"squawk box. good morning welcome to "squawk box." we're live from the nasdaq market site. i'm becky quick along with joe kernen and andrew ross sorkin. joining us for this hour is ambassador ed burns. great to have you. >> great to be here. we have a lot to talk about. let's look at u.s. equity futures. as joe mentioned, the dow crossing 23,000 for the first time ever during yesterday's trading session. it ended up closing just below 23,000 as you can see this morning the dow is indicated up by 65 points, which would put it well above 23,000 s&p futures indicated up by 2 1/2. the nasdaq up 6 points the dow yut perfooutperformed yy

because of some strong gains from unh, johnson & johnson and goldman sachs. we will keep an eye on futures this morning as we continue to get the earnings reports >> ibm today >> let's look overnight in asia. we have seen japan close higher. you're looking at a gain of almost 27 points, 21,363 hang seng closed marginally higher the hang hishanghai was up by a quarter. in europe, in some of the early trading, the dax is the leader, up over 0.6% cac up by a half percent the ftse is up by a third of a percentage point if you look at crude oil prices, you will see at least this morning crude oil prices are up 16 cents 52.04 for wpi. brent crude up by 41 cents

ibm shares are jumping this morning on better than expected results. the company beat on both the top and bottom lines but ibm still saw its 22nd straight quarter of revenue declines the cfo addressing those declining revenues on the earnings call last night >> as we said at the start of the year, and reiterated again in july, we said we would see improved trajectories in the second half of the year relative to the first half. our third quarter performance reinforced that. while we have more to get done in the fourth t shows we're on the right course and shows our confidence and strategy is well placed >> ibm expects to finish the calendar year with at least $13.80 s in earnings per share, 5 cents above estimates. that stock now back at about 153.19 sort of a tale of two different types of share holders there are the true believers who

think this strategy is working and those who look at revenue numbers. and that is the one and only data point you need to be in the negative category. >> with ge they say 4%, that shows you how unsecure the dividend is. it's way too high. they don't say that about ibm. twitter, one thing i did see last night, all of the commentary that it's a tax wriwritrate they do tax avoidance strategies we keep hear about financial engineering, but the stock is up to 153 buffett is in it at 170. we've been talking about it from 140 to 180 it's a nice bounce but i don't know if you can say the corner has been turned when a lot of the same things we've seen over the last 22 straight quarters

are still happening. if you do the math, seven points, you know why the dow is trading higher this morning, in large part because of ibm. the s.e.c. is charging rio tinto and two former executives with fraud the regulator claims the mining giant tried to cover up a multibillion dollar loss of african coal investment. in 2011 rio tinto purchased coal assets in mozambique for $3 billion and sold them for 50 million. the s.e.c. says the company inflated the value of the assets to hide the loss and raise money, billions from u.s. investors. rio tinto denies any wrong doing. they call the s.e.c. case unwarranted. shares of pg&e are rebounding after a man was suspected of arson in the fires that devastated northern california shares of the utility had fallen 18% since october 9th amid concerns it could be found liable for the fires

this would make that difference. the cause of the fires remains under investigation, but a newspaper in santa rosa reported that a 29-year-old man was arrested on arson charges after he was seen leaving a creekbed where a fire was burning in political news, nafta renegotiation talks have talled, but a short-term deal on healthcare is gaining traction and may have support of the president. kayla tausche joins us from washington with more >> reporter: that bipartisan health plan that been in the works for more than a month. it would be a narrow short-term fix to stabilize the market it would pay cost sharing reductions to insurers for two more years, extend catastrophic plans for those over age 30 t would preserve coverage for essential health benefits, one of the key tenants of the affordable care act. president trump after flipping between supporting the deal and not supporting it yesterday, and between flipping from canceling

those payments to insurers last week and now supporting a bill potentially that would restore them, he called last night in a speech for continued efforts for a full repeal and replace. >> while i comment the bipartisan work done by senators alexander and murray, and i do commend it, i continue to believe congress must find a solution to the obamacare mess instead of providing bailouts to insurance companies. >> the short-term deal has been reached in principle it has note been officially rolled out yet but senator alexander will be speaking at an axios event this morning. we'll listen in on that. on trade, the top u.s. trade official, bob lighthizer told reporters yesterday there's no active process to withdraw from nafta, but will consult with president trump after closing statements to negotiations yesterday showed in public some disagreement between the u.s., canada and mexico. canada called the proposals

designed to favor american manufacturing turning back the clock on 23 years of predictability the three countries agreed to extend talks through the first quarter of next year after acknowledging it will take quite a bit more time to bridge what they call significant conceptual gaps in their approach lighthizer said he had seen no evidence in this round that the two trading partners could meet the u.s.'s demands >> we have a 5$500 billion trade deficit. for us, trade deficits do matter we intend to introduce them. i'm disappointed by our negotiating partners on both fronts >> the bulk of that trade deficit comes from china, but even so he lighthizer listed several areas where he felt

canada and mexico needed to reach more agreement with the united states. one area that all the countries could agree on yesterday, they need more time the next round will begin in one month in mexico. >> thank you we want to check on the biggest healthcare stocks this morning. let's look at the board there. looking -- well, united health up just a bit. everything else unchanged. a federal judge in hawaii has blocked a major part of president trump's revised travel ban. that ban was set to go into effect today it would bar most nationals of syria, libya, iran, yemen, chad and somalia. the ruling does not apply to parts of the ban restricting travel by certain north koreans and venezuelans. the white house says the decision is wrong. china's president xi jinping opening the communist party congress today with a pledge to

build a modern socialist country for a new era. he used the term new era 36 times in that speech it lasted nearly 3 1/2 hours the congress will conclude with the selection of a new political committee that will rule china for the next five years. president xi is expected to consolidate his grasp on power with this. we'll get a live report from beijing at the bottom of the hour >> i like that is there any country more capitalistic than china? they're better than we are now still forming a socialist -- let's get to our guest host, nicholas burns, former undersecretary of state during the 43, during the george w. bush administration, former ambassador to nato and greece. that was a cushy gig, wasn't it. >> terrorism, anti-americanism >> but you could make it to

mekanos in how many minutes? >> not minutes >> if you were with this administration, you could take a private jet over ambassador burns, thanks for joining us we were over in -- we weren't getting makeup, we were getting coffee my point to you was the rhetoric on both sides in this north korea situation, it could not get more incendiary and inflammatory the last one was kim jong-un saying that we're like a hair away from total nuclear war. the south korean stock market goes up. markets here go up all we decided is that people don't leave him or believe that war is imminent. >> war is not imminent nobody wants war the north koreans are interested in one thing, the survival of

that family that runs that country. it's a rational regime, it's brutal, a human rights violator, but they want to survive mattis has given a clear message to them six weeks ago. if you attack south korea, united states or japan, we will inflict punishment on you. that's what we've been doing to terry them since 1953, the father, the grandfather, the grandson >> is the grandson different >> he owns a nuclear weapons force, the fwraer didn't have th that, but he's boxed in. the chinese don't want to get involved so they're champions in rhetoric, the north koreans, and i see the trump administration looking for negotiations they turned up the heat. you have u.n. sanctions that are tougher now than before. you have u.s. financial sanctions inflicted upon them. i think the administration has a chance to move the north

koreans, eventually, sometime in 2018 or 2019 to negotiations but the probability of war quite low. here's the wildcard, the administration has been disciplined, mattis and tillerson, the president has not. when you want to deter someone, threaten them, you want to be clear what the threat is mattis and tillerson have been clear about the threat, the president has not. >> some people look at it and say you have good cop, bad cop, if he thinks tillerson are going calm down, mr. president, don't do it, the guy is like, wow, this guy is nuts, maybe i am not long for this world. that's the other side of it. >> i don't think it works in this situation could work in nafta. >> though it worked, some would say, with bringing china around to do some tougher things. you point out if president xi is elevated to this position, he will be the strongest leader

since mao. >> i think the trump administration deserves credit here they didn't create the problem, kim jong-un did. they moved the chinese towards tougher sanctions. i don't believe many believe the chinese will use everything they have, but they're in a stronger place because the president has not been tough on trade. the implicit deal shehere is th chinese will not push this issue on trade -- >> just yesterday the treasury declined to label china as a currency manipulator >> we all know the chinese are a major problem on ip but i think this is the right call north korea is on the front burner deal with that first >> i think it was richard engel,

they say it's still mad, it's mutual destruction, he said it is not that nuanced, all i meant is this guy is 33, he likes life he like bgs in charge. he likes his his family in charge he doesn't want to end up dead >> if he feels he's going to be taken out, he may want to take everyone with him. >> the danger with the president's rhetoric has been intimating that maybe we will use force first. that's not our strategy. >> he's also seen some classified information that there have been some potential assassinations or -- >> as long as he feels like he's safe f safe, if he doesn't come strike us -- >> we want him to know -- tillerson said publicly, we're not trying to remove you

we're trying to negotiate with you. if you attack us, we'll annihilate you that's m.a.d., mutually assured destruction, but it's worked >> i think richard's point was they don't have the ability to destroy the entire -- to destroy the united states. we do have the capability to destroy -- >> they could cost millions of lives. >> we also were talking that a lot of people have nuclear weapons. we don't understand obviously -- i have never been to north korea, i don't know how it works, but in their mind it's like you got them. israel has them. all these other countries have them, why can't we who are you to tell us we can't gop this >> while you continue to do these exercises, military exercises every year with the south koreans on our border. >> can we say the entire world thinks you shouldn't, it's not just the united states

>> and that's true >> should they then say if you don't want us to get it, we'll stop that wouldn't convince me to stop. tlfrn >> there are 195 nations, the post powerful countries have them, some outlaw states have them like pakistan yand h india has been folded into the system because they're responsible. north korea is not responsible if we could move them towards a freeze of their program which will be messy and complicated, that's the best probably the trump administration could do. i think of all the national security issues they dealt with, they have done the best on this. mattis and tillerson have been professional and effective i would say be patient the president's rhetoric, it's

inpatient. it threatens to interfere with a well crafted policy. >> interesting you say it may work on nafta. we'll get to that later. >> god willing, ambassador burns will be with us for the rest of the hour i feel better now. maybe nothing will happen during the show we were talking about that, will we make it until 9:00. >> i assured you >> i did point out the exits all right. when we come back, we'll have more of the biggest movers of the day. your list of stocks to watch is next. and the dow's quick march from 22,000 to 23,000. it happened in 2 1/2 months. we'll talk to j.j. kinnehan about the rally after this break.

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george soros has reportedly donated most of his wealth to open society vaults and the top ranks of philanthropic organizations, becoming the second largest behind the bill gates foundation it begs the question whether the battle of the billionaires giving is brewing. harvey weinstein resigned from the board of the weinstein company after dozens of women have come forward over the past week and a half with allegations of rape, assault and sexual harassment claims against weinstein. barry diller address the scandal

at a "wall street journal" conference yesterday >> he's not going to be known for the good movies, not going to be known for anything other than this. and this is a very, very hard demarcation line where -- and -- where behavior, any kind of manipulative behavior is simply not going to happen. so i think it's an enormous change >> worth noting weinstein has denied all allegations of nonconsensual sex. the head of amazon studios stepping down following sexual harassment allegations there roy price was put on leave of absence last week after reports that he sexually harassed an amazon tv producer price led amazon studios since september of 2014. the dow logs another record closing high that's its 50th record close this year. the index crossed the 23,000 mark for the first time ever

just a little over two months after first piercing the 22,000 level. joining us to talk about it is j.j. kinnehan. i saw some things yesterday where people were saying don't look at 24,000, look at 25,000 as the next mark do you agree >> 25,000 is the one that people, i think, would celebrate more, rounder number, et cetera. if we hit 24,000, it's pretty special, as you just mentioned it's been an amazing run over the last 1,000 dow points. with that, what really, i think, is the thing that has made it so difficult for traders overall is the fact that we just don't have any selloffs you know, in an average year, about 33% of the days have a move of 1% or more this year we had four. with that, that's been the toughest part about this up move, everyone is waiting for this back off.

whether to reinvest portfolios >> maybe that's why, if you're waiting for a pull back, you never get it because every time the market is down 1% everybody rushes nfrmt. >> just like playing football if you run the same play time time after time and it works, so far being a buyer has worked this is also the one rally -- you have guests on every day, you talk about this every day. it's always amazing to me that so few people have nice things to say about the market. every time you hear somebody talk about it, it's waiting for the next shoe to drop. when you look out there, there's not a major warning signal coming from volatility through the end of the year. geopolitical events you can't predict. that's the one thing we have seen over the last few months

that has riled the market a bit. but we have not seen that since mid-september. it's amazing in that sense >> let's talk about the end of the year we had warren buffett with us. he said that, look, he usually doesn't change his behavior based on things happening in washington, but because he thinks there's a good shot tax reform gets done and done before the end of this year -- he said this a couple weeks ago -- he said there's things he's not selling because he would feel stupid if he sold it and two we weeks later you have a low in it >> i think one thing tax reform does or tax cuts, whatever form it takes f something gets done by the end of the year, one thing that i will be scared of or may make you sell off, there's been such a build up on it, it seems difficult to believe that the expectations

around some sort of tax proposal can live up to it. i actually think that's the one thing if it happens by the end of the year may upset the apple cart to the down side. everybody thinks this is almost going to be a panacea for everything else that's going on. when people talk about how the market will sell off, obviously we're in the height of earnings season now, earnings have been good at the end of the day earnings drive the market taxes may help, but earnings drive the market >> thank you >> have a great day. when we return, china's president kicking off the country's party congress with a speech that lasted three hours and 23 minutes we'll boil it down to 60 seconds and get a live report from beijing next before we do that a quick look at yesterday's s&p 500 winners and losers

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back time for the squawk planner. on the wall street agenda, septemberhousing starts and building permits are out at 8:30 eastern time at 2:00, the latest beige book report new york fed president, bill dudley, and dallas fed president, rob kaplan are speaking today on the earnings front, abbott labs, u.s. bancorp reports results before the bell.

after the close, american express, ebay and united airlines and a programming note for you don't miss wilfred frost's exclusive interview with wells fargo ceo tim sloan at 2:30 p.m. on "power lunch. a look at the u.s. equity futures. they are up quite a bit. up 68 points above fair value. looks like the s&p would open up by just over two points. the nasdaq up by four. gains from ibm that we've seen in the market after their earnings report last night helping things out and pushing us to what would be well above 23,000 for the dow at the open >> china's president xi kicking off the 19th communist party congress meeting with a pledge to build a modern socialist country. eunice yoon has more on what that means >> president xi said he would usher in a new era for china

he mentioned new era 36 times in his speech the speech was 3 1/2 hours long. this was the longest for any chinese president in these congresses he went through praising the party for the past five years and outlining the vision for the next five years. in this report he described china's future as socialism with chinese characterists. he signalled there would be no political reforms. the party would continue to fight against corruption and that china would re-emerge as a mighty force on the world stage, politically, economically and militarily this is what he had to say >> translator: today compared to any time in our history we have never been this close to and confident and capable of realizing our grand mission of revitalizing our country and culture. >> in terms of the economy, president xi continued to

present himself as a defender of globalization saying that china would become more and more open. he said that openness brings progress and he also addressed some concerns of foreign investors saying foreign investors would have greater access to the markets here he also said the services sector and the final industry would become more open more quickly. and said foreign investors should besured that interest and businesses here would be protected still many china watchers believe the president favors a state-led, much more controlled approach we saw that again reflected in the speech some contradiction he said that the state-owned enterprise and the reform would be a priority for the government but at the same time he said that that would mean to him that a better as well as stronger state-owned enterprise in addition to that bigger state-owned enterprises that

raised a lot of red flags among the foreign business community because the foreign business community had been opening they would withdraw from the economy. andrew >> eunice, thank you for that. >> three hours he used -- yueune said he used new era pv time i think mohamed el-erian said new normal remember that. >> i remember that phrase. >> he loves when i mention him he doesn't even have to show up. there's a couple of tweets this morning. we saw one, then as we often see, there's a dot dot dot waited around until the dot dot dot. there's only a dot dot today president tweeting, wow fbi confirms report that james comey drafted the letter exonerating

crooked hillary clinton long before the investigation was complete many people not interviewed, including clinton herself. comb i were stated under oath he didn't do this obviously a fix. where is the justice department? this came out yesterday. i saw the sound bite from comey after -- when they asked him -- they asked straight out. i used to believe everything he said i totally believed him when he said no, i didn't prepare anything before. i don't know how that jibes -- you have to make sure -- there's jive and jibe. >> i don't know how that jibes >> we want to get back to our guest host, ambassador nick burns. want to talk about what's taking place in china and that report the other report about a week ago, the "wall street journal" reporting that the chinese government thinking about taking stakes and forcing themselves upon some of the big state-owned enterprises, including tencent

and buydo. saying they would try to get on the board. trying to understand what that would do between the relationship with the u.s., the opportunity for chinese companies to buy businesses here and put that into the context of north korea. >> all in 30 seconds >> all in 30 seconds >> this is a consequential party congress this is not humdrum. two things are happening xi is about to become the most powerful leader in 45 years since mao zedong secondly it's an affirmation of the big change over the last five years china is pushing out against the neighbors in the south and east china sea with one belt one road i think openly contesting the power of the united states in the asia pacific region. these are big events he is being crowned with this authority.

a lot of people think we'll see who is on the standing committee at the end of the congress, that he's ma noouferri ernoouf maneuo stay in power longer than ten years. so we may be seeing a change in chinese leadership >> what do you think his view of us is? >> i think the chinese government believes the united states is weakening. that we've been distracted over the last 15 years by the wars in iraq and afghanistan >> weakening or stepping back from the global stage? >> both. weakening in terms of our impact in the world, our impact that we had in the george h.w. bush administration, when we were all powerful in the world. they want to see the united states bogged down in long-term wars they believe there's a historic opportunity not just to put china back together, that was the ping vision.

so they do have a long-term vision of this he has been skiffulin practicing it. they underestimate the power of the united states, that we're going through a leadership crisis in washington that doesn't mean we'll be in that crisis forever i think a new administration perhaps in 2020 or longer -- >> when you say leadership crisis, you're pointing directly at -- >> at president trump. >> the man just tweeting. >> >> because? >> he's closing our doors, he's been ambivalent about our alliances, for me, when i was practicing diplomat, our alliances, nate to the ea s nat-

>> these are things his base want to see happen this is a pull back that's reflected in the american population >> strengthening alliances and repairing relations with israel rather than appeasing our enemies, taking a step back -- leading from behind in syria you like the iran deal, but a lot of people thought that was turning backs on one of our oldest allies, israel. so he's strengthening those relations. >> it depends on what prism you're looking at this in. richard haas just wrote a book called "world in chaos" based on eight years of the obama administration >> richard's book had a different focus. that was a diminution and power of the united states >> he was really good. he was an ambassador >> he made it a more complex world. one thing about public attitudes. the recent pew poll and public

council poll, they both show americans support free trade, americans support our alliances, americans don't want us to pull back into the country and not ab global leader. >> one of the reasons the market has done well, and that people have, you know, backed off on the worst case scenarios for what would happen in trade, because none of those things that were -- at the height of political season that were threatened, none of those things -- >> nafta is -- >> we'll see what happens on nafta. look what we gave up on tpp. >> but hillary clinton wasn't going to support tpp either. that's where i say both parties came to this thinking that they were pulling back from our push into global trade at that point it was not something anyone would say in the election. >> i would say our trade policy has helped to grow the economy and make us powerful >> but there's a serious conversation taking place about

people trying to figure out where they come down on that trade. i think that's why it was such an unpopular issue during the election you couldn't get anybody -- >> people campaigned one way and governed differently one would have hoped president trump would have been more adaptive in his leadership over the last ten months. >> i don't think we've seen any of the trade fears, there's a reason we're at 23,000, not just the fed. there's another tweet that just hit. this one has to do with the tax reform he says the democrats will only vote for tax increases, capitalized. hopefully all senate republicans will vote for the largest tax cuts in u.s. history coming up, our guest host at the top of the hour will be sir richard branson, author of the new book "finding my virginity." i don't think it means it quite like -- any way. i think it's a business type metaphor isn't it >> virgin group. yes. >> there you go.

then at 8:00, george senator david perdue will talk to us about taxes and the budget vote in the senate. later, we'll talk to wes moore, best-selling author and ceo of the robinhood foundfoundation. you're watching "squawk box" on cnbc i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss when you have the right financial advisor, life can be brilliant. ameriprise a silicon valley server farm. the vault to man's greatest wonders...

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welcome back to "squawk box. time for the executive edge. we'll start with a couple stocks to watch credit suisse is considering part of an activist plan to break up the bank. "the financial times" reports that harris rejects the bulk of the case but they want credit suisse to look at parts of the proposal including shifting parts of the banking unit out of switzerland. many criticize the restructuring plan calling it impact cal. shares of cree trading lower this morning the company's earnings and revenues were in line with estimates but the current quarter guidance falls short of forecasts.

tomorrow marks 30 years since the dow lost nearly a quarter of its value, the historic day on wall street known as black monday. joining us is mark grant, chief strategist at hilltop securities i guess you read in history books about this i know i did i know i did but i remember it well you remember it well we made this point earlier in the week history usually rhymes t does not necessarily repeat itself. we don't have portfolio insurance, we don't have that arbitrage with the futures that set in that day. but we got a lot of other stuff. we have zero on the fed, etfs, computerized trading, rules-based investing. you think something similar could happen some day? >> you're very kind to me this morning. i appreciate it, but i was around in 1987 >> in the business we were not even in school >> no i was running cap palmar

ket capital markets investment bank. what happened at the bottom of it, when you have a calamity like that on a given day, it forces selling having do with margin accounts, program trading, a number of things. with the curbs, that cuts significantly off the force selling part of the equation, one. two, with the amount of money that the central banks put in the system, 21.7 trillion, an economy bigger than the united states, there's plenty of liquidity to go around to deal with issues like that. no i don't think it can happen >> just to play devils advocate, why don't we just make sure -- why don't we double the liquidity that central bankers put in we'll be clear sailing for the rest of our lives there will

never be another crisis. everybody will have a bunch of money. we can do universal basic income it seems like to say it can't happen again because the fed is here providing money, are there ever any negative consequences, payback or unintended consequences from that cheap money? >> i think about that. could they double it from here >> triple? >> could they triple it from here yes. the answer is yes. >> when does that come home to roost? it seems like that dislocates there's no price discovery things are not worthwhat they're marked up to because of that just seems like it's built onca. we can't create wealth by just printing it. >> that's what they've done since the 2008, 2009 crash, they created wealth by printing it. i think they'll continue to do

that it does three things, this manufacturing of money raises the stock prices it is more important in my estimation than earnings or anything else. so it pushes equity prices up and creates wealth it pushes yields down, so that the government has to borrow at low interest rates which is great for the social programs. number three, it compresses all risk assets, corporate bonds, mortgages, everything else to the treasuries or to the benchmarks and that is where we are i don't see it changing any day soon >> still not getting to -- okay. then i should -- i'd like to just eat candy and doughnuts if you let sorkin just eat doughnuts, there before no negotiate sieve conativotiatatid explode, like on "stand by me. this sugar high, all this consuming never has a negative

consequence, mark? >> at some point it could have a negative consequence >> i can't believe it's -- >> as long as all the central banks are basically moving in tandem i said continuously in my commentary out of the box that the people are way too we're in a global economy, and all the other central banks are printing, and i think equities and debt keep going in the directions they're in. >> wow okay we're at -- >> andrew, don't get fat >> eight years and counting on this i just -- i don't know then i would wait. we don't need to worry >> you don't think we should be raising rates rates either you have been saying that repeatly >> no, i don't think we should raise rates. it doesn't help the country, the economy, or any kind of growth

>> must be making a lot of money or something you're long, i guess you love this. bring it on. all right. mark grant >> bring it on >> all right thank you. >> thank you, joe. >> what does 30 years mean it's just a number >> blink of an eye >> coming up, parting shots from our guest host, ambassador nick burns. we'll have more with him in just a moment then at the top of the next hour, our guest host will be sir richard branson. billionaire, entrepreneur, and author of the new book "binding my virginity." my virginity." be right back. stay with me, mr. parker. be right back. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker.

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pthey don't invest inn stalternativesds. 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. so that's the idea. what do you think? hate to play devil's advocate but... i kind of feel like it's a game changer. i wouldn't go that far. are you there? he's probably on mute. yeah... gary won't like it. why? because he's gary. (phone ringing) what? keep going! yeah... (laughs) (voice on phone) it's not millennial enough. there are a lot of ways to say no. thank you so much. thank you! so we're doing it. yes!

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>> let's get back to ambassador nick burns bev about enfollowing the crude oil markets because of what's been happening in iraq, and now bp's ceo is just making some comments about the iraqi kirkuk oilfields. what's happening here? >> a big power move by the iraqi government and baghdad backed by the iranians to gain back kirkuk, which is an important city for the oil industry. it's also a big push about kurdish nationalism, and it looks like the kurds made a mistake by holding that referendum for independence.

they didn't even contest the iraqi takeover of kirkuk behind it iraq is still divided into three parts >> the two sides have been working together, working with us to try to fight isis to this point. >> thief been our closest military partners as well as the syria kurds and iraq you have a situation now where everything is up for grabs, and the shia dominated government in baghdad wants to contest kurdish nationalism. they also want to be a factor in the sunni area i think a fractured iraq is probably going to be what we're going to have the next five or ten years. >> ambassador, thank you so much for your time today. come back again soon >> okay. coming up when we return, sir richard branson will be our guest host for the next hour live in studio the billionaire entrepreneur joins us to talk about his investments in commercial spaceflight, high speed rail, ord a lot, lot me. richard branson for the hour starting at 7:00 a.m back in a moment

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ol00000000000000000000000000 00000000000000000000000000000000 . ♪ come on, come on >> live from the beating heart of business, new york city, this is "squawk box."

>> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernan and andrew ross sorkin. we have a special studio host with us this hour. sir richard branson. good morning, sir. >> good morning. >> good to see you >> great to see you too. >> he is here because there are so many things to talk about, including his new book, though finding my virginity we're going to talk about the book and so many other ventures and all kinds of interesting things, including cyber lube in the meantime, let's take a look at what's happening with the markets this morning after seeing record closes yesterday and the dow pushing above 23,000 for the first time ever during the trading session, it closed just below 23,000, but with these gains up 81 this morning, it would open well above that s&p 500 is indicated up by just over 3.25 and the nasdaq up by 5.5. a few headlines for you this morning, the reason you're seeing those gains in the dow is

because of ibm shares. they are up sharply in the premarket trading. ibm reported quarterly profit of $3.30 a share. that was 2 cents better than expected revenue also beating the street's forecast. ibm did, however, see its 22nd consecutive year-over-year revenue decline, but that stock, check it out, it's up by 4.6% right now. don't miss ibm cfo who will be joining jim cramer on "mad money" tonight the federal reserve will be out with its latest balk book a little later today, and that's the region by region assessment of the u.s. economy. it's out at 2:00 p.m. eastern time as usual, its economic pronouncements will be evaluated for how they might impact future interest rate moves. plus, jp morgan chase has made its first significant acquisition of a technology start-up the bank has agreed to payment company we pay for an undisclosed amount a source quote by the "wall street journal" says that the purchase price was above $220 million. the valuation that stemmed from a 2015 funding round

talking about this rio tinto story, the sec is chashlging rio tinto with and two of its former executives with fraud. the regulator claims that the mining giant tried to cover up $1 million loss on an african coal investment. it's back in 2011. rio tinto purchased some coal assets in mows mosambique and sold them a few years later for $50 million. the s.e. krfrm says the company inflated the value of the assets to hide the loss and to raise billions money from u.s. investors. rio tinto denies any wrong doing, calling the s.e.c. case unwarranted. we'll see. it's down almost 2%. meanwhile, select comfort's third quarter earnings and revenue missed forecast. the mattress maker also reported disappointing same store sales the company is blaming the impact on the hurricanes that have hit the u.s. and puerto rico last month. >> let's get to you are special

guest joining us right now for the hour virgin group founder sir richard branson. he is the author of the new autobiography, finding my virj inty, focussing on the past two decades of his career. there is so much to talk to him about. you've written two autobiographies before what led to this >> getting older i had another 20 years quite exciting things happening. the first losing my virginity sold very well i have met a lot of people -- >> that was funny -- >> a lot of things have happened in the last 20virginity. you didn't mean it that way. >> the book. it sold well >> i wasn't buying that for a second >> i think young people maybe got some inspiration from it i thought i would do a sequel. >> i was thinking this morning, as i read the book over the past couple of days, and the number of new businesses that you

entered, the new sectors that you have entered, even the last 20 years is remarkable starting with the mobile phone business, which was a huge success when you -- and selling the airline business and then getting into the airline business in this country, which then has now been sold on an economic basis only, what's been the best virgin business that you have ever created? >> the virgin brands i think even if we sell the company, the virgin brand continues, you know, forever with -- as part of that company. you know, it has grown into, you know, the biggest part and the most important part, and it is our reputation it's everything. i think, you know, what people -- remember when we started 50 years ago in business and we moved from, you know, student magazines into record

companies, record companies into airlines, people -- the press said that this man is mad. he is going to stretch his brand too far. he will go bankrupt. 50 years on, if i hadn't done that, you know, the record shops have disappeared things move on we try to move on with the times and create a way of life >> if the brand is the most important part, does it worry you at all to have people using the brand and using the name when you can't control it? >> we do control it in that we have a brand company we have a fantastic brand team snoo moefz companies we have reasonably -- if we do sell it, the brand generally lives on, and we can still monitor it. >> i don't think -- you can correct me if i'm wrong, but what is the origin story of the

virgin brand itself? >> that was in the previous book >> i think that was in the previous book. >> i was 16 years old. i was sitting around with a bunch of girls drinking -- >> here we go. this is the story. >> drinking wine i come up with a name slip disk records for our new record company because based on the old black vinyl needle keeping slipping, and one of the girls said, no, call it virgin we're all virgins. we're all virgins. you're a virgin in business. we decided on virgin then i couldn't get it registered in the registry office for four years because they thought the word virgin was rude in the end i wrote a letter to them saying we're going to quote in the english dictionary, it's untouched, it's unblemished. it's the opposite, and they finally gave in. >> it wasn't a strategic decision that the brand -- the word "virgin" could be used in so many different places >> it wasn't at the time

i mean, obviously we got lucky because, you know, there's almost -- perhaps the only company that we came unstuck on was virgin brides because there wasn't a market for them we found that the business didn't work. generally, it worked well with pretty well anything you can do. virgin condoms also had some history. >> confused. >> what's that >> nothing >> joe heard you say you got lucky. >> i wasn't paying attention you have never written, though we got it. >> i know all of your children, but is there -- this goes back to maybe to the economic question is there a favorite, meaning within the virgin -- within the various businesses that are branded versions >> i mean, virgin atlantic was a baby that was born 35 years ago. they got bullied in a big way. british airways came out

she's still going strong at 35 years old, and i think virgin atlantic put virgin on the map on a global basis. i have always had a soft spot for virgin atlantic. >> you write in the book about virgin america, which has now been sold to alaska airlines, and that brand is going to ultimately get folded into alaska it sounds like you must be upset about that >> i explained in the book how disappointed i was i wasn't allowed to have the voting shares because i had an english accent america said you can set up an airline, but you can't have the voting shares. we had to bring in other shareholders an offer was made that they decided they couldn't refuse

>> is this an opportunity to create a new one >> i think -- i don't normally take these things lying down >> and the other thing i wanted to mention, we keep talking our president has been tweeting this morning. >> he tweeted again. we have one. >> picking up some of the tweets fascinating in the book, you talking about receiving a letter from donald trump. tell us about that letter. >> i had a -- >> this is a reality show. the rebel billionaire. >> i had a show that was very different from his it was like sarah blakely from spanx was one of the people on

the show when she was just starting out i took her up in a hot air balloon. i was in one hot air balloon, and she had another. she had a plank between the balloons she had to walk the plank to see me, and then we had a rope ladder that she had to -- both of us had to climb, and she had to have tea on the top of the balloon. >> was it connected to something, i hope? >> sarah, we definitely, connected. >> i don't like hearing this >> it was a fun show, and trump wrote a letter, you know -- very trump-ish. you have to read the book to see the tone of the letter, but just disparaging the show and saying, you know, you should concentrate on the airline business. it's a terrible business you know, don't worry about producing shows. i mean, just typical trump, anyway read the book. you'll see >> did you ever have a friendship with him? >> the only time i've met him before was equally bizarre

he invited me to lunch or dinner at his house, and he had just been bankrupt, and i thought we would have an interesting conversation about a whole range of issues, and he just spent the whole lunch talking about five people he had rung up to try to get help from when he was bankrupt >> what do you mean when he was bankrupt one of his companies -- >> one of his companies had just been bankrupt, and how these people had refused to help him and how his life's mission was going to be to destroy these people that literally was the gist of this conversation of our very first meeting, and i left just thinking -- i said to him, look, you are going to eat yourself up you are going to destroy these people unnecessarily they haven't actually crossed you. they just said no. he was fixated on this mission of his >> we are going to talk a lot more with richard branson over the next hour. we're going to talk about what's going on in the caribbean after

all those hurricanes and your experience down there. we also want to talk about hype he were-loop now vishlgin hyper-lool loop discussion to be had >> that's what we'll be talking about next when we come back the future of transportation we'll talk to sir richard branson about the plans for the newly renamed virgin hyper-loop one. then in the next half hour taking cloud computing to another world. we will introduce you to one company that says putting your information in space could actually keep it safe. then coming up at 8:00 a.m. eastern time, washington watch senator david perdue will join us to talk about the budget, tax reform, and health care. stay tuned you are watching "squawk box" right here on cnbc we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that?

we can do that. then do that. can we do that? we can do that. 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.

welcome back we've been watching the futures this morning, and they have been indicated sharply higher at this point. dow futures indicated up by 82 points nasdaq up by five and a half the s&p up by just over three. in our headlines this morning, canadian pacific reporting better than expected third quarter results on higher shipments of crude oil and coal. the railroad operator is also raising its full year guidance looking for double digit earnings growth. >> some global news this morning. qatar pushing back after during a four-month economic embargo imposed about i a group of fellow gulf countrymen the qatar minister of foreign affairs accusing saudi arabia of trying to destabilize the leadership of qatar.

>> if we see that their government officials are talking about regime change, if we see their government officials are talking about protesting and insighting the people to go and protest against their government, so it's about regime change, if we see a country, which is bringing back the dark ages of tribes and putting them together in qatar, it's -- it means that they want to destabilize this country their behavior, as i just mentioned, is just showing that they are not willing for solution they are into escalation they are into thinking about regime change and other things >> saudi arabia, the uae, egypt, bahrain have all cut ties with qatar. i should say, by the way, we always talk about is it qatar or -- he called it qatar i'm going with imhad >> qatar

zplu broke away from us, and then you messed up a perfectly decent dwsh. >> i think that's part of the animosity too is that we did break away, and then became so successful it still seems to gall you >> all right you win. >> the future. i mean, think of great britain, and now, i mean, the navy is gone it's sad almost. >> can't be great anyway coming up, the future transportation we're talking about sir richard

branson's plans for the newly renamed virgin hyperloop one you got to do this i want to do -- i want to ride one of these things to l.a. in, like, 15 minutes anyway, you are watching -- i'm going to use the british now you are watching -- on cnbc. that's how wilfred said -- >> time for the affleck trivia question what was the first item ever listed on ebay the answer when cnbc "squawk box" continues s parents. what? no. i just broke my leg. no, this is a full blown move in to the basement, you're gonna be out of work without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool. health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac!

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>> now the answer to today's alac trivia question whachs first item ever listed on ebay the answer, a broken laser pointer. >> welcome back. virgin hyperloop one is reimaging the future of transportation joining us right now is josh geygo, the co-founder and president of engineering at virgin hyperloop one the newly renamed virgin hyper loop one thank you for being here >> thanks for having me. >> we were just talking with richard about how the virgin brand is the most important part of his business that he has ever seen what does it mean to have the virgin branding brought into hyperloop one? how does it change things for you? >> i think for us it's really a

testament for what we've done over the last three years. i mean, tree years ago we were sitting in a garage, and now we're moving to a production commercialization phase and to have a group like virjgin supporting that and doing that transition means we're doing something right. i think it's really exciting for us to have a partner that's going to be taking us from, i'll say, post-garage to actually taking people down the tube. >> it's a signal to future potential customers out there, but i'm guessing it's also a big signal to potential investors too. >> yeah. i think for us having that kind of, i'll say, credibility in knowing that we're creating a new mode of transportation and then we've got people who have actually done that before an created new forms of that experience, i think i we can't find a better way to say if you have new information, let's reinvent the experiences and not do thethings we don't like about current travel >> we had you on the other day to talk about this, about where you see this really heading. what captured you when you sat down with them >> well, first of all, we invest in people. josh used to work at virgin

galactic before. we were incredibly sad to lose him at virgin galactic it's his genius that created hyperloop one. i have a train company it's the largest in the u.k. the foogsest those trains can go is 130 miles an hour the idea of being able to transport people at 600, 700 americans is just too exciting you know, we wanted to do it for our passengers we wanted to do it for the fact that, you know, all over the world that we would go people are saying, you know, they would just love the opportunity of making countries a lot smaller and making city pairs a lot smaller. it is exciting i went out to the desert, saw it running, and it is ridiculously

exciting >> josh, let's talk about where you are right now. how fast things go what you plan to get to. your last test showed what >> it's about 200 miles an hour. >> just under? >> and richard and the virgin team came out in may and got to walk inside the tune and got to experience the whole thing, and for us that was right before we actually did the test back in july, and now we're dealing with the air lock, right? we're putting that in, and that's how you would get the vehicle inside the tube when you are moving in the production veemt. from a station inside the tube we're actually testing tha within a couple of weeks here, and then we'll be going a bit faster as well >> when do you get up to 600, 700 miles an hour. >> we only have 500 yards of tube, so if we need two to three kilometers to get up to those kind of speeds >> yeah. serious g-forces >> there's no g-force if it's straight i mean, if you want to explain that

>> what about if you -- during acceleration >> not much, is there? >> it's about what you would feel in an aircraft at take-off. >> you are 500 feet at the acceleration you are talking about you can't get anywhere near 700 miles an hour if you could, the acceleration you would feel >> here's the part that i just -- it's a physics thing that i don't understand, which is let's say you build one of these trains from new york to d.c. selfishly for those of you us here people are going to want to get off in philly or other places, or is it just -- how can these pods jump off the track and keep -- i mean, how big are the pods >> they're about 40 to 50 person size pods. anywhere on that order instead of actually having the vehicles like a whole train, you're able to -- it's like an individual car you are only going to philadelphia you are only going to baltimore. you are only going to d. krchlgt. >> you have pods behind you. >> you have pods behind you, and the fact that we have -- maglif

has a horrible reputation of being -- we have a new version what that allows us to do is digital switching. you are allowed to basically turn imagine an off ramp at a highway as opposed to having this track actually you have to move. because you can do that, you can have pods follow each other very, very closely >> you can also -- "squawk box" can have a project here. you could all get into the pod you could just -- the pod could take you without a driver down to the tunnel. down you go. then off you go to where you want to go, and then it will then take you to "squawk box" office in -- speaking of tech wonders, with the geico app you can get roadside assistance, digital id cards... or even file a claim. do that.. yeah, yeah that should work. it's not happening... just try again. uh, i think i found your problem. thanks. hmm... the award-winning geico app.

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>> good morning. welcome back to "squawk box. we're live at the nasdaq market site morning applications rising 3.6% last week. that's according to the latest figures from the mortgage bankers association. both new purchase applications and refinancing activity increased during the week. the average 30-year mortgage rate fell two basis points

during the week to 4.14% also, microsoft now adding a new model to its surface line-up of laptop the new 15 inch surface book two seen as a direct competitor to apple's mac book pro the expansion of the surface line coming despite an overall slowdown, we should mention, in pc sales and uneven sales for the surface computers. also, another cable dispute has been avoided viacom reaching an agreement with spectrum. that's the cable system owned by charter communications the new multi-year pact will keep viacom's networks like nickelodeon on spectrum systems. a lot of investors in viacom had been watchingto see what was going to happen with that as we talk about cord cutting.

>>. >> in this case a network -- cliff is president of cloud constellation corporation. the company signed a deal with virgin orbit to launch its space belt in this case space belt system is made up of 12 satellites delivered by virgin's launcher one system then also, nicole stoddard, retired nasa astronaut not from the bahamas, and member of the advisory board of the company. this one is called hyper cubes i'm going to move quickly just to get -- so, cliff, if you put these things up, 12 of them, you can get off the internet and have secure data for companies or governments to use using small satellites, and you have a network up there, and it totally is unhackable. be you can't get to it that's your idea, correct? >> absolutely. the world runs on data what we're doing is trying to fill the security gaps and cover the security gaps in the networks, and that exists into the cloud storage

infrastructure by putting our satellites into space, we're interconnected using optical lasers it's moving data at a high speed, employ there's no exposure to the ground >> if you can get the data, how come other people can't somehow access it the way you get it >> that's a good question. it's a 400 kilometers above the earth, and it's hard to get into hack into data at that altitude. >> since we are always time-constrained, we'll get to your idea you need more satellites how big are these things they're similar, i guess the same size that you would use for the cube system you are going to set up? >> i think the cube system is going to be much smaller on the size of, like, 10 ki kilogram looking at 100 of them >> you set up anetwork that could look at -- look down at the earth and see an entire area of crops that might be water depleated or you could look down at a fracturing site and see methane leaking or you could look at the ocean. could you see the plastic building up somewhere in the ocean?

you could see whatever you need to see from space, you could see using this, and then if it's measurable, it's fixable, is that the whied >> yeah, absolutely. that is the whiidea to provide that information. we're essentially -- in simplest terms, i think of it as measuring the earth, measuring our planet the things that are on it and in it, which then gives us the information not to just locate it, but to manage it from the longer term sustainable, you know, sense of our planet, and from the sense of how do we manage our resources in the most economic way too. >> how high -- are these low orbit? >> yes, exactly. they're at low earth orbit it's 400 kilometers above the earth. we're flying above the equatorial plane >> how high, though? how high >> i was up to 50,000 feet >> well, that's stupid anyway. that's just as bad i think that's crazy >> i mean, what they're both doing is fantastic

methane leaking, it's the damage that's something like 20 times worse than carbon, so if she can actually, you know, let people know whether methane leaks are taking place and then stop them, a, it saves the company's money and, b, it saves the environment a lot of damage. >> there's a lot of room up there. >> that needs monitoring illegal fishing boats. something else that can be done. >> you don't need to manage the traffic at any point, right? there's a lot of room. this is a lot of -- we're talking about having a lot of things up there. right? >> but there are -- >> how fast -- >> the traffic controllers are in place yeah >> and how -- and they're moving, i would maimagine -- >> every five years they actually burn up and fall out. as new technical nothing comes, you put new satellites up. you are are not in danger of cluttering up space.

>> it would be a nice to have a company to send them up there. this sounds like it's going to be expensive, though, but -- right? >> it actually -- it's a capital intensive business, but our business model, we're asset light. our total cap-ex is under $12 million. we have eight petabytes. three tara bytes can store the entire library of congress we have 3,000 times that in terms of our ability to protect data and get it off the ground and move it without the regulatory constraints of other issues, i mean, because our business model is to do something unique and different >> i was going to say, if it's not stords -- i mean, there are all these questions about privacy and privacy laws andmenting to have servers stored on their own. does this impact any of that if it's space >> yeah, that's a great point. really what the question comes down to is data sovereignty and

protection of data, and as we talk with our customers, our customers are interested about putting data in space, but their lawyers are talking about can this be in compliance with our global data protection laws? you take that data and put it up in space, and you are essentially having the diplomatic immunity, and we look of ways to be in compliance with data protection. our business model is really moving data in a secure environment, providing data sovereignty, and also creating a future for communications in space. >> what else can we do up there with the network of satellites i mean, these are two great uses you must be thinking of other things the idea of one web is to enable people in remote places of the world to get connected if you're not connected, you can't start a business

there's just so much we rely on the web for these days that's another area which is very important >> we were talking about this during the commercial break, but just so the audience understands, what is the difference between what -- the way you're approaching this versus the way elan musk is approaching this, versus the way jeff bezos is approaching this that's a conversation that we have a lot you are now here, and you can tell us yourself >> as anas nat i'm sitting opposite i think space needs a lot of companies doing lots of different things to benefit the earth back here. i think elan is absolutely fixated on going to mars, and that is almost -- i think it's his life mission it's as wonderful as kennedy was fixated on the moon shot i think jeff and ourselves are more interested in how we can

use space to benefit the earth because the earth is, in my opinion, extremely beautiful and needs to be protected, and he with just learned to in some of the ways we can protect the earth by using space then the other thing is just there are thousands of people who would love the opportunity of becoming astronauts and going into space virgin galactic is the only company that's built a spaceship with wheels that can come back and land again and take people up and enable them to become astronauts >> cool. all right. thank you both >> thank you >> thank you >> still to come this morning on "squawk box", much more from our guest host sir richard branson including his next big venture then, later, senator david purdue will be joining us and we'll talk about the budget, tax reform, and health care. plus, we have washington's u ried on the impovesh

yoare watching "squawk box" here on cnbc

a couple of stocks on the radar this morning ulta beauty was downgraded to neutral from overweight at piper. that's the second downgrade for the cosmetics retailer this week cut from goldman's conviction buy list >> that was such a run >> yeah, it was. they got to buy a consonant. ultra would work piper citing a survey showing a slowdown in cosmetics purchases by teenagers not by us, that's for sure select comfort reported quarterly profit of 62 cents a share. 6 cents short of forecast. revenue also missed analyst estimates.

>> you could have doppler my pillow could have been virgin pillows >> would you like to jump on that >> you like to jump on that doesn't work. yeah, you'll get -- >> okay. coming up when we return, we're going to have a lot more from today's guest host sir richard branson. he has a new book out. it's called finding my virginity. later today, an exclusive interview well wells fargo ceo tim sloan. that's going to be on power lunch. richard branson coming up in just a moment. who's he? he's green money, for spending today. makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement, it's time to get voya.

our guest host is sir richard branson. he is the author of the new autobiography, finding my virginity. it focuses on the last two decades of his career. it's an update on how things have been going for him. sir richard, we talk an awful lot about your successes, and obviously, you've had many, but you have also had some struggles along the way, and that may be something that will help people the most in reading this book. just finding out that it's not always easy.

>> i talk about how you need to deal with the 600 engineers, the staff, your public, in order to get through it, and then hopefully move on ahead and put it behind you and hope you come out ahead in the long run. we should be traveling at 18,500 in about four months time, and putting satellites around the earth. virgin galactic should be in space in four months time. we're coming bss unity, our new spaceship, will be heading the way.

>> the yfd of building a company as a public company would not have been possible because you need to have a lot of belief in your team, and i think that they are about to deliver >> were there other times along that journey where you thought, wow, i but off more than i could chew here? this was a much tougher thing. >> there's lots of ups and downs. we started the companies from scratch, you know, when i was 15 years old, and without any financial backing. the advantage to that is that we still earn is00% of the top company. we can make the decisions than if i had other shareholders in that top company there's a thin dividing line between success and failure. >> i mean virgin galactic in particular was there ever a point along that journey that you thought -- >> you know, i mean, when the

accident happened, if it had been a technical problem, not pilot error, we would have had to ask big questions very quickly we found out the test pilot had made a mistake, and in a sense that's what test pilots are there to discover they're very brave they test craft that you can't test on the ground in the air, and a mistake is fatal and, you know, obviously that mistake will not be made again that was the main day that we faced. >> the normal system of you mentioned it has to be a private company, but satisfying shareholders in doing these endeavors you are doing seems impossible luckily, you're the shareholder, and you don't care if you are going to make any money.

you are willing to blow a lot of money to do these things that you want to do, right? do you raise money from other people that don't make money >>. >> have i never been motivate bid making money i've been motivated by creating products that make a real difference in the world and in people's lives >> but you can't keep doing it if -- >> the end results of that is that if if you create something exceptional, it actually ends up becoming very valuable >> when you started that company, did you -- was there a business plan that said we're going to do this and this is what the revenues are going to look like? >>. >> no. i don't think i have ever done a business plan for any of our companies because you can go to one set of accountants, and

they'll tell you you're going toic ma money, and another one will tell you how you're going to lose money. >> who do you surround yourself with we know you and we know the brand, but i imagine that there is a team behind this, and there's -- imagine there's a team of advisors and people that you talk to about whether you should be doing x, y, or z >> i have a wonderful chairman, peter norris, and josh bettis. they should sit in this chair next time, and you'll see the other side much the people bho are doing the real hard work out in the front >> are they like-minded in terms of who you are, or are they grounding? >> they are like-minded, but, i mean, i'm dr. yes, and, you

know, yeah, they sometimes give me a reason why maybe i'm getting too enthusiastic on occasions. ultimately, though, the buck stops with me, and sometimes i will just say, well, you know, screw it, let's do it. you know, i don't care about, you know, what the are figures say. we'll prove them wrong >> all right i read something that you had written this week, and i bring it up because i know it's been an issue over people in our church that have run into scams too. you had a very sophisticated scam artist who came after you you figured it out you had a friend who wasn't as lucky. >>. >> i had a call from sir michael fallon, who is the defense secretary in the u.k., saying a high level british diplomat had been kidnapped, and the government wasn't allowed to put up money for blackmail and for extortion.

he was going to put up $5 million each to get the person back out again, and, fortunately -- it was very real. i double-checked and found that sir michael fallon hadn't phoned me it absolutely sounded like him we had official note paper, lette letters. >> when we had this hurricane in -- someone sounding like myself range up a friend of mine in the states, a very high profile really good man, businessman, and said that richard needed -- couldn't get hold of his office in england and, you now, i just needed $2 million to help the local population for rebuilding the caribbean, and he paid it. that's the end of -- he has lost that $2 million. now that's a heist of -- the

bank robber got $2 million, then they would be very happy this is happening all the time worse, it's happening to people for $1,000 here, $500 there. you know, $2,000 there who can't afford it. this businessman can afundraiser to lose $2 million , and, you know, so. >> all those people they should concentrate on all the vulnerable people that are being hurt in this way >> what's the situation? >> a big chuk for it is care bean have been completely and

utterly devastated it was a category seven hurricane that hit it was over 200 miles an hour. we're working with the world bank we're working with the imf trying to get it rebuilt with clean energy rather than dirty energy when something like this happens, the whole grid won't -- not everybody won't be knocked off for nine months, and it's going to be -- it's going to be tough for a lot of, again, quite vulnerable people who lived in wooden houses who have lost tfrg >> sir richard, we want to thank you so much for your time today, and, folks, again, the book is called finding my virginity. >> plus, going to washington and

checking in with senator david purdue his take on everything from tax reform to health care. all straight ahead first, as we head to a break, take a look at the futures this morning. the dow could open up higher about 92.5 points. u' wchg ck in a moment yoreatin"squawk box" on cnbc tirement solutions to help you reach your goals. it's having the confidence to create the future that's most meaningful to you. it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life. for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke. that would be devastating.

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another market milestone the dow hits 23,000 for the first time ever. this morning it looks poised to touch that high again and have more gains and then there were five president trump nears his decision for the next leader of the fed. a rundown of the candidates is straight ahead plus, big blue beats shares of ibm jumping after the company hints at a return to growth the final hour of "squawk box" begins right now ♪ i'm a soul man ♪ i'm a soul man >> live from the most powerful city in the world, new york. this is "squawk box." have that gentleman on remember the original soul man welcome back to "squawk box" from the nasdaq market site in times square i'm joe kernan along with becky quick and andrew ross sorkin let's get a check on the markets.

the futures have been getting stronger as the premarket session has gone on. now 91 points. you might think, wow, you get to 23,000 maybe that's where it pauses ibm is part of that. the s&p indicated up three the dow much stronger than the broader markets, and the nasdaq is just up three a lot of that is, you know, one or two stocks on the dow, i guess. >> two stocks. one in particular that have been helping the dow move higher this morning. the first is ibm the second is merck. ibm boating on both the top and the bottom lines, but the company still saw its 22nd straight quarter of declines it finish the calendar year with at least $13.80 in earnings per share. that's 5 cents above the street's expectations, and that is a big part of it is reason that the stock is now up 5.8%. it has steadily continued to climb through the morning. jim cramer is going to be speaking to ibmcfo

that's tonight on "mad money" at 6:00 p.m. eastern time >> drug maker merck second stock to be watching this morning. upgraded to buy from neutral at citi based on a forecast of increased sales for merck's cancer drug. separately an over aaron cancer drug made by merck and -- was granted priority, fda review, in a bid to try to expand the drugs to treat breast cancer that stock up by 1.2%. abbott labs beating estimates by 1 cent with quarterly profit of 66 cents a share revenue also beating the street's expectations. results there were helped by strong sales and medical devices and generic drugs. that stock up by 1.2%. in political news republican senator lamar alexander and democratic senator patty mury have a short-term agreement to help the health insurance -- the deal would reverse president trump's decision last week to end billions of dollars to insurers the new agreement would extend those payments for at least two

years. president trump tweeting this morning about another part of his agenda tax reform he tweeted the democrats will only vote for tax increases. hopefully all senate republicans will vote for the largest tax cuts in u.s. history the senate also preparing to vote on the republican budget to tomorrow hoping to pave the way for tax reform joining us now georgia senator david purdue he is a member of the senate budget committee senator, welcome it's good to see you again this morning. >> good morning, guys. >> we hear, you know, that's why we call it news, i guess, because we keep hearing the latest things. what's the latest thing you are hearing about the vote count for this right now do you have it >> yeah. >> we will gets the budget passed this week, but let's be very clear, joe. this is a sham on the american people it's a fraud it's been perpetrated for the last 43 years since the budget act of 1974. the only reason we're doing the budget like this this year, 18 days after the beginning of our fiscal year, is to get to

reconciliation so we can do the tax deal this year >> yeah. okay we hear different rumblings, different things about, you know, people that have a problem with it, people that don't have a problem with it. what's the latest that you are hearing about whether this is a go >> well, we're going to get it passed we marked it up two weeks ago in committee. we passed it out of committee. we considered over 100 amendments this is a regular order budget >> we'll take it to the floor. let's be clear this is not a law. this is a resolution, and it has nothing to do with how we'll fund the government. you know, what we'll do is we've already passed a continuing resolution that got us passed the fiscal year, and sometime between now and december 8th, six or eight people will get in a room, joe, and decide how to spend $1 trillion, and we'll get an up or down vote on that >> we have seen some people are saying they want to blow out the cap. whether it's mccain or -- they

make a good case for defense spending or whatever it is, and then rand paul says i'm not going to go with it. is that still going on, or you feel very confident this -- because it's important this time because you can't move on in tax reform until this is finished, right? >> this budget is a political statement, joe again, it has nothing to do with how we will actually spend $4 trillion that's what the federal government will spend this year. there's always those conversations. >> we talked about the stock market today being up at an all-time high. i think there are three things driving that, joe. you've got consumer confidence that's at a 16-year high you've got 800 rules and regulations that have already been reversed this year. now we have the anticipation of passing this tax deal that will actually help our corporations and our workers become competitive with the rest of the

world again. >> is is this going to remain intact to provide the trillions of -- the trillion dollars that's necessary for the corporate tax cuts >> well, joe, look first of all, we have got to get competent tiff with the rest of the world. you have to -- there are three pieces of this tax effort that we are -- that's underway today. we got to lower the corporate tax rate, which is an onerous tax on american workers. in 1986 the last time congress took any measured change in the tax law, we had the third lowest corporate tax rate in the world. today we have the highest. we also are the last country to have a repatriation tax. those two things alone will stimulate this economy

i think we'll get some democratic votes if we get to 50 >> you made need a few, right? >> yeah. >> you don't want to talk about individual senators, i guess is mccain going to be a go on this >> well, so far, you know, senator mccain's top priority is funding the military my arg argument is if you want to fund the military long-term, you better solve the debt crisis to solve the debt kries, we have to get after our budget process and our debt if you really want to solve the problem of funding our military, you better get the economy going, and the economy will move, i believe, if we get this tax deal done. it's just as simple as that, joe. >> all right, senator. thanks for joining us today. you didn't go to georgia, did you? >> no, but i learned how to say go dogs. >> god all mighty. i'm worried for the -- i'm worried about the lake collapse. didn't see it last week. that's for sure. >> no, their quarterback is from my hometown. they're not going to collapse

this year. they have the real deal. >> i mean, are they -- can they go up against some of the stallwarts, do you think can they beat alabama? >> they're in the top five that's the one ahead of them now. you saw clemson get beat last week and lose their quarterback. i think it's right there to be done i think georgia can take alabama thiskidding. all right from your lips, maybe. i got -- i get down there enough to where i feel a little afint for it, as you know. anyway -- i'm pulling for the dogs as well thanks, senator. see you soon, hopefully. in the meantime, president trump will reportedly announce his pick for fed chair very soon in fact, according to the president, steve liesman joins us now with a look at who that might be steve. >> yeah, becky president trump's exact language is that he is going to pick his fed chair in a fairly short period of time current chair janet yellen trump will meet with her tomorrow she's one of five candidates under consideration. the president said he likes and respects them all.

here are the latest market productions. jay powell is leading the pack john taylor, 24% yellen to be reappointed at 23% probability. kevin warsh's numbers have declined down to 21%. gary cohn. once the frontrunner had just 6% those odds, they only seem to reflect the latest media headlines. not sure how much added information is there a better way to puzzle through this is to think about who wants what in this process let's begin with president trump. he wants low rates, and he likes the high stock market. he would also want somebody who favors deregulation. congress have been critical of the fed, and reappointing yellen would repudiate that they want someone to confirm that past criticism, and also, there has been some expression for rules-based monetary policy. finally, the congressional democrats, not sure how much of a vote they have they would like somebody who is

pro dodd frank, backing regulation, and favoring the current policy framework the key point concerning this runover of fed personnel is not whether they're hawks or doves, but, rather, they will favor a different approach to policy when it comes to that different approach, the question is whether the market gets the benefit of short-term uncertainty. the benefit of that is more sesht, long-term in the way fed -- the way the fed makes policy for example, in a rules-based system markets, though, could also be concerned. rules-based system won't rett the fed react quickly enough to immediate threat we have to do a trade-off in all of that coming for the markets and uncertainty until the president makes up his own mind. andrew >> thank you for that, steve we will see you in just a little bit. meantime, when we come back, a big line-up of heavy hitters going to be taking the stage at robinhood's investor conference. the organization's ceo will join us on the set right after the break. stay tuned you're watching "squawk box" right here on cnbc wes moore in just a moment

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snoo here's more about what it takes to go into the line of

fire, and to be willing to give your own life up for the greater good or for your fellow citizens it's just that's a defined characteristic >> anyway, there's -- let's talk money after that >> the s&p up 3.25, and the nasdaq five. kobe steel -- the world's largest plane makers have said they are conducting a review of those products >> robinhood's annual investor conference kicking off tomorrow bringing together heavy hitters in the industry, including jp morgan's ceo, jamie dimon, and david tipper and transportation

secretary chow >> what are actual investments we can make in the market that can be -- that can create alpha, and create different opportunities. i tell you the thing i'm really excited, though, tomorrow is the conversation it starts tomorrow the conversation that you are going to have with paul jones about the fact that this is the 30-year anniversary to the crash. you know who it's going to

really be hard on? poor people. >> how do you think you're transforming robinhood one of the things that's so interesting about this is it was started by paul tudor jones, but it really does feel like it is evolving, and now you are trying to turn it and almost revolutionize it >> how do we influence the role that policy and advocacy plays the truth is philanthropy alone cannot fix what policies have also helped to create. how then do we think about ways of partnering with other organizations and ways of thinking about being taking risk capital.

it's taking the great work of robinhood and thinking about where we're going. that's incredibly exciting >> you saw the george soros news giving away $18 billion. i was thinking there are now so many different people who have done a remarkable job and are planning to either are or giving away lots of money in some ways i wonder whether we're setting ourselves up to some kind of grand competition to give away, and whether some of this is doubling up and triple unin ways we have to be able to use data and metrics to be able to really force and push levels of ethicacy, and collaboration does not -- when we think about these

issues, these are hard, and these are complex issues being able to unify and find ways to unite on different fronts becomes the most effective way of being able to get things done. >> you were talking about poverty and trying to find ways to really be the most efficient and effective in fighting it i think back to lyndon johnson the war on poverty back to 1964. the housing policies or the criminal justice policies or education policies of the past decade, you have watched a herky jerky way in the way that we have fought poverty, which is basically meant that we have dwo chronic leflts of policy, right?

you have the generational poverty. then you also have this almost transient level of poverty i think having the ability to understand and distinguish between those two, having the ability to stay focused on what are the type of things that are going to move people and creates economic mobility and move people forward >> you have people that look at different solutions and waves that come in and out of washington what we think -- >> and i think that is part of it, right? i think the thing we also have to understand about poverty is there's not going to be one single thing that has gotten us into this. >> where does robinhood land on policy when it comes to the tax policy that the administration has been offering on mc? especially when it comes to the impoverished >> i think one thing that robinhood is doing in fact, robinhood is actually going to be bringing on for the first time in history the organization in chief public policy officer

>> whether it is issues of tax a little, and if you look at the current -- as is currently spoken about and currently constructed, the tax plan that has been proposed will have a clear and distinct impact on the people living in poverty >> will that impact whether or not you alienate some of your donors i think the reason that you haven't had an official policy is because these donors may have a wide variety of their own personal opinions. >> the median donation to robinhood is $133. we have a wide variety of opinions as to what that means the thing that we promise as an organization is that we will always be transparent.

we will take and hear everybody's opinion and everybody's thoughts we will works in partnership, and we plan on making our voice mean something >> if we could get 3% or 4% gdp growth, it's not all about just dividing the pie up more equally. it would be great to grow the pie. then divide it up more equally if we could do something about that, if we go to zero on people up to a certain level, or you do earned income tax credits, or you do things, and whatever it is, if you can -- if the private sector can take us to a higher growth rate, you wouldn't automatically say, no. >> there are ways that the private sector can help. >> it's also important to distinguish between means and

ends, right? the end is not necessarily saying, okay, we want to decrease gdp the end isn't necessarily saying that we want to have a rising star market and continue to hit record highs in the market that can be a means in order to get us to an end, right? the end has to be creating society and creating an environment where everyone feels a vested interest. >> there's a butting of heads between trickle down and redistribution, and it's a combination. you do want to grow the pie more, and maybe some people do end up the market goes up, so people that own assets are better off >> i think you do want to grow

the pie more, but, again, i think what it comes down to is what are we growing the pie more for? that's the point that i think we have missed. we haven't been as deliberate about what become the end? what's the goal that we're trying to achieve with all these things, and understanding with all these things, there ends up being consequences to it we have to be honest and transparent. >> we can afford a lot more of what we want, and all the entitlements that we've already promised, which we're not going to be able to live up to these entitlements as it is right now. >> okay. we wish you luck with the conference >> thank you >> thank you very much >> when we come back this morning, a fashion snafu at nba's opening night, and calves star lebron james is at the

center of things we have details when we come back

>> coming up, breaking economic news two key housing reports about to cross the table. we'll bring you the numbers. plus, it's been 30 years basically since blackmon

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>> we're 15 seconds away from housing starlts and building permits. triple digits right now. 105 on the dow less gains on the s&p, and the nasdaq up just four on the s&p six on the nasdaq. rick santelli is standing by at the cme. rick, the numbers. >> all right been a disappointment on the headline number right off the bat. that's down close to 5% from a 1.183 that we had last look, and that is slightly revised let's look at what may come down the road in the form of permits. this isn't really a whole lot better we're expecting numbers close to 1.25 we end up with 1.215

>> none of these numbers are very good. they're a lot better off than what they were in ermz it of housing, but these are disappointing. especially after the home builders index jumped nicely yesterday to 68. if you collected a toll every time we hit in the low to mid 30s. nothing special. we'll continue to monitor this, of course and the flattening yield curve which has caught many people's attention over the last couple of weeks >> that's what i was going to ask you about. the flattening yield curve the tightest between two and ten years between 2007 what does it mean, recollect

>> well, 30s to 5s is pz they close in the 36 to 37 area. that's keeping pressure globally based on programs that obviously in europe and japan that may not change with regard to policy stimulation. keeping long rates a little on the easy side. i think the combination has lots of distortions when short rates start to rise, should the curve invert -- we're a long way from that that isn't a good thing in an economy that lives by short-term financing. >> rick, is it okay with you if it's another, like, 80 years for the -- do you think there's a chance this year down three to

this team, and you have to hand it to l.a. a heck of a team >> do you know where the taco bell is? do you know where the taco bell is the taco bell they're talking in "the journal" today. do you know where that is? >> i did not -- not the one in "the journal." i'm sorry. refresh my memory. i missed that. >> at wrigley there's one near wrigley, and tearing it down >> i know exactly where it is. yeah, we all park around there yes, i do know a lot of outrage >> if it was a chipolte, i this think, but i get your point. >> save the tacos. if that's what gentrification means, you can keep it that taco bell has to stay there near wrigley thanks, rick

dominik chu has a look at how -- >> i don't think the consensus is that many people it's going to happen, but the expectation is there that there won't be some kind of a market crash the likes of which we saw back on blackmon, 1987 of course, the debate rages on about the effects of a electronics trading, algarit mick trading in a hypothetical situation where markets did go deeply discounted in a very short time, some stock pickers are looking to capitalize. >> that's one of his picks that could get hit harder than others in the downturn he likes more complex businesses that may be undervalued from a sunl of parts perspective.

you have ever more global advisor ceo david marcus also that likes that global theme he is looking at av' ndi and tyson, which he thinks is positioned well, but somewhat misunderstood by the overall market then you have cboe -- he likes the dividend to aristocrats. that's in the mooeft of a big pullback obviously everyone has their own shopping list, and that likelihood of a massive market failure is pretty small these days, but some investors are taking a fresh look at what they have in discounts, given the fact that we have that big anniversary. >> what we're hearing, i guess, it's good to know we don't have

to worry every again that's because of the central banks. >> he with just print more >> japan does it i mean, we do it everybody. it's all the rage, joe >> well, i don't know. if my dollar is worth 12 cents, i'm not sure that's going to buy as much. that hachbts been the problem up to this point. it's asset inflation maybe. maybe want >> maybe >> all right thanks making headlines, shares of cloud content provider bots are on the reez. the company won an fda contract to modernize the agency's cloud management platform. my cloud is going to be unhackable i got the idea today any cloud i

deal with will be orbiting around anthem has announced plans to launch its own pharmacy benefit unit it will officially start in 2020 once the contract with express scripps ends anthem has signed a deal to have new unit managed by cbf health the treasury department has -- we talked about this earlier declining to name china as a currency manipulator how far, the department's semiannual report does keep china on a currency monitoring list saying it remains a concern by the lack of progress and redpusing their trade surplus with the u.s china has refrained from calling us currency manipulators >> the federal reserve >> staying at zero for eight years. >> coming up, when we return, shares of im, they are jumping after an earnings beat is big blue back we're going to talk to an analyst about that right after the break.

michael wolf will also join us with his predictions back in a moment ♪ some moments can change everything. you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions to help them reach their goals. being ready for wherever life leads. that's the power of pacific. ask a financial advisor about pacific life. today, the new new york is ready for take-off. we're invested in creating the world's first state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent.

all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. right in the heart of the was in his financial crisis,k state, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was

able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. >> joining us right now on the squawk newsline. chief of strategy officer and head of technology research at

gbh insights good morning to you. help us understand whether a corner has been turned that seems to be the question this morning, given that we did have better than expected results. however, we still have that revenue number that continues to decline. >> yeah. apparently i do think this is a small step in the right direction. you will get strategic imperativ imperatives, cloud, security, analytics starting to see good growth itlooks like they might finall break the streak same with the world series last year in terms of the declining quarter. next year. ultimately, this is painful turn-around. they still have a lot of sort of wood to chop before you really see growth return to the story >> when will you know? fiscal 18 is really an inflexion year for them. i think that's where they really prove that this is actually the start of something where you'll see modest growth, and

potentially a turn-around. similar, you may have seen early stages of a microsoft oorks or if it doesn't transpire, that is where there could be dark days ahead, and you compare this to an oracle or the gold standard with dell and microsoft, and, you know, they're definitely some headwinds ahead, but this is definitely something that the idea was a positive step >> i think this is something where -- i think it's sort of the next quarter or two, but ultimately i think the turn around is really going to be tough here there are challenges ahead, and i think next quarter is the start of a huge year for im. >> dan, real quick there's a nasty story that

market watch is publishing this morning. headline "ibm earnings beat is a product of tax avoidance, and it's nothing new." they talk about a series of inter-ene entity asset transfers which effectively created a tax rate of negative 23.1% what do you know about that? >> the lower tax -- when you look at eps, look at bottom line, there's definitely a lot of what i view as nonoperational gains, and i think that's why as an investor, you really focus here on can they grow. if they can grow, i mean, the stock goes higher. if not, it continues to be a quick sand situation >> okay. dan. thanks for jumping on the newsline this morning. >> thanks for having me.

>> we talk all the time about how they're growing phenomenally you point out they're going to keep running into each other as they're all seeking areas for growth i wonder how the turf war plays out. >> it's interesting because their product road maps seem to mirror each other. in fact, each one of them when one launches something, the others need to fall. you see this with smart speakers, which is launch with echo and alexa, and then suddenly microsoft, google, apple, everybody else is getting into it. not to mention all of the asian companies. >> who wins, or is it different for every arena? is it the first guy there wins or who does it the best? >> it really starts with who is

able -- who has the most capabilities in place. amazon in e-commerce they've got the infrastructure they've got massive logistics, and they have an incredible membership base in prime goggle and search. and facebook not just in social but in messaging. people forget how strong facebook is in messaging 3.5 million people in the world between what's app and messenger are using facebook you think there's a lot of money to be made with subscriptions. he was saying, look, it's late because netflix and amazon have locked this up why do you see additional opportunities here ing. >> first of all, i don't think it's all locked up i think that if you look at netflix this week announce it's going to spend $8 billion on

program willing, we always find that just because you spent doesn't mean you get hits. the other thing is we're going to see a price war they raised their price from $ .99 to $10.99. >> can that stick? >> hulu lowered its price from $7.99 to $ -- >> can netflix raise and have those price increases stick? >> i think they have the ability to increase their prices, but all of our research about how much people are going to willing to pay for these streaming services suggest that people are going to be willing to pay as much as $20. when it comes down to sports, those hard core sports fans who are 90% of people, they are willing to pay up to $25 for sports i don't agree with barry difficulter.

i think there's a lot of way to go with subscriptions in general. >> there are a lot of people who had said this was going to be great news for consumers they could be paying less than they were for the cable bundle when you start looking at all of those ak pajz and adding up when you get back some of that, not convinced that the consumer will make out in terms of the cost saverings. are you? >> right a year ago, at&t announced its $35 direct tv now package. you had to continue to pay more if you wanted the channels you wanted the same is true with sling tv and playstation view my forecast that maximum we're going to reach about ten million homes in the united states that will be receiving these virtual pay tv services. the other problem is you need some sort of cable, some sort of broad bantd connection

true watching a tv game on a streaming video. >> right let's talk about that very quickly because at&t, when it talked about the number of digital subscribers that it lost it sent shock waves through at&t stock, but through all the cable companies too. they are very concerned about the potential growth down the road and potential future. are you? >> i'm not, actually i think that there's a difference between direct broadcast salt light and what's happening with cable i think cable has a lot more to win here the dbs guys less so is. >> because of what you just said >> because they -- right people are still going to buy broadband. the fact that you have a broadband pipe in your home means your cable operator has the opportunity to come back and sell you tv again.

are i hope you'll stop by the next time you're in new york >> great to be here. >> thank you >> jim cramer will join us live from the new york stock exchange we'll get his take on today's top stories. here are the futures right now we are only at 23,000 for a day. now we may be at 23,100. we'll be right back. at fidelity, trades are now just $4.95.

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bank of america and merrill lynch downgrading the chain to under perform from neutral labor costs will continue to pressure profits let's get down to the new york stock exchange jim cramer joins us now. we've been scratching our heads, ibm will be up you've got schroeder on tonight but what else in the dow 100 points i thought if we hit 23,000, we needed to pause. >> we got j and j, more price targets boosted and united health we're seeing good numbers, predictions out of visa, goldman sachs was overdone on the sell side yesterday we're seeing money come back in. i do think that the banks when we talk about that two-year,

it's a really good sign that there's going to be rewriting the banks. jp morgan goes to 100 and ibm was much better than expected in terms of saying that the fourth quarter is going to bring the inflection in revenues and i think that stock up nine, ten, that's a lot to pay up but it's justifiable if q4 ends the drought of 22 straight revenue declines and it will and martin schroeder pretty much ensured that. >> it's not the third quarter, it's fourth quarter. >> yes, fourth quarter and there's a lot of bears trying to get their arms around very quickly how they could be so wrong except for katie uberty, morgan stanley, a except tistept a cynic. >> did you see the yankees >> that was terrific i caught the later innings, what you needed to catch.

>> yes, watching that eighth inning, my gosh. >> i can't believe it's on at 5:00 tonight i woke up thinking i'm excited, i can watch a sporting event think about us, once in a while. >> i know, you guys don't get to watch -- unless it's like -- the saturday night west coast game between oregon state and oregon, it's not your -- >> you've got that one >> i have watched some -- how many are there i watched some of those pac-12 games. >> thursday night football is made for you because those games are over in the first quarter. >> sc notre dame this week, i think so. >> really? i do feel bad for you. like the cubs game probably completely eluded you. >> what if it's l.a./new york, that would be a big deal, two of the biggest markets, right >> i was going to say one ibm

thing talking about the tax rate -- >> what nonsense, honest to god, what do you think it is ge the tax rate has been 15% forever. it's not ge where the government pays 1%. ge on friday mentioned they use real numbers like other companies like honeywell and united technologies or continue to use ge numbers -- >> i saw you tweeting that. >> i saw you tweeting that yesterday. i was like, wow. >> i like real numbers, it's something i've always thought were right, the ge standard. >> but you're thinking those ibm numbers are real >> they are very real. >> martin sh roeter is very real. >> these were clean beat and did not have any real benefit -- >> exactly. >> despite the market watch story and what we were talking about earlier. >> guys should go cover ge, he's made for ge that guy. >> what do you really think, jim? >> the market watch piece is wrong. anybody who says it was tax rate

wrong. anybody said it was intellectual property wrong. anybody who said it's revenue ramp right. that's the story. >> we'll see you in a few minutes. "squawk box" will be right back. and in this simple everyday act, we see. when we give, we receive. ♪

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we teased this earlier, nike made its debut of the official outfitter of the nba lebron james new jersey tore down the middle, this is at least the second nike jersey to endure a large tear during play, one lakers jersey ripped during a preseason game earlier this month. until the current season, nike rifle adidas had outfitting rights for the nba remember a couple of years ago when under armor was still kind of new and made -- >> it was the skating, right >> speed skating, like too much -- i don't think that was ever true but -- >> they weren't doing well and blaming the new gear as a result >> exactly. >> i do remember that. >> let's take a quick final check on the markets this

morning. the dow is now indicated up by triple digits, gain of 106 above where it closed yesterday. s&p indicated up by over three and nasdaq up over 5.5 it's important because the dow touched over 23,000 for the first time yesterday. >> cramer said there's numbers boost on the do you components reported yesterday make sure you join us, speaking of cramer, he's coming up now with his friends make sure you join us tomorrow, "squawk on the street" is next ♪ ♪ i'm gonna knock you out >> good morning, i'm carl quintanilla with jim cramer and david faber. big blue could add as many as 50 points to the dow at the open after the 50th record high of the year on tuesday. some solid gains in europe and