a full rundown of today's agenda on wall street on this tuesday, october 10, 2017, "squawk box" begins right now ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. things are looking slightly higher after yesterday actually watching stocks decline ever so slightly but it was something to watch. the nasdaq was down for the first time in ten sessions down by ten points and the dow and the nasdaq hit record intraday highs before receding and giving back some ground this morning the dow futures are indicated up by 40 points. s&p futures up by four the nasdaq indicated to open up

by 15 points let's look at overnight in asia. the nikkei going strong closing at the highest level since 1996. a gain of 132 points that puts the nikkei at 20,823 hang seng was up by 0.6 pfr%. the shanghai was up by a quarter percentage point in europe, you will see that at least in the early going things have been mixed. these are modest moves in spain, stocks are under pressure down by 0.9% this is coming as some concerns arise in catalonia. we'll talk more about that in a moment we have news just out from the national federation of independent business, showing small business sentiment dropping in september. the nfib's monthly index dropped to 103 for the month, that compares to 105.3 in august. the group saying the immediate temptation is to blame the

hurricanes in tex and florida but adds this is not case with small business owners across the country becoming measurably less enthusiastic but also points out the index is high by historical standards. also in energy news, opec secretary-general calling on u.s. shale oil producers to help curtail global oil supply. he said the supply driven cycle should be taken seriously. opec and other produce verse cut supplies to prop up prices, but u.s. production has soared driven largely by shale drillers crude at 50.02 what are they saying, don't produce as much? >> join opec come with us >> that makes no sense help us with the supply. help us with -- >> help us reduce the supply >> we don't like that. there's a developing story --

>> definition of a cartel. >> we're not in it >> we're not >> developing story out of california this morning, at least 11 people are dead, hundreds of homes and other structures destroyed as a string of wildfires sweeps through northern california's wine country. strong winds are fanning the flames which spread quickly in an area where the homes are relatively close together. thousands of residents have been forced to evacuate at least 5,000 people are under mandatory evacuation orders in santa rosa, accounting for a quarter of the region's residents who are displayed. governor jerry brown declared an emergency in eight counties. a separate wildfire torched a half dozen homes in the anaheim hills neighborhood in southern california we'll bring further updates from that state as we get them. spain is in crisis today the leader of catalonia and its parliament are meeting

and could make a unilateral declaration of independence. the leader will speak at noon eastern time he has been threatened with arrest if he declares independence france and germany stressed support for spanish unity. on sunday, hundreds of thousands protested demanding to remain a part of spain. on the corporate agenda, a big proxy battle coming to an end. at 9:00 a.m. eastern time we will find out the results. procter & gamble share holders will vote on whether trianian's nelson peltz should get a vaseat on p&g's board she will have an interview with nelson peltz at 10:00 a.m., followed by david taylor at 11:00 a.m.

everybody says the race is tight, no matter what's happened, you could argue p&g already lost, not necessarily the seat itself but in terms of what it will say given how close the vote is expected to be >> will it force changes >> the signal it sends to p&g and the kinds of changes they may have to make whether he's on the board or not president trump is feuding with senator bob corker, but he may be mending fences with senator lindsey graham eamon javers joins us now. he has the top political stories. good morning >> you do get the sense that the white house is in a bit of a fence mending mode today after that weekend of open political warfare with bob corker. the president's fellow republican up on capitol hill yesterday, lindsey graham, another frequent target of trump's criticism, another senator who has frequently criticized president trump accompanied trump to northern virginia to the president's golf course there issued a couple of conciliatory tweets saying he enjoyed a round

of golf with president trump today. president trump shot a 73 in windy and wet conditions he said how bad did he beat me i did better in the presidential race than today on the golf course great fun. great host so, some warm words from lindeyy grah graham we know the president will be having lunch today with jim mattis and rex tillerson, both men will be at the white house rex tillerson has been at odds with the president the president has publicly criticized his effort to negotiate with the north koreans, saying it won't likely bear fruit and that rex tillerson is wasting his time. mattis is seen as an ally of rex tillerson within this administration tillerson forced to call a press conference last week to say he's not resigning from his position as secretary of state and forced to send a spokesperson out to deny he had called the president

a moron. we'll see how that lunch goes today. some strained relationships within the administration and between this administration and fellow republicans on capitol hill the white house taking steps, it would appear to mitigate all of that political damage ahead of the big push on tax reform later this fall. >> some stories circulating is that rex tillerson would leave and that mike mom ppompeo would considered >> we saw that name floated around >> any potential thoughts or we're looking at mending fences and pushing ahead through the end of the year to get the agenda >> my sense is folks on the inside of the white house don't want to have anymore changes they had a tremendous amount of turnover on the team so far this year i don't know how it compares to other whouzs white houses in t but really volatile inside the white house. they want to tamp everyone down. i asked a senior administration official at the white house

yesterday why it seems to be that the president engages in these public feuds and name calling more often with republicans on capitol hill than with democrats you can name six or seven republicans that the president has feuded with or insulted publicly within the past year, you can't get anywhere close to that in terms of democrats this person told me that the president sees coverage in the media of republicans who are criticizing him. it gets dispropore t poportionae coverage because it's republican criticizing republican that gets under the president's skin the president expects total loyalty from people up on capitol hill when he doesn't get it from members of his own party it bothers him personally, that's when he goes on these tirades against them >> it may also just be the republicans, they can't get their act together to get the agenda passed it may be a frustration with that, too you don't need the democrats to

get your agenda passed if you have the republicans on board. >> a lot of flash points over healthcare reform, where the president and aides express complete bewilderment with the fact, as they will tell you behind the scenes, that republicans campaigned for seven years on repealing and replacing obamacare, when they had the votes to do it they couldn't agree on a system of repealing and replacing. that's maddening to folks in the white house. they feel that should have been done earlier in the year you're right there's no expectation of loyalty among the democrats, that's why the president is not in the twitter wars with democrats. >> that's what i thought it was, in his own party i was thinking what does it mean about tax reform and we had grover norquist on yesterday who said i think cork ser enough ero an adult to have these little feuds on the side but can still

pass reform. then i thought that's probably true congress is not doing it just to give trump a win congress feels like they need to do it, too they're under pressure to get something done i don't know who needs it more they both need it he's kind of saying corker and trump can be in the sandbox -- is it a sandbox or litter box? if it's a litter box -- it's kind of a litter box >> i would go with the boxing ring >> they can be there that's separate compartmencompa. that's my only interest in it, whether this screws -- if all this sniping making it less likely that tax reform gets done >> that is exactly what they think inside the white house having talked to this official yesterday, a high ranking person inside the white house who said

that bob corker will vote how he will vote on tax reform on the merits of the bill, how he feels about the deficit which he's concerned about, and this person said that corker is going -- will have been a yes or no anywhere depending on where he lands on the merits he will do what he thinks is appropriate for constituents, not based on whether he's fighting with the president or not. they don't think they lost him as a vote on tax reform because of this, but they do think he was possibly a no vote all along because of the signals he's been sending about the deficit and his concerns there they think he's out there as somebody they could get despite the fact he's been at war with the president here and has been saying that the president needs to be managed on a day-to-day basis, that the white house has become an adult day care center, where people have to corral the president. all of those comments are pretty personal, but at the end of the day the white house thinks he will vote however he will vote on tax reform regardless of

that >> thank you we will turn to the markets. we pivot out of that conversation, markets bracing for earnings coming this week. we have simien hymon and doug cotares of voya to what extent do you believe there's implication with this twitter debate with bob corker in terms of tax policy and if you baked tax policy into the equity market now. >> i don't think it's a terrible thing to have the deficit hawks to at least have a voice we needed massive deficit spending nine years ago. we're at a point where the counter cyclical need for that extreme level of deficit spending, we missed the boat on that a bit of deficit hawk voice in this to get modest tax reform. don't quite dig ourselves a

deep -- >> i'm curious whether you think the markets have baked into the cake one way or another some form of tax reform and whether that represents opportunity, dare i say, in terms of where the equity market may or may not go >> i think that the equity markets are reasonably supported by fundamentals. earnings season should be strong we had 4%, 5% top end growth, if you are looking for value pockets, it's on the growth side of the equation. >> if tax reform gets passed, you see that as an additional upside potential >> if it's something reasonable. >> i apologize, give me one more second on this do you think that the markets -- could you see a tax plan go into effect or be announced that actually turns the market down you keep talking about deficit

hawks if it was a tax plan that raised the deficit in a meaningful way or the experts said it d you could see that being a negative >> only if inflation really took off. as long as inflation remains subdued, you know, then i think we're fine >> i just wanted to be on the same page. you want to comment on the tax piece or comment on earnings >> i think the tax conversation is wrong they should be asking middle class and people looking for jobs what do you want? do you want this notion of fairness and cutting taxes, or do you want jobs and higher wages? if you want jobs and higher wages, don't cut taxes, slash taxes. what is the distinction? >> it's -- there's so much worry about the deficit. the economy we've seen it in reagan, in kennedy, we've seen it almost every tax cut, it raises revenue

this notion of oh, if you cut taxes immediately t will raise the deficit. it will growth economy don't road you'll have higher wages, better jobs >> raises revenue but doesn't pay for itself >> raises revenue, but it's -- >> there's no -- there's no economist, conservative or liberal who will do the math and suggested that it has paid for itself >> of course it has. if you look at reagan's tax cuts, it's raised way more revenue, record revenues but what happens is you do have to cut spending sometime you do have to rein in the government and mick mulvaney, the office of management and budget has a plan to lower spending. what happens is it does raise revenue. tax cuts raise revenues. >> we don't even talk about the other side of the income -- we don't even talk about cutting spending because it's just a given. it's almost like -- you know, i

had arguments over the years about this they know what we're spending. they know it will go up year after year just broaching the spuubject of cutting something, it's like what the only side of deficits anyone talks about is the tax revenue side the idea that you would cut spending is so foreign to most people in washington just the idea that you would slow the growth of spending. they get a rash. they start to go wait a minute they can't they can't that's an idea, isn't it maybe you could -- maybe the deficit wouldn't be so bad if you could address the spending side >> that's exactly right. the question about is it priced into the market, it most certainly is not priced into the market >> a tax cut is not. >> a meaningful tax cut is not priced into the market this is an opportunity if you look at it, it comes at a good time. because the federal reserve is trying to get out of the way of

capitalism, trying to reduce or shrink the budget. but also raise interest rates. they should do that. the central banks are in the way of reflation and what you need to do is cut taxes and but the economy is doing extremely well >> we have to pause from our normally scheduled programming because the president has just got ton twitter. what do you think? about tax reform >> not about tax reform, not about corker >> about the nfl >> about taking the knee >> president trump -- before they took the knee, kaepernick just sat for a while, andrew the knee made it more -- i don't know, made it more dignified. the president tweeting why is the nfl getting massive tax praks while at the same time disrespecting our anthem, flag

and country. change the tax law >> the nfl is a flaun fnonfor ps the institution itself >> a lot of the stadiums are financed through the taxpayers >> i don't think he's referring to that. >> no, but in general, this is something i thought of recently. in general all the tax pays who paid for the stadiums don't go into the stadium to hear a partisan protest you paid for the seats, you paid for the concession stands. >> there's been protest over those stadium costs for a long time for people who are not nfl fans >> after you paid for the stadium, you want to watch a sporting event >> we paid for the streets, there's parades into the streets, protests in the streets all the time >> but you don't have to pay to go in and use it >> no but the taxpayer pays for the roads. >> but you don't pay $400 for a seat to watch a sporting event and hear a partisan protest. >> that's a different tax -- the

ticket is your doing the taxes are everyone's doing >> people have problems with public funds for stadiums for a long time. this adds a whole new dimension of it. >> but in truth, i think his reference is literally going after the structure of the nfl this is a shot across the bow at roger goodell and at all of the owners because of the structure with which that corporation, if you will, or entity, institution structures its taxes >> he's got another tweet that we want to bring to everyone as well >> wait. back in 2015, time said that the nfl announced on tuesday its voluntarily relinquishing its tax exempt status. >> that true >> yeah. >> that's why it started to pay taxes. >> is the president behind on that >> it looks like in 2015 they changed it this is about immigration?

is that the next one there's a third one. the problem -- the problem with agreeing to -- god the problem with agreeing to a policy on immigration is that the democrats don't want secure borders, they don't care about safety for the usa is that true with you, andrew? you don't care -- >> who doesn't >> democrats >> why would you look at me? >> he's calling for an end to the nfl tax break. in 2015 they gave up their tax exempt status. they are no longary ter a tax e status >> bernie sanders is not specifically a democrat either, right? what was corker's line yesterday? >> somebody is missing a shift in the morning >> you think that's clever >> i do. >> i know you do. >> any time these things -- >> you're a clever guy >> any time these things get kicked off -- >> they made $10 billion in

revenue in 2013, which is why they gave up the tax exempt status >> so they already gave it up. >> i have no idea what the first one is about >> we should look into it deeper we're doing this on the fly. >> i forgot about that >> you could have tweeted that i wouldn't have tweeted it because i would have looked it up first that's the difference. that's why i -- >> you don't even need -- >> or my minders would have told me >> you don't even need a shift if they were on their shift. >> he says getting massive tack break tax breaks >> they give money to the military, too. >> we have to look into this deeper they did start paying taxes. i don't know what other tax productions. >> did he say tax exempt status or -- >> no, he said tax breaks. a lot of things could play into that >> exactly i would really like you to be right about this i would.

for once. showdown in queen city t procter & gamble voters will be voting today on whether to allow nelson peltz on to the board a live report from cincinnati next what are the ingredients of a life well lived? is it the places you go? the things you own? or the people that fill it with meaning? for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions. protecting what's most important to you. that's the power of pacific. ask a financial advisor about pacific life.

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the month-long proxy fight between procter & gamble and nelson peltz coming to a vote this morning share holders will decide whether to add peltz to the board of directors ge has roots in cincinnati immelt was from there. they did it. it was like, yeah, we'll do it we could use some help maybe you have some good ideas p&g, no way, right >> not so much no they are fighting this hard. and the city that you and i both love, not only taking sides in this fight, but aggressively rallying behind their hometown company. p&g. here's the cover of the cincinnati inquirer. p&g votes, stakes huge for cincinnati it does matter we've been talking about how 40% of the ownership of the stock is retail out of that, 25% is p&g alum

because of stock compensation. you have seen it in the local news pulled out this ed over itor ci carto cartoon. it shows the activist investor barbarian storming the gate. i also asked the mayor of cincinnati about it on twitter he shot back instantly vote blue for p&g and the proxy fight. taylor already creating value, improving the company. peltz will only destroy value. don't be fooled. p&g also paraded celebrity ceos to endorse the company to vote against peltz. there have been countless articles in the cincinnati enquirer suggesting that peltz is threatening local jobs, he

will cut costs and move business out of cincinnati. one article suggested that peltz deals have cost 100,000 jobs at other companies. to be clear, peltz is not talking about layoffs here at p&g. in fact, p&g itself has already cut more than 30,000 jobs since back in 2012 when its transformation first began that came in buyouts and other deals. layoffs. many of them here in cincinnati, about 10,000 jobs still in cincinnati for p&g about 10% of the total global work force i just confirmed many of those people do live in the west side of cincinnati as well. one thing peltz would say and trian would say, they're only fighting for one board seat out of 12 in order to make changes to the city or business, anything dramatic, it would be difficult. it would just be one seat. he is here peltz and many other shareholders, things get going at p&g headquarters around 9:00

a.m. management will take questions votes will be starting hopefully we'll get the results shortly there after. >> sara, are you in the camp -- we talked about there earlier this is what i surmised given conversations with people i had on both sides of this, no matter what happens, to some degree nelson peltz has won, not necessarily a seat on the board, but in terms of a real shift in thinking given how close this is imagined the vote will be either way. that it will force real change >> absolutely. that's already been reflected in the stock price. it's trading near multi-year highs. the pressure has been positive at least for results at p&g. and really put on the pressure on david taylor and his two years as ceo to keep this transformation going start to show it is bearing fruit which they have done in the last few quarters. that's one part of the answer. the other is everyone says this will be close and it will come

down to three index funds. even if he doesn't win, i think that p&g felt there are a large group of share holders that have questioned some of the board's decisions over the years the stock has underperformed peers in the market over the last decade. and already taylor and others are talking about adding more board members with cpg, consumer package goods experience, something not represented on this board peltz says he brings it. p&g says, that's adjusted foot business already they're talking about a vetting business where they will bring on board members and refresh things they're making moves to respond to shareholders. he got all three proxy advisory firms, too. >> sara, how many times have you actually been to the -- would you know how to get to the west side of town if someone told you that they were going to meet you over there tell me now? >> i would >> name one street

name one street over there can you? >> one street on the west side i used to go to finney town. >> that's not the west side. that's where immelt is actually from >> it's west of 75 isn't that the divider >> i guess so. i'm talking about price hill or dell high or -- >> the real west side. >> you would be like a fish out of water maybe -- i would like to get on the board of skyline do you think they need representtation? >> private company, i don't know you should get on the taste tests of sky line. i knew you would ask me to bring skyline. i'll try to do it if they have it at the airport. >> i like when it comes with the spaghetti. we have to go. thank you. we'll talk more about this later and maybe about nelson peltz later. you have an exclusive interview with him at 10:00 a.m., followed bay sit-down with david taylor at 11:00 a.m

that's good. poth of t both of the guys on the leading business network >> on the day of the announcement both there no matter who wins. when we come back, we'll talk to the ceo of bulk threads, a company replicating spider silk for use in footwear and apparel. first look at yesterday's winners and losers

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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 are indicated to open higher we had our correction. it was like 12 points yesterday apparently on the dow. the market pullback looks like it's over, temporarily it has been a very one-sided market for a couple of months now in terms of being pressured. another 44 points upward momentum on the dow. 16 or so on the nasdaq the s&p indicated up over 5. honeywell announcing a corporate makeover that will create two new publicly traded companies. here's what company is saying. it says after an intensive review it will spin off its homes product portfolio and its

adi global distribution businesses as well as transportation system business into two stand-alone publicly traded companies they say the planned separation transactions are intended to be tax-free spins to honeywell shareholders for u.s. income tax purposes and will be completed by the end of 2018 they also give guidance, talking about what they're seeing and says they are looking at third quarter earnings per share of 1.75 right now the street was looking for 1.73 so you are talking about guiding slightly higher. third quarter sales of 10$10.1 billion. they expect this to happen by the end of 2018. right now we're looking at unchanged. i see a bid of 149.92 and ask of 146.42 that stock closed yesterday at 143.60 they say the new distribution business will have about $4

billion in revenue. president trump tweeting since congress can't get its act together on healthcare i'll be using the power of the pen to give great healthcare to many people fast. here's an article, sorkin, from the "washington post," republicans suggest cutting off nfl tax breaks in wake of play procedure tests, ta er protests. the protests in a tax stadium, compared to protest on a street that everyone uses is not comparable it's not this is used to enrich -- [ overlapping conversation ] >> it's a total distinction between normal infrastructure and getting tax breaks to buy a stadium. >> i imagine it's a local issue, it's a state issue if you were republican you would say this is a state issue. i don't know what you're talking about.

>> are republic >> there are republicans -- >> maybe we'll see them start to do that. that will be interesting >> it's federal tax policy -- here's what it is. >> he didn't need his day care session, right he was right about this. [ overlapping conversation ] >> for the facts on this tax exempt bonds in the federal tax plan that allow you to use these bonds, tax exempt status for things like infrastructure there's a loophole in it that allows nfl stadiums to be included in that that's what they're talking about in this. >> okay. >> that's where they come down on it. >> in this case he didn't need his morning session. that was not correct he needed his handler. >> was confusing we were confused by it instantly. took us time to dig into it. let's talk about a special guest we have with us today. when we talk about high performance clothing, there's no shortage of players involved, but nature still engineers the widest variety of materials and the best today one start up is trying to

harness mother nature's expertise in this area joining us now is dan widmeirer, ceo of bulk threads. you're chemical engineer >> chemical biologist. >> and you have found what. >> over 4 billion years we have had living things on this planet she st they have developed things to make them survive. one of them is spider silk, made by eating flies, moths, spinning that into a protein fiber. we started a technology company out of graduate school to take that material and use it in consumer products. >> my guess is it was not an easy path to get from there to he here

>> a short 14-year period. >> when you first did t were you just trying to get spiders to do it. >> pretty much we had about 100 free-range spiders that were teacup saucer size that experiment ended quick. >> now how do you come up with this spider silk >> when nature makes a material, all the information is encoded in the dna of the organism we copy that out we use yeast, so global scale, biotechnology. grow it up in a giant tank, collect it and spin it making fibers like you would make rayon or nylon what does it look like >> at the end of the day, this is a yarn. this is the first commercial product made out of spider silk. this is a yarn, made out of spider silk, grown in a tank, we did a line of knit sprayeder silk ties. >> when you say stronger than kevlar what does that mean

>> a tie, no one cares how strong it is so we can tune the fibers to be stronger or weaker for this tie, we wanted the property to capture dpye silk loses dye easily, this holds dye six times better >> so more brilliant colors? >> more brilliant colors, less waste. we have a big problem in this world with the plastics that go into our clothing, with what ends in landfill >> how does this play out in a market where i might be looking for things made with this? what kind of partnerships have you developed? >> we have two announced partnerships, one with patagonia doing performance outdoor wear and one with stella mccartney in high fashion we debuted two pieces in fashion week you'll see this continue time and time again as we go through

the thousands of materials we've made >> this is like a whole new industry this sounds like genetically modified food, but you do material for clothing. did you see lord of the rings? >> yeah. >> do you remember that light stuff that -- you can't stab through it it's very light? could you make kevlar much lighter? >> that was the inspiration in the beginning. we got government grants, we were funded and that's what we were going after >> we were talking about this in the commercial break you want do this as a white label effectively to sell to others to manufacture, but also want to do your own branded stuff. >> we do a mix >> why the mix within your world there's a debate about whether you should be in the mixed business >> we talked to a lot of brands that came before everyone said, understanding the consumer, the problems of the downstream customer is key we look to do things ourselves

and we're looking to understand quickly what's going on in the marketplace and answer questions, then scale with partners >> will we continue to see partnerships from you and not some company coming in and buying you up and saying we'll take you in-house. >> i think you'll continue to see quite a few mapartnerships this an exciting space not a lot of people are playing in it. >> is the model for this like dupont is this lycra? >> that's a reasonable -- >> is that the way to think about this this is the next version of not lycra but some fabric that -- >> gore ttex? >> i would emphasize one thing those brands were one property, stretch to fit, water proof and keep you dry this is a technology platform. we start with spider silk but we made 4,000, 5,000 different molecules. >> you won't just give this selectively to the seattle seahawks if you get some type of -- >> it's possible >> he's a huge seahawks fan.

that's not fair. >> unfair advantage. >> chemical biology. >> spent way too many years in a lab. coming up, how many apple evvices are in your house? ste liesman has some surprising survey data when we return my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to? synchrony financial. ♪ some things are simply impossible to ignore.

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welcome back to "squawk box. time for the executive edge. how many apple devices are in your house steve liesman has some surprising survey data i know what's going on in the sorkin household >> i want to hear your numbers we asked this question five years ago but the iphone was just on the scene with the iphone and the irnipad we've shown strong growth for apple products call it as american as apple you can get rid of the pie 64% or two-thirds of the public now report in our cnbc all america survey owning an apple product, up from 50% in 2012 that's some pretty strong growth

there in the five-year period. how many products? the average american household reports owning 2.6 afteral gizmos, that's up a full gizmo since 2012 it was 1.6 a big difference is it's suicwie str spread in every group. here are some of the breakdowns -- >> can i stop you for one second pfizer is mulling a full or partial separation of its consumer healthcare business that's a large part of pfizer. they ultimately plmay determine not to do it but it's one of the largest over the counter healthcare businesses in the world. any just announced this as part of a strategic reviewing alternatives for the company a lot of companies doing this. >> after honeywell, just hearing this news.

>> honeywell and pfizer splitting off. >> let me just quickly run through this last screen just some of the breakdowns. looking at under $30,000 of income, the average ownership is one product. over 100,000, 4.7. big difference between the south and the west 2.2 to 3.7 retirees, 1.3 to 3.6 the question becomes is there a product out there, any company out there that has that kind of permiation into your household maybe some toiletries, a company you don't know very few companies like this have that kind of penetration into a household >> interesting >> centrum, advil, ambisol and preparation h, steve a lot of different -- >> right, but all of those add up in dollar amount to -- >> 3.4 billion >> $7 in your pantry >> pfizer stock trading higher on this. you can see it's up 31 cents

>> thank you, steve. >> i own nine apple devices. >> i think we own ten. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

>> stocks to watch today shares of tokyo electric power

are lower after a japanese court ordered the company, along with the japanese government, to pay $4.5 million in damages following the 2011 fukushima disaster shares of tepco fell nearly 4% tokyo electric down less than 1% samsung having its best day in more than a year the tech giant is expected to announce record profits for its memory chips in the third quarter. samsung, gaining nearly 3% on the day. keep an eye, if you will, please -- or if you want to, or not -- i'm not ordering you to do it, but shares of sky and twenty-first century fox are both active -- or could be active today the u.k. competition authority announcing it will examine the proposed deal between the two companies. rupert murdoch's twenty-first century fox is looking to acquire sky for roughly $15.4 billion, and it's been all tried before, and then roger ales, and all kind of nuances to whether

this -- what happens here. >> the henl fund has been pushing for changes at that company. of course, the big proxy battle going down later today in cincinnati with procter & gamble and trian. >> big week for them >> it is a big week for trian one way or the other >> you can cut the planes. you can cut the cars you can cut the people >> i don't have the physical stupid certificates, okay, so i'm -- i've got these things >> from the -- when ge owned nbc. >> from when ge e owned nbc. to get it, you got to sign away your first born child. you got to do, did just to get new certificates costs more than probably what

they're worth. >> down from 60 watching the dog of all dogs. >> yesterday was down on the news the cfo -- >> i still have it you have any >> i was -- >> you got your own dog. >> no, no. >> no, no, no. just in the past year it's doubled, by the way. >> you are conflicted. you defend all the reporting because you own the stupid stock. you thud thishould think about . >> you could have made a lot of money on that stock. just saying. >> all right well, they're not getting -- >> trading at $19 right now. it was $3. >> you know the revenue numbers at the "new york times." you know who is not contributing one penny? >> we're going to talk to analyst anna about the news fa pfizer is considering strategic alternatives for its consumer health care business huge business. $3.4 billion in revenue. we'll be right back.

good morning. procter & gamble shareholders voting on whether to add nelson peltz to the board what you can expect from today's big vote straight ahead wildfires turn deadly in northern california as hundreds of homes are destroyed the latest on the developing story just minutes away. and bank earnings and the economy are in focus as u.s. equities futures pointing to a higher open. more records we'll get a preview of this week's big reports a top rated analyst about the sector is coming up. second hour of "squawk box" begins right now

>> let's take a look at the futures this morning, and after the slightest of pullbacks yesterday, the nasdaq's first down day in ten sessions, you can see the futures are indicated higher once this morning with the dow futures looking to open up by about 40 points s&p futures up by close to five. the nasdaq up by over 14 in our headlines at this hour, honeywell has announced the corporate makeover that the street has been anticipating it says that it's going to be spinning off its home products division also, its transportation systems business into two stand-alone publicly traded companies. the moves are expected to be completed by the end of 2008 the company also talking about how it is raising its guidance vital for the current quarter. it's looking for $1.75 a share the street was looking for $1.73, and the stock is indicated to open higher

it looks right now that the bid is at $143.80. the ask is at $145.26 after that stock closed at $143.60. another big company mulling a makeover, and this is news we've just heard pfizer, the drug maker, is reviewing strategic alternatives for its consumer health care business among the possible moves is a spin-off, a sale, or some other transaction. pfizer also says that it's possible that it will retain the business, which currently has annual sales of $3.4 billion >> i don't think it's entirely surprising, pfizer they're focussing on prescription pharmaceuticals they did the same with the animal health business, and i think they'll create and unlock more value for the shareholders by either spinning it out or selling it you know, there's much more synergy with a company like j & j with a strong consumer

franchise. >> we've seen almost, like -- the chair -- the musical chairs with consumer products and animal products and -- >> roll them up, break them out. >> pick them up. this is the latest iteration why does it make sense for pfizer >> it's a subscale business. it's not a core competence i think they've had a number of moves of late just to unlock more value for shareholders. they could redeploy the capital they generate from that elsewhere. perhaps that is a little more synergistic with the core prescription business. >> as you were beginning, i was looking up -- this is the kind of stuff i do. i was looking up robo cop. there was one company left that did everything in this movie omni consumer products i think in the future amazon -- there may not be -- it may be everything might be amazon, and i'm leading into this -- the possibility that they provide all of our pharmaceuticals at some point by getting into the -- not just the pbm

business, but mail order pharmaceuticals, i guess, and you think that's coming? >> yeah. i think that's coming. i think they're in active discussions with a number of players in the arket they've been reported to be in discussions with midmarket pbm's. even larger players like creme therapeutics is owned by the blue cross-blue shields. it's a $560 billion market >> all they have to do is buy a small pbm, and they could have large very quickly, right? or no? >> it's about 18 to 24 months is ma whaer hearing they have a core competence of mail order fulfillment, customer servicing. very easy to use simple on-line shopping platform.

it seems to benefit consumers. i know there are larger questions about if and when they take over an entire market at some point what will happen to prices how much margin is there that they can actually compress and then, by the way, what is that going to do to everybody else? >> right in the new term we have more price transparent market drug discounts has been considered to be kind of the real primarily of the pbm's, but amazon brings strength and scale with 75 million prime members, a

and. >> if you talking to doctor now, they say it's middle men who you don't need there and only drive up costs it seems crazy that given all the scrutiny amazon is already facing from going into whole foods and from people rising up and saying they're getting too big, you get into an industry like this, how much more does it put federal eyes on you for your growth prospects and for just for being so big >> it is an entrenched and complex market perhaps that's the reason amazon hasn't come up until now, but i think they're taking their time, and they're evaluating their entry. their general focus in every other market has been to, you know, improve the pricing and the convenience, if you will, for the consumer so the hope would be that while the middle man in the pharmaceutical business has been enjoying very fat margins, you know, those would compress >> would you want to own cvs,

walgreens or any of the other stocks, express scripps. >> it's an immediate threat for cvs and walgreens. they can move share from retail chain stores to the mail order channel. >> for express scripps it's an opportunity and/or a threat. if amazon chooses to partner or do a jv with express, perhaps express can grow volume, but i think they will see market erosion. i think there's more down side for the stocks we've seen the stocks selling off in the last few days, but, you know, it could get worse >> it reminds me of when they wanted to get -- who wants to get in the grocery business? why? the margins are you make pennies on dollars, and this is not a great business it's going to be more regulated. there's a target on the back of all these people, and it's really hard to figure out too. i mean, don't they have other stuff to worry about

>> it's a hard business. even trump talking about it. we got to negotiate. >> that's what i would worry about is bringing federal oversight. >> they have fat margins >> we have doctors that will come up when they talk about pbm's. they think these guys are, like, the devil. >> i mean, look, in some cases the doctors say they won't let us give the medicine that we want to our patients they're interfering with the doctor-patient situation the whole idea of a middle man of even existing, some people have brought questioning about that >> it's -- i think they will do it as a means to an end as

opposed to an end in itself. their whole end game would be to drive mail order penetration they bottle foods. they can over time repurpose the bricks and mortar assets of whole foods. if they don't transformthe business, cut pricing, and cut some of the fat out in this very, very complex value chain, you know, i don't think they would come in. i think there's a lot of advantage for them from a branding perspective they can actually solve some of the issues on the prescription market right now >> thank you good to see you in studio. the largest proxy fight ever coming to a head in cincinnati at 9:00 a.m. eastern procter & gamble shareholders will vote on whether trian's nelson peltz can get a seat on p & g's board. sarah eisen will have full coverage of the vote from p & g cincinnati headquarters. she will also have an exclusive interview with nelson peltz at 10:00 a.m. eastern followed by a

sitdown with david taylor, it p & g ceo. we'll get an update from cincinnati in a couple of minutes. okay another developing story leader of -- could make a unilateral declaration of independence france and germany have stressed support for spanish unity. the region's president speaking right now. we're going to monitor his comments and bring you developments out of spain in just a moment. also, defense secretary james mattis calling on the u.s. army to "be ready" with north korea "military options. ayman javers joins us with the latest good morning >> yeah, good morning, andrew. james mattis has said in the past that this is a diplomatically led effort in north korea, but the united states military should stand ready. he repeated that sentiment yesterday, and we get the sense now that there is some diplomacy going on both domestically in terms of u.s. politics and internationally in terms of the north korea situation at the white house today. take a look at the tweets from lindsey graham yesterday lindsey graham has been a frequent target of the

president. the president once called him a nut job, called him a disgrace, but yesterday the two men played golf together. lindsey graham tweeted "really enjoyed a round of golf with president trump today. president trump shot a 73 in woibd and wet conditions how bad did he beat me i did better in the presidential race than today on the golf course great fun. great host." maybe some of the bad blood between the two men is over with the president reaching out to lindsey graham after spending much of the weekend in sort of a war of words with bob corker today he is going to be having lunch with james mattis, and rex tillerson, secretary of state. the president has been at odds with rex tillerson as well tillerson calling a press conference saying he wasn't going to resign from his role of secretary of state, and also sending out a spokesperson to deny that he had called the president of the united states a moron. now forbes has just posted an interview with president trump in which the president addresses

that comment that rex tillerson allegedly made the president saying, "i think it's fake news, but if he did that, i guess we'll have to compare iq tests, and i can tell you who is going to win. maybe they'll be comparing iq tests today at lunch, but presumably, one of the things they'll be discussing is north korea. very tense situation there, but also a very tense situation now between the secretary of state and the president of the united states we believe this is the first time the two men will have seen each other in person since this whole moron flap began last week, guys >> there was a kid in seventh grade that i knew who used to do that used to always say compare my iq store with your iq score that was like, you know, key in the playground >> he probably had a higher iq >> he might have, but, you know, where is he now? >> there's, like, some big kid going to come along and stomp you and your high iq on the playground >> joining us now florida

congressman -- on national security and is a member of the foreign affairs committee, and we've dealt with north korea, congressman, for so long that i understand the criticism of not wanting to exacerbate a situation, but we've for 30 or 40 years we've seen what has gotten us in this position, so i can almost see how even without wanting to advance the military option, you might want to at least look like you have a military option to try to -- the situation we have to try and maybe make some progress is that what we're doing, or is there really a military option in the future? >> well, it's clear, as you said negligenting the problem has only made it worse, and we're in a much worse situation than we were 25 years ago. if you don't have a credible threat of military force, then kim jong un has little sneptive to look at what's going on around him i would say that the threat of

military force is part of it they've actually done a lot if you look internationally to squeeze the kim regime there is less cash going in there now. i would like to see that continue if he is hemorrhaging money -- he is never going to voluntarily give up his programs that's a key for him being there. if he sees the bottom falling out of his economy, that could threaten his hold on power, and that could be a way you could deal with the problem. >> you think there is enough pressure that could be put on him to where his eventually goal of having a -- even a hydrogen bomb that could hit the mainland usa, that's what he wants, doesn't he for leverage or whatever he wants to do that. you think there's something that would get him to stop or delay that development >> it would only be because he has to he is not going to voluntarily -- >> how does he know? >> maybe he doesn't have any money. he can't continue doing the program. maybe he sees because he doesn't have resources that his hold on power is starting. it's very difficult in that country because it's a

totalarian country >> are we willing to accept that eventually >> him having the bomb >> having the -- there are other countries that the capability right now to hit the united states mainland with -- >> i think the problem with him is two-fold. one, we don't really know how rationale he is. this is a plump 31-year-old kid. if he were born somewhere else and not to that family he could be playing video games and eating cheetos in some basement somewhere. we don't know how rationale he is the other thing is he is willing to transfer that technology to rogue states like iran if you remember, syria -- when israel took on the syria's reactor in 2006, that was north korea. that was before kim jong un, but that was north korea who was helping produce that i think this regime's history has shown that they're willing to export that technology so that may be a bigger threat than them even using it against the united states.

>> there may not be -- we have cyber capabilities we have covert capabilities. if there's a way you can neutralize this, that may be something that they want to do >> get updated on our cyber capabilities oorks are is that -- >> we do >> the thing back down and crash it right in the -- >> well, that's the issue. there is a lot of stuff on the classified side. i would also say him launching missiles, we have capabilities that would be able to prevent those missiles from reaching their intended targets >> do you know whether another test is imminent i've read that there's another one. >> we hear the chatter, but i have no way of knowing for sure. >> so you really said he is -- he is like a plump kid that could be in his basement playing video games eating cheetohs. >> he is an accident of birth. the only reason he is in that position -- >> i have a joke about watching tv and eating cheetohs do you know that joke?

>> i do. >> that's not what it's from, though congressman, thank you the way we jump from subject -- we go from the wpresident's tweets to this -- the news nowadays -- >> they have a relationship with iran iran would be dealing with the de-certification they could bolster iran's nuclear program. if we're in the same situation with iran in five or ten years, that would be even more intractible. >> thank you >> thank you coming up, when we return, the nasdaq snapping a nine-day winning streak as investors looking towards earnings season to drive markets what you can expect when the reports start rolling in we'll talk about it next stupid you're watching "squawk" here on cnbc

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>> he is also a cnbc contributor and was repeatly recognized by barron's as one of the top 1 00 independent advisors in the nation gentlemen, welcome to both of you. sarat, why don't we start with you. what are you looking to see this earnings season? >> so i think the financials are going to be really important because right now expectations are pretty muted they're brought down earnings, but i think they're going to over-promise, and you can have better earnings coming out of financial that is will drive the market going forward >> financials leading the way? >> i think so. if you look at the large banks, they've got international exposure you have global growth that's where you are going to get it i think regulation is actually tempered, and if interest rates actually move, you are going to get the financials getting better earnings. >> what does that mean for the market overall we're already sitting at record level on an almost daily basis >> i'm looking for more of a rotation i think the market could drive higher, but you are going to see sector rotation. there are parts of the market that are pretty over-valued. if you look at technology, you look at some of the utilities,

staples, they're trading at 20, 25 times earnings. banks are trading at below market multiples with higher earnings, trajectories, better balance sheets, and a better tax flow >> omar, you agree with that assessment >> yeah. i think the financials will play a big role i think expectations are at the point where financials can do a good job of leading the market i still think technology and energy will play a key factor also in earnings season. it's not going to be as good as q-1 and q-2. i think q-1 and q-2 will have double digit earnings. that's great we should expect not to be that good going into this quarter >> why energy? i mean, we're looking at oil prices really struggling to even stay at $50 a barrel we've had plenty of guests who have come on and say they think the direction for oil is down from there >> the expectations are very low. everybody thinks exactly as you said i think everybody is expecting they're going to outperform. >> do you think crude oil pushes above the $50 range. do you think it's just

expectations >> i think just the expectations have been so low for so long, and you compare year-over-year from what it was a year ago, it actually looks pretty good when the oil price has gone up to close to $50 just compared to last year, the same time, it looks actually much better for energy >> so where does that leave you with the market overall? do you see a sector rotation it sounds like you are even more positive about the overall market if you think many sectors are still going to be going strong >> well, i think we at the u.s. have been the beneficiary of global growth. europe and emerging markets have actually helped us quite a bit i think, you know, the weaker dollar is actually going to continue to play a big role in earnings as well as the overall market as long as we have stable currency, we actually can see another big run going to the end of the year. >> sarat, what is it that -- when you are talking about it, it sounds like you just think it's earnings and the economy that's been fueling markets. >> yes >> if washington actually does pass a tax korea form bill, what happens? >> i think there's option value for much more up side. i don't think the markets are building that in right now i think it's been focused on

earnings since really last july, and i think that's going to drive the market higher. again, i'm talking rotations here with sectors because i do think there are some sectors that are going to be ready for some disappointments if earnings come down on technology stocks, i think you'll see a big sell-off, and i think you can see money then rotating into other sectors. >> this is where you two disagree let's talk about technology in particular when sarat says he could see disappointments coming through, how do you counter >> i think overall we have been, you know, 33 quarters with positive results you know, i think it's going to be unlikely that we see another, you know, quarter with bad results right off the bat. especially when you see the momentum going in through where we are and expectations continue to lower if you think about what companies are doing, they continue to play the game of lower their expectations you know, beating the earnings is not going to be as difficult. technology, especially certain parts of technology, continue to have their positive momentum >> which parts do you like the most >> mostly the ones that are more digital. i think the more old-fashioned

technology you want to call that they probably will have a harder time the new technology, the fang stocks have positive earnings growth they continue to grow. >> sarat, what do you think about the fangs in particular? >> i like google i think that's a good company to own. i worry more about the netflix and amazon, the valuations are very high there. >> they're much higher than what people expect. that given p their multiples could bring them down. especially if you see interest rates starting to creep up because that could cause a rotation again as i mentioned into other sectors that are going to been if the for higher interest rates such as the financials

>> take a look at u.s. equity futures, which continue to indicate a positive opening for the markets here they are now up 37 on the dow. four on the s&p. 14 on the nasdaq

and in this simple everyday act, we see. when we give, we receive. ♪

good morning welcome back to "squawk box" here on cnbc we are life from the nasdaq market site in times square. among the stories front and center this morning, small business optimism fell in the month of september national sfed rags of business says the monthly index fell from 103 to 105.3 in august the group says that the drop in sentiment spread well beyond the areas that were impacted by hurricanes, although it points out that the index is still very near historical highs. aig says that it expects roughly $3 billion in third quarter

catastrophic losses. the insurance company says that that is primarily because of the hurricanes harvey, irma, and maria. the earthquakes in mexico are also contributing to that anticipated loss opec is calling on u.s. shale oil producers to try to help put a cap on global supply. this call comes from the cartel's secretary general who warned that extraordinary measures might be required in 2018 to try and keep the market in balance opec and other producers have cut, but u.s. production is up by 10% folks, some news just out from wal-mart dow component. wal-mart out with several significant announcements ahead of its p analyst meeting in arkansas retile giant announcing a new $20 million share repurchase program, which it expects to execute over approximately the next two years the street's consensus estimate right now currently at $4.37 for the following fiscal year, it's now expecting earnings to be about 5% above that range

that would put the range at about $4.52 to $4.62 a share >> we are following a developing story out of california today. at least ten people are dead and hundreds of homes and other structures have been destroyed as a string of wildfires sweep through northern california's wine country strong winds are fanning the flames, which spread quickly into an area where homes are relatively placed close together thousands of residents have been forced to evacuate at least 5,000 people were under mandatory evacuation orders in santa rosa alone that counts for about one-quarter of the region's residents being displaced by fires. governor jerry brown has declared a state of emergency in eight counties, including napa and sonoma a separate wildfire torched at

least half a dozen homes in the affluent anaheim hills neighborhood in southern california we will bring you further updates from california as we get them okay we want to talk about big banks getting ready to report. what you can expect when the numbers roll out our own will fred frost joins us with that. good morning >> good morning to you, andrew so earnings for the second half of 2017 this trend is stark. it equates to nearly 10% decline sequentially from last quarter, which was soft itself. of particular focus will be whether goldman sachs continues to underperform fears peers in a relative sense banking weakness has been well telegraphed and explains some of the share price weakness in the first two months of the quarter. within retail banking, although

the average ten-year yield in q-3 remained low at 2.24%, the benefits of the june rate hike should be felt this quarter with a higher net interest margin the last few weeks of rising rates may allow guidance there to improve another area of focus for the earnings calls will be for tax reform banks pay a high rate of corporate tax, so a cut to 25% would benefit all of the big banks. let alone, a cut to 20%. and with some recent senate confirmations of regulatory appointees, investors will also be hopeful of deregulation picking up pace. guys >> okay. thank you for that meantime, institutional investor out with its annual all america research team. the newly minted number one rated bank, as john mcdonald joins us right now >> you heard what wolf just said >> pretty good summary from what he described

kind of a mixed bag. >> the banks are benefitting from the rate hikes that have already happened they've already enjoyed the repricing of the loans, and they haven't had to pass along any of that in our checking accounts, if you notice. we haven't seen much of an creation in our checking coun accounts >> who do you love and hate? >> the groups really rallied on the macro. we'll probably take a little bit of a breather here as we digest -- >> for the entire group. >> as for the entire group i think we priced in weakness on the prints just because everything is rallied on macro i think the macrowill be a reminder that the estimates probably aren't going up or down they're going to be pretty flattish >> still, break it out there are certain banks you like more than others >> absolutely. still like the reinstructing stories. citigroup, bank america still getting on their feet after many years after the crisis still kind of getting -- moving into offensive mode after

playing defense for many years and restructuring their business jp morgan at 1.8, 1.9 to book. citigroup is 7% to 8% return on equity we're looking that to grow to 10%, 11% jp morgan is already doing 13%, 14%. >> you are considering it a value play >> absolutely. >> how are you thinking about goldman sachs versus morgan stanley. we used to talk about them in the same sentence. i don't know if we do anymore given that they're almost in different businesses >> a little bit outside my coverage i focus more on the traditional banks and the money centered banks. i think there it's about more morgan stanley diversification of their model, and what goldman is going to do with this model going forward. >> how do you even think about wells fargo given all of the terrible headlines that they've suffered over the past couple of quarters >> i think they'll get through those. they're going through a big transition at the company. they used to always focus on growth first, and they're transitioning to being a big bank that looks like the

economy. they're going to be a slower growth company >> have they been hit so hard you could put them in the same value category that they will come back from this, or do you say that there's actually more down side because of where this is all going >> i think there's a value story at wells fargo it's going to take two years or so to play out because they're trying to turn a battleship around it takes a while to move a battleship and turn it around and get it to grow again there's a lot of internal transition on the strategy i do think that there is a value story there. >> is there still any m&a left to be done in this category? not necessarily that size, but, you know, we just saw p & c on the screen or some of the other regionals >>, this but there's a big obstacle p & c, the ceo has a joke about, you know, he is trying to turn all the branches to look like the apple store. the last thing he wants to do is buy someone else's blockbuster stores the transition of the role of a branch is an impediment to m&a that's something that's slowing things down. there's also not a lot of divergence in the multiples right now. i think m&a is going to be slow to come back >> are there any other big money center banks that you wouldn't

touch right now? >> no, again, i think what i would say is i would wait until earnings come out and see weakness there prefer the value stories, citi, b of a just on price and valuation. >> final question, as we ask the bank ceos, i'll ask you the question all the money center banks hate bitcoin. some of the other guys don't where are you? >> i'm in the middle on that one. i'm not going to enter the fray on jamie versus lloyd. i'll leave that to them. >> appreciate it thank you. thought i would try. >> thank you going beyond sanctions and diplomatic efforts to deal with north korea and iran what options are on the table. we'll ask former assistant secretary of state p.j. crowley after the break. in the meantime, check out the futures at this hour continuing to show some gains early on 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. those people might just get what they want out of life. or they could get even more.

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♪and let me play amon-- (ding) (bell mnemonic) >> wal-mart shares are rising in premarket trading after announcing financial highlights ahead of its analyst day to recap what we first told you just a couple of moments ago the retail giant announcing a new $20 billion share repurchase program, which it expects to execute over approximately a two-year period. also, repeated adjusted earnings guidance for the current fiscal year of $4.30 to $4.40

the consensus estimate at $4.37. for the following fiscal year it's expecting earnings to be approximately 5% above that range. that would put the range at about $4.52 to $4.62 per share the street currently at $4.62 already for fiscal 2019. wal-mart saying it sees sales growing by about 3% or more next year driven by improvements in comp sales and e-commerce. then we have the big news from honeywell that announced that the corporate makeover that the street had been anticipating it says it's going to be spinning off its home products and preparation systems business into two stand-alone publicly traded companies the move is expected to be completed by the end of 2018, and then on top of that another big company mulg a makeover, and that one is pfizer take a look at this stock. the drug maker, we should say that stock on the radio up about, oh, a little over 1 % right now. it's saying that it's reviewing strategic alternatives for its consumer health care business

among the possible moves a spin-off, a sale are or some other transactions pfizer saying it's possible that it will retain the business which currently has annual sales of $3.4 billion. a lot of corporate moves this morning. perhaps it will move markets >> what multiple do you put on, like, advil sales and -- what's normal advil? they make a bunch of really good -- centrum. really well known brand names. $3.4 billion in consumer products it's not worth -- >> that was a revenue number, though >> what kind of multiple do you put on sales that's why i said sales because it was -- >> rather than -- >> first of all, i think most people would look at -- >> is it 5 or 10 is it a $30 billion? is it 20, 10 what is it >> i do not know the answer. i think we have to figure out the ebida piece of it. >> it's not sales? a lot of times they have a sales, you know -- >> they might have a sales comp. i'm -- >> a multiple on sales because

the margins aren't big you can buy tylenol, not advil, or whatever. i take advil >> who buys the consumer products unit? >> most of the things will be sold -- >> you should be able to figure it out based on the -- it's worth some multiple of sales that's worth -- is it two times sales? >> probably depends on the -- >> five times sales. >> depends on the buyer and what they can do with it. >> it's not an internet company. it's the ebida that's the main component of the comp if it's an internet company, you do it off of sales >> i'm just trying to figure out whether it would be worth $10 billion, $20 billion, or $30 billion. >> i don't know the answer president trump faces an october 15th deadline on whether to de-certify the iran nuclear deal let's bring in former assistant secretary of state in the obama administration and author of "red line, american foreign policy in a time of fractured politics and failing states, peter crowley. one of the things that you think the president's lurj companion today, rex tillerson, is you say

literally he is not long for that job you use the term dead man walking. do you believe that? >> i do believe that notwithstanding his press event last week where he says he has no intention of leaving. i think this relationship is very, very troubled, and at some point in the foreseeable future, either he will jump or he will be pushed. >> and it's interesting to conjecture who would take his place. you think nikki haley. other people have been talking about pompeio. he seems like he is loyal and has the president's trust. nikki haley sometimes seems even more, i don't know if bellicose is the word, but even more strident than the president on some of these things you know, in the past she was not always, you know, the apple of the president's eye during the election, you remember that. she's now on board, but i don't know if he would have the same idea as far as loyalty goes with her. >> well, i think last month the

president had a fairly good week at the united nations, and i think clearly nikki haley deserves some credit, you know, for keeping him, you know, properly focused and channelled. i think she has become an influential voice within the administration, and i think she'll gain some consideration there. as will mike pompeo who is a terroristed a trusted advisor to the president. >> it's almost like talking about the same thing if they de-certify, what you expect that it's going to congress, and then corker is going to be involved with what finally happens. the president has said that corker is like the architect of the deal you say that corker was not that thrilled with the deal, or how would it play out, do you think? >> senator corker is vonsible for the administration process that the administration clearly feels uncomfortable with i think it's important to kind of pick up where congressman

desantos left off in your last segment, which is, you know, the virtue of the iran deal at the present time, it is something -- it is a challenge. you know, it is a problem ten or 15 years down the road, but it buys you time to be able to deal with the here and now problem like north korea if you do blow up the deal as the net result of process that the president may kick off, you know, what's to prevent iran from racing to a nuclear capability just as north korea has over the past ten or 15 years? >> another thing that i don't know if every realizes, you point out that it wasn't peace in 1950 with -- in korea it was an armistice, and it's still an armistice, and it's always been, you know -- we've been right on the -- theoretically, we've had troops there, and the war, you know, we've been on the cusp of maybe another engagement, and that's still the case is that always going to be the

case >> i think, sadly, the answer is yes. you know, we've been in a state of belligerence with north korea for years. it defines itself by that. it sees a conflict with the united states as its primary national security threat i don't think that dynamic is going to change. the dilemma with communications like the president's tweet the other day that talking to north korea is a waste of time, you know, is that that necessarily leaves the united states with very stark choices you know, either take military action to try to eliminate the nuclear capability in essence, you would have to undertake regime change to do that or, you know, learn to live with a north korean nuclear capability that's -- that may well be what we're forced to do, but it's an unpalettable choice. >> that's -- that is what we're talking about, right you figure five years from now

north korea will have the capability if things don't change, if hitting the mainland u.s. with a hydrogen bomb, so any city in the u.s. could be a specter of north korea launching -- would we be able to shoot it out of the air? do we have a star wars defense system, or will we really be living in a new cold war >> well, i think that as general joe dunford, the chairman of the joint chiefs said yesterday in testimony, we have to presume at this point that north korea has some basic capability. you know, is it accurate enough to threaten u.s. cities at this point? it probably not. clearly, on the trajectory that they're on, you know, they're going to obtain that capability at some point in the foreseeable future their rate of progress now has been very surprising, but very pronounced i think that north korea can be deterred you know, as steve bannon said, you know, in his exit interview with the american prospect, the dilemma is that there's no

military option that doesn't put hundreds and hundreds of thousands of people in south korea, japan, and the united states, you know, at risk. as congressman desantos said in the earlier segment, a major dimension of this is not yet can we contain north korea even a nuclear north korea? i believe we can we have to work very steadfastly to make sure that north korea does not have the means to take their cash crop and export it to somebody else. >> just wonder, i'm trying to figure out how many real outcomes there are there's that -- we try to stop them, but we don't, and they finally have the capability to hit us, and we live with that. there's that we do something that results in, you know, unfortunately loss of life maybe in the thousands, maybe that -- maybe something like that. or is it possible that we make it so uncomfortable that he calls off the development and freezes it where it is are those the three --

>> the dilemma with the freeze option is that requires diplomacy. the trump administration, or the president himself, does not necessarily see that as an option i think the -- actually, the administration has a reasonable strategyfissures that can be exploited, but we have to play the long game here we're going to have to be patient in dealing with this growing threat to us that's where it's interesting this dynamic between north korea and iran we have to find a way to be patient with respect to iran as well >> all right, p.j.

thanks for being with us this morning. you got anything, sorkin you know anything? >> i do. >> what's -- >> when behr bought merck, it was seven times sales. >> i see that too. is that true >> that is true. it was about seven times sales >> but right now pfizer is at four times sales >> right >> overall some different businesses are -- >> because the disclosure is it's an ebida story, which is -- >> well, i'm not saying what you would use. i'm just saying in general what would you -- what would this -- >> somewhere betweenou fr and seven. >> so that's 12 to -

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>> orlando, thank you very much for being with us today. tell us about this pledge that you have made. $10 million. how are you delivering it? >> look, i grew up in it west puerto rico, which is about 100,000 people down on the west coast. a week after the hurricane hit after we were finally able to get in touch with high school friends, family members, extended family members, we

noticed that in the areas particularly on the west coast of the island, they have yet to receive any form of centralized government aid whether that was federal or from the centralized government of puerto rico. we stepped up and said, look, we not only have to make a financial pledge in the short-term, but we have to set up our own delivery network to go direct to those towns that are in need. >> why is this so different than when we've seen hurricanes hit on the mainland? what's different about puerto rico and the damage that's been done >> look. i mean, the hurricane was devastating. i made my first trip there literally one week after the hurricane hit, and when you are flying down into puerto rico, it looks like a complete war zone, disaster zone. that's wanot the island that people are used to going to. it is isolated it is, of course, surrounded by water, so it's very hard for people to evacuate very hard for people to come in.

very difficult to ship into the island now, what we did in the private sector is we're trying to give an example that despite those difficulties, it can still be done we have been delivering by air on a weekly basis about 200,000 pounds of food and water to those municipalities that are hard to get to, but you can still -- you can still get to them the mayors come with trucks and buses and suvs, and they fill them up, and they take them to the people who have not received any aid yet. >> orlando, very quickly, there's an economist there that says this could set the island's recovery back by 12 to 13 years because of the immense devastation. what is the number one priority you think needs to happen? >> look, the -- i think it's too early to talk about recovery and rebuilt. when you are on the ground right now and you are talking to the mayors of thesemunicipalities, which are close to the people and they're very good operators, it is way too early to even think about how to recover

right now it's about survival. you have shelters, towns, rural communities that are running extremely low, to this day, almost three weeks after the hurricane hit on food askand wa. you have -- you have to have centralized government help getting to those areas after that -- >> orlando, we thank you for your time today, sir we friesht your donation, and we will catch up with you again to see how things are going thank you. >> thank you coming up, will the president keep janet yellen, or will she be replaced we'll discuss that after the break. plus, the latest from california as the state battles deadly wildfires. live report is straight ahead. "squawk box" will be right back. oh, that's really attached. that's why i rent from national. where i get the control to choose any car in the aisle i want, not some car they choose for me.

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that something wonderful can happen. those people might just get what they want out of life. or they could get even more. new this morning a potential new era for pfizer the pharmaceutical company explores a sale of its consumer health care business showdown in cincinnati p & g shareholders will decide whether or not to give nelson peltz a board seat a live report from the company's headquarters straight ahead. plus, from slaying vampires -- >> give us a kiss. ♪ >> to slaying business in the kitchen. actress sarah michelle gellar

joins us on set as 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 welcome back to "squawk box" here on cnbc live from the nasdaq market site and times square i'm joe kernan along with becky quick and andrew ross sorkin the futures right now are positive up to about now 50 points on the dow. up five on the s&p up 16 on the nasdaq. indicated for another positive open this morning. >> and we have some news just breaking in the last half hour a couple of things going on. wal-mart announcing a $20 billion share buy-back program the retail giant also giving guidance that it's roughly in line with street estimates and a projected 3% or better increase in fiscal 2019 sales now, those announcements coming ahead of wal-mart's analyst day in arkansas. also, a couple of other big corporate announcements in the news this morning.

pfizer says it is exploring a full or partial separation of its consumer health care business the unit had 2016 revenues of about $3.4 billion, and it includes brands like centrum and advil. the company says any decision related to strategic alternatives would be made next year also, honeywell announcing it will spin off its homes products and transportation systems businesses into two stand-alone publicly traded companies. this is a corporate makeover that the street had been expecting. the move is expected to be completed by the end of 2018 you're seeing that stock up over -- a little over 1% right now. fed chair janet yellen's term is quickly approaching its expiration date, and with several names floating about as replacement, nobody knows if the president will keep the obama nominated fed head or replace her. joining us right now to talk more about it is the "wall street journal's" chief economics commentator greg and nathan sheets and our senior economics reporter steve liesman. gentlemen, welcome to all of

you. this is a question that wall street is really trying to ponder because everybody seems to think that this is the only game in town right now the fed is kind of determining where markets are head and whether there are fair value waeg - valuations greg, i want to start with you there are a lot of names floating out there you think it's four candidates what's the binary choice >> i think we have four candidates >> powell has been on the fed for the last five years, and is more or less voted into yellen and bernanke >> there are two unknowns.

one is gary cohen, who, as you rnl, was know, was in the running as being trump's closest economic advisor, but his star seems to have faded somewhat. gosh, does anybody really know what's going on in trump's mind about whether or not he wants that candidate then there are a couple of other people floating around on the periphery, like john allison, who used to be the ceo of bt & t. honestly, i would put his odds extremely low. >> where do you come down on this i know it's really hard to try and handicap >> i think he has done a nice job dividing it. i would add more detail to it. i think that there's yellen who was continuity and powell who was more continuity light in the way that powell has come forward, among other things, and talked about details about how he would change the regulatory environment for finance. warsh is seriously the change candidate. john taylor, change light. he gave a very important speech at stanford conference this past spring where he said, you know what, we need to talk with the

other side warsh comes up with very different ideas. i think he is correctly criticizing the fed for a lot of the way it makes policy. i don't necessarily hear or understand or have not seen the research backing up how we would change what he does. in other words, changing the inflation model the fed uses, changing some of the communications things the fed does those are things that he has yet to really -- >> there are questions when you try to figure it out, we could be facing much of the same or a very different fed, and that's got so many people just trying to anticipate how the fed is going to get out of this massive trade that they've kind of rolled up here reply feeling for the differences are first and foremost rhetorical. having been inside the federal reserve for many years, the fed is a big ocean liner whoever is at the helm is certainly going to have an impact on the direction of

travel it moves slowly. >> you're not suggesting whoever it is is going to be just shifting the deck chairs on the titanic, though. >> well, maybe a little bit more than that, but he is also -- or she -- has to continue to deal with the reserve bank presidents has to continue to deal with the staff. has to deal with the political constraints of congress. i think at the end of the day this is an important choice. i don't think it's -- >> i push back a little bit on that in that the number of people that the president has to appoint here, creates the possibility of, you know, changing the captain, the first mate, engineering, you know, just to follow metaphor here that he has the opportunity to make vast changes, and what you could be setting up here is a conflict between the federal reserve bank presidents and the board of governors, and that could be an interesting set of developments for policy.

>> if i could -- i just wanted to sort of, like, agree with steve's comment there. i think that on the one hand, the committee structure of the fed does create kind of a center of gravity effect that means that the chairman can't push it too far to the left or the right. leadership does matter, and the chairman by definition creates a default position around which the other members have to form their opinion. if you have a person in there like a war diagnosis sh or taylor who fundamentally believes policy has been too loose, that dictates a default position that you are going to go three or four times rather than two or three times in the coming year, and it's up to other members to develop a position about why that's not the case i agree with nathan that you aren't going to get radical changes, but i would not understate the extent to which you develop a bias in one direction or another because of the chairman's preferences >> but even there the staff is very important in setting the possibilities, and the menu of policy options in terms of the other

appointees, if all of those appointees are in unison in their views, yeah, that could be very powerful. the probability that all of those seats are going to be filled by people that are seeing eye to eye -- >> let's get beyond -- >> that's fairly low >> let's get beyond the workings of the fed and get to the position that a lot of investors care most about, which is if a guy like kevin warsh or john taylor become chair of the fed, does it mean more rate hikes >> does it mean more rate hikes, and not only that is the communications structure different so that wall street is confused for a while where does that -- >> first of all, wall street is confused right now it's really interesting. people complain about the sort of -- of fed communications. at the same time i see that it's sort of working pretty well in that the market seems able to set its expectations for the fed and the fed seems to meet them i don't think it works as badly as people say it does. there's a sense of a lot of chaos because a lot of people are talking right now. i think it's going to be a

little bit different in the senses that yellen is more likely to push against fiscal policies of the president, but i also think she's less likely to believe the fed is too loose right now. i think the exact opposite is true for kevin warhad. >> i wanted to sort of weigh in on that because you hear this a lot. you know, janet yellen and perhaps jay powell have this mechanical view that if growth speeds up, you raise interest rates faster i just think that's too simplistic i mean, trump has been -- the people around him have been pretty clear they're looking for sustained improvement in growth. basically it means supply side growth that's a sort of thing that federal reserve does not want to get in the way of. the only thing they would resist would be if you get demand that drives unemployment rate below 4%, and, frankly, i think if you had a warsh or taylor in there, you would get moerlts the same result i think the bottom line is that

if you run the math, it's hard to look at this tax plan and get really big effects i mean, my back of the envelope calculation it is maybe you get .1 at the most .2 drop in unkbamt rate i just don't think it's a big deal i understand why people think that choosing this candidate has implications for the president's tax policies and his economic agenda i just don't think that once that person is in place, you'll actually get that much of an affect >> now, the other place where this could have very significant effects is in regulatory policy. i think there you are likely to see more dispersion of views and more dispersion of actual policy than is the case for rates i think in the rate space we're talking about, you know, something on the order of one more rate hike a year if the fed tracks in a more hawkish direction. the scope for regulatory ease,

if a fed chair and a board were inclined to move in that direction would be quite significant. >> meaning big changes potentially for bank stocks and the like, steve. >> i think the bank stocks are kind of smelling this. they get a pull me, pull you as interest rates and the yield curve, by the way, has been very interesting in that it's kind of generally flattened over the time the fed has been raising rates. that's sort of a bit of a kwaundry for the federal reserve. yes, it's true that the bank stocks will benefit, but i think what greg was saying earlier is that it was a process, and it takes a little bit of time over time the president should have a vast ability to change the board of governors and, therefore, the regulatory regime >> if i could add one point, it you can already see it happening, by the way. federal officials have seen more of a role for guidance from the political sphere on regulatory than on monetary last week we saw janet yellen vote with the trump appointees

to rescind the systemic designation for aig. that is just one straw in the wind powell has made it fairly clear subtly, i will say, in his speeches over the last couple of years, that he worries that the regulatory crackdown has gone too far. in my judgment, any of these candidates that are in consideration, you are going to get the regulatory stance of the fed moving in a less restrictive direction. >> greg, thank you very much nathan, steve, great to see all of you there's a string of wildfires sweeping through northern california's wine country. nbc's jenner bjorkland is live in napa. she joins us now good morning, jennifer >> good morning, joe these fires have been burning now for more than 24 hours they burst out across california's wine country. there's no other good way to put it at 11:30 at night and hopscotched through the northern part of the state, burning

73,000 acres at least and 1,500 homes, including a winery, a historic dairy, and a hilton hotel on the north end of santa rosa sort of in the business district, which was a big surprise for people, although they knew they were under red flag warnings. fire doesn't behave that way, and especially not in the middle of the night it did it time the good news is the weather has calmed down. it's nothing like it was sunday night to monday morning with single digit humidity and the winds picking up and gusting through areas and sustained winds that just brought every ember that was sparked to the next fire and spotting all across the landscape here. these are the kinds of conditions we only see a few times each century that's the good news that it's done, but the bad news is there are still no lines around these fires, and we're hoping at first light to get some update from fire crews as they report in

from all over the northern part of the state, and we can kind of get a feeling for how well they did overnight as the winds were calm hopefully trying to get the upper hand on some of these fires or at least get ahead of them i'm jennifer bjorkland live in napa joe. >> all right, thank you. jennifer, appreciate that. we still got a lot to come on "squawk box." up next, airline stocks, are they ready for takeoff we'll check in with the industry's number one rated analyst after the break. plus, actress sarah michelle gellar's new role. a mom-preneur is what we're calling her. the buffy the vampire slayer star will join us on set at 8:30 eastern time then, later, it is d-day for procter & gamble shareholders. a vote today decides whether or not nelson peltz gets a board seat we'll talk to an analyst you are watching "squawk" here on cnbc. at fidelity, trades are now just $4.95.

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welcome back among today's top stories, pfizer considering a makeover. the drug maker is reviewing strategic alternatives for its consumer health care business, among the possible moves, a spin-off, or sale, or some other transaction. pfizer also says it's possible it will retain the business

which currently has annual sales of $3.4 billion. we want to talk airlines this morning we've heard from a number one large cap bank analyst this morning as rated by snougsal investor we want to check in with the top rated airline analyst for the second year in a row want to congratulate him hunter kay is a managing director of wolf research covering the airline and aerospace and defense industries >> thank you >> let's talk about which airlines you like and which ones you don't and how we should even think about this sector now. there was a moment it was hot, hot, hot, and then it sort of came off a little bit, and now where are we >> stocks peaked out in july, and they've just tanked. largely due to multiple compression. on fears of a price war. we saw 70%, 75% of the move in airlines by changing the forward earnings multiple instead of a cut in ford estimate revisionre.

since then, the pricing has stabilized it's poor and weak, but coming off a low bottom, there's a seasonality tail wind going into the fourth quarter oil prices have moved up you're going to see airlines take marginal capacity out and you'll see stable pricing. we have earnings with delta. i think the theme will be stabilization of pricing steady demand. >> bill miller came on our set this is maybe now two or three years ago. >> this is more like five years ago. >> he was talking about how the airlines given the consolidation like the railroads, right? that there's only so much track, and it comes a really great business then you have warren buffett in it the past 12 months now jump into this space after saying for years he wouldn't, you know, touch it with a ten foot pole. >> sure. >> has something changed >> yeah. well, i think consolidation is dramatically overrated as it relates to why the industry is restructured obviously, the stats are pretty compelling in the fact that the

top four have 80% of domestic capacity, but that's not why the industry got disciplined in pricing power. that was about capacity. disciplined because of high oil prices that would have happened anywhere if there were no mergers. that being said, what consolidation has allowed for is airlines to respond month are quickly when the pricing environment gets -- >> i disagree. i think if it was just low oil prices, airlines would not be doing what they're doing >> high oil prices, becky. that's what caused the capacity discipline from 2012, 2013, 2014 -- >> you can't control we've heard again and again from people like gordon bethune that you are only as smart as your dumbest competitor >> high oil prices are everybody's problem. that's what drove the consolidation -- that's what drove the -- >> that's what kraed tcreated ts >> that's -- >> i was actually interviewing -- >> it was 2008 >> yeah. it was in 2008 >> $147 oil crude. >> that's the billions of dollars they bring in. >> so, again, consolidation is

not harmful, but it's not why this industry is better than it was before >> if there were more airlines, you wouldstill like -- even if they saw new competitors in triple space, you would still like them? >> it's not good, but, you know, you would have had seven airlines all shrinking 1% as opposed to 4%. these mergers don't have overlap. there's no redid you understand answ -- redundancies >> which ones do you like the most and the least >> we like american the most because they have a lot of wood to chop on the network you had the merger between u.s. airways, and you had an awkward fleet created. you have a lot of fat in the network. they're are 50% bigger than united in domestic network they have too many planes. available seat miles it's a measure of capacity they have too many planes. they may serve too many cities they could grow 1% maybe efficiently. delta is number two because of the cash flow and the margin, but they've already created that from their merger. >> where are you with united >> united, i think you have to

wait i like the turn-around story there. what we think about united is there's still more pain to come. i think this earnings season has been difficult they just have a good report actually this morning, but there's still going to be more pain the margin gap will widen before it sh rinks again. that's a stock you have to own next spring because they're either going to be doing it or not, and more changes are going to come. >> okay. it's great to see you. congratulations. >> thank you appreciate it. >> i think so that >> thanks for coming on. >> thank you >> also, quick programming note for you. delta airlines reports tomorrow, and then we're going to talk to its ceo, ed bastion, in a cnbc exclusive interview. it's going to happen at k a.m. eastern time, and hoefltly hunter will be watching. >> coming up, president trump questioning the nfl and tax breaks in a tweet this morning we'll talk to sports business professor patrick reisch next. then, later the star of buffy the vampire slayer and i know what you did last summer is getting down to business sarah michelle gellar joins us on set at 8:30 eastern time. we will be right back.

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>> on twitter it can be an uncomfortable place, but lots of people on all sides of this. they were taking shots at him for doing it this way. >> when we return, you may know sarah michelle gellar from her hit series "buffy the vampire slayer" or her many movies over the years, but now the actress is getting into the business world as well. she's going to join us on set with the details about her company's plan to disrupt the kitchen. we'll be right back. is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim,

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>> good morning. welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square want to look at stocks to watch in today's trading here's what's going on dow component, ge, general electric that stock fell 4% following news of management changes, including the departure of its cfo. ge also announcing ahead of yesterday's trading that ed

garden from trian, the activist fund, had been elected to the board of directors also take a look at drug maker eli lily downgraded to neutral from outperform at credit suisse looking at that stock down 3% this morning contract electronics manufacturer jabil circuits is downgraded from sell to neutral. they caution that compared to its peers, its earnings are among the most volatile. that stock down as well. president trump tweeting this morning why is the nfl getting massive tax breaks while at the same time disrespecting our anthem, flag, and country? change tax law the nfl did give up its status, but teams are potentially eligible for tax breaks, including the use of tax stream municipal bonds to bring in stadiums let's bring in patrick rich,

washington university in st. louis. he jouins us on the squawk newsline the washington post had a piece, and it wasn't about the president. it was not that long ago a couple of weeks ago, patrick, about republican lawmakers in red states and congress actually talking about something like this if you want to play sports, you're free to do so do it on your own dime pointing out that a lot of the stadiums are built with some tax benefits from tax free bonds is there merit to this argument at all, and does it go anywhere? >> first of all, thanks for having me on, joe. it shows roughly 65% to 70% of all money that's been spent on sports facilities since the late 1980s does come from public sources. whether it's tax breaks on

municipal bonds, sales taxes, hotel taxes, sin taxes and so forth. what you have to also look at is bh you evaluate the cost benefit analysis of each individual case, you got to look at, k on, well, there's also property tax increases that generally stem from new facilities as well as new sales tax revenues from events that those facilities can now host is there a reason to say it should not be done in a taxpayer funded setting, or does that -- is that not following? >> yeah. i mean, it's hard to follow that logic, and it's so funny we're talking about this because we're actually just talking about this in my sports business class at wash u the reason why this number is what it is, that the public has contributed so much to the facility is simple supply and demand each league is set up as a

monopoly you have 30, 32 teams and each of these respective sports leagues, but there is a larger demand by cities to host teams because demand is greater than supply, this puts teams in an advantageous bargaining position >> you know, this was in september a couple of weeks ago, and we -- i guess we did have the pence situation that happened a couple of days ago, but the president brought it up again this morning he said that, you know, maybe it does make sense to change the tax laws do you think it goes anywhere, or is it just more, you know, each side playing to the base? to their own respective bases? >> i really think this is each side playing to the base, and i guess one of the issues i had with the tweet this morning is, you know, it's a little bit misleading because obviously the nfl teams as they have during their entire existence, they pay for taxes on their tickets and the ticket revenue the sponsorship revenue. the leases -- the luxury suites. a little misleading. also, keep in mind that you do

have two other leagues the nhl and pga tour that have this league office tax exempt status the nfl gave up theirs two years ago. >> smith has already come out and said we talked about gary jones kept telling the players what to do, that it's against the players association and players union. i'm going to be fascinated i respect adam silver probably more than any of the other commissioners out there. he has done great things

it's going to be real interesting given that particular sport obviously with a larger percentage of african-americans than any other sport by far i suspect you're going to see some guys perhaps not doom out for the anthem. it's a week or so away i'll be fan naughted to watch. >> entrepreneur sarah michelle gellar, the co-founder and chief officer of family-friendly banking company called foodsters. >> thank you for having me >> we'll practice on that. >> i know what you did last summer and -- what is foodsters and how did you get involved

>> i like to think of it as it's sort of my second act. i had two young children, and i was looking for something where i could be more present in their lives, and i started to really realize that that was happenin in the kitchen all of these great -- one of the moments where you really spend time and put those devices down. it seems to be in the kitchen. my kids love to bake i grew up in new york city, so, i mean, i know how to make reservations, and that was about it i realized i was sort of missing these moments, and i went to the store to there was nothing that spoke to our generation, and so i have these two fabulous partners, and we decided to tackle this one head on, and we thought it f it wasn't us, somebody else was going to do it >> we have people that will come in all the time.

entertainers who come in they're the face of a product, but they're not necessarily the person who has been involved i understand had the scenes. this is different for you. >> this is really different. i mean, this is my fult-time job. for us it was about not just creating these really simple micks, but really locking up supply chain figuring out how we could offer the most premium product at an affordable price for everyone because what's the point if everybody can't have it? we use biodynamic sugar, which is the most -- you are laerg a lot now in wine, but i think it's going to be the future of food, which is giving back down to our multi-generational heirloom wheat flour that we can trace back to the acre it was grown on, but above all, it tastes amazing who doesn't love the smell of coming home and having something fresh baked? we are the most sustainable mix on the planet. >> how much does it cost >> goodness, depends where you are buying it. i would say normally about

$4.99, but we have a lot of bogos running. the big news is we just went nationwide distribution. we had -- we have only been in retail for about a year. our goal was to hit 3,500 stores by q4 this year, but we're really excited to announce that we are in over 7,500 stores. >> how did you find your partners in all of this, and how much money did you have to raise? >> as my mother would say, it's never nice to discuss money, but i will say that it has been a very interesting process in terms of raising money >> you raised more than $5 million, right i mean, it's -- those are the numbers that we've come up with. >> so we raised a seed fund initially. my two partners, a friend of mine from the pp.r. world. marketing. we realized that we needed sort of an extra hand that had cpg experience, and we came along, greg fleschman >> to hear her talking cpg experience, q4 >> i'm not the face of a brand i don't do anything halfway. if i'm going to do a television show based on a failed movie on a network no one has heard of, we're going to dominate and take

over and make it legendary we like to use the word legendary. we want to rewrite the playbook. >> what did your mother say about money? >> oh, don't discuss numbers >> problems. this is cnbc >> we get a special -- >> yes we raised a seed fund. it was very difficult to raise people think that being a celebrity it's really simple it's not >> we know that. all of us. >> okay. there you go. to say, you have a kleenex, right, but you really

mean a tissue, but kleenex -- when you think of any kind of baking or anything sort of in that realm, and we do plan to push the boundaries of what that realm is, i want you to think of foodsters for the modern generation baker >> when you say that this is really you threw yourself into it, what's the hardest thing you found out about trying to start your own company what caught you often guard? >> it was really honestly it's all the technical jargon i was basically computer illiteral when we started. somebody had to do the e-mail marketing campaign i spent a weekend learning mail chimp and for the first six months, i apologize to some of you that got those emails. they were coded by me. not the most sophisticated i love the challenge of learning something new and being able to take the celebrity and having that voice and being able to do something different. and to show my children that just because you focus your life on one thing, that you should never be afraid to try something else >> are there other actors or actresses that you have talked to that have gotten to become entrepreneurs in the process >> oh, i mean, goodness. jessica alba, obviously, with

such a great help, and she guided us so much through the beginning process of, you know, really preparing me for how difficult it was as a celebrity going forward and trying to explain that you are shedding that, that you are capable of more than that she's been definitely very helpful with draper james. >> i don't know where jessica alba stands on -- >> that's a good question. reece doesn't sleep. i have no idea how she does it for me right now this is my focus. my children are really young i don't think i want to take on, you know, says that much i always feel you have to be really present in whatever you

are doing, and for me to make this succeed right now, this is going to take my every day being in the office, you know, from the ground level whether it's supply chain, whether it's promoting, going to the stores and checking the shelves and making sure we're not out of stock, that we're forecasting correctly. >> that's how closely you're involved, every step -- >> yes that being said, it's not to say once we're really up on our feet and have proven concept, that i can't do both. i mean why not maybe i'll do a third career who knows. >> you like halloween. >> i love halloween. >> you do. >> yes i know what -- i know what you did last summer. i did. i remember >> you do? >> don't you like when they come -- when these -- it's my favorite time of year. >> oh, you were rail --

>> we really appreciate your time talking about foodsters >> nelson peltz holding a major vote today we'll check in with sarah who is at p & g headquarters, and, of course, that vote leads up to two big interviews on cnbc today. nelson peltz and p & g ceo david taylor "squawk box" will be right back. ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial.

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>> shareholders will vote today for procter & gamble to see if activist investor nelson peltz seeks a seat sarah eisen at p & g head dwaur kwaurtheadquarters in cincinnati i don't understand why it's so threatening to the company you own that much stock, big shareholder, there's a lot of board members. one guy comes on, got a couple of suggestions here and there. what is really at stake in terms of what they think they're losing if he were to get on the board? why do they fight it so much they do a lot of vetting, and you can't just come and say why not give me a board seat that's been one of the key arguments. i will tell you, the members of

the board are here david traylor, chairman and ceo of the chair it is a who's who of corporate america. meg whitman, terry lundgren, ceos and ex-ceos jim mcinerney is the lead director now, peltz says, on the other hand, if you look at the board tenure of all of these outside directo directors. >> this is key we're talking hedge funds, mutual funds, and pension funds. texas state teachers union is he actually peeking out publicly advocating for peltz to join this board because he has such high conviction it is largely expected wall street vote goes to peltz. the mainstream vote, on the

other hand, is unusually large 40% of shareholders are retail that is expected to go largely to procter & gamble. it's one reason why this proxy battle has become so expensive to get out the word and get some retail participation all advisory groups did go for peltz. could ultimately decide, guys, whether how big is too big when it comes to a company in an activist investor trying to get on a board and launch a fight.

>> all right thank you, sarah i guess you can't catch a reds game >> you can't catch a reds game that's for sure. maybe a -- no, i wouldn't bother to do that either. actually, they won they won a couple of games >> although i thought they won last night >> yeah, they did. they've won a couple of games. hope springs eternal this is going to be interesting. when will we know or get an idea when do you think would be the earliest we would know something? >> it is earliest we could know is in the next hour. the counting begins at 9:00 a.m. there's no exit polls. we talked to both sides, and both sides say it's going to be close, and nobody is producting which way it goes. there are about 500 shareholders in the auditorium behind me. they have an opportunity to ask questions of management, and that could go for an hour or more we'll be on guard. hopefully it all breaks during squawk on the street, but we'll

see. we'll be here all day. >> i know where you are. you could walk to the boat ho e house. >> these two buildings behind me are iconic, theyart of the reason why this is such a big deal the company's history, its roots and culture, even though it is one of the biggest most global companies in america, all traces back here in cincinnati. >> they haven't been there forever. for you they've been there forever. i remember when they weren't there. joining us now, kevin grundy the key point i was making right there. what is so threatening about this i understand they've got these big time board members and a lot of them are what you would think, sort of a board that likes the ceo and all like

friends. what's wrong with getting someone on the outside, somebody ins lar and conservative as p and g. >> they did a call with inconstitutional investors and think it's the wron the mid of e turnaround you started to see some of this take hold. the recent results have been good organic sales growth has been better they posted strong results in q4 in the midst of what's been a difficult environment in consume staples and another thing which i think gets less attention in contrast to what nelson peltz has said publicly, there's a fear that there's a trojan horse dynamic here and when he gets on the board, there will be some distraction, number one in the midst of what they believe is a successful turnaround and number two, that he may indeed push to break up procter that's in contrast in what he

said publicly but reading between the lines, i think there's a little fear of that and view it as a distraction when the stock started to perform and results have gotten better. >> is the best strategy in your view, take something plik a tide and rejuvenate it because you have the shelf space and people around the world are buying it or start from scratch with a niche brand and build up hundreds of those? that strategy that peltz was outlining, i don't know if that makes sense. >> the answer is both. they have some of the best brands in the world, leading market shares in the large majority of categories they compete, lends itself to pricing power and brand loyalty. what nelson peltz brought up, the company was reaching that conclusion on its own. and i think that's sensible. the synergies you're able to derive with revenue, putting it through the global distribution can be very high i would argue they are heading down the path themselves

the two key things which are a bit different and nelson peltz white paper relative to what procter outlined, i would say productivity we have not seen the increase in advertising marketing support -- >> even if he doesn't make the board, what happens? >> thanks for bringing that up it's still a win-win for shareholders, he can drive change being vocal from the sidelines and continue to drive stock out performance why we like the stock. >> when we return, jim cmer ra joins us live from the new york stock exchange we're back in just a moment. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer,

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jim cramer joins us now. what do you think is going to happen and what do you want to happen with this vote? >> i understand the disruption as jim mcnernny has been talking to me about and i also feel that procter has done nothing for a while. i think mr. taylor made changes but the idea of doing smaller brands actually makes sense. the idea of some of the corporate overhead being cut back makes sense i can understand why he could come in and shake things up.

maybe they do need that. i look at that culture and think, you know what, they do need more outsiders and the board did make a mistake in the previous ceo, maybe they need nelson in the same way garden has to come into ge. they need a little shake-up, i think they can handle it i don't think there's anything dangerous about nelson coming out, which is what mr. taylor said, dangerous. >> all right, jim. we've got to go. see you in a couple of minutes makeure syou join us tomorrow "squawk on the street" is next

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♪ >> the time is now p&g shareholders to vote on whether nelson peltz should be on the company's board. it's judgment day. good morning and welcome to "squawk on the street. live from the new york stock exchange and carl and david are off today. the procter & gamble annual shareholders meeting under way in cincinnati. let's look at how futures are shaping up on this tuesday there's a look at the s&p, down, nasdaq would open higher, dow by