we talked about where he is, coming off a solid quarter. 3% organic growth. something that p&g had not seen since back in 2014. where he sees growth. this is a company behind many household brands that you know. old spice, pampers, tide, we talked about whether p&g got its innovation mojo back, what products are hitting the market and you couldn't ask for a better person to give a view on the global economy from china to the u.s. and what consumer spending and habits are changing and doing now. i'll bring you snippets from that interview throughout the hour on "worldwide exchange" and throughout the morning and the day from cincinnati. swing county in a swing state, little less than weeks before the election. >> nor could you ask for a better interviewer to pose the questions. look forward to that. >> thank you. >> global markets, futures at

this hour, this coming off a mixed day of performance yesterday. we saw the dow up slightly, despite a decline in apple. we saw the s&p down slightly. the nasdaq down a half percent. fractionally we are flat in the pre-market. a bit of red on the screen. two points we're expected the -- positive now. just flipped. pretty much flat after a basically negative day yesterday. week to date, the dow is up. other two are down. let's look at the ten-year note. yields ticking up close to the 1.8% level yesterday and crossing over the level overnight. that's been a factor that has concerned equity investors as we've seen yields tick up. that attractiveness just changing as the yields go up. 1.8% we are above once again. uk gdp hitting the tape about 30 minutes ago. the british economy growing

0.5%, topping the 0.3% that economists had been expecting. a nice beat for the uk economy following brexit, all those concerns about whether this would hurt the economy. part of the beat coming down to the fact that the pound has been weaker. it's soft this morning, 1.22. the fact that gdp came in on the upside, that probably lessens the likelihood of further easing in the short-term. looking at european equities on the back of that uk data. bank earnings from the likes of deutsche bank, barclays, we have a mixed picture in europe, mostly lower. it looks like the german dax is down about a third percent. france down. the deepest of any of the markets that we're looking at, down more than a half percent, yesterday stocks falling because of the impact of lower oil prices and weight on the oil-related stocks and equities overseas and the deutsche bank and barclays earnings that we're seeing over there in europe as

well if we can look at what's going on in asia, mixed picture. also oil prices weighing on some of the action in the market. you can see the hang seng down by about 0.8%. that's probably the biggest laggard at this point for asia. the nikkei down slightly as well as the shanghai. >> soft day for australia today. let's look at broader markets. oil prices slipped with brent and wti below $50 a barrel. yesterday we saw a 1.5% decline for wti. its third negative session in a row. looks like we'll buck that trend today. up a quarter percent. 49.3 for wti. the dollar yesterday was pretty much flat. it's calmed down the march higher in resent trading sessions. it's flat again today. small moves into either direction. the pound had rallied a bit after that gdp data and softened again. gold prices, to round off the

market outlook, slightly higher this morning. 0.2%. 1.269. european banks have been reporting this week. deutsche bank posting a surprise profit of $303 million, toching estimates. the firm setting aside more money to cover litigation costs amid discussions aimed at settling the mortgage security probes in the u.s. bond trading improved in the quarter. in the u.s., shares had been up about 3% when the numbers hit the tape initially. they pared those gains when people thought those trading gains might be one quarter specific. and on the call mr. cryan said the doj decision may not come until march. he said it will be done by march. expectations for when that happened wouhad slipped in rece weeks.

some had hoped a deutsche bank settlement before the elections, that has not happened. barclays also out with better than expected pre-tax profit for the third quarter. the bank also benefitting from an uptick in bond trading. net profit came in lower than a year earlier as the firm put aside funds to cover bad debtin the bottom line. barclays up 1.8%. tesla announcing results after the close of yesterday's bill. they reported a profit and it's tesla's only second quarterly profit ever. the company was helped by record sales of the model s and model x cars. elon musk attributed the success to improvements in production. musk also gave a rosy outlook on the earnings call. >> we are currently believing

that q4 will be profitable excluding non-cash stock base expenses. i think there's actually a chance we'll be -- there's a chance we'll be profitable even includi including stock and noncash stock expenses. >> investors in the market often hang on what elon musk has to say. shares up 5% today. volkswagen hiking its guidance for group revenue and targeting slightly higher profitability after it posted higher auto sales in the third quarter. year to date, sales swinging back to growth helped by strong demand in china and europe. volkswagen shares flat at this hour. it's a busy day, here are some of the stocks to watch to get you started. western digital swings to a loss. the disc drive earnings and revenues beat forecast.

buffalo while wings reporting same-store sales fell, but that was offset by total sales boosted by new location openings. shares of cheesecake factory are spiking today with better than expected third quarter results. sales rose 2%. texas instruments third quarter results beat forecasts on strong demand from the auto and industrial sectors. the chipmaker issuing guidance in line with analyst estimates and is hiking quarterly dividend by 3 2%. walmart has long been known for emphasizing low prices. that's what it built its business on, but this holiday season the retail giant is pushing customer service. the company plans to deploy holiday helpers who can direct customers to registers with shorter lines or run back to

aisles to pick up items you may have forgotten. they will hire extra staff. during the holiday it sees five times same-day pickups than during a normal week. groupon buying living social. they did not disclose the amount of the deal. in 2006, living social was valued at $6 billion. the transaction should close next month. groupon reported a loss of 1 cent per share meeting estimates, revenue of $720 million was above consensus. shares of groupon did slide on the news. today is the busiest day of the earnings season. get ready. more than 50 companies in the s&p 500 set to report. here's a rundown. before the bell, numbers from bristol-myers, conocophillips, ford, u.p.s., twitter, after the close alphabet, and amazon.

address for economic data, weekly jobless claims and september durable goods are out at 8:30 a.m. eastern time. that's followed by september pending home sales at 10:00 a.m. zto has raised $1.4 billion in the largest ipo this year. the package delivering company posting shares at $19.50 each. that values zto at more than $12 billion. shares will trade on the nyse, their ticker is not there. we look forward to that trading later today. snapchat's parent company, snap inc looking to raise $4 billion in an ipo. bloomberg reports that could value the messaging app at $35 billion, well above the last private valuation of under $18 billion. snap inc decided to file its ipo

documents confidentially. the company telling cnbc it doesn't comment on speculative stories. looking forward to that. >> that is a big one. >> big one, but such an important company moving forward in terms of what's high pressuring in that space. you are instagram also announcing its story aspect, is that why they're bringing this forward? the way they have thiss millennial viewer and getting advertising. ibm's ceo spoke to cnbc last night and said watson will reach more than 1 billion consumers by the end of 2017. ro mark >> there will be different parts of ai. i believe watson's absolutely the ai platform for business. because you understand what matters so much to business. we've talked about the goal is

different, that matters for business. how we treat data is different. how we treat the ecosystem is different. the industry clouds for watson. there's regulatory environments, privacy, security environments. these are things that are important. you need a cloud to get it everywhere so you have to have scale with this. >> she mentioned ibm's new partnership with quest diagnostics to help cancer patients through genomic sequencing. coming up, a roundup of the markets and sara will join us from cincinnati. >> procter & gamble posted its best quarter in years. how far into the turnaround is this company? the stock is up 10%, yo outperforming this year. we talk to the ceo. that's coming up on "worldwide exchange."

♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it. that worked better than expected. i'll dial it back. yeah, dial it back. just a little. live business, powered by sap. when you run live, you run simple. now that fedex has helped us we could focus on bigger issues, 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.

good morning. welcome back to "worldwide exchange." let's get you up to speed on the market action. declines in the premarket, about a tenth of 1%. this following a mixed set of performance yesterday. the dow was slightly positive, the nasdaq down about 0.6%. for the week as a whole, all three essentially flat. similar to today's moves in the premarket. down a little bit. let's look at oil prices. we did see both brent and wti

tick below $50 a barrel. yesterday wti had three straight days of losses, fell about 1.5%. we looked like we would buck that trend today. up 0.33% for wti. nice to see some green on the screens. back to sara in cincinnati with more of her exclusive interview with david taylor. after that eye of the tiger exit to the break, i'm pumped for this interview. >> good, thank you for that generous setup. cincinnati has been home to procter & gamble since it began nearly 180 years ago. when david taylor was selected to be the next ceo about a year ago, many on wall street were disappointed that the company turned inside to a 35-year veteran instead of bringing if an outsider to shake up the culture and bring p&g a much needed turnaround. but after a few quarters of

improvement capped off by one of its best quarters in years just reported this week, were those critics silenced? i started with that question to mr. taylor. here's what he said. >> it's interesting about sometimes comments around insider or outsider. i've been out in 20 markets over the last year. i met with probably 15 of the top 20 customers personally, ceos. met with all ten of my top ten customers. the ability to get outside perspective, consumers, customers, stakeholders can happen no matter where your background was. the key is to get the input and apply it to accelerate balance growth and value creation. >> you have started to see results in the last few quarters, 3% organic growth that you just reported. certainly a step forward. i think the best since 2014. where are you in this turnaround for the company? >> we're making good progress, progress will be measured in years, not quarters. i want to make sure all of us

stay focused that this year is better than last year. next year is better than this year. to do that, everybody has to understand that ultimately it's about winning the consumer value equation, working with customers. working hard to create and build categories as the key driver of growth. if we do that, it's sustainable strategy. >> new categories? >> new categories is open. it can mean new jobs to be done. in existing categories, there's spaces we can play. going back ten years ago car air fresheners was a small, quiet category. we introduced febreeze card, it has grown. ten years ago there were no scent beads. today that's several hundred million dollars. it's a new job to be done and it built on a successful fabric care business. y open to new categories, but open to new jobs to be done that delight consumers in ways that grow our business and

categories. >> there is a conception with the industry that there's a certain amount of category growth, you, kimberly, unilever and other competitors are fighting for that. and it will come down to pricing. >> no. i believe very much that it will come down ultimately to innovation that builds categories. if we do our job better than others, we'll get a bit of share growth. it is only about whether we can take from someone else. >> david taylor talking about some of the changes he's made. this is a company that has stripped down and shrunk to grow. under the previous ceo, who came to implement a turnaround, they got rid of dozens of brands, now we're focused on ten major categories, healthcare is doing very well. then coming up i'll share with you some of his comments about which brands, brands you all know are doing better and which ones need some work, particularly on the beauty side. for now, back to you guys.

>> interesting your question about cost, and if that is where they need to go to gain share. did he talk at all about pressure from retailers? like walmart or target to keep costs low so those retailers can offer consumers the lowest prices? >> not as much. p&g is focused on maintaining what it calls its premium pricing. that's something that has hurt it over the last few years, starting with the financial crisis when consumers realized they could buy generic for cheaper prices. they maintained that through their innovation, which david taylor calls the life blood of p&g, he continued to delight consumers, grow the category instead of taking that pricing, those pricing cuts which would lead to price cars, something that analysts are expecting from this industry right now, especially after this quarter. p&g reported growth, but kimberly clark, not so much. unilever also had a weak quarter. that's why some are saying maybe

p&g is resurging. taking share. david taylor disputing that fact, saying, no, that's not how we look at it we'll take it a bit in certain competitive areas, but really trying to grow the categories. i have to tell you, the downey scent beads, he's obsessed with. that's one of the fastest growers in the portfolio. people apparently love it. i think you'll hear more about it later when he talks about some of the specific areas of the portfolio. >> it's good to hear from taylor himself. great job, sara. i know you have more coming up. thank you very much. we'll be back out to you soon. for now, coming up this morning's top political stories including hacked e-mail suggests that the clinton foundation fund-raisers pushed corporate donors to steer business opportunities to the former president. stay tuned. you're watching "worldwide exchange." so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move.

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welcome back to "worldwide exchange." a hacked memo published by wikileaks shows fund raisers at clinton foundation pushed corporate donors to steer business opportune tips to former president bill clinton. it details how sometimes that led to large speaking fees. it was sent in 2011 to lawyers reviewing the clinton foundation's . >> now to sports, the world

series, the chicago cubs looking to even the series last night after losing game one to the indians on tuesday. the cubs would ride the arm of their ace pitcher, jake arietta who did not give up a hit until the sixth inning. ben zobrist knocked in a run putting the cubs up 3-0. they went on to win 5-1. game three is tomorrow night in chicago. the first world series game at wrigley field since 1945. >> all square me. >> people are so pumped up for this. awesome to watch. >> a bit late to watch, but nice to follow. did you watch it last night? >> i watched half the game. >> that's impressive. >> i went to bed, they were up. >> well done. 1-1 in that. still to come, the busiest day of the year for earnings. a report card on what we've seen so far, and sara has more from

p&e in cincinnati. >> p&e is behind so many of your products in your pantries and in your linen closets, from tide to bounty. we talked to david taylor in a cnbc exclusive about what is working inside the portfolio and some candid comments about what is not and what he'll do to try to fix it when we come back on "worldwide exchange."

hold on to your hats, it's the busiest day of earnings season. we'll get you ready straight

ahead. and a cnbc exclusive. sara sits down with the ceo of procter & gamble. and the cubs beat the indians to even up the world series at 1-1. you're watching "worldwide exchange" on cnbc. ♪ good morning to you. a warm welcome to "worldwide exchange" on cnbc. i'm wilfred frost alongside courtney reagan. good morning to you. >> good morning. >> sara is in cincinnati. she'll join us in a few minutes with her exclusive of the procter & gamble ceo. it's throwback thursday, we're throwing it back with some of the sports themed songs. congrats last night to the intdiintd i indians -- >> the cubs last night. >> this song is about cleveland. and you're surround by ohioans.

>> markets are a bit negative this morning -- there we go, pretty much even. the dow slightly positive. nasdaq and s&p 500 slightly negative. yesterday the nasdaq down a half percent. s&p and dow flat. european shares, slipped a bit in the last half hour. nothing too major. france down by a half percent. ftse 100 just below flat. barclays beat estimates, that's up a percent. in germany, deutsche bank beat estimates, it's pretty much flat now in german trade. asian shares, we saw a bit of a soft performance in hong kong, down 0.8%. let's look at the picture for wti crude. still below $50 a barrel, still concerns about whether or not opec countries will come to agree to those production cut

levels. you see brent actually hovering above $50 per barrel. we have some gains here in the energy market. if we can look and see what the dollar is doing. we've seen some momentum loss versus the euro and pound, at least slightly. really holding on pretty steadily as we expect the fed to continue to raise rates in december. you can see the euro is at about 1.09. about flat from where we've been. looking at gold. that was slightly higher. some expect the physical gold demand during festival season to get stronger. watching for potential strength there. gold prices up ever so slightly. >> today is the busiest day of earnings season with more than 50 companies in the s&p 500 set to report. before the bell, we'll get numbers from bristol-myers,

conocophillips, ford, u.p.s. and twet twitter. after the close alphabet, and amazon. address for economic data, weekly jobless claims and september durable goods are out at 8:30 a.m. eastern time. that's followed by september pending home sales at 10:00 a.m. joining us now is lindsay bell. good morning to you. >> good morning. >> thank you very much for joining us. busy week, busy day. before we look ahead to the rest of the day, so far earnings season been pretty encouraging? decent beats overall. >> i would say so. growth is at 1.5%, ending the earnings recession we've experienced over the last four quarters, we're up significantly compared to what we were thinking about going into the corner. on our way to the 400 basis point beat that we typically see. 73% of companies reporting so far are beating estimates, that's ahead of the historical average and has gone up over the last couple days. we'll see what today does for that number. >> the stand-out performer sector-wise you say in your notes has been financials. >> it's the only sector with

double digit growth. hopefully we'll get consumer discretionary to join them in the double digit growth rate area as we get through the earnings season. financials have been strong. i think expectations were super low. and they are cycling easier comparisons. it is a good sign for the economy overall in general. like courtney mentioned, the interest rate rise in december will bode well for that group. >> hopefully coming in december. >> hopefully. >> unless you know something. >> i wish i had an inside look on that. >> what do you see so far when it comes to macro versus micro trends, which is outweighing the other? does that give you expectations for what could be coming from the consumer discretionary names? >> the macro outweighing the micro. q3 earnings have been good. you still have the election overhang and the potential interest rate hike late ther interest rate hike late the thi

year. the guys that are beating on top and bottom lines are only outperforming the market by 50 basis points. the guys missing are under by 1.5% basis points. we have big tech names reporting today. what do you expect? >> my focus is on amazon. it is actually a consumer discretionary name. they are going to -- the last two quarters they blew it out of the water. there's no difference for this quarter. estimates have come down significantly after they reported last quarter. i think the bar has been set low. all eyes will be on that operating margin number. the cloud has been very good to microsoft this quarter. we saw gross margins hit a new high. i think people will be watching that. >> a big part of the valuation brand is the cloud business. >> right. >> lindsay, thank you very much for joining us.

amazon out after the bell, twitter before the bell. now back to sara in cincinnati with more of her exclusive interview with p&g's ceo. >> p&g has been retooling its portfolio, spinning off almost 100 brands to focus on the core 65 brands that contribute the most profit this quarter they had success with profit and growth in all ten of the major categories. i sat down with david taylor, the ceo, and asked him where the real growth was coming from. that's healthcare, the biggest beat of the quarter. here's what he said is driving it. >> one of the strongest elements is oral b power. one of the ones that's exciting because it provides a better therapeutic benefit when you use

a power toothbrush and there's low category penetration. as we communicate and get consumers to yanked the benefun benefits of that, there's tremendous upside. it's growing fast, growing the category and still relatively few people have them today. that's one i'm most excited about. >> what about beauty? what will you do with olay? >> olay is a great brand, has had some history and some struggles recently. starting about a year ago rewrerenic recognized we tried to stretch the brand too far. we have to discontinue skews and items that may have not done well. and gotten away from the core benefit. >> another one is grooming. it does feel like there's been changes in this market with gillette. you continue to innovate and put out premium products there.

with harry's, dollar shave club shaking up the market, and just changing habits with men shaving less. there have been challenges. what are you seeing now? >> the landscape outside the u.s. is pretty good. category is growing now, we're doing quite well. we're growing share and the category is growing. there is a societal trend in many countries of more facial hair, and that's not great for gillette, though we play in wet and dry. we have braun and gillette. there's a lot of trimming jobs to be done. in ma >> are adult diapers still one of the fastest growing products? >> yes. we have always discrete, always discrete has been launched in the last quarter, probably the fastest growing product we had. grew over 30% in the first quarter. it's another one growing the

category. it's bringing new users in. >> you get demographics in your favor. >> that one is very clear. that's an important point, because the demographics make this an important and attractive category for us and others. so the consumer will win because there will be more innovation. >> one of p&g's promises is that it's leaner and more agile to focus on the core brands, but one question for analysts is whether it's focused enough. this is a company with 100,000 people, mega brands, trying to shift the decisions out of cincinnati and geneva, and more localized. that's another thing we talked a lot about. i thought you would like the comments about body grooming being a job that needs to get done in many countries. is the uk included in that? >> i don't know about body grooming. the debate between gillette and braun for facial hair is a fair one. i'm not allowed to grow a beard.

i have to support gillette. glad you asked me about that rather than always discrete. >> than adult diapers. >> which should be called always gross. >> i was wondering which one we would react to. they were both like, okay, these are heavy-handed topics for 5:39 a.m. >> is it body grooming. thank you for bringing them up. there we go. >> no problem. glad to give you a taste of what's working and what's not in household products. that always category is interesting, courtney. i'm glad you brought it up. it's a new category for them. one that kimberly clark dominated, but p&g said so many women are dealing with this problem, they're not getting the help they needed, so they're seeing double digit growth in that category. and the demographics are working with this aging population. it's an area that p&g is in on. coming up, today's must

reads, including a bonus pick from a cincinnati paper. you can guess who will be coming back to deliver that one. you get used to sweaty odors in your car, you think it smells

fine but your passengers smell this... eliminate odors you've gone noseblind to for up to 30 days with the febreze car vent clip break out the febreze, and [inhale/exhale mnemonic] breathe happy. welcome back to "worldwide exchange." the morning's must-reads, my pick in the "wall street journal" titled what the china trade warriors get wrong. the author writing mr. trump and mrs. clinton claim large imports or trade deficits are associated

with weaker economic growth, which is the opposite of the u.s. experience. before threatening huge tariffs on countries, they might take more care to understand, define and explain what they're hoping to fix. the reason i picked this one courtney and sara, there may be justifiability criticisms of world trade and free trade deals, but too often it's framed as if we had a trade deficit with a country and pouring billions into their economy, that's a bad thing. clearly you can have deficits with some, surpluses with others. the rhetoric around trade is disingenuous. there might be concerns, but the way it's framed in the debate is inaccurate. >> different people see this different ways. especially the folks in ohio. that's part of sara's pick today. >> absolutely. the trade argument is strong here in ohio. i have to tell i, from the

heartland, less than two weeks before the election, this is a key swing state. it's been leaning trump in the polls, though more recently those polls have tightened. donald trump will be just about an hour and a half north of here later today. chelsea clinton was here. my pick for morning must-read comes from a pbs station on their website. they have a great take on how the economic argument is working here. here's a quote. trump is correct, that in the major urban areas in ohio have lost more than 30% of their goods producing jobs since 2000. among them akron, canton, cleveland, warren, dayton, cincinnati and columbus areas. but there is a risk of oversimplification. the midwestern manufacturing juggernaut that transformed the world was old and wheezing by the 1970s, a decade before the first american free trade deal was struck. so those are sort of the details in the op-ed pages about the truth behind what's hurting manufacturing, jobs, and incomes

in places like cincinnati and other counties here. but that trade argument resonates, it's part of the conversation, part of the appeal of a donald trump which has bushbus bashed some of our trading partners. >> it certainly had. yesterday chuck todd was talking about the election, he said one thing he heard from ohio voters, their biggest concern is what is the future of work for me because of those manufacturing jobs that have disappeared? that's something they struggle with. he's heard it loud and clear from all of them whether democrats, republicans or independents. >> and they'll have to balance some of those economic anxieties which are felt here with some of the concerns recently about donald trump in particular. later on "squawk on the street," we will talk with a key democrat. this county voted obama last two

elections, voted president bush two times before that. it's a toss-up and a battle for ohio's electoral votes. >> great stuff. thank you very much. now approaching the top of the hour, that means the team is getting ready for "squawk box." andrew joins us on the road today. where are you, andrew? >> we're from atlanta this morning. we're at okay cafe, a place visited by many of the candidates when the primaries were going on. now a big spot where the topic of regulars is the november 8th electio election. georgia typically a conservative state. republican donald trump leading in an average of polls, just over three points now. but democrat hillary clinton gaining some ground as we approach the final stretch. if clinton were to win this state, she would be the first

democrat to take georgia since 1992. that's when her husband, bill clinton, turned the red state blue. we'll talk more about this coming up on "squak" live from okay cafe. we have a trump adviser, dav, a david purdue. a lot more coming your way. one more must-read, don't know if you saw this on the cover of "usa today." poll, clinton up but voters anxious. 51% fear election day violence. many trump backers won't recognize a win by democrats. that's a question we'll put to a number of the folks we'll be talking to here this morning. that's on tap. >> thank you very much. look forward to it. "squawk box" in about 11 minutes. still to come on "worldwide exchange," season kicking into overdrive. earnings season kicking into overdrive. art hogan, chief market

strategist from wunderlich securities will join us next.

welcome back to "worldwide exchange." a quick look at futures. trending down just ever so slightly this morning. hours still to go until the opening bell on wall street. joining us is art hogan, chief market strategist from wunderlich strategies. we had a strong earnings season so far. would you look at these and say they're high quality beats, expectations too low or a combination of the two? >> it's a great combination of the two. revenues are beating much we look at a five-year average of beats, revenues are beating on average by about 5%. usually beat by 2%. that's the good news. it's coming at a time where it's unexpected. also coming at a time where we needed a pivot in the earnings recession story. that narrative can be broken now. we look to the fourth quarter.

what we need to do post earnings season is get through this election. there is uncertainty around what happens november 9th, and what does the world look like. >> is the different with q3s earnings beats, y lshg yes, low expectations, but share prices came in better than expected. is that why we're treading water off the back of what on paper looks like beats? >> that's a good point. when you enter the earnings season, the s&p has been at 2130, 2160 for a period of time, that's up 4%, 5% for the year, you're entering -- even though expectations are low, you're leaning into this such that when companies report and beat expectations, the upside is muted. 1%, 2%. when somebody misses, under armour is a great example, the punishment is much more severe than the reward. that's because of where we're priced now.

>> you p november, two fed meetings the rest of the year, can we break higher before those events or do we have to get through them? >> i think we can break higher before the december fed meeting. that's baked into the cake. the fed has delivered a strong message. it will take a terrible piece of economic data or some event to keep them from doing that. the election is the biggest of the hurdles. opec and saudi arabia wants to get this done. they will give concessions to get this done. they have other financing they have going on. we have put a higher bottom and price per barrel for oil, that's important. that's constructive. the election behind us is constructive. the fed has been priced in we'll think is it two, three times next year? that's okay. think about the fact we came into this year thinking they'll

raise four times, they get one. next year they talk about three, they get two. still ultra low, the more important thing, the macro versus the micromicro. you get the sense that the macro is improving. all the data we've seen is almost better for september. >> when you look at apple earnings, does that give you read through for the rest of tech or consumer discretionary? folks buying iphones may be taking away from other areas. >> apple is a tough one, like amazon. do you call it a technology company? it should be, but it sits in the consumer discretionary sector and the s&p 500. are apple's problems or the fact this is the first time they've had an earnings miss or -- didn't have earnings gains, did that have anything to do with

they didn't build enough of the phones they're selling. every quarter we have a reason to say this is it for apple, they're over. then samsung's phones blow up. the narrative there is samsung folks will stick with samsung, they'll just go to the galaxy 7. people are saying i'm going to spend $600 on a phone for last year's model? i think apple's growth and runway is in front of them. they're doing a lot of things well. if they can get enough produced for the christmas shopping season, they'll be fine. expectations are pretty much right in line. >> touch on oil prices for us. we've had three days in a row of declines, below $50. is that a concern in the short-term? >> if we were sitting here two months ago, we would be talking about breaking 45. the range has changed.

we're out of the 40 to 45 doctor range, now we're in the $47 to $51 range. that $50 mark, though it's psychological, it's not even the new upper end of that range. the global supply demand is getting tighter. we've come down in production. that's been consistent throughout the last 1 months. saudi arabia needs to blink here and get prices firmed up. every time they talk about it it works. the combination of opec getting something accomplished -- remember, they'll freeze production at almost everybody's maximum capacity. it's not like the world will change. we'll be awash with spupply. i think the new range is 47 to 52. >> art, thanks for joining us. about. >> 15 seconds left what are you watching? >> lots of earnings and the

economic data. >> and tech names like google, amazon, twitter, all due, more of sara's interview throughout the day. "squawk box" is next.

good morning. earnings surprise for tesla. the company posting its second ever quarterly profit. details straight ahead. plus we'll get you ready for the busiest day of the quarter for corporate results, featuring ford, u.p.s. and a rare premarket report from twitter. and georgia might be in play for the first time in more than 20 years in politics. andrew is squawking the vote in atlanta. it's thursday october 27th. he is down there. he's not meeting with the real housewives, i don't think, but maybe he gets a chance to do

that, too. i'd like to see that. "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 andrew, we have a steady stream of georgia-themed songs on our play list for all of our commercial breaks. what do you have going on in a state where the polls have been tightening, but trump still have a slight lead. >> thank you for all the rant recommendations, we'll try to get to them later. yo self, we'll try to get in on the action on the housewives of atlanta. that's something we all want to participate in. we're at the okay cafe in atlanta.