♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and melissa lee our guest host this morning is steve grasso from stuart frankel, also a cnbc market analyst. joe is clapping. >> how do we get you >> happy to be here. >> ask nicely. >> so nice i responded nicely, too. >> familiar setting for me here. usually i'm on the other side. >> normally we have to settle for adami. >> come on, we love guy, too he brought you epsom salts when you needed it. >> i like to stir things up.

grasso not bad better looking >> so nice at this time of the day? no one is better looking at this time of the day. >> i saw you in makeup >> need some ice packs >> you don't need makeup -- you need a surgeon more powerful than a brush >> don't we all. >> we will need something more powerful than water. >> you guys are drinking water >> hot water with lemon. u.s. equity futures, markets closed at record highs again dow futures up by 24 points, nasdaq down by a half. i think the zp s&p closed up 14t of the last 15 sessions. >> and picking up steam.

the s&p 2534 >> right >> and we're not that far from 23,000 at this point who knows whether we get there 14%, 15% on the dow for the year it's supposed to be mid single digits that's all we deserve. >> how long have people been saying the market is overvalued? 2200 you can say more than that it keeps rolling you can't short it. >> don't chase this rally. >> let's tell but news just out. pepsico out with earnings. the company is in with much stronger than expected numbers core eps 1.48 compared to the 1.43 the street was antiestici g anticipating organic revenue up 2.3% year to date looking at some of the guidance that they're giving for the full-year, raising some of that

guidance they say at this point they are on track to deliver their fifth consecutive year of 9% core constant currency growth they're looking for fully organic revenue growth to be about their year to date growth of 2.3%. they expect improvement for the north american business -- beverage business in the fourth quarter. expecting $10 million in cash flow from operations cash dividends of $4.5 billion and share repurchases of $2 billion. if you look at that stock, at this point it's looking like it's going to open up a little bit. that chart is not what i have, i have 109.50 to 109.90. >> they innovate the reason i know this is remember i was going go off my diet i asked for chilli cheese doritos. they sent me a care package,

because i'm a tv person. it wasn't over $50, i think. but in it are all these new things like they have a lot of carbonated drinks, like an orange mango soda. it's not zero calories, it's like 60 or 80 calories in a long, thip bn bottles. a lot of different snacks. things that are not greasy fried chips. that's what they're talking about. they have healthier options they're rolling out around the globe. >> the carb count is not that high what were they >> they were -- i abilite them . >> one was called sun bites. healthier snacks >> a lot of innovation >> tropicana fruit desserts in france >> they got to look at what general mills tried to do. they tried to take out all of the colors from trix

>> i love that >> there's a fine line >> they were using kale -- using everything i hate to make it to make trix give me back my dye, would you >> you know, you can really turn off an audience. >> we like that orange >> did you ever get back on your diet >> the diet, i have not put it back on. >> he told me i needed a cal pell a scalpe many makeup. >> it's a constant for all of us >> it gets harder as you get older. as you'll see. recovering from hangovers gets much harder, too. >> really? >> yes >> we do have a quick programming note pepsico's cfo will be on "squawk on the street" at 9:10 eastern time news breaking on amazon. the eu ordering the company to pay about 2$295 million in back

taxes to luxembourg. the european commissioner saying the online retailer was given unfair tax breaks. meantime the european commission announcing it's taking ireland to court for failing to collect 15 billion in back taxes from apple. uber reached a deal with softbank and will go public by 2019 they will move from a super voting structure to a one share one vote structure uber's board will move from a super voting structure to a one share one vote structure >> that's a big deal >> basically it dilutes travis

kalanick's voting. >> this is a constant day by day battle. >> it's like a game of chess, i'll see you two board members this is all perhaps a bid to regain access to the london market former equifax ceo richard smith heads back to capitol hill today for a second day of congressional testimony. he was grilled yesterday about the massive breach politico reporting that the irs has awarded a 7$7.5 million contract to equifax to verify taxpayer identities and help prevent fraud. the no-bid contract was issued last week.

equifax already provides similar services to the irs under a previous contract. >> that makes me feel better >> did you read this one the numbers are great. yahoo!'s data breach was the worst in history, and the company said they didn't really know the total amount. and every single account was compromised. 3 billion? 3 billion people had a yahoo! account? >> did >> how many knew they had the account? are they our partners in some things i don't know i have a yahoo! account. i know mine was compromised. what do you do with it >> forward stuff from my other thing that i need to printout from my computer at home >> i have a yahoo! account that's just to get coupons >> yeah. >> so if it got breached, it

didn't make a difference >> i have a yahoo! account, but this sounds private serveresque with you guys. very hillary clinton >> pretty much >> you can't say hillary now or anyone in the trump family >> the thing is that yahoo! breached 3 billion, it's ensane. the idea that everybody was breached is insane the information they have about me is nothing compared to what equifax has on me and 145 million americans is essentially any adult who has a credit ratin rating >> how long does it take them to figure this out? >> it's terrible i am not happy about yahoo! but the equifax information they have on me is much more concerning >> and you have no say if you get breached with yahoo!

you can say i don't want an account. if you get breached with equifax, you have to choice. >> at least it's everybody >> you didn't get left out >> yeah. president trump will be traveling to las vegas today that's where he will be meeting with victims of the mass shooting jane wells has the latest on this good morning >> this is where it happened this is the concert venue, the stage is straight back it's an area still frozen in time everybody's belongings are still in there we now are told stephen paddock fired for between 9 and 11 minutes, killing 58 people his body was the 59th death. look at this video outside his hotel room when police got there, they found 23 weapons, 12 converted to shoot hundreds of rounds a

minute cameras over his door and in the hallways and on a food cart to monitor response but why? that's on the mips of everyone in las vegas, including those at the massive global gaming expo that's a big insider event of the 26,000 registered attendees, we're told so far only 15 people canceled. >> we don't have a thriving industry we don't have a thriving las vegas if people don't feel safe. ensuring that safety is top priority we're going to work as an industry and work as a community with law enforcement, with the customers to ensure people feel safe >> some compare the massacre to the horrific fire at the mgm grand hotel in 1980 which killed 85 people. a fire that changed everything about building and fire safety here to make sure such a tragedy never happened again it hasn't. could we see another change based on this shooting in las

vegas. we have video from the wynn which shows guests being wanded. as you said, president trump will arrive today to visit victims and first responders last night he tweeted it's a miracle how fast the las vegas metropolitan police were able to find the demented shooter and stop him from more killing if you think about it, paddock shot from 9 to 11 minutes. it took 71 minutes to reach him. there was a one-hour period where he was in mandalay bay in his hotel room waiting until a certain point when he eventually killed himself >> you bring up the changes this could eventually lead to, in terms of hotel security in vegas. you know, you think about it that's a situation you can just about export to any city in the country. you think those types of security standards will change around the country is it something people here in a free society are willing to put up with?

>> it's interesting. the nypd has been training housekeeping personnel to recognize gun bags or guns in bags do you want to turn your hotel experience into going through tsa. in this case he wasn't running through the casino with guns shooting people, he was at a perch in a high building shooting down on an open area? what do you do about that in america? there's so many questions. even the police response the president complimented it, and they are saying because of all the cameras they have in las vegas it helped to get to him more quickly than they might have otherwise, but certainly that 71 minutes from the first 911 calls to finally breaking in the room, that's something that will be studied over and over to see if that could have been improved >> january, thank you very much. janewells in las vegas we are continuing to follow a developing story out of puerto rico it's been two weeks since

hurricane maria made landfall. the governor said the death toll numbered to 34 this comes hours after president trump visited puerto rico to survey the damage and he made big headlines when discussing their debt load. >> we have to look at their whole debt structure they owe a lot of money to your friends on wall street we'll have to wipe that out. that will have to be -- you can say good-bye to that i don't know if it's goldman sachs, whoever it is, wave good-bye to that >> the white house did not immediately return requests for details. you asked the question, how does that work? are they talking about wiping it out and not repaying it? is this a taxpayer bailout >> it didn't sound like a taxpayer bailout sounded like he was wiping out the debt, which is extreme ramifications for municipals this is something we've been talking about since may when they filed for bankruptcy. this is a totally different

thing. >> people argued it's a violation of the fifth amendment of the constitution that a government can't take property and unilaterally take over >> it's 20, 25% held by hedge funds, different types of funds. the rest is held by mom and pops >> bond mutual funds, 850 bond mutual funds open puerto rico's debt when he says your friends on wall street, it's us >> they got compensated. there's a reason the yields were so high. tax-free yields. >> it's a risk >> it's a risk >> there's been times in the past when it became clear something was never going to be paid back. you just eat t i guess >> that happened after 2008, after the financial crisis with gm and different places. >> countries over the decades it's happened to i don't know we'll see what he meant. i hurt myself yesterday.

i'm turning into hanes remember how he woul >> the back. >> i can only use one camera today. news out of washington, elan mui is reporting that house republicans are leaning to a fourth bracket in their sweeping tax overhaul plan. i want to know, i heard it won't go above 39.6. they might keep that high one. what's the cut off who is wealthy who would -- what is the income level? we don't know, do we >> we don't. details are still to be determined a senior republican said it's highly likely we will see that fourth rate for wealthy households the tax framework from the big six only had three rates, 12%, 25%, 35% but it did give lawmakers the option of adding a fourth rate on the richest americans

at least in the house now they appear ready to take that option there's no word exactly what that top rate would be yet as far as i can tell now, it would not be above that current rate of 39.6%. this is a move that could help republicans defuse some criticism from the left that the tax plan so far benefits the wealthy. orrin hatch said those numbers are still being negotiated and he said without those and other key pieces of information there's no way for an outside party to produce a credible analysis of the framework let alone a detailed estimate of revenue and distribution of the tax burden some key conservatives are indicating this is a point they could concede as well. the head of the republican study committee said this week he

doesn't seed a need for the fourth rate, but right now it's not off the table. we'll see what happens as this heads through the process. >> we should get details the fourth rate will help modify the state and local deductions, which are now supposedly up for, i don't know, up for discussion, negotiation, because there's so many republicans in -- >> potentially talking about capping the deductions, changing it so you can have a limit >> take one or the other with the mortgage deduction >> or the real estate deduction. >> this would replace that i'm sorry, steve, if this happens. you're the only one here that probably would be affected by it when you do well, you shouldn't really mind if you have to pay a little more. >> sure. in theory, right >> yeah. >> this is supposed to be a pro growth, supposed to be putting money back into the

system this drives me nuts. >>that's why i singled you out as the affected. >> the whole thing that we have to help people on the lower pay scale. 50% of the people in the country don't pay taxes. when you have a tax cut, it has to go to people who pay taxes. >> but there are other provisions that would help wealthy that are still remaining. if i look at the repeal of the estate tax, the repeal of the alternative minimum tax or perhaps what could happen with the pass-through rate. there are still ways that the people quwho are up at the uppe end of the spectrum benefit even if the top rate does change. >> repealing the state tax, it's hard to see if that is a den t benefit. >> not for you, for your kids.

>> i have a big life insurance policy i can't wait for that -- wait a minute >> tax-free. >> that one. when people say that, whoa i'm not sure that -- >> they're willing to trade? >> yeah. >> i hear you. give me something else thank you. coming up, it's jobs week in america. before we get the adp private payroll data we'll tell you what to expect from the numbers and what it could mean for your money. the dow looking to add 23 at open

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joining us is steve chron from global allocation fund, and michael gapen, and our guest host is steve grasso michael, a lot of talk yesterday about who would be the next fed chair. at some point in the session jay powell emerged as the leading candidate. we saw the dollar index back off. i'm wondering from your standpoint, does that matter in terms of the fed's course of action could we see a real change if

it's warsh over powell or vice versa? >> my view is no matter who gets put forward, i don't think the tightening cycle gets done differently. for me the key question is will the new chair, whether it's powell, warsh, whomever, will they use the balance sheet in the next downturn. warsh is not happy with balance sheet expansion. not a lot left for the new chair to decide in the current course. for me, it's would they be responsive and use unconventional policies. >> there's also the knock f there is a knock, on jay powell, that he wasn't involved in a downturn that a lot of candidates for fed governor have not dealt with the markets or a fed balance sheet, whereas warsh was in bernanke's inner circle and may have more experience >> he was a key contact for the fed to go to congress and the market he had the credibility to speak

to that side of the aisle and the markets saying here's what we're trying to do and why this conversation of hawkish over dovish in terms of who will be ned chair is interesting given the prospect of fiscal stimulus it seems like most of the fed's actions will be to the hawkish side the risk is to the hawkish side. because we will see, if we have those tax cuts implemented, we will see inflationary pressures enter the economy most likely. >> we would agree. we think growth is on the upswing. we think tax reform has the ability to add attorneto earnind inflation expectations could pick up. in the work that we've done, when the fed is hiking from a low base t makes multiples on the market move higher, not lower. so we think it throws fuel on the fire >> that because rates are so low? >> when you start from a zero

rate and the fed moves higher, the black swan of deflation is no longer a risk, you have growth picking up. two, banks can lend and earn three, we've all gone out and refinanced our debt at low rates. rates go up, we feel smart and maybe go out to dinner more. traditionally that's what has occurred moving off an extreme low level of rates >> at this point in the cycle, where are we in the bull market? what seblgters do you wanted to be in? we've seen an upswing in the past month in the reflation trade in materials do you continue with that. >> we move financials into that group. you moved from an interest rate bull market to an earnings rate bull market. with this fiscal policy coming into play, the value cyclicals represent the best opportunities. >> in terms of friday, jobs report, anything that could change yourout look for what ou

for what the fed does? >> no, they expect weakness. we're saying the average hurricane since the mid 80s takes 50,000 off employment growth this one feels stronger than average, but not quite rita katrina 2005 so the consensus is roughly 100,000 lower than the recent trend. it will be a one-month story you'll get it back next month. i don't think the fed takes a big signal from this the market may, but it will be a temporary story. if you're in the reflation trade does that mean you're not in technology >> for two weeks or so, maybe will step out of the technology trade and go into the reflation tra trade, but it returns before the end of the year. >> all right thank you very much. when we come back, the latest on massive cyberattacks 3 billion accounts compromised at yahoo!. 145 million at equifax

we'll go live to the cambridge cybersummit where experts are talking data security. right now, a look at yesterday's s&p 500 winners and losers people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning u.s. equity futures at this hour, as they are sometimes after some gains, slightly higher and mixed down a little on the s&p, less than a point down on the nasdaq, about 5 the dow jones continues to head higher indicated up 23 points or so after a big session yesterday to 2264 i'm sorry, 22641, up 84 points >> time for the squawk planner look for the september adp employment report at 8:15 a.m. eastern time forecasters expect the economy added 150,000 private sector jobs, that's followed by the ism

services index at 10:00 a.m. we'll hear from janet yellen this afternoon, when she addresses a community bank conference in st. louis greg phlegming is partnering with rockefeller financial services to form rockefeller financial manager, fleming will become chief financial officer of the firm. he was previously head of morgan stanley's wealth management business he was also up at yale and normally would come on our show. so thanks, greg. any way, he'll be on "squawk on the street" at 10:00 a.m. eastern time to talk about the new companying and his role. we'll remember that. >> congratulations this week's congressional testimony from the former ceo of equifax spotlighting how dangerous and widespread

cyberintrusions have become. our next guest says he expects things to get worse before they get better joining us is john carlin from morrison and forecentester, he s us from the cambridge cybersummit. so you think things will get worse before they get better hard to imagine when just about every american who has a credit rating has been hacked in this equifax issue. >> you think about it, it's no accident that we have top officials from the fbi with backgrounds at the central intelligence agency, the intelligence community, top white house officials, they're all out here talking with key executives why? because they recognize this is just the tip of the iceberg. think about what we've seen. it's not just the volume of data, billions of accounts taken, it's who is getting hit it's those there to protect us

from the securities and exchange commission to equifax, a company customers turn to when they think their identities have been stolen for protection. the fundamental problem is we have moved almost everything we value into digital space, connected it through a protocol, the internet, that was never designed with security in mind just now as government is, and as as a private sector are we figuring out what those risks are and addressing them. >> i know we're supposed to talk about what a ceo is supposed to do in this environment, but what can a consumer do? even if i want the to pull this information back, i don't think it's possible. >> yeah. that's a great question. i think one of the topics being addressed is are we using the right techniques to identify people to show that they are who they say they are when doing the most sensitive transactions >> like social security numbers?

>> exactly i think you'll hear discussion today saying that the social security numbers is outmoded, and we need to look for another way to identify people when they do transactions. one thing consumers can look for, when i do business with someone, are they having me use more than one factor nofr nor in other words, a password, user name and that you're calling from the right device or phone the other thing with consumers, given the scale of what we're seeing, be active, demand this status quo is not acceptable we need better practices to protect information. >> i can scream and yell all i want, and i've complained loudly about these things on air, nothing seems to be done if you're really anticipating

something, isn't it government has to step in as much as we don't want government intrusion on these issues, the rules have to change to keep up with what's happened in society, right? >> i think that's exactly right. there is an important role for government here. we'retalking about where we ar now. when you think about where we're going to be, the internet of things, billions of additional devices being added to the internet this won't be the irritation of having your identity lost, this is life and death. this is devices go into hearts, pacemakers, by 2020 vehicles will be internet connected now is the time for the government to take action. you heard yesterday a key industry group call for additional regulation when it comes to the internet of things to encourage security by design. the other thing the government can do, this is not disease, this is not a hurricane, these are bad guys

these are crooks, terrorists, these are spies who are doing these intrusions it's the government's job to protect us against bad guys, but that means going after them where they live and making sure that they feel pain and don't just inflict it on the american consumer and business. >> i do have some empathy for ceos trying to keep up with such a fast-moving game how do you distinguish between the companies that are doing the best they can, and the companies that are just lax and should have been updating like equifax should have with the patch they never bothered to put in how do you know which companies are doing a good job and which ones need to get thrown under the bus? >> there's a couple things going on here. we focussed on how serious the threat is. that doesn't mean you can't do anything it means it's an area of risk. there are other areas of risk that are ultimately the responsibility of the ceo.

part of what we should be looking for companies to do is make sure they have a reasonable standard of care in terms of perimeter. keeping people out we also need to recognize that there is no technology today that can keep a dedicated adversary out of an internet connected system that's true for government systems and true for the private sector then we need to focus on what steps are they taking, assuming someone breaches their company, for when the crisis occurs, if they happen to be the next one what steps are they taking in order to ensure they have a strong communication to their key stakeholders, be it other businesses or consumers? have they thought about in advance having extra bandwidth if they know they'll get consumer calls to handle those consumer calls do they know how fast and who they'll tell in government to inform they've been breached there are steps. one thing we learned in government and i've been seeing in private practice, those

companies who practice what it will look like if the crisis hits ahead of time, they play like they practice that means they're able to respond quickly and in the most serious breaches like north korea attacking sony, sony's share price was up by spring an it did not affect the company. >> there's probably a few executives with sony who would beg to dif wer that, but john, thank you very much for your time today a programming note, top leaders in government and cybersecurity are taking the stage at the cambridge cybersummit today. stay tuned for big interviews throughout the day. at 8:00 a.m., we'll talk to kevin brady, one of the architects of the gop tax reform plan what we know so far.

and then an early read on the jobs report. then maryland senator chris van hollen will join us to talk taxes, healthcare and e th equifax hearings stay tuned, you're watching "squawk box" on cnbc

welcome back russian president vladimir putin is speaking this morning as part of russia energy week. he follows the president of venezuela who made news earlier today, too michelle caruso-cabrera joining us now she has more on all of this. >> good morning. vladimir putin has just started speaking right now we have a live picture of that we're monitoring it. if he makes news, we'll bring that to you. nicolas maduro, the leader of venezuela spoke earlier. he said that the debt they owe to russia may have to be restructured at the same time he also said that they will pay all of its debt how do you put those two together the second one probably referring to the outstanding debt of bondholders that trade around the world and among a lot of hedge funds, which is high

yielding, even as they face desperate times in venezuela the government continued to pay it we'll likely see movement in those bonds later today. what makes the issue with russia interesting is the following the russians have been lending money to the venezuelans, as part of that the venezuelans have collateralized three refineries of sitco that sit on u.s. land. if venezuela defaults, in theory rosneft would control 49.9% of sitco refineries in the united states the u.s. government already made clear that is never going to happen they'll have to figure out that problem. people familiar with the discussions tell me that the venezuelans and russians also realize that the u.s. will not allow a russian state-owned company to be in the u.s

this as they continue to deal with terrible problems back home due to poor policies that led to desperate times there. >> i know this is off topic. we were talking earlier about president trump's proclamation yesterday that puerto rico's debt might have to get wiped out. you have a lot of thoughts around this. >> so president trump is saying out loud the way the bonds have already started to trade, if you thought that the bondholders were a low priority before this massive hurricane, you can imagine they are now a much lower priority when it comes to any kind of restructuring talks. bonds started to trade down as well that doesn't surprise me at all. he's saying out loud what people were coming to expect. the other thing i would point out, the reason puerto rico is in such desperate straits right now and why they have so much debt, all coming from the same reason, fekless leadership for decades. this is a tiny little place with

less than 5 million people they borrowed nearly as much money as places like california and new york yet their physical plan for energy restructure is so antiquated so they have a lot of yishs. sues i think the bondholders knew they were falling lower and lower on the totem pole. coming up, we'll speak to ned colletti, formerm gof the l.a. dodgers he has a new book out about leadership in baseball when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,

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baseball's season is underway the l.a. dodgers will take on a wild card in the first postseason matchup joining us now is ned. he was the general manager for the dodgers leading the team through a nine seasons taking center field in many of the baseball's historic moments and recently published his memoir entitled "big chair.

a lot of the dodgers' success, it just took a couple of years after you left, ned. i mean, the best record in baseball for a while this year, didn't they? did they -- >> they did. ended with the best record in baseball had a very successful year for the franchise. >> it's a great baseball town and a great state out in a ballpark, i should say, out in pasadena it's really a pleasure what can you tell us in terms of leadership that you can tell us overall from being gm of the dodgers and baseball manager >> well, i think it's important that any leader leads in a variety of different ways. one standard way, but really when you have people that are looking to you for leadership that you find out who they are, how they react, how they are receptive, strengths, weaknesses, and you kind of paint a brush by brurn, stroke

by stroke. i don't think you paint the entire room with a roller. i think you do it with as fine a tune brush as you possibly can everybody is different everybody looks to leadership for different things i think to be a respected leader and somebody who is successful i think you have to really kind of drill down and know who the people are that you are trying to get to be somebody, get to be someplace. >> great game last night with it is yankees that's always good for baseball, i guess. i feel bad for the twin, but it's always good for baseball and the yankees -- when the yankees are in what else does baseball need what is the state of the game right now, and you think that they're looking over at the nfl and thinking, wow, you know, maybe we got -- maybe we got an opening here in terms of being america's, you know, premier sport again? >> well, i think that baseball -- i think every sport aspierz for that always no matter where the competition is at i think that what the nfl goes through right now is kind of a wake-up call perhaps to some other sports to make sure that

their game is clean, to make sure that the fan experience is at the utmost, the families can attend at a reasonable price, and a good environment i think that is something that sports always takes a look at. i know my 36 years inmajor league baseball it's been a topic every year how to make the experience as good as possible and the games as entertaining as possible. >> were you surprised at the nfl at all i mean, you know, they start their games with -- usually it's a flag that covers the entire field. they have fly-overs. they have, you know, the u.s. military advertises on nfl

>> if you were running a baseball team, and you had your players sitting down during the national anthem, you would not urge them to not do that, or perhaps express it in a different way? how would you handle that? >> well, i think that it's really a management decision how to handle it it's not just one person i think many people would probably chime in and have really some soulful conversations as to what the best path can be i just think it's a personal choice to have people to make. >> okay. is there anything that baseball needs to still work on, do you think, as far as the length of the game or, you know, the -- i love postseason, but i can't say that if there's a game of the week on between -- and it's not the reds where i'm from, i don't know i don't sit through nine innings of a game. it's a local sport for tv and attend yangs, i think, more than national i might watch an nfl game, on the other hand >> well, i do think pace of game, speed of game is something

that mlb continues to look at. this past year the games ran longer than they ever had in the past i think you put a clock on a pitcher and make sure you keep the game pace going. some of it is pace where the perception is that it's slow i think you put a clock on it for the pitcher. i also think as pitchers, they have a lot of teams right now that -- you have a lot of young pitching that is still trying to get their feet wet and trying to get accomplished at the highest level. as they throw more strikes, more strikes will speed the game up that's one way to get the game moving a little bit quicker pace >> i still don't like lopes or ron sei. i like kirk gibson i like him they hurt us a lot >> well, being from cincinnati, i can understand why you feel that way >> they hurt me badly. a lot. anyway, appreciate your time today. love driesdale and cofax >> we're going to be talking about ford's new game plan

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>> the dow notching a five-day winning streak now as stocks close at nigh highs. the latest on the markets. plus, liesman, the cnbc all america survey what do the current athletes, the best in the country, think of the fed details straight ahead ford rolling out an aggressive plan to keep up with technology. plus, earnings from pepsico. the market reaction is just minutes away, and puerto rico released the president says that the island's debt will have to be wiped out potentially more on his comments as the second hour of "squawk box"

begins right now >> good morning. everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site. i'm becky quick along with joe kernan and melissa lee we've been watching futures this morning, and as the record closes for all of the major averages once again yesterday, you are looking at mixed results this morning we'll keep an eye on it, but let's also get to today's headlines. we are watching shares of pepsico this morning the snack and beverage giant earning $1.48 a share for the latest quarter that was 5 cents better than the street was expecting, but revenue did miss forecast as sales of the company's north american beverage business declined however, pepsico gave a full year earnings forecast that is

above the street's consensus, and as a result, that stock is up by about a half a percentage point. gain of 56 cents pepsico ceo hugh johnston is going to be joining squawk on the street that's coming up at 9:10 eastern time the e.u. says that amazon has been given illegal tax breaks in that country since 2003. amazon says it's considering its legal options in the case. the september adp report on private sector employment is due out in just over an hour's time. it hits at 8:15 eastern. economists are looking for 150,000 new private sector jobs for the month. that would be a big drop from august we'll be watching from impact from hurricanes harvey and irma. >> speaking of the economy, c c cnbc's new all america survey finds the country is more optimistic about the state of the u.s. economy steve liesman is here now to help us run the numbers. >> we tracked -- by the way, it has been -- it will be next quarter ten years that we would be doing this all america survey >> really?

>> which means joe has been -- >> it's the same joke. >> that's a new one. >> the point is the main issue all five indicators are at ten-year highs when you take the four quarter average, since donald trump got into office in november, when they picked up -- this is the fourth in a row, so i finally

have four quarters to average. people's expectations of the economy on the four quarter average is the economy excellent or good in a four quarter average? will your wages go up? are your home values increasing? all four of those are at ten-year highs >> that's probably why he got elected. >> and how blue in the face were these people when they thought their wages were going up for the last ten years >> they were -- look, there was an increase from the recession into the expansion period for president obama, but it was a definitive surge after the election of donald trump, and the surge has remained it's levelled off a little bit, in part, because you can imagine people who think the economy is going to get better after it's in their opinion, approved, and it would go down a little bit. a little bit of flattening the point is that on a four quarter average basis now, we are at the record. here is a track of the two key things where we put it all together are you optimistic now and for the future are you pessimistic now and for the future

you can see, finally, those things are now at an even place in terms of the public however, when it comes to the ratings of the president, we're lucky. we have a republican pollster on this poll, and we have a democratic pollster. what we find is that our republican pollster tells us the economic numbers are keeping the president's rating approval up, and the democratic tells us the president's behavior and how he runs his administration are keeping a lid on it. they can't get any higher. what we had is no change at all in the president's approva rating overall 38% approve. a little bit better on this economic approval. he is above water in terms of approve or disapprove with a higher percentage saying they are not sure 43-41. that number is 37% unchanged i want to show you this breakdown by party people are entrenched in their opinions of the president. all of those democrats just nine. independents, under water with

independents the republican support our survey shows this. some other surveys back it up. we're showing not as strong support among republicans as a typical republican and/or democrat would get there are critical areas where people agree with the president or the republicans that's an issue for the president when it comes to some of the incredible legislative battles. when you go to the fight, you want both guns, and both guns is like 80% or 85% when it comes to these battles. he is a little bit capped in there. you can say, look, he has been able to hold up, and he was holding it up as the economic numbers, or there are other issues that are keeping it down. >> a long way from a normal republican, obviously. >> that's right. but we're picking up, joe, this internal battle inside our republican party >> they've been elected by a lot of people that never voted republican or haven't voted republican in a while. >> right >> well, they're not -- you

know, i throw mitch mcconnell in there. he is not in the 72% probably. >> democrats and republicans are not. snoo no, but i mean, mitch mcconnell, republican leadership is probably, you know, they would love for you to call them, but they're not athletes and, of course, they think their wages are going up, aren't they? aren't a lot of these guys going in the nfl if they're all americans after -- >> not sure about the nfl, joe >> well, their wages are going to go up when they leave college and go to -- >> what do you think about the results otherwise, joe >> i was thinking that bernstein is over there going, well, i'm making a lot of money. i wish it wasn't trump that was causing it >> can i just tell you what's going on i have a tease for something tomorrow i'm going this evening to austin, texas, and going to bring you to harker. we'll have two -- and kaplan those are both fed guys. we'll have two of them from -- talking about jobs >> friday is jobs report then we have kaplan speaking at 8:30 >> right after the jobs report we're going to get instant commentary from a fed official

about what -- come on. >> that's pretty good. >> this is "squawk box." >> it's never been done before >> it has been, actually, but i just want to irks ma >> it's been done before, but never as well as it will be on friday noted. i was listening. we went through cheeseburger day last week, remember, a couple of weeks ago? national cheeseburger day. then national drink a beer day that was last week >> very last week. >> do you know what today is bernstein? national taco day. the biggest of all that's the biggest of all. i mean, i was -- i listen to everything, but i just -- it's trending i was, like, wait a minute >>. >> stay crunchy. >> you're thinking about tacos >> don't say crunching to me the dow -- i may need to -- can i leave for, like, 15 minutes? >> we'll get somebody to get you a taco, joe. >> i love -- taco bell closed in my neighborhood. i miss it. i do the dow notching a five-day winning streak as the street gets ready for comments from fed chair janet yellen this afternoon.

is that true >> i wouldn't -- opening remarks. no she's already -- yeah. >> all right joining us now richard bernstein, ceo of richard bernstein advisors, which has more than $5 billion -- seriously? >> yeah. >> $5 billion? when did you start this shop just a couple of -- >> 2009, 2010. >> so it's been eight years. how many employees now >> 19. >> creating jobs, joe. >> you were a friend of the show it $5 billion under management, cnbc contributor you were at merrill for how many years? >> over 20 >> over 20 years set out on your own in 2009. now $5 billion under management. >> yeah. >> that's -- it's a success story. >> yeah. knock on wood, right >> you have been bullish >> i have been bullish >> you have. >> have been absolutely >> i remember. i got to hand it to you. not necessarily for political reasons, but for global growth reasons. >> absolutely. >> you hear buffett yesterday saying that valuations given where interest rates are

aren't -- >> uh-huh. >> he usually doesn't say stuff like that. he usually says -- >> i don't take paengs pay attee markets. >> he went on a limb saying people that say it's expensive aren't taking into account interest rates >> i think that's absolutely right. i think if you -- i taught in the grad school at nyu for a long time, and when we talk valuation, even if it's just a straight p.e., there always had to be an interest rate to look at a p.e. in isolation tells you nothing. here we are, and we have a high relatively high p.e. i get that we also have a relatively low interest rate. if you put the two together, it says the markets probably on the high side of fair value. look, it's not 2009, right let's not go crazy over this it's also not end of the free world type valuations. we're not even close if you look at valuation right now, if you look at the liquidity that's still around and how people are scared of the equity market overall, i think you still have the backdrop of a bullish environment. >> and as we have noted, again

and again, earnings keep going up >> it's kind of interesting the trump trade went back on as soon as obama care was stuck with that, and they went to that tax stuff. it went back on like people who really think something is going to happen. >> well, i think, look, after the election i think expectations were so incredibly high, right? the market said, look, republican house, republican senate, they're talking monster packages expectations in the stock market got very, very high. obviously that hasn't quite come to fruition yet. you had a period of disappointment in the beginning of the year. you saw traditional defensive trades, and you saw everybody re-evaluating what was going to go on. now we're at a point in the last four months or so where fundamentals are the story again. not expectations about washington, and i think the market is behaving exactly as it should in this part of the cycle. >> richard, yesterday to joe's point, when mr. buffett said that the range is 5% to 6% on the ten-year it becomes, you know -- he left

helms a very wide berth. >> there's a long way between where we are now >> my guess is your inflexion point is a lot lower than that where does the ten-year have to be to create some competition for equities >> the difficulty in answering that question is because you know what earnings are going to do, where let's say earning continue to be robust. then you could go, you know, 3%, 4%, 5%, 6 perz if earnings begin to wiggle and weaken, that threshold is much lower. >> how much is also just the market anticipating how quickly rates are going to change? if it suddenly looks like they're not going slow and steady and will kind of see it, it looks like there's jumps along the way. the market starts figuring >> there's a tug-of-war, right on the positive side you'll have better earnings. on the negative side you'll have rising rates which one wins depends on which one goes up faster right now we're at the point of the cycle where you should argue that earnings are going to win that tug-of-war versus interest rates because the fed, with all due respect, the fed will be late relative to the stock market, and so the stock market is probably going to win that.

there will come a point, as there is in every cycle where the fed tries to get in front of the economy, tightens too much, and then holds over. >> et cetera this new paradigm thinking thinking this low interest rate for a long time with low inflation, is that settling in and becoming part of a longer at least medium term investment thesis that i hear, and it makes me nervous to say the words new paradigm because it always equals losingmoney >> well, i think, look, the summer of 2016 all of a sudden everybody began to say lower for longer the rates were going to be lower forever. right? i think that was right at the point in time where inflation expectations troughed. they're not ripping. don't misunderstand the point. they troughed. eth right there. now we're at the point of the cycle where if you are fix it aed on the investor, you have to start worrying about some increase in inflation. they're talking about 6% inflation. i'm just talking about going from 2% to 3%. >> especially for fixed income

>> puerto rico, that's a whole different story, joe >> you reward yourself with those glasses? how old are those? >> these glasses >> they new? >> no. >> straight across these aren't -- >> i like these better >> these are probably six months old already, but -- >> i like -- >> when is the ras tilast tomim were on? sporting new spectacles? >> spending some of the $5 billion under management you are going to get some new glasses. >> always got too stay current >> rich, thank you not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.

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welcome back shares of drug maker mylan are sunching while teva pharmaceutical, the shares there tumbling after the fda approved mylan's generic version of teva's multiple sclerosis drug treatment kopaxone >> the latest read on the housing sector and mortgage applications out just minutes ago. diana ohlich has more on the numbers. hi, diana. >> hi, becky >> rising rates and rising home prices are cutting into mortgage demand total application volume was essentially flat last week down 0.4% seasonally adjusted. that per the more importantly banker's association is now 24%

lower compared to the same week one year ago that's mostly due to refinances. they were down 2% on the week. down 40% compared to a year ago when rates were lower. now, the average rate on a 30-year fixed with a conforming balance didn't move much last week up to 4.12% from 4 .11% for loans with 20% down payments mortgage applications to purchase a home, though, are still running well below historical averages and moved just 1% higher for the week. they're nearly 5% higher than a year ago, and home sales had been weakening for five out of the past six months, indicating a slowdown in the overall housing market, and that's due less to rising interest rates and more to a lack of homes for sale, which means higher prices. now, one telling sign that first time buyers are struggling the most, a sharp drop in purchase applications for fha loans down 8% compared to a year ago fha has long been the loan of choice for first time or lower income borrowers because of its low down payment all these numbers on-line at

cnbc.com thank you. >> diana, thank you so much. we're going to be talking ford with other corporate headlines. then at 8:00 a.m. eastern time congressman kevin brady will join us to talk tax reform we'll hear more details, including hopefully what to make of these reports of a fourth tax bracket being added for high werers "squawk box" will be right back. are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy.

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a modern approach to wealth management. snee transferred $100,000 oversooers the days before the attack and the planned massacre. so meticulously that he even set up cameras to spot anyone coming for him. jane wells joins us from las vegas with the latest. jane >> hi, melissa right now -- well, people are still not able to go into the concert venue behind me to collect their belongings, which have been there since sunday, but they are allowed to get

their cars in the area if they have id. of course, that could be an issue if their id is in there. first of all, has stephen paddock's girlfriend, marilou danley was met by the fbi at the airport. she's a person of interest they hope she can help fill in a lot of holes in the story. her sister, according to nbc news, said paddock sent danley away two weeks ago, and police have released some of the dramatic body cam videos from officers wearing during the massacre [ gunfire you can hear it there. police say paddock shot on and off for nine to 11 minutes, and it seemed like an eternity you could hear people saying, oh, no, it's fireworks others shouting the fire is coming from mandalay bay, and people rushing to safety, shouting for them to get down or run. it would take another hour for swat to break into paddock's

room he had cameras set up in the hallway, and over his peep hole. he fired through the door at the first security guard to arrive, but by the time swat went in, he had killed himself will we ever know why? >> we're comfortable that we have the suspect in custody, but something more may come of that investigation, and i want to understand the motivation that you describe, okay, to prevent any future incidents did this person get radicalized unbeknownst to us, and we want to identify that source. >> that was an interesting statement. now, of the 23 weapons that he had in his room, 12 had been converted to fire multiple rounds it's not clear if anything he had or anything he did to the weapons was illegal. in all, between all of his properties, the two houses and here, police recovered 47 weapons, and they say it's going to take days to process the crime scene in his hotel room on

the 32nd floor in fact, our camera man last night was kicked out of the elevator because officers were, again, wanting to go up to that floor, which nobody could get to back to you. >> those cameras that he set up, did they record what was being filmed, or was that just for surveillance purposes? >> they are hoping they can retrieve video from those three cameras. there were two in the hallway. one being on a food cart another over the peep hole one would maybe speculate that he was watching on an app which you can do with go pros and other cameras so you can see who is coming. whether he was recording, police wouldn't say that, but they say they are examining the cameras >> all right, jane thank you. jane wells in las vegas. coming up, ford providing strategic update on how the automaker plans to continue evolving stock rising sharply after hitting a 52-week low of 1,047 should you be a buyer? we'll discuss that as we head to break, take a look at u.s. equity futures the day after across the board pretty

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>> good morning. welcome back to "squawk box" here on cnbc of all the stories front and center, proctor & gamble david taylor voting against the -- taylor made his comments during a q and a session with investors yesterday. p & g's annual meeting is set for next tuesday peltz has criticized p & g for under performance and says the company has a suffocating bureaucracy. yahoo now says all three billion of its accounts were hacked in the 2013 data breach that's triple the earlier estimates. that could increase legal exposure verizon to the hack verizon bought yahoo earlier this year and combined with the former aol to form a unit called oath disney ceo bob eiger says the company did senior buying twitter before deciding instead to buy a stake in sports driven

site banta he says the company was looking at a variety of ways to distribute its services directly to customers and twitter was one possibility. >> we have to look at their whole debt structure you know, they owe a lot of money to your friends on wall street, and we're going to have to wipe that out it's going to have to be, you know -- you can say good-bye to that i don't know if it's goldman sachs, but whoever it is, you can wave good-bye to that. >> we're going to having to wipe that out let's show you trading in puerto rico, bonds before president trump said this. so the benchmark that everybody looks at is a bond that's due in 2035 8% was the original coupon when

it was issued back in march of 2014 we're traded at only 93 cents. by may of 2016 it traded at 64 cents on the dollar. september 26, this is after the hurricane -- after hurricane maria, it falls to 51.75, and then yesterday it had fallen to 44 cents the bonts had been falli the bonds have been falling every single day it became clear to the bond holders that they were going to fall lower in priority when it comes to a restructuring now 44 cents isn't zero, right even though president trump says it should go to zero, it doesn't mean it will it suggests that it's going to be even lower. puerto rico really is struggling with this massive debt load, and the inability to get power back on for the same reason they borrowed tons and tons and tons of money, and, yet, did not invest in their physical plan and in their energy infrastructure let's show you some statistics here the average plant or the medium plant age on the island of puerto rico is 44 years.

compare that to main land united states, 18 years their physical plant is so old, it's still fuelled by petroleum. i mean, that's how they do it in cuba are still they have to import that oil in order to run their power grid. compare 47% of their power grid being run by petroleum in the mainland united states that's fallen to 0.6%. as a result, they have to spend a lot more per kilowatt hour 21 cents versus 11 cents they borrowed so much money, they're second only to california and new york. even though they have a population of 3.5 million, and yet, they did not invest in their energy infrastructure through all those years and with all that money >> michelle, as you said, 44 cents is not zero. you think this is the art of the deal in play >> yeah. i would absolutely bet we've seen presidents weigh in on debt negotiations before. president obama was very -- had very clear views about how he felt gm should go, et cetera >> president ford to new york. >> right exactly.

yeah, i think absolutely this is a signal that they're going to get less than they thought, but you can't make it go all the way to zero just because the president wants it to. >> all right thank you. our graphics giving you a little bit of foreshadowing about what we're talking about next ford ceo james hackett rolling out arn aggressive plan. phil lebeau has the details on that good morning >> this is all about cutting costs in the near term while investing for the future really three key points to the transformation plan that jim hackett laid out for analysts in new york city yesterday. on the near term, they're going to try to cut costs by $14 billion. things like content reduction, engineering expenses they're trying to cut those by $14 billion, while also pushing more heavily on trucks and suvs. really the profitable vehicles in the line-up, less towards cars in the meantime, they also are going to be investing on ramping up their electric vehicle development. here's hackett talking about ford's ev plan

>> why didn't we move more quickly in the battery electric vehicles simply, it's uneconomic, and we were too much focused on the now. we believe that it was an all or nothing, you know, question, and now we know that there's a future around propulsion that we have to pay attention to >> they're not only paying attention. they are investing heavily in the development of electric vehicles as you take a look at shares of ford, like a number of the automakers, since late august, early september, it has been moving higher. why are so many automakers -- not just ford, but really almost every automaker investing more actively in developing electric vehicles after years of saying, well, yeah, someday we'll see electric vehicles. a couple of things are happening. one, battery costs are falling, and it's becoming more obvious that there is a point where they will be able to be profitable making and selling electric vehicles also, you have a number of countries that are saying, look,

we might ban gas-powered cars, the sale of those cars, after 2030, 2035 china is a good example of that. that's why ford, earlier this week or gm earlier this week announced it's going to be introducing 20 new electric vehicles by 2023 guys, the world is moving towards electric vehicles. may not happen overnight, but by 2030, 2035, you will see substantial sales in that area ford trying to catch up with its competitors in that regard that's part of the transformation >> whether you like it or not, you're going to buy an electric vehicle. >> someday i don't know when. but someday. the world is moving that way there's no doubt about that, becky. i'm not saying it's going to happen tomorrow. might not be until 2030, 2035, 2040, but the world is moving that way >> phil, thank you very much we'll talk to mario. right now for more on how the century old automaker plans to continue evolving and meeting the challenge to connectivity

and sustainability, we are joined by michelle she's executive editor at auto trader, and, michelle, what do you think of these plans that ford unveiled yesterday? >> well, i am thrilled to see a plan i think that's what we've waited for for some time. i've always said we've seen little pieces of a jig saw puzzle and not the picture put together, and that picture is starting to form ford has been lagging, so i think yesterday was a good move to get things rolling. >> in terms of cost cutting, you can understand where they're coming in with that. in terms of wanting to focus more on the profitable parts of the business, the suvs and the trucks, you get that too one of the big hang-ups has always been that you have to sell the cars because you have to meet cafe standards for the entire fleet is that what the electric car business is all about? >> i think the electric car business is more about china and markets that are talking about eliminating gasoline engines even california is thinking that way. i think the really tricky thing here is that ford, like all of

the other established automakers, have to follow these two paths. they've got to focus on the now with cutting costs and producing more suvs because those are popular all over the world, but they've also got to be investing in the future technologies like electric vehicles, like connectivity in it cars, and that's not going to pay off for a while. the trick is going to be how do you make money through all of this >> and hackett addressed that directly you said something to the effect of you don't want to walk off the ledge when it comes to operating margins. they have a goal right now 8% auto operating margins by 2020 what's the margin profile that ev versus a regular combustion engine and does that actually -- that in and of itself pressure margins? >> well, at the moment it's all about investing in that, and there's not -- there's not a payback yet, and we don't know exactly when that tipping point will be where there will be a payback. they've got to, you know, g

generate a lot of products on the business so they can fund those future businesses. it's a really tricky tight rope walk >> this is really, as you mentioned, positioning for markets like china, correct? i mean, ford is basically saying, you know, ev sales in the u.s. may be less than 1% of all u.s. vehicle sales, but in china they're going to be a greater percentage, and we have to get there before the other guys >> right and china -- there are other places too, but china is the biggest market in the world. it's being regulated at some point. if you are going to be a successful global automaker, you have to be successful in china, and that is going to mean an electric future. >> quick question to you, steve wrrsteve? ford or gm >> gm is up mid 20% year-to-date that's definitely the beneficiary of a lot of this i pick gm. i do think that the hurricanes were the massive effect on these names. does that last a month, two months, three months it remains to be seen. i do think that you have a little bit of longevity.

i am long car, if you know that's the way i've been playing it car values go up especially used car values >> for avis budget, you have said on fast that it's going to be at least a double you said this about, what, three weeks ago? >> i started talking about avis's budget. it trades at $39 i do believe it's going to $70 we started talking about that bet on air at $35. yes, i'm still comfortable saying that it's going to $70. i know it's a bold call. i'm not afraid of it >> all right michelle, thank you for joining us today >> thank you >> coming up, springsteen on broadway the boss opening up his broadway debut with a tribute to the late tom petty. tickets for the latest broadway event running sky-high we'll speak to former sony music ceo and broadway producer tommy mat oela after the break about the business of broadway there's a check on futures at this hour.

>> the boss matd his broadway debut. he kicked off an 18-week run of his one-man act. for more on the business of broadway, let's bring in iconic music producer and now broadway producer tommy matola. he is the former sony music entertainment chief and ceo. his new show "summer, the donna summer musical" debuts at the la jolla play house next month and broadway next spring you are doing jersey boys off broadway, right? you are all over the place you're broadway now. can you make -- it's risky, isn't it if you hit it, you hit it big. >> it's risky, but so is this game it's sort of like this >> the most successful thing you have been involved with so far on broadway that you really hit

it out of the -- >> well, the bronx tale is usually successful we're really proud of that my partners and myself, dodgers, and robert deniro and jerry sachs, who are the co-directors, and from the movie to the one man show and now the musical written by alan mankin -- >> that helps. >> we're really, really happy about that >> the donna summer thing you are doing, i think that should be fascinating because, i mean, she -- that was an icon. she's gone springsteen just seems like he is doing a concert on broadway the donna summer story is going to be about her life mixed in with her songs, right? >> the great thing about donna, who i knew most of my career, most of my life, was that even now you can go to any crack or crevice in the world and someone will know her music. she dominated the disco scene, but it became popular music

throughout the world there is nowhere that you can go that doesn't know donna summer, and we're excited about that told with her story, again, directed by dez -- who did "jersey boys" and "tommy." we're excited about it opening in la jolla in three weeks. >> the transition to broadway, it makes sense, because you're all about music, and great music is going to what will put people in the seats, right? >> we all look for new challenges, and we all always try to climb the next mountain, and this is certainly a mountain to climb i find it -- i say to people it's 100 times harder than anything i ever did in the music business just because of all the moving parts and the challenges are really extraordinary, but it's great. it's a great creatively satisfactory -- >> you don't have to worry about streaming. think about that >> exactly >> this is a business where we're looking at millennials, and we talk about it on the show where they're looking for experiences. when you look at broadway,

that's an experience it's counter intuitive that will this should be an easier or more profitable way of making a living versus streaming. is that your feel on it? >> if you have a hit, it's extremely profitable you know, one out of ten or whatever, you know, are successful, and hopefully you have the right story and the right timing, and all the ingredients that it takes to make a success although streaming is becoming a really huge income source for the music companies these days, and i think it's just going to continue to grow one of the things that becomes problematic is that there's so much music coming out that it's hard to identify people who can become the next big group of superstars in the same way that we did where you can sort of focus, you p what i'm saying there's just a lot more of the same popular music coming and

coming and coming. the cream will always rise to the top. you'll have the next adele, or you'll have the next beyonce it makes it harder >> harder to control probably too. you used to know how to put them through the paces and you go to this place, you go to this place, and we know we're going to put them on with the dj's >> we were able to control the supply chain when you can do that, you can find and develop the talent. you work with retail you work with all the moving parts, the distribution, the creative part. it made it easier to sort of mold that image. there's going to be a share

musical. >> it just seems like, you know, broadway and music sort of merging, but not necessarily with the actual artist itself, but the artist's life, but the music is there that you don't have to start from scratch >> the music is compelling enough, it can lend itself to creating a story around it, or oftentimes it develops its own story inside of the life and the career of the writer and the artist >> tommy, we're the only ones here we're getting old, and rock music came about we saw it happen everybody -- i mean, it revolutionized the music in the world, but now people are starting to -- they're dropping like flies i mean, it's scary, isn't it how can we think about it where we don't get depressed i mean, walter becker, tom petty, david bowie, says we talk about glen fry >> we just spoke about and george michael, leonard colin, whitney houston. i mean, these are treasures. they're gone they're gone forever even though their indelible mark

will always be there, but when you think about, you know, how in a flash that it just disappears and then the greatness that was there, it is sad and depressing especially like petty in his home getting a heart attack, helpless you know it'ssad. >> walter becker >> walter becker >> just saw him, and then had been driving back from the hamptons, and i have him on the play list, and i got home. my son says walter becker -- walter becker. >> glen frye >> he was like -- he was like a young guy. >> best writers of all time. >> a young guy >> real quickly, you said one in ten are your odds of success on broadway >> don't hold me to that >> one in ten. i mean, that's better than a lot of venture capitalists that we watch all the time, and my guess is -- >> might be a little greater than that. >> my guess is when you are talking about with the musicians you are talking about, it's got to be greater odds

that's for everybody out there your odds are probably much better than one in ten with the things that you are bringing in. >> it always comes back to the same thing you can't have a hit record without a hit song you can't have a hit movie without a hit script you cannot have a great broadway success without a great story and a great book and great music. if you have those components, at least you have the ingredients >> you have improved your odds drastically? >> exactly >> it's hard to start from scratch, but an evan hanson, that music is unbelievable >> music is unbelievable the actor is -- i thought that was one of the best performances >> me too. >> that i have ever seen on broadway >> the mother too as well. >> stunning. >> i just can't believe you can do two performances in one day everybody else is crying too >> i would hate to be his psychiatrist >> all right tommy, thanks for being with us. >> thank you very much when we come back, we're going to you can that about some stocks you need to watch before

the opening bell on wall street. by the way, the futures this morning have been mixed after another day of record levels for all the major indexes. this morning the dow futures are indicated up by just over 12 points s&p futures down by a point. nasdaq, eight points below fair value. we'll be right back.

>> while maintaining a buy rating the firm says its analysis suggests that strong growth momentum will continue for the video streaming service. kind of interesting at 180 usually, you know, the firm has a 190, they'll go to 220 at, like, 210, but they're going to 210 from even though it's not -- that's a real call office depot announced the deal to buy information technology services company comp uconn, from thomas h. lee, as part of this billion dollar deal thomas h. lee they're now beginning to fade, and that the food company at outperformance

relative to its peers is likely to wane. >> uber has reached a deal with soft bank and resolved to go public by the year 2019. the board voted unanimously to move forward with the proposed investment by soft bank and with governance changes that would strengthen its independence among all shareholders cnbc confirming that soft bank will buy somewhere between $ billion to $1 .25 billion worth of uber shares at its current valuation of $69 billion, and will make another secondary purchase under those gorchance changes uber's ward will move from a super voting structure that gave early shareholders more voting power to a one share one vote structure. the board goes from 11 to 17 two of those seats will go to soft bank. former ceo travis will keep his board seat, but his power is now diluted under the new deal this was the first meeting that included new board members they were brought there by -- >> all right we do want to thank steve rossen for joining us quickly before you go, you're headed to the trading floor.

we've got materials, industrials, technology all at highs here where do we find value in this market >> so if you look at why the russell caught up, if you look at value versus growth, it caught up because energy is a large portion of the russell if oil is not maintaining the $50 mark, then you'll see the value plays sell off and go back into growth. >> so you -- >> watch oil that's the canary in the coal mine watch the $50 level oil. that will be your guide in these markets. >> all right a fast money trader. great to see you >> great to see you. >>. crumb, house weighs and means chairman kevin brady talks tax reform, and we'll get his response to warren buffett's take on what tax reform means to america. then another piece of the jobs puzzle as we head to friday's big report the adp private payroll data will be released rahthembers and market reactio n stig aad

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mystery tax rate cnbc reports that the tax rate will include a fourth bracket. we'll ask congressman kevin brady straight ahead round two in the hot seat. >> truly and deeply sorry for what happened. >> the former equifax ceo faces

another day of tough questions senator chris van holland will be in that hearing he will join us. new this morning, amazon hit with a nearly $300 million bill as the e.u. steps up its tax avoidance campaign the final hour of "squawk box" begins right now >> live from the most powerful city in the world, new york. this is "squawk box. >> good morning, everybody welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernan and melissa lee andrew is on assignment today covering cyber security issues in boston. big conference there the september adp report is coming out at 8:15 a.m. eastern today. take a look at the futures ahead of that. the dow futures indicated up once again after closing at a rrd level. now indicated up by 11 points above fair value s&p futures down by a point. the nasdaq off by just over seven. >> among today's top stories pepsico. the snack and beverage giant

beat on the bottom line, but revenue going in below analyst pepsi did give a full earnings forecast that is above street consensus, and you won't want to miss hugh johnson on squawk on the street that's at 9:10 a.m. eastern time the e.u. ordering amazon to pay about $295 million in back taxes to lum emburg. the on-line retailer was given an unfair tax advantage beginning in 2003. the e.u. also saying it would take ireland to the european court of justice ford's failure to recover up to $15 billion of tax due from apple. the commissioner said it's been more than a year since e.u. ordered to pay back taxes, and ireland has failed to collect. russian president vladimir putin says the rhetoric around the north korea missile crisis should be dialed back, and argues ways other than diplomacy to resolve the situation are at a dead end speaking at an event earlier in moscow this morning, he condemned pyongyang's actions. he also says a hopes a mutual interest in fighting terrorism

will help improve ties between russia and the u.s yahoo now says that every single account was compromised in the 2013 attack, and that's three billion. three billion accounts the company previously said one-third of that had been affected yahoo said it discovered the wider breach through new intelligence obtained during the company's integration into verizon communications verizon finished its acquisition of yahoo, and is combining it with aol under a new subsidiary named oath >> okay. this is new, and it's great to have this next guest, house republicans are highly likely, it says, to add a fourth top rate on wealthy households amid criticism that the big six tax plan primarily helps the rich, and that is according to a -- house weighs and means chairman and part of it is big six.

is it a done deal, chairman, or is it still in the works >> it is not here's why we're trying to drive a very strong and will drive a very strong middle class tax cut. we want lower taxes at every level, so people can keep more of their hard-earned dollars unlike the rating reforms, where really the rate was all of it, we know in this environment we have repealing alternative minimum tax, which is at double tax on a lot of americans. lowering the business rates for every type of business a number of those issues are in play as well before we finalize the income tax brackets and where they begin and end, we just want to make sure we have a full picture of what tax payers are facing these days >> can you shed any light on the -- you know, some of the features that we're talking about, just a little bit more what the word is that won't go above the highest rate right now? 39.6

i'm just wondering what type of income level are you talking about? i've heard people say it would be on some of the individuals that are really, you know, have huge income, but not the top 1%. it it was the top 1%, 750,000 would be the cutoff. do you have any idea -- >> look, all that is speculation from people who frankly are just guessing at what might happen. the truth is, look, we want to lower the rates. as i said, at every income level. we think people just pay too much of what they earn to the federal government we just want to make sure that in addition to the rates, that all the features of this, which drives that middle class tax cut are right in sets, and we really are jump-starting this economy >> the reason they're going to -- that this is being considered the "new york times" piece, they acted like they know republicans are reconsidering a full repeal of the state and local tax deduction that at this

point you're interested in hearing what republicans in blue states have to say because it's not going to pass muster the way it is right now. is that a done deal that there will not be a full repeal of the state and local deduction? that's not going to happen now because it's 1.3 trillion, and that's why you have to go with the higher rate on -- >> yeah. >> so, look, i've heard it too more speculation here's what i can confirm. we are listening very carefully to lawmakers especially from high tax states where the governors and mayors have really put the screws to local taxpayers. we want to make sure we're lowering taxes for every american, regardless of where they live.

6. >> the level set is, again, we are determined to drive strong middle class tax relief. beyond the rates that go into it in this very complicated tax code once the budget is signed, sealed, and delivered, weighs and means committee will bring forward the tax reform plans with all those details filled. >> that sounds leak it's not going to be a simpler tax code maybe tightening some loopholes. >> it will be. >> again, what they're talking about 39.6% still remaining as the top tax rate, and you are

trying to give a tax rate to everyone, and there are going to be loopholes that people will need to utilize. >> let me stop you right there you couldn't be farther from the truth. we're simplifying this code in a major way. we're eliminating a lot of deductions and loopholes and special interest provisions. we can lower the tax rates on everyone that's the only way it will work being thoughtful about that process, making sure we're really driving that tax relief, especially for the middle class, i think it's important to do you would like us to spend the time to do that. >> we would. >> over the weeks ahead, that's exactly what we're saying. >> we would. i guess my concern comes into the idea that there is this deadline that's looming where people say this has to be decided in the says next 30 some days of congress actually being in session we're facing a tight deadline that we've, i guess, imposed on ourselves for this you're right people want to be thoughtful they want to have time to go through the details. are you going to be able to be thoughtful and still get this done before the end of the year? >> yes, we can i know for much of the year we faced the question of what's taking so long

let's get it done now. we are not -- we are moving forward very -- we're on a timetable to finish this and get it to the president's desk by the end much the year, and i'm confident we can >> i love washington, and i know you love it too, but -- so the democrats and a lot of their, you know -- their mouth pieces in the media, love mulvaney's latest comments because they point out that he was previously a huge deficit hawk. you have known him as a deficit hawk back in 201 1 he famously said it would be better for the government to default and pass that clean high, and now is he on record saying to create jobs, we should have deficits. the left -- instead of welcome g ing mulvaney into the philosophy that they have espoused for as long as i've watched that party, instead of welcoming, they are now suddenly deficit hawks, and they don't like that he is no longer you see the hypocrisy on both

sides. mulvaney used tb a hawk. now he says deficits democrats love spending. they added $10 trillion to the debt, and now they don't want to add a penny to it this time around it's very frustrating. you wonder why congress and washington is viewed with, you know, not a lot of approval. >> look, here's what i know. eight out of ten americans want congress to act now on tax reform they believe it will help them, and it will get jobs coming back to america in ways to raise their paycheck >> deficits are now okay, chairman >> no, but here's the point. look, we may want to focus on congress's approval rating we ought to focus on the approval rating of the current tax code, which is atrocious people want change in a big, bold way we with are focussing on delivering that. in the house approach, we believe tax reform can move us toward a balanced budget and create the permanency that our businesses and our families need to bring those jobs back to america. that hasn't changed, and we're continuing to move that

direction. >> i wonder if you got rid of the amt but kept the repeal of the state and local, what whenever you do these things, they'd people will, and then these people won't now their taxes are going up >> just the thought that you should the reform plan, nine out of ten americans will use a simple file system >> that is simplicity. nine out of ten? >> ten out of ten, yes nine out of ten will be able to use a simple postcard style system to file their taxes we are going that simple, and i think that's important in earning many >> here's what i don't understand if you are still paying 39.6%,

and let's say the salt provision is cut in half or is taken away, i still don't get how you get through to lower taxes from this >> amt >> continue iing we just want yu to keep more of what you earn at every level. that's simple. that's fair. i think that's the best approach >> if it does not all work out as far as if you have to use fuzzy math -- in other words, if you don't get the $1 .3 trillion, and it does indicate a deficit, you think the republican senate, you can get 51 votes with pence to do that if you don't have a border adjustment, you don't have a full repeal? will you add to the deficit and still pass it to repatriate and lower the corporate tax? >> we're focused on making

america competitive and simplifying the code and doing that in a way that moves us towards a balanced budget. that is still achievable that's exactly why we are taking our time to make sure we get it right, and shortly, after we pass a budget, sign, sealed, and delivered, you'll see the details, and we'll continue to listen to our families and our lawmakers moving forward >> chairman brady, one criticism on the corporate tax cut is we don't know what the corporations will do with that money, and in the past whenever they've had a tax cut, a lot of corporations have, in fact, bought back stock. they have given dividends to investors. that, of course, boosts profits, but it's a whole different approach does it matter from your standpoint what the companies do with that money from a corporate tax cut? >> we know what they're doing now under the corporate tax code we have $2.2 trillion of u.s. earnings stranded overseas we know under the current tax code they are moving their

headquarters jobs and -- we aim to change that in a big, bold way. frankly, look, no one has convinced me a dollar stranded overseas is better than a dollar brought back and reinvested in america in any way we're really going to become competitive, china, u.s., mexico, and canada those business reforms at every level is key to us being competitive again. >> $1 invested in a plant or a dollar invested in a share buyback program is equal to a dollar invested in a higher wage for the worker >> it is better than that dollar being stranded overseas in china, yurm, and other countries, by the way, taxing those dollars because they're conveniently left overseas let's bring that home to the yates. while we're doing that, make our businesses competitive again we have fallen to 31st in the world in competitiveness other countries are blowing by us we want to leapfrog back into the lead of the pack that will create jobs in america. and higher paychecks

>> are all americans surveyed, chairman brady, showed that everybody is more optimistic -- liesman is here. -- more optimistic now. it was a big deal, steve ten-year history of the survey there are more optimistic now, and you know why they're optimistic because they're counting on -- okay liesman has me saying it's not -- >> the fed did a little bit. >> they're counting on you you got to talk to those -- you got to talk to those weak, spineless, feckless republican senators that are going to -- i can feel it. i can feel that they're not going to be able to do this because they're going to hear from constituents and they're going to worry about getting reelected, and they may not do this i trust the house, but i really don't trust the senate >> look, the senate, given what happened in health care, they need to deliver in a big way on tax. all 52 republican senators

understand that. we're going to deliver a big, bold tax reform, and it will be time for them to deliver as well >> i am going to give you a couple of their votes, congressman, and you can vote for them by proxy. can i do that? i don't there the authority to do that. we have to running, congress thank you for coming on, and we appreciate it, and i know, it's -- who said it was complicated? it is. anyway, thanks adp is out steve liesman is here. >> 135,000 the adp employment number for september, which tries to predict the bls number for friday is 135,000. adp payrolls for august revised down by 7,000 to 228,000 this is substantially a hurricane affect in the weakness here there are two things cited the first is the hurricane weaknesses from harvey and irma, but not necessarily from maria yet. that will be next month, i believe. also, there's a problem here cited by adp the continued problem with small business in hiring due to lack

of competitive compensation to attract skilled workers. now, i want to get to the next thing. you can see exactly where the weakness was, and that was in small business if you think about how these hurricanes affected business, it affected mostly small retailers much more so than large and medium size business you can see small business down by 7,000, while medium and large size businesses did pretty well. looking at the industries where there was weakness, you can see that it was first in the trade and transport. the place you would expect it. education, health, construction doing pretty well, and that number, if they can find the workers, could do better as they rebuild process begins hospitality, i thought that might be down more, but it was up by 20,000 manufacturing up 18,000. that's another solid number for manufacturing. you guys saw those ism numbers that we had earlier this week in terms of the straight from the manufacturing sector look, this is -- this is the fist and most important so far of the hurricane affected numbers.

we'll be dealing with this so far the markets looking through it, and we'll see the down side and then we'll see the up side on that. >> they've been, you know, adp the last couple of months. >> the adp has not done very well the last couple of months >> 50,000, 60,000 range. >> no, it's not. your work has been better. >> my work has been better than adp so far that's correct >> steve, thank you. >> thanks, steve >> that is saying something. >> when we come back, the former equifax ceo back in the hot seat today. senator chris van holeln will b in the hearing he joins us after the break. people don't invest in stocks and bonds.

they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen.

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>> joining us right now senator chris van hollen he sits on the banking committee ask will be over -- that committee will be overseeing that hearing today thank you for being with us today. >> good to be with you, guys >> we heard the opening gambit yesterday from mr. smith today what questions do you have on top of what you have already heard? >> well, there are a whole series of questions. first of all, equifax was alerted to the fact that their system was vulnerable. they didn't do anything about

it why? is it number two, when they did discover the breach, it took them some time to notify the public even though they had a material change in their situation. during that period of time, you had executives of equifax selling stock. 14 million americans have had their -- 143 million americans have had their personal financial information now compromised. we have a whole series of questions. how did this happen? why didn't equifax act earlier why were those executives selling their stocks before they had notified the public? >> you know, we hear about these data breaches on a more and more frequent basis we're also now hearing that the yahoo breach was not -- the one billion accounts that we originally thought, but all three billion accounts at yahoo. it's kind of stunning. it's hard to keep things in perspective. consumers are worried about these riesissues something like yahoo, they didn't have the same sort of crucial information that can really lead to bad things that

equifax has about every american with a credit rating it's kind of stunning to hear, and you just wonder what can or should the government do about this situation >> well, you are right look, they are vacuuming up all sorts of information personal information on people this is not a situation where consumers have asked them to collect this information they just go out and do it they put it all in one place they have a higher burden and responsibility to make sure that they protect that information. there are also questions about what they did after they discovered the breach. for example, on the one hand they said to the 143 million american, we're going to provide you some protection against identity theft, that kind of thing, but in the fine print, at least initially, they required that consumers getting that protection gave up their rights to bring any kind of actions against equifax for wrong doing. >> right >> at least in the initial

moment they clearly tried to take advantage of these customers who already have been injured once >> by the way, it sounded like he was backing -- it sounded like he was backing that up when he was asked point-blank yesterday, are you going to be making consumers whole, and he said we have a plan that's put out. basically he wouldn't answer the question if you are a consumer who has been injured by them, they're not saying they're going to make you whole? >> that's right. there are all sorts of sort of astericks and fine print and details, and that's why we want to have this hearing today because they say one thing they've got to, you know -- they have their own p.r. machine, but the reality is in many cases they're doing something else consumers should not be injured twice, right i mean, there's enough exposure just from the leak of their confidential information to come back and have equifax exploit that situation to make money off it is unconscionable >> senator, you mention the higher burden that equifax and companies like it should have. should the law reflect that? should there be tighter regulations on a company like an ek question fax as opposed to

the cyber practices of a yahoo or a target? in those cases, as a consumer, i can say, you know, i'm not going to go back to target i'm not going to have a yahoo account. i'm not going to use heartland payment services for a company like equifaequifai have no choice >> i do think there's a station, and i think we have to think through those distinctions as a general rule, you have these credit agencies that are collecting all this information about you and me and everybody else in this country my view is that if that is put to bad use or somebody gets that information, then the penalties and burdens should be on them. the risk should not all be on the consumer the risk of penalty and loss should be on the companies that are, number one, collecting this information without our permission and then allowing it to be exposed. we are thinking through those different issues and seeing what we can put forth in terms of rules or protections for

consumers. >> senator, thanks so much for joining us lots of questions ahead for equifax. senator chris van hollen >> the man who predicted amazon would be buying whole foods is calling out big tech, and why professor g -- professor scott galloway will be here with his new book s making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital.

good morning, and welcome back to "squawk box. we are live from times square. among the stories front and center, mortgage applications fell by .4% last week. that's according to the mortgage bankers association. that was driven by a decline in refinancing activity, while new home purchase applications actually rose. the average 30-year mortgage rate was virtually unchanged at 4.12%. one more economic report is on the agenda today it comes out in about 90 minutes. that's the institute for supply management it's going to be releasing its september nonmanufacturing index. that measure of u.s. services economy is expected to come in at 55.2. that's down slightly from august number of 55.3 more data breach hearings are ahead on capitol hill. senate commerce committee chairman john thune will hold a hearing later this month over the braechz at both equifax and yahoo. the equifax breach is the

subject of a senate banking committee hearing that began yesterday and continues today. secretary of state rex tillerson was on the verge of resigning this summer. that's according to an exclusive nbc report vice president pence recordly had to talk tillerson out of quitting tensions between the former exxonmobil ceo and the president reached a high point when president trump gave a controversial speech to the boy scouts of america in late july that's an organization that rex tillerson used to head president trump headed to las vegas today where he will meet with victims of sunday's mass shooting. las vegas police clarifying overnight that 58 people were killed in the rampage. previous reports put the death toll at 59 that included the shooter, stephen paddock. paddock's girlfriend arrived at l.a.x., los angeles international airport, from the philippines, and was escorted by fbi agents it's not immediately clear where she was taken, but authorities have said that she is a person of interest. the shooter had wired $100,000

to an account to his girlfriend's home country of puerto rico the week before sunday's massacre. >> philippines >> yeah. >> that's what i thought why did it say -- i thought it was really interesting that it would have been, but, you know -- for more on what is the deadliest shooting in u.s. history, we're joined by david clark, former milwaukee county sher sheriff who is now senior advisor with america first action it's a super pact supporting president trump. sheriff clark, thank you for joining us this morning. >> my pleasure >> i know that we're all sort of searching for some type of motive here. you have been in law enforcement a long time. does there have to be a motive will we ever -- do you think there is a motive in this case -- sometimes -- someone mentioned, sheriff, that the texas shooter from the tower that they discovered a brain tumor afterwards in an autopsy

that could have caused violent behavior is it -- is it a fool's errand to always think that there's something we can point to to explain it to us, pure evil, why it happens >> i think you have a point there, but it's kind of part of the human element to kind of know what was going on in the person's head at the time. i think i agree a little with that in that, you know, how relevant is this 59 people are dead 500 injured in a horrific incident that played out in las vegas, nevada. i think going backwards, that's how these things work. you do work backwards. you take the incident and start to work out from it. to find out this person, their actions, who they associate with, so on and so forth, i think the motive at some point becomes a part of it, but is it the most important thing i don't know what was the motive in orlando, florida? what was the motive in san bernardino

when we learn what it was, really in the end how relevant was it to the fact that many people were slaughtered that were in a very vulnerable position >> and we immediately hear calls obviously to do something and the question is what do people really mean? i mean, there are some people that would like to confiscate or at least attempt to confiscate 400 billion guns, however many there are, but then there are others that at least talk about this bump stock device, which can turn a semiautomatic into, for all intents and urpz approximate, a fully automatic, and i guess 12 of -- you know, there are different reports, but as many as 12 of the 23 guns that the shooter had were basically modified to be fully automatic. i would think that you could just say, let's not have this -- these things anymore because nobody -- you can't have a grenade. you can't have a mortar launcher a machine gun seems like something that, you know, you don't necessarily want in the

hands of the public. i'm looking at a new york post, and there's a ban it and should stay legal editorial from both sides. can an argument be made if that these things should not be banned, sheriff? >> i think it's worthy of a discussion, but when you look at these incidents dents, and you look at the ones that have happened prior to this, some of those have already mentioned, you know, when someone has the will, they're going to get around it. i think that's what happened here you know, if we just focus on the gun, i think we're going to be missing other things because multiple interventions are going to be needed what i like to point to is the fact that there are over 200 million gun owners in the united states, and less than -- i'm much less than 1% would ever think of taking that instrumentality. that's all it is it's a tool. less than 1% would ever think of taking that and mowing down people, slaughtering them in a mass fashion like we saw in orlando and san bernardino and

now in vegas what we end up doing is we sometimes end up working on the wrong thing. we'll end up punishing people who had nothing to do with this, number one, and, number two, would never dream even if they had a nightmare -- they would never dream of taking that instrument and using it in this fashion. our american system of juris prudence, if you will, our system of justice, has always been predicated on punishing those individuals who violated society's laws not making hardships and not punishing people who had nothing to do with this. >> i hope it's not anywhere -- better be a lot less than 1% better be like one in. one millionth of 1%. that would be -- in a would be too many in this case. >> the air auna grande attack was a bomb

the nice shooting was -- i mean, i see all those things, but just for pure ease of killing as many people as possible, it seems like a machine gun makes it much easier you don't even have to think about making a bomb. you don't even have to rent a truck. you can just, you know -- i mean, i almost see how you would want to just say, look, we need to get rid of at least machine guns at this point do you think it's -- the second amendment right eventually would be affected by getting rid of the ability to make a machine gun? >> well, i think if we're talking about this really being a political end, i think it is a slippery slope again, i'll go back to the fact that if we work on the wrong thing, we'll end up with the law of unintended consequences machine guns are banned in the united states for private citizens now, there are some stipulations that allow people to get a permit for whatever, a

collector, something like that, but i don't think we have ever seen a collector of a machine gun take and use that thing to mow down people. what i caution -- i said all the stuff is worthy of a discussion. a discussion not an overreaction. when you make a decision like that, when everybody has ang zbriet up and they're panicked and grief stricken, what you do is overreact, and you do too much of something, and i point toward, like, 9/11, for instance 9/11 commission, i'm not switching the subject here well intended, but they ended up with the law of unsbinded consequences the cost, the security at airports, the delays it's causing people, the fruts rags you know, patting down elderly people and making them get out of their wheelchair. that's the law of unintended consequences i don't want to do the same thing here like we did in some of the others and end up right back here again trying to do -- we'll talk about the same thing and really not affecting where, we're not going to solve this because it's part of the human

condition. that's why i say where there's a will, there's a way. if we banned all guns -- i'm not for that i'm not even going to suggest doing that, but if we did that, someone would find a new way of being able to commit mass casualties, and we think, well, we thought we solved that, but re really didn't what we did was punished people who had nothing to do with this and would never think of doing something like this. >> it's either second amendment rights or privacy or there are some people that say it's a free society -- maybe we need mental health records shared or someone that's predisposed i don't know what it is. we're going to have to give somewhere to get -- to try to minimize this. right? >> true.

i don't think we have to accept it, but if you look at some of the previous mass shooting incidents or mass casualty -- 9/11 wasn't a shooting uns dent. for heaven sakes they used box cutters to take down airliners if we -- there's no magic pill here that's the unfortunate thing at the same time some of these things are worthy of a discussion, but quickly after the event -- that's kind of when i talk about the political end, you know, the people who are really out to kind of blame and nail the nra because of their influence in gun rights, if that's what we're trying to accomplish, then we won't accomplish anything, but, again, we're attacking something. i don't remember an nra member being involved in any of these situations when you look back, there were red flags. let's go after the red flags let's improve our system of information sharing. there was a red flag on the omar mateen in orlando. there was a red flag in fort hood with nadal hasan, i think

his name was, where federal officials, law enforcement, knew -- the system was blinking red, and they kind of, for whatever reason they did, you know, they kind of like, well, there's not a whole lot here, and they kind of walked away from it. when this investigation is concluded in vegas, i believe because nobody acts in a vacuum. we're going to learn a lot about this individual and as time goes on, we're going to find out that there were some red flags. the system was blinking red, and, again, some of it's being part of the human condition. nobody is perfect in these situations >> okay. sheriff, thank you >> thank you, sir. >> you're welcome. coming up, the influence of big tech nyu professor scott galloway out with a new book next real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time

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>> up next, is big tech too big? we'll ask scott galloway, who is out with a new book called "before, the hidden dna of amazon, apple, facebook, and google." he will join us next hey, how's it going? um... who are you? i'm val. the orange money retirement squirrel from voya. i represent the money you save for the future. see? we're putting away acorns to show the importance of being organized. that's smart. who's he? he's the green money you can spend now. what's up?

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>> we have market reaction to president trump's comments about having to wipe out puerto rico's debt the 8% bond 2035 that's traded this morning at 35 cents on the dollar. that's compared to yesterday's 44 cents

>> the jern obligation bonds >> may be a different situation. >> let's talk about ford technology companies amazon, apple, facebook, and google combined they have a market capitalization value of $1.6 trillion their value in our lives burrows even deeper. that's according to our next guest. scott galloway is an nyu stern professor of marketing he is the founder of l2 inc, and he is the author of "the four. scott, thank you so much for being here today >> thanks for having me. >> i love what you say about these companies. it's very intriguing just in terms of calling them the four horsemen, and you say that their behavior is like darth vader acrossed with ann rant >> i think these companies very wisely wrap themselves in a neon blue or rainbow or a pink blanket and create an illusionist trip to -- progressives are largely perceived as nice but weak, but these companies when you really look at their behavior, they're more like the spawn of darth vader. these companies play very

hardball, but they typically try and present an image that they're nicer and softer a wolf in sheep's clothing >> there's been a change in perception >> absolutely. the warmest term it's a combination of things whether it's the cultural problems at uber i think the tipping point has been the notion that most innovative use of technology in 2016 was amazon's alexa. the most innovative use of technology in 2017 was russia weapon sizing facebook i think the notion that our democracy can be -- with a credit card and someone can pay in rubles to start advertising and creating and sewing chaos here is probably the tipping point. the thing that's made it worse is the underreaction or half measures by facebook, refusing to acknowledge, in my view, the important role that they play in our society. >> it's not just that. there are now people looking at amazon and saying, wait a second now that they've purchased whole foods, which, by the way, you predicted five days before it was actually -- >> better to be lucky than good,

right? >> you got any other predictions for us >> i think the lonl cal one would be amazon going after nordstrom, but nordstrom is a family business, so there's an x factor, but amazon has license to get into the most wealthy refrigerators in the world, but they still don't own the wealthiest closets because aspirational beauty and luxury brands are still remiss to distribute to am skblon. the most logical one is nordstrom. probably what you are going to see, though, that's going to take amazon to be the first trillion dollar market cap company is something called prime squared where they have zero quick ordering and begin sending you things before you order them then this is going to happen they'll then offer you the opportunity to second stuff back in an empty box. they have the fulfillment netwo network, your purchase history, the brand credibility, and you can manicure these things with alexa just saying, alexa, change my beer to stella artois >> i already get enough stuff that we're order, and now we're going to add on the layer of getting stuff that we haven't even ordered that's crazy >> 90% of your purchases are well considered purchases. you don't want to show up and

have the right stuff in your refrigerator >> national taco day if they send me -- i didn't order those. that would be -- with google's motto really everything we do should be evil was it different than no evil? it's like everything we do is evil should that have been the more accurate -- >> you want to talk about a hack imagine for a moment that there's a hack into a google, and everything have typed into the google query box is listed underneath your name and your picture. think about how scary that would be google is our modern man's god >> my kids were on the computer. it wasn't me >> then facebook, you talk about, you know, that there are responsibilities, but just what they dug -- i watch social media and what my children's life is compared to what my life was, and i think there's an overall -- there are some negatives associated with where we are right now in terms of society with social media. it's not all positive. i don't think. >> there are some huge up sides

and huge down sides. show me a teenager that's on instagram, and i'll show you a teenager that feels left out a lot. there are some very negatives. a lot of less time with each other. even that, i don't think that's -- i don't think that's the big issue here i think that these companies get the mother of all hall pass from our government companies get the mother of all hall passes from our government and society. >> they steal our -- they get our information and done give us diddley for it. >> earlier you had an elected official and the narrative is that we need to bring those dollars home from these companies so they can put it to work those dollars should never be overseas apple issues licenses, its ip, to its irish entity then charges high tax domains, billions of dollars, suppressing their taxes and high tax environments and juicing their taxes. why isn't the narrative that we should be penalizing these companies as opposed to rewarding them. >> because it's within the law we need to change the laws. >> fair enough. >> scott, thank you very much. we'd love to have you back again soon there's a lot of ground to discuss it >> whose god

google's god >> one in six queries presented to google have never been asked before in the history of mankind. what priest, rabbi or scholar has that kind of history. >> wow. >> the book is called "the hidden dna of amazon, apple, facebook and google" and we appreciateou yr time. when we return, jim cramer joins us live from the new york stock exchange

the final quarter of the

year tends to be strong for stocks with th

down at the new york stock exchange, jim cramer joins us now. we had an interesting discussion i don't know, maybe it would be good amazon buys nordstrom. that would make sense. >> i just literally called two nordstrom analysts when i heard that because i said okay, look, if they're not going to take it private, isn't having amazon as your partner having it be private? >> it's a sound strategy. >> that was brilliant. during the commercial break i said is this true, could this happen is this in the parameters because that is a new story and boy does it make sense they don't own the closet. galloway was fabulous. i've always followed his stuff but this made so much sense but if a company's contacted

bankers, what the held, throw in a call to amazon they're right down the block. >> cramer, you know how trump will say things that are sort of the bottom line but, you know, sometimes it's good and -- and sometimes -- but with puerto rico, something probably eventually happens but now i think the administration is going to have to scramble to explain exactly what would meant by -- and mulvaney is out saying he was referring to the need to fix the debt problem and that we can help it, don't take the remarks word for word but it's already happening there. so i don't know -- he says puerto rico -- >> look, i think it's important to point out that there's go bonds, the general obligation that you pointed out are supposed to be full faith and credit and then there's the other bonds. there's 60 ability of revenue bonds. they can go to zero without a

problem. >> so they could go to zero without a problem? >> the gos, i think -- >> well, gos you wonder about. >> you went in there -- as a portfolio of municipals, i can't own stocks, i just own them, i don't trade them but maybe this is an opportunity. >> does amback and mbi -- i haven't looked since i was retail but -- >> i don't know if they're back -- to me, we never needed the insurance of the go because other than 1933 we're supposed to be okay. >> okay, jim, thanks. >> thank you and on "mad money," don't miss jim cramer's interview thwi bill ackman tonight at 6:00 p.m. eastern time with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation.

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i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss

when you have the right financial advisor, life can be brilliant. ameriprise check out this full-page ad in facebook. this is in the "wall street journal" and it says "protecting our community from selection interference, we take the trust seriously, we'll fight any attempt to interfere with elections or civic engagement on facebook" this after facebook handed over information about thousands of ads to congress about russian entities backing these ads.

>> this goes to what scott galloway was saying in terms of how these companies have become so big and their influence so enormous is there something that needs to be done? >>or at least pay more attention. >> exactly. >> the checks cleared so that is one of the problems, i think >> right. >> it was in rubles but -- anyway time to go make sure you join us tomorrow, melissa, are you here tomorrow >> nope. quack squawk on the street next good wednesday morning, welcome to "squawk on the street." we wait for yellen this afternoon, the president heads to las vegas europe is slightly red despite strong pmi