good morning. earnings alert. amazon shares drop on weaker than expected earnings and a disappointing holiday season forecast. tech talk. google and alphabet beat the street. and sweet home, chicago. the world series heads to regularly field tonight. it's friday, october 28, 2016. "worldwide exchange" begins right now. ♪ good morning. welcome to "worldwide exchange" on cnbc. happy friday. i'm sara eisen.

>> you really meant that today. >> i had a long week. so did you. >> i did, indeed. happy friday from me as well. i'm wilfred frost. straight to the market action. >>erring earnings in a minute, first a scary moment at laguardia airport last night. the campaign plane carrying vice presidential nominee mike pence skidded off the runway after landing in heavy rain. emergen emergency personnel evacuated everybody on board. nobody was injured. the plane did not strike any of the fencing and was never in danger of going into the water. later this morning, governor pence will join the team of "squawk box" in the studio live at 8:00 a.m. i landed in laguardia last night around the same time that governor mike pence did. then they closed the airport, and had a full grand stop. it was very rainy, wet, skittish. >> a bit. >> delighted that everybody --

nobody has been hurt. >> delighted to be back. >> and you had a safe landing. let's check in on the global market action. futures are looking a bit soft, down about 5 points on the s&p, dow down about 17 points. nasdaq down 28. yesterday, we saw slight declines in the nasdaq and s&p. tech was the best sector for the s&p, and real estate was the worst. the nasdaq was the worst of the three indices yesterday. overnight, pressure there amazon, down over 5% in the premarket following disappointing numbers last night. we'll dive into that in a moment. that's on heavy volume as well. very heavy trade in amazon in after-hours trade overnight. let's look at the ten-year treasury note. big move in this yesterday. the yield now at 1.856%. we did hit a high of 1.89 yesterday. so, significant move. no real single factor to point

to. just investors worrying that loose policies not here to stay. some pointing to the stronger uk gdp yesterday as the spark for that, suggesting there wouldn't be further easing there as some expected. either way, a big move in yields, one would say quite encouraging that there wasn't a bigger selloff in equities in light of that. >> it was a global move in terms of the jump in yields. you saw it from the u.s. to germany to australia. >> there is the european market check. european trading off to a down start. the dax down about 0. %. italy down about 0.9%. ftse 100 down more than a half percent. earnings that they're die justing, anheuser-busch inbev disappointing on the numbers there. let's show you what happened in asia. it's been a global market pressure over the last few sessions. in hong kong, stocks falling three quarters of a percent.

ha shanghai down a quarter percent. the nikkei, the japanese stock market finishing at a six-month high. >> that's on the back of soft japanese cpi showing ongoing deflationary pressures which added to the yen's softness. other markets. we have wti at 49 opini.57. as we learned yesterday from art hogan, the new range is 49 to 51. dollar prices, this morning a little bit of strength, about 0.3% given the rise in yield, you might have expected more dollar strength, but yields rose around the world so it was matched. not much reaction in the dollar. today a bit of -- yen is flat. it was softer earlier. now flat for the day. across the board no major moves. >> but the dollar holds its

highs. talking about seven-month highs for the u.s. dollar against major currencies. that follows the move in yields. it all has to do with this fed looking to increase interest rates. >> absolutely right. gold prices this morning at 1267. two big tech reports after yesterday's closing bell having an impact on trading. amazon posting a big earnings miss. earnings 26 cents short of wall street consensus. revenue rising 29% from a year ago to $32 billion. that was in line with estimates. amazon says results were off because it's been investing heavily on warehouses and trimming delivery times. sales guidance for the holiday season also disappointed investors. amazon's cfo discussing the company's investments on the conference call. >> what you're seeing in the second half of this year is a step up in investment primarily around digital content and the

fulfillment center investment and also in things like echo and alexa which we're adding resources to india and aws as we add people there to support additional service rapid growth in that business. >> certainly so. you heard aws, that was the bright spot in the report. amazon web services, it rents computing power. its sales increased by 55%. this is the play book, spending a lot, sacrificing profits to grow. investors maybe got a little spoiled by seeing profits rise over the last few months, didn't like that quarter -- or that holiday quarter forecast. >> yeah. profit basically disappeared which is a step backwards whether this is a trend growing forward. cyrus will join us in ten

minutes. he has a buy in this stock, pointing to the improving margin there, and that's the future of the company in his eyes. >> amazon has run up strongly, double digits in the last year or so. really in the last few years. it has had slides like this on earnings disappoints, and has rebounded back towards near record highs. another big tech name, google parent alphabet beat expectations. the world's second largest company by market cap 9.06 a share. 43 cents better than estimates. revenue rising 20% to more than $22 billion. strong sales of ads on mobile devices helped to drive results. the company announcing plans to repurchase $7 billion of classic c shares. ruth porat said google cloud is one spot seeing substantial revenue growth and that the company benefitted from its transformation from alphabet. >> other move to alphabet was

motivated by our belief that revolutionary ideas drive the next big growth areas. long-term success requires a commitment to making bets, putting the right talent and resources behind those bets and remaining flexible and dynamic as we pursue them. shares of alphabet are up 1% in the premarket today. joining us now on the cnbc news line to discuss those results, richard cramer, managing partner at aratae research. best idea, long target price, 8.70. you must have liked what you seen in the results. with the stock so big, that's run up to a record high, it will take it a lot to move higher. >> i think a couple things with your discussion. i don't think most investors pay much attention to eps and eps beats, but when you step back, google generated 7.3 billion of

free cash flow this quarter. though grew revenues incrementally 3.8 billion to put that in context, that's an entire year's sales of twitter, yelp and we don't know exactly, but probably snapchat thrown in there as well. this company is a machine in terms of absorbing digital advertising spend. >> a machine in terms of that classic advertising revenue that they generate as opposed to these other parts of the business where they're trying to suggest there, diversifying a tiny bit of the pie still. >> absolutely. i think you can say most companies have one great idea in their history. you know, for google it was search-based advertising. most analysts looked at the 3 billion losses in other bets last year and extrapolated it and assumed they would lose a billion every year, a billion more every year going forward. what's happened this year is that the new cfo has come in and taken a hard look at areas like

nest and google fiber and realized that maybe it is not worth spending so much money. google still spends $10 billion on rnd. tremendous amount of product they need to bring to market. it's safe to say that the majority of their cash flow and growth is going to still come from their core digital advertising business. >> where specifically within that digital advertising business do we know it's coming from? the journal leads with mobile giving google a second life after there were a lot of concerns of what google was going to do in terms of search revenue in the world of mobile. is it mobile? youtube? what's the headline of where this is coming from? >> i think it's both. what you have is a battle between google, facebook, and other companies that are not advertising led business models like netflix and amazon for consumer time spent. whether it's maps, youtube, search, all of these -- g-mail, all of these various google properties are absorbing

incremental bits of our day, time spent. what google saw this year was -- this quarter was a 42% growth in paid clicks on its own cites, which means it's creating 40% more digital advertising inventory than it had a year ago that was against a 35% rise a year before that. so it's effectively doubling in two years. >> so you raising your target today on this? >> we can't obviously talk about what we do with target prices. numbers will move up. i think most sensible investors will look, instead of at the eps and ep, at the cash google is generating and that it is starting to give a bit of that cash back to investors. >> thank you. richard kramer of arete research. let's move on to other earnings reports coming out of europe. ubs posting a 60% slump in third quarter net profit, still shares are trading higher no. the bank is citing risk aversion, lower trade volumes

and negative winds as headwinds going forward. ceo sergio emrotti saying the drop in earnings is not a good indication of the quarter. if you look at q3 for the quarter it was a tough quarter for the industry, so the year on year is misleading. >> shares are up 0.72%. this was a beat. royal bank of scotland swinging to a third quarter loss and warning investors that low rates are eroding profits. they also say they were weighed down by legal costs related to its settlement with u.s. authorities over mortgage backed securities. rbs saying it would take longer to achieve 2019 profitability targets and was uncertain when it would be able to resume paying investors dividends.

bnp paribas increased its capital buffer for the quarter, shares are off by a half percent. sanofi pleased investors by lifting its profit outlook for the year. they announced $3 billion in buy backs by the end of 2017. those reflected efforts to cut costs to make up for poor diabetes drug sales in the u.s. the sum total is we have europe down by 1% today, ending a slightly soft week for european trait. general lelectric is in discussions with baker hughes for a partnership, none of the options include an outright purchase. ge is in talks to merge the oil and gas business with baker hughes in a deal worth upwards of $20 billion. the businesses could be combined and spun into a new publicly

traded company. baker hughes up about 6% in the premarket. >> shares spiked on this idea that maybe they would buy them outright. baker hughes telling people, no, he we're just talking about a partnership. economic data could take over when it comes to earnings and the news and trade today. the first report on third quarter gdp out at 8:30 a.m. the forecast is for 2.5% growth versus 1.4%. economists raised their outlook following positive trade and housing data. at 8:30, the final read on consumer sentiment. in terms of earnings, chevron and exxon will lead the list today before the opening bell. also get word from abvi, mastercard and hershey. some stocks to watch today,

baidu reporting a refr kn ing i decline in the third quarter. this as tougher regulations hurt its advertising business. expedia shares fell on higher costs, the online travel a agent is up 1.5%. linkedin expects better than fourth quarter results. linkedin expects growth to decrease further. just above flat this morning. he predicted apple would have a china problem in september. that proved true. the tech giant's earnings report earlier this week, we saw the china numbers, what else does this analyst have to say about the price of apple and the entire tech sector overall? we'll look ahead to facebook results and get you ready for trading next week when we come

right back on "worldwide exchange."

tech dominated the earnings chatter this week from apple's first sales fall in 2001, to disappointing earnings out last night. joining us is cyrus.

the there was a decent slide in amazon last night. what do you attribute that to? >> amazon went down. i think, you know, if you're an investor looking for constant profits, amazon is not the right one for you. if you are looking for a long-term play, it's the one for you. we have a long-term buy on it. amazon is good at taking investors money and investing it in the right places in technology. we still think investors completely underestimate the importance of cloud infrastructure as a service in terms of what it does for technology, for the next generation of technologies. so every next generation technology you can think of from artificial intelligence to virtual reality, mobile payments, big data, cloud, it all sits on amazon's instructure

or google cloud infrastructure. margins have just gone up from 25% to 32%, that's amazing in an environment of cost cutting or price cutting. >> we're a couple days past apple's results. why do you have a big sell on that stock? >> the main reason is i think there is a big gap between falling maturing iphone sales and the next big blockbuster product. i'm looking to put -- i've had a buy on apple for four years. i'm looking to put it on a buy again, but i need to see one of four things happen first. first, i think a big acquisition would help. so they missed time warner. i think the time warner acquisition would help apple because of what it's doing in tv. second, a big blockbuster product to replace the iphone. there are all indications that apple is investing in tv, cars,

augmented reality, but we don't know precisely what. third, we need a different communication strategy to investors. so, in the past, you know, apple has never broadcast what it's doing. always denounced its new product releases on the day of the launch. and as a result, hype is built up and it's in effect become a cult stock. now it's the largest company in the world by market cap. by any definition you can't call it a cult stock anymore. now the shroud of secrecy that apple used for so long to create the hype in its products needs to change. so now i think apple management need to tell investors what's coming next. whether are they investing in. what's that big r&d budget doing for investors. >> final reason? >> final factor, let's come back to that later, i forgot. >> great stuff. we have to leave it there.

out of time. thank you very much for joining us. when we come back, the top political stories including how much money both campaigns are raising in the final days. you're watching "worldwide exchange" on cnbc.

hillary clinton is entering the final stretch of the presidential campaign with a huge cash advantage over donald trump. data from the federal election

commission shows clinton had $62 million as of last week, nearly four times the 16 million trump has. trump said he will give $100 million to his campaign by election day, but his total contributions are a little more than 56 million. now to sports and the world series. just hours away from game three which will be played at chicago's regularly field, hosting its first world series game in 71 yours. jay gray is outside wrigley field this morning where, jay, i bet folks there have been waiting their whole lives for this moment. >> reporter: you are absolutely right. good morning to you. the sun not up yet here in wrigleyville, but the fans definitely are. many have been up all night getting ready for the big game here as we talked about. tens of thousands will fill not only the stadium, but the streets surrounding it as well. chicago's been planning this

party for 71 years. cub fans finally getting their chance to host another world series. >> it is absolutely about time. it's been about time for a long time. >> reporter: a really long time. in fact, no two teams have waited longer between world series wins. the indians have not won a championship in 68 years. the cubs, it's been 108. 108. >> powerful number for the cubs. >> reporter: consider this, there are 108 stitches in a baseball. the foul poles at wrigley field are 108 meters from home plate. the last two cubs to enter the hall of fame, ron santo and andre dawson, numbers 10 and 8. others say a chicago win is in the stars. >> the sun is 108 times larger than the earth. the distance between the sun and earth is 108 times the diameter.

the fisted man space flight around the earth was 108 minutes long. >> reporter: back on earth for those who watched their team flounder and falter, a world series game at wrigley is overwhelming. >> it's something to be emotional about. >> reporter: turns out there is crying in baseball. tears of joy for fans and two teams. >> 2-2. >> reporter: taking a swing at history. now, look, if you want to take it get a ticket to one of the three games here, it is the highest priced scalped ticket in u.s. sports history. that's the latest live outside of wrigley. >> they sell those roof tickets, too around wrigley field. those probably go for many thousands. >> for a package there that had two seconds worth of baseball footage, i can't wait to watch this.

it's exciting. that is later this evening. still to come, the top stories,s through jonathan golub will join us with his take on markets and earnings so far. i can see him, he's in the house. we'll talk to him after this short break. this woman owns this house, with new cabinets from this shop, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits

to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.

good morning. tale of two tech names, amazon shares dropping, alphabet rising.

q3 gdp coming today. we talk expectations. and burger king dressing up as mcdonald's for halloween. we'll explain that story. it's friday, october 28, 016. you're watching "worldwide exchange" on cnbc. ♪ good morning. welcome back to "worldwide exchange" on cnbc. i'm sara eisen. >> i'm wilfred frost. good morning. we have not mentioned halloween yet. >> halloween on monday. >> i know. >> my first halloween weekend in new york city. >> do you have a costume? >> i do. wait and see. it will be posted on instagram. >> surely. >> it involves body makeup. that's all i know. >> that's true. similar to last year's outfit. we should move on and look at if markets are spooked by the halloween weekend this morning. >> spooked by something. >> they are a bit.

but not anymore. >> they've improved. >> dow slightly higher by a point. s&p down by two. nasdaq down by 24 points. yesterday we saw the nasdaq underperform by a half percent, the other two indices were flat. within the s&p it was the tech sector that was the best performer. it is a confusing performance yesterday. either way ending the week pretty much flat in the premarket. europe has had a bit of a soft week. soft today. there's been disappointing earnings reports, the likes of abi, rbs, the bank in the uk suffering. france eking out a gain. the rest in the red. asian trade, soft other than the nikkei. there was some weakness in the yen overnight after some deflationary cpi figures. the yen bounced back a bit since then. the nikkei closed up 0.6%. hong kong and shanghai down. >> let's go broader indexes and see what's happening with oil. wti below $50 a barrel.

49.63. brent at $50.46 a barrel. absolutely pla lly flat. the story has been in bond yields around the world jumping yesterday. the ten-year wreeyield above 1.. saw a jump there, saw it in the uk, germany, australia selling of bonds pushing the yields up. higher bond yields in the u.s. helping the dollar. dollar rising against the japanese yen in particular. let's show you the currency check. that level has gone up to 105.27. euro, 1.0905. the pound under pressure again, now below 1.2139. as for gold, on the back of little change, gold not doing a whole lot. it is doin a lis down a little

dollar. amazon posting a big earnings miss, 26 cents short of wall street consensus. revenue rising 29% from a year ago to $32 billion. roughly in line with what estimates were expecting. amazon says results were off because it invested heavily on warehouses and trimming delivery times. sales guidance for the holiday season disappointing investors. shares are down 5.5%. one bright spot in the report, amazon web services increased. alphabet crushing earnings expectations. they hosted earnings per share of $9.06. 43 cents better than estimated. revenue rising 20% to more than $22 billion. strong sales of ads on mobile devices helped to drive results. the company announcing plans to repurchase $7 billion of class c shares. ruth porat said google cloud is one spot seeing substantial

revenue growth. for the year, they lag rivals like facebook and apple. apple has gotten a strong pop on sales on iphone 7. we've heard that antidotally. facebook reports next week. that solid digital revenue growth in advertising for google bodes well for facebook, though it is trading near a record high. >> there wasn't a huge comment on the pixel yesterday. >> which is just hitting the market. >> i was in a verizon store for an extended period last week waiting for an iphone, and a number of people came in asking for the pixel. >> did you do a poll? >> no. >> particularly with the samsung issues. general electric is in discussions with baker hughes on

potential partnership. while nothing is concluded, none of the options include an outright purchase. ge is in talks to merge its oil and gas businesses with baker hughes in a deal worth upwards of $20 billion. the businesses could be combined and spun into a new publicly traded company. last week ge said the oil market has bottomed but demand for infrastructure would take longer to recover. one issue affecting european trade, the beer maker ab inbev reporting results overnight somewhat disappointing. landon dowdy joins us with more. >> reporter: inbev reporting a drop in third quarter profit and a cut in guidance as beer sales declined once again in brazil, the second largest market. core profit fell by 2% versus the 4.5% growth that the street was expecting. the firm also announcing it would cut outlook for brazil for

the second time this year. this comes after ab inbev extends itself by buying sabmiller for nearly $100 billion, earlier this month. the new takeover adding countries like colombia, peru and taking it into africa for the first time. but the belgian-based firm's earnings are the fifth disappointment in six quarters highlighting the need to look for growth in markets. shares are down about 4.5% on the report. >> landon, thank you very much for that. economic data could take the lead over earnings today. the first report on third quart quarter gdp is out at 8:30 a.m. the forecast is for 2.5% growth versus 1.4%. economists raised their outlook following positive trade and housing data. at 10:00, the final read on consumer sentiment at 10:00. in terms of earnings, chevron and exxon will lead the

list today before the opening bell. also get word from abvi, mastercard and hershey. joining to us talk about earnings in the markets, jonathan golub from rbc capital markets. good morning. >> good morning. >> so earnings season thus far has been -- >> great. you can't really find bad news. all ten sectors are beating. we are back in the black in terms of having a positive result. if you have not a single beat for the second half of earnings season, we will still be in the black this quarter. there's still a drag from energy. if you take that out, you're looking at -- you could end up with an 8% or 9% growth rate excluding energy. no matter how you slice it and spin it, good news. >> what about revenue season? >> pretty good. looking at something like 4% revenue trend so far. it will probably come in a bit better. margins probably will end up being flat, may even be down a tad.

about 2% coming in from buybacks. >> we have run up share-price rise better coming into earnings. >> it's a bit curious. you're seeing the same thing in europe as well. there are also expected to have strong growth. the best earnings season in several years. yet the market has been soggy on that. not really rewarding the winners as much as you would have expected. >> why not? >> you know, maybe it's the near-term bounce that we've had up in interest rates, or concerns about the fed and the e electi election. i think as we move this, this will fuel the market higher. >> a big move up in yields yesterday, close to 1.9% now, unheard of a couple weeks and months ago. is it encouraging that this didn't destabilize equities more? >> first, if you look at the yields, we were at under 1.4 around the time of brexit, and

three, four months later we're back to something that's much more normal. the market wants normal yields. it just doesn't like the readjustment process. this is especially good news for the banks that had a good quarter or are having a good quarter, but they do much better on higher interest rate environments, this is especially important for european banks, when interest rates are so low they can't make money. >> but interest rates in europe are still incredibly low, and that matters to most banks. >> true, but they're edging up, and you're seeing a number of central banks backing away from this crazy easy monetary policy. still very easy, but they're taking their foot off the pedal a bit because they're seeing it's harm. to the banking sector. >> the best performing sector in the s&p is financials with a gain of 1% which makes sense to your point. the only other two sectors positive on the week are

utilities and consumer staples which goes against this higher yield play. >> right. it's this -- it's like i said, muddled. one sector you didn't mention which has been interesting is technology. here you have a story in earnings that's a bit confusing, apple has had a weak run of growth. we'll see how that moves forward. but tech x apple is 4% earnings growth this quarter. an interesting story over there. that's providing potential fuel for that group. >> jonathan, december rate hike, is that your best case? how many next year? >> absolutely december. if the fed doesn't move in december, either they lose credibility or something had to go terribly wrong. probably a couple moves next year. i don't think the market has a problem. >> do you expect the nasdaq to continue to outperform? if you see a rate hike, that

could be a headwind. >> i think the story in the market is whether we get fiscal stimulus. if we get fiscal stimulus, the market will be more cyclical and companies more high octane -- >> industrials. >> industrials, because maybe even some nasdaq names because risk appetite will increase if you have that. that could be next year's big story. >> a lot of people looking for stimulus. jonathan, thank you. jonathan golub of rbc capital markets. to today's top trending stories. a festive prank ahead of halloween. a burger king in new york dressing up as mcdonald's. the restaurant covered itself in a white blanket and covered itself with mcdonald's. i had known about this. my trainer lives in the neighborhood in queens where this is. he showed me pictures of it earlier in the week. it was very confusing to the

local residents. >> i love they did this. i'm amazed they got away with it. theed a v ed a veadvertising ste uk wouldn't allow that. you can do that here? >> it's a good joke. >> this baby is the hands down winner of the cutest costume award. this 5-month-old is taking the internet by storm. her mother, a life long harry potter fan shared these photos on instagram a while ago and they suddenly went bad. >> this the one who dresses up the baby while the baby is sleeping? there's one of those on instagram, too. can't wait for your costume on monday. >> it won't be cute. when we come back, the must reads. first we're celebrating two big birthdays today. bill gates and indra nooyii both

turning 61 today. nooyi led pepsico for the past decades and is among the world's most powerful women. happy birthday to them both. >> absolutely.

. welcome back to "worldwide exchange." to the must read stories catching our attention.

my pick in the "wall street journal" titled doesn't clinton embarrass democrats. the author writes looking at how successful mrs. clinton and her when were in monetize ining her position in as secretary of state, why would any voter, of any party, want to see how much revenue she can squeeze from the oval office? >> the trump campaign jumping on this yesterday, it's a fair question to ask, there's been accusations from this, and questions they have not answered, in a way mr. trump had to answer wild accusations to him much more clearly, she's been able to gloss over these more easily. >> the election is so strange for so many reasons. this would be so much more of a story and something she would have to answer if not for all of the distractions and all of the scandals on the other side as

well. both speaking, by the way, to the character of both of these candidates. >> absolutely. we're approaching the top of the hour. the team is getting ready for "squawk box." joe kernen has a look at what's coming up. >> what was your must-read? >> it was -- we really wanted to get to you. >> i would much rather have -- viewers would much rather have your must read. >> mine was in the "usa today." an opposing view on why the justice department should look at blocking the at&t time warner deal. the consolidation of power argume argument. >> joe, we had such a good session with jonathan golub, we ran long, usually when we do that, it's my must read that gets dropped. i'm pleased mine was kept. >> it's good to alternate. you had a good session with j n jonathan golub? >> a really good session. >> seriously? >> seriously.

>> we have mike pence today. number one, glad he's safe. laguardia, you can avoid laguardia, probably a good thing. rainy, slippery. i haven't slid around in my car eventually. i noticed i was like is it cold? some ice? it was very slippery. so obviously that -- we're glad that everyone is okay, then we'll get down to business and try to figure out, you know, the economic plan of the trump/pence ticket. get some details. i want to ask him how those two guys work together. whether it's a -- you think trump says it's my way or the highway? he is sort of beneath him, or will he say you're in congress, you're governor, what do you think we should do? i wonder how they work as a partnership. we'll get to that. and former israeli prime minister ehud barak is in studio as a guest of arthur brooks, for me the sort of -- he's young, a lot younger than i am, but

legendary aei american enterprise institute president and thinker. who else? mike jackson on to talk about what is increasingly interesting, the state of the u.s. auto industry. are there incentives? are used car and used truck prices going to affect earnings? why are ford and -- ford and gm can't get out of their own way in terms of stock price. >> fair enough. >> i think your "usa today" thing would have been better. but that's backwards looking sort of this is forward looking. >> it's a great lineup. we look forward to it. >> what about my skyline? what about my skyline? >> i was in cincinnati for 16 hours. i couldn't get you skyline. >> would take five minutes to go into a supermarket and get a couple cans. >> i didn't have it. it was more important for me to get ice cream. next time. up next, today's test for the markets, a first read on

third quarter gdp, and we have michelle meyer to tell us what to expect next. 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 "worldwide exchange." futures at this hour, down a bit. the dow lower by 12 points. joining us is michelle meyer from bank merrill lynch. banks pricing in definitively a hike in december? >> i think that is right. the fed has made it clear they inten to fd to further normaliz rates. i think the markets should price in a december hike. what happens between now and then in terms of the economic data and will it hold up so they can continue on their olympian? >> i think it will. they don't need to see particularly robust data. they need to see more of the same, which means something

consistent with low 0.2 growth. wage inflation picking up. overall inflation picking up. the next jobs report has to be consistent. they can't see a deterioration in the data that would stop them from hiking. >> in terms of earnings season, they have not seen a determination. >> that's right. they are getting confirmation across the board. asset prices are holding up, antidotal earnings look strong. they have the ability to hike in december. >> what do you expect from the first look at the third quarter gdp today in. >> 2.5% growth. after the trade report, and the inventory data, looks like there's upside risk, but not huge. always a lot of potential room for error with the first release, because of a number of estimates within the data. still some potential concerns about seasonality. i give it a range, but mid 2% growth number is about right. that's what most market participants expect. if we're looking for

relative weak spots, amazon's forecast last night, they were soft, consumer confidence earlier in the week, that was soft. something going on there? election related? >> one of the theories and things we've been concerned about is uncertainty shock ahead of the elections which holds back purchases of beggar tickig items, something that needs financing. for consumer confidence t did tick down but within the range of the recent range. i wouldn't be that concerned about it. for holiday sales who knows, we have so much time. what we've learned from the past few years is that consumers typically buy at the end of the season. they know the discount will continue. >> they're buying increasingly online. housing is your specialty. we got some numbers this week. where are we in the home price, in the home sales recovery and just looking at some of these

housing stocks. they've been languishing here. >> yeah. i think, you know, we've taken a knife to our forecast for housing starts twice this year. most recently in the last month. what we've seen is though the fundamentals are supportive for housing to do well, though you still have population growth which is supportive, some signs of household information, in general builder s as are not rag up building construction. i think you are seeing still gains in housing construction, but it's low. it is low. >> michelle, thank you. >> my pleasure. >> michelle meyer of bank of america merrill lynch. >> what are you watching? >> mr. pence at 8:00 on the "squawk box." >> and the yields breaking out,

will that make investors nervous? we'll be watching. >> that's it for goldman sachs. happy friday "squawk box" is next.

goldman sac good morning, earnings alert. nobody knew that was me. you thought that was a sound effect. amazon shares dropping on weaker than expected earnings and a disappointing holiday season forecast. and alphabet beats the street helped by mobile and video ads. we'll look through those results with an analyst. apple adding a touchscreen bar to the macbook pro, finger touch i.d., and we're back wondering about amazon. is it about profits or just growing and growing? it's friday, october 28, 2016.

"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. i'm andrew ross sorkin. a look at u.s. equity futures at this hour. looking at red arrows. not terrible. dow off about 5 points, 6 points. s&p 500 off about 3 points, nasdaq off about 25 points. in asia, let's show you what happened there. again, a bit of a mixed picture. nikkei up a half of a percent. hang seng off, shanghai down as well. european equities now also a mixed picture. mostly down on the margins. look at crude. i imagine we may be talking about baker hughes and ge in a bit.