it is 5:00 a.m. at cnbc global headquarters and here is your top five at 5 nafta is out umc is in. united states and canada inking a last-minute deal. ignore all distractions. that's what elon musk is telling employees. the justice department suing california fortrying to reinstate new net neutrality rules. the death toll continues to

rise in indonesia following a major earthquake gold just did something that it has not done in 30 years. we'll tell you what that is on this monday, october 1st, as "worldwide exchange" begins right now. well, good morning, good afternoon, good evening and welcome to october and the fourth quarter as well i am brian sullivan. it is a very busy monday with a lot of ghusd for your investments. look at this this is not a misprint, folks. dow futures are up 217 points right now. the markets are set to take off and it's because of this the united states and canada creating a united states, mexico, canada agreement unwieldy but futures are moving higher on the news let's get to tracie potts live in washington, d.c. with more deals.

>> usmca new deal, new name. it sets up trade parameters. here are the highlights as we know them. we got the text a few minutes ago. it covers the environment, intellectual property rights the big highlights are changes when it comes to dairy canada will ease dairy protections and open up market for the united states in a way that the trump administration says is better than the tpp. it protects canada from auto tariffs on our site, something they were concerned about although senior administration officials are very quick to point out that steel and aluminum tariffs are a different thing on a different tract being dealt with by the commerce department not part of this deal getting reaction this morning. a joint statement from the u.s. trade representative saying that this is going to be good for workers on both sides. congress just getting the text today. they'll start picking it apart

because, of course, they have to approve it brian. >> big news to start your day. we appreciate you bringing it to us tracie potts, thank you very much. the markets like this new deal nearly everything everywhere is up including as tracie is says, the automakers like it let's talk we're going to talk more about the markets in one minute. right now let's get to your top corporate story to begin your week that is tesla. elon musk striking a deal with the sec over the weekend to settle fraud charges under terms of that deal musk will remain tesla's ceo but he will surrender his role as chairman of tesla. he'll pay a $20 million fine the sec fining tesla $20 million. total $40 million payout in the meantime in e-mails obtained by cnbc, musk is urging staffers to, quote, ignore the distractions, end quote, adding that tesla is very close to

turning a profit as a tesla watcher and shareholder, what do you make of this deal? >> yeah, i think investors will like it. obviously a lot of people wanted musk to be removed as chairman over all it needs to be seen there is a lot of uncertainty. overall the settlement happened quickly. i think investors will like that this took place quickly. >> are you shocked, brad the news came out friday over weekend we gave news of the settlement thinking how in the world this is possible >> yeah, brian, there was certainly chatter that elon stepped out of a potential deal with the sec last week this happened rather quickly since it moved quickly, this looks more positive.

most people will be shocked how this took place. >> some people will be disappointed that he's ceo he has more control than others may want in terms of for the company and for the leader, this is the best case for him from an investor's standpoint, you got that, that will take place. the only negative people may look at is that he was not taken that more negative things to have happened to him some of us may have wanted to see that. >> are you happy that he is still ceo? >> you know what, i think the leader -- he's a visionary we can all disagree on some of the tactics that he does, but he's certainly a visionary he's done quite well with many different ideas. i think it's good that he's still the ceo. i think it's very good there

will be an independent chairman. now let's see if they can execute model 3s first and foremost what's on people's minds and see if we can continue to get that going. >> i'm wondering, brad, down the road how the chairman and the now ceo alone are going to get along, but for now it's good news brad, we appreciate your time early this monday morning. thank you. >> thank you all right. switching back now to the broader markets and your money fourth quarter is underway in europe as it is here that's a vagary of the calendar. it's october 1st pretty much everywhere germany, look at that. all the markets are riding high as well. the italian market is your big winner in morning up 1.5%. stock futures on the bottom right-hand corner of your screen or if you're in the car i'll tell you, up 204 a lot of good news a lot of green on the screen today. however, going forward we need you to keep your eye on one

thing and that is what is happening in the european bond market because it's not a greece like situation yet but everybody's eyes have been on italy. they passed their budget last week the market did not like it probably reacting positively to the trade news here. here's what i want you to watch. these are the yields on the ten-year notes germany, look at that, probably the most stable economy in europe a ten-year bond, under 1/2 of 1% france is up .8. spain, 1.5%. look at this jump, italy 3.2%. we put greece in there as a reference point. what you need to watch is italy versus the rest of continental europe watch that bond yield. if it keeps going up the market is saying italy and its budget and its constant political problems are something to watch. a lot of good news today let's bring in the ceo of

irvings investment management. great to have you on today we have a new nafta deal, bond yield, european market soaring what is the main thing for you and your team to watch right now for your clients >> first off, thank you very much for having me good morning to all the watchers there. the nafta is a deal. it's sending a signal that the weight of the united states is pursuing its trading tactics, if you like, or the negotiation tactics work it's a high risk structure, but it does work we've seen this with president trump and nafta and why is that important? there are tensions between the united states and china and this may be an indicator that, in fact, it's a new tactic that the united states starts employing which is that it takes it to the wire and reaches a deal.

that is on the general wire. you mentioned italy. that's worth coming back to. the difference is in the united states the popularism is about cutting tax and a strong economy and you have a positive background in italy you have a populist government about spending money. what we saw last week is this government with a new budget saying they're going to take the deficit to 2.4% of gdp it's still under 3% but it's a lot more than the 2% people are watching to see what are they going to do next because they cannot deliver on all of their promises. to promise to cut tax is easier than to promise to actually raise tax and pay for more stuff, particularly if we have a deficit city situation and if

the economy is not booming in the same way it is advance being in the united states nonetheless, the overall picture is, look, what's come out of the nafta deal or whatever it is called now is not very good news but also for trading in general. that's very good news. >> i'm going to call it the umc. i like the acronym very easy to say a lot of good news out there today. italy's problems are not going away will this become a greece like situation which dragged on for multiple years >> this could be again, you -- the problem with italy's situation is, look, had they gone over 3%, near 3% of deficit then you have a problem right here, right now. what they've done is gone up 2.4% which is a deficit in spending which is more than what the market expects what does that mean?

it means they haven't broken the rules but they've gone close to the wire the difference between europe and the united states is twofold. number one, we don't have the same degree of growth. earnings are turning down with companies and that bodes bad for the economy and you don't have inflation. on two measures of growth you're not seeing the positive news that therefore means the 2.4% budget deficit is still within the 3% pound that is accept aabe to the european union. that's why you've seen it drop to 3.2%. is it a greece no, it's not a greece. it's not that bad. is it going to drag on for some time yes. and we've got to wait and see how it regresses from here this is just the beginning

the reality is they can't tlifr on all of it -- >> does it make the european stock market unattractive relative to the united states? >> so i think relative to the united states, the united states stocks have been unattractive for some time. i've been seeing that for a while. i think what makes it slightly less attractive is not just italy per se but the fact that earnings are not better than expected, in fact, they're disappointing and economic growth is slower than expected look, don't under estimate the fact that the u.s. economy is much stronger and that in the world stage makes it a more attractive place to be. >> saker out of london, a real pleasure to have you on this side of the pond on tv anyway. thank you very much. all right. let's get a check on the stocks that need to be on your radar this morning

jackie deangeles joining us bright -- not really bright but just early on this monday morning, jackie. what are you looking at? >> good morning to you, brian. the top three stock stories to watch. husky energy has made a bid to buy meg energy for $2.6 million. it's a 37% premium to friday's closing price in toronto the combined company would have a total production of moore than 400,000 barrels of oil a day. meantime, oracle's top cloud executive is leaving the company less than a month after he took a leave of absence oracle znt give a reason his responsibilities are being reassigned. shares of ryanair is cutting the 3r06r9 forecast by 12% the company says the decline could be worse if recent strikes continue to hit traffic and bookings.

>> jackie deangelis, we will see you in a few minutes thank you very much. along with the stories that jackie brought you, we're watching shares of facebook. the stocks taking a big hit on news that a security breach may have exposed personal data by 50 million users. facebook stock, by the way, if you think it's been weak, you're not kidding. facebook just posted its worst quarter since 2012 in fact, the worst quarter since as a publicly traded company they're not down and just under 1% we'll be watching the fb all day here on cnbc up next, going global. the one international market that is hitting 27 year highs and nobody seems to care plus, we are talking turnarounds. could emerging markets about ready to make a big face tim seymour is joining us. get a coffee, get going. we are back right after this

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i can't remember a time since march when the futures have been up this much maybe it was a day when i was here, i can't recall one either way, we are going to see at least right now a major pop at the open. let's move on. the chinese markets are closed for national day turn your attention to japan the japanese stock market continues to power higher. the nikkei 225, the dow of japan if you will, hitting a new 27-year high the nikkei up 8% in the third quarter. best performance since fourth quarter of last year let's bring in nicolas smith japan strategist with csla nicolas, welcome the japanese markets has been not on fire but looks like it's heating up nobody seems to care or at least believe in it. how come >> it's an incredible business

part of the problem is just the language a client was saying to me the other day an international investor says japan is the only place i have to bring a translator with me which has gone up more in earnings per share, japan or the u.s. japan has. the profitability has improved out of all comparison. you look at profitability for japan going up it will be 70% higher than any point over last 65 years the only reason the market is up is because the bank of japan is buying >> corporate and the japanese market by every single measure

is the cheapest developed stock market in the world but it is a market that has burned people many times over the last 20 or 25 years do you think people don't believe it because they've been hurt by it >> they think the market only moves because of the movement in the currency the correlation is there this market is about corporate profits. it's nothing to do with these big mac crow moves it's a country that's finally got its act together on profitability. >> do they why do you think that, nicolas why do you think this time they have a demographic crisis. women are barely in the work force. they're leaving half their

educated work force literally in the home do you think they're finally going to change? >> no. you have that absolutely the wrong way around the japanese country has too many people in it. >> i used to work for a japanese company. >> that makes the bubble in the u.s. look like -- well, so the point is they had a bubble in the late '80s. they diversified into other businesses to stick their excess citizens in. now they want to close them down because they have a worker shortage you got to a stage when 73% of the companies were making their money. we can't have that, we changed the tax system, everybody should pay something and the result of that is that you've driven out the zombies. that allows real companies to make real money.

>> we'll see if it lasts a lot of our people have money there. still ahead, major changes coming to california's c suites. what the golden state just did that o could put an end to the all male corporate board. scores and more. if you went to bed early tonight as we and our team did here, we've got you covered. highlights of the ravens/steelers coming up. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

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good morning 5:24 on a very busy monday morning. here's a shot of new york's times square the first two days over the weekend in a row this year where it hasn't rained or something. let's get a check on this morning's other top headlines including all the disaster recovery efforts in indonesia. phillip mena is here >> the death toll continues to rise after a massive earthquake and tsunami swept through parts of the island. authorities confirmed at least 840 people have died with some reports up to 1200 victims mostly from the coastal city of palu officials fear that number will rise as rescuers reach other areas. the fbi has joined an investigation into a car explosion that killed three people in alan town, pennsylvania officials believe there was a criminal incident. there is no immediate threat to

the community. the trump administration is suing california over its new net neutrality law setting the stage for a high stakes showdown over the future of the internet. governor jerry brown signed the measure on sunday requiring internet providers to treat all sites the same in banning online fast lanes the fcc repealed nationwide protections after deeming the rules a regulatory burden. this is the latest battle between the federal government and the state of california. >> 23phillip mena, thank you. call it the new nafta, umc, whatever you want. why the new trade deal will send your money higher today. we'll talk about it. new ceo on the block will athnying change at goldman sachs? we'll begin next begins to change which may cause trouble with recall. - learning from him is great... when i can keep up!

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nafta is dead. long live of data. the new trade deal has stocks set to soar. elon musk settling fraud charges with the fcc but jeff sonnenfeld says more has to change and he is here. golden state setting new standard for the c suite which will change corporate board rooms forever. ♪ ♪

1991 is calling and they want their music back. welcome back, everybody. thank you for being here with us on cnbc. i am brian sullivan. it will be a big day today for many dayze -- reasons. nafta futures are soaring. dow futures up more than 200 points on this news. jackie deangelis has more on what is going to move your money today, jackie. >> good morning again, brian the u.s. and canada reaching that last-minute deal last night to overhaul nafta after talks going into the weekend appeared to be on collapse. washington had imposed a mid neat eastern deadline for this in a joint statement u.s. trade representative robert lightheizer and christa free lan says the u.s., mexico, canada agreement or usmca will give our workers, farmers, ranchers and

businesses a high standard trade agreement. they agreed to a quota of 2.6 million vehicles the deal failed to resolve tariffs on canadian steel and aluminum there is a trade dispute process that canada fought for canada made some concessions in providing u.s. dairy farmers access to about 3% of its $16 billion market that's a big sticking point that was apparent in talks. the markets are reacting to this today. the canadian dollar hitting the highest dollar the mexican peso. >> the uscmca. it doesn't have the ring. >> let's call it the umc. switching gears to the

corporate story, that is what else tesla. elon musk settling a deal to settle fraud charges he'll give up his role as chairman he'll pay a stiff fine of $20 million. musk is urging staffers to ignore the distraction and that tesla is close to turning a profit joining us is jeff sonnenfeld, a cnbccontributor and a guy who has written exclusively about musk are you happy with the deal? does it go far enough? >> no, it doesn't go far enough but it shows that the fcc is extraordinarily fair to the company, at least to this board. they're getting a sweetheart of a deal that they kicked in the

face last week just $20 million against him. >> i joe jeff -- the great jeff sonnenfe sonnenfeld, when you say overly fair, that is jeff sonnenfeld speak for, wow, the sec rolled over and played dead. >> they capitulated. this is fraud. where's the punishment for fraud here this is pretty modest. they could have survived sure he's a genius it would have been generous of them to let him stay as a board member they could have let him have those back still brought in a new ceo it would have made a difference there are equally brilliant ceos who are geniuses >> i was going to say, that is a

murder rouse row of -- you don't want to be associated with those guys long term they were great for a while and all the companies went away. >> you're exactly right. the stubbornness became the seeds of their own destruction later on that's what we see here. this guy is out of control nobody's reining him in. look at the turnover they've had. they've had 50 significant people leave and 30 key ones including certain functions they've had three layers three cohorts take off in the finance function, key operational roles and autonomous driving. where is the board asking questions and the wild tweet storms, financial plan they have pressing needs for

debt every day he says he's going to build a new giga factory that's not the sec's challenge their challenge was to show they were going to punish for fraud. >> can i ask you to switch gears in the generous time we have left, jeffrey, to talk about somebody else you've talked about, young visionary, mark zuckerberg another hacking scandal. a lot of people feel like they've been misled or deceived by the company do you think that mark zuckerberg needs to be restrained and contained >> zuckerberg, he, too, is a genius again, shouldn't leave the firm. they should be thinking about some kind of succession there. we see cults form around them.

you can replace these people you can find a key role for them, at least most of them. i'm not sure about papa john's looking at the turnover they've had there too is why is it you've lost the founders of what's app, instagram and the people are being discouraged from the key acquisitions, it was the people that made the difference why can bob iger buy the top leaders and hold on to them at pixar, marvell, lucas and keep creative people together here it's kind of the my way or the highway. when it comes to regulatory compliance, it's a huge issue. the electronic issues have been contained. they're following blindly and religiously. they need to put more pressure on him, wealthy. if you do that, you need to be accountable to them.

>> we've gotten you up this early. we're going to ask you about a third topic. call it the sonnenfeld triif he can at th-- trifecta. boards have to have at least one female of the board. i assume you would support this move >> that's a tougher one. if you take a look, we've come a very long way on boards but not so well -- the old -- you've come a long way, baby. we've not done so well with women ceos it's only 5% that's crazy, 24, 25 of them that's ridiculous. however, on boards, we've got a long way to go if you look back in 2005, we had 12% that had women on the board. so we've made significant progress it's sort of tapped out. of all of the open board seats in the country, 19% are women.

that doesn't make sense. you look at the work force, consumer base, demography with the country. the problem with regulating this, we pick gender doch so much for this. are we going to try to make it a municipal city you're putting people into context and off of demography. it's not that high 35%, nowhere is it parity of 60 perts percent. i don't love the way it's getting to them. i'm not sure this will hold up a constitutional test. it does seem questionable why we

hold this out. look at congress if it's 19% of available board seats, it's 19% of congress right now are women -- >> yeah. >> -- and it's been that way for many years 75% of them are democrats and of course 1/4 republicans but are we going to ask the same standards for the clergy, congress, elsewhere? i think there will be a lot of questions of spreading this around the country >> jeff do you think you can keep your phone by your help >> yes. now to sports if you went to bed early like most of us on this fine program did, you might have missed the end of the game. this is what you missed. the ravens of baltimore visited the steel workers of pittsburgh. tied up at halftime. the ravens scored four field goals in the second half to take home the win victory capped off by a big interception late in the game.

the baltimore ravens have not allowed a touchdown in the second half this year. first time a team has done that since 2006 the ravens are good. up next, a big bank shakeup. there is a new ceo on the block and today marks his first day on the job. we're going to dig in gdmonolan sachs latest move next ust inves. from insurance to savings to retirement, it takes someone with experience and knowledge who can help me build a complete plan. brian, my certified financial planner™ professional, is committed to working in my best interest. i call it my "comfortable future plan," and it's all possible with a cfp® professional. find your certified financial planner™ professional at letsmakeaplan.org. we distributeus, i'm the owner environmentally-friendly find your certified financial planner™ professional packaging for restaurants. and we've grown substantially.

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today marks the dawn of a new era at goldman sachs david solomon takes over led them through good times, hard times, good times again what do you think david solomon's legacy will be >> david's a very impressive guy. i worked with him briefly at bear stearns i think the challenge for him is deciding what to do with this business they had to kind of become a bank, quote, unquote, during the crisis. >> an actual bank. >> know had an industrial loan company in utah and they turned if into a full blown job is there a real intention at goldman to become a big bank with a deposit base, with a broad offering they keep talking about it but they haven't done it. >> what do you think they should

do when we say banking i'm talking about i give you money and then i have a checkbook is it brutal, brutal business? >> or commercial banking just focus on what they know. >> even that is slightly less brutal it's all about margins and fees and everything has been compressed. >> it is i did a piece about some possible acquisitions. look at someone like key, big player in commercial real estate, big trustee in cnbs deals. very big market. goldman loves that market. they could join, and they really don't have a deposit base. >> some of the highest funding costs and lowest assets for any funding base, do they need to fix that >> if you want that reward, you've got to stop being a bank. go back to the fed and say, we're converting it back into a

non-bank as it was before 2008 same with morgan stanley by the way. you save millions of dollars a year >> always a pleasure to get your insight? >> thank you. still ahead, can emerging markets see a big turn around this quarter third quarter a quarter to forget we'll get your fourth quarter play ahead when is a honda more valuable than a fraerri not a trick question it has to do with investing. stick around

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row. find out what's coming up on "squawk box. joe kernen, i hope "squawk box" puts up a better fight than the u.s. did in the ryder cup. >> they're great players, obviously. they have a lot of team spirit and camaraderie. our guys, you know, we had so many guys in the top ten you saw thomas bjorn is able to set the course up the way he wants. that's the course just outside of paris >> so you're saying next ryder cup, we should pick a course they haven't played on.

>> they've never seen a rough that deep and made the fairways very deep. you put the smash brothers together you think you're going to win unless you hit it in that deep stuff where you can barely even move it out of -- >> they made the fairway like french pants, skinny and narrow. >> exactly exactly. it was the berth of mollywood. it was -- i liked it i enjoyed it i thought it was great webb simpson was solid justin thomas is the new star obviously. not everyone played great. phil went in with -- did you see what's happening here with nafta? >> nafta's dead, my friend it's called the usmca. >> two days ago we were trashing them. >> we were ready to go to war.

we love them again. >> you wonder why the market sometimes shrugs off this stuff. this is, again, it could be dangerous, because it just -- we kind of think, well, trump says all of this stuff, president trump says all of this stuff to get a deal maybe this means the same thing for china, brian. >> yeah. >> we're never going to -- but it scares me that the worst can half. >> we'll find out who's breaking out the orange. >> we have to change the microphone battery before the show. >> it's going off in my ear, too. >> we've got the top stuff around here. we're an international financial -- >> with a european ryd rydeuscma kurns see crises in turkey

and argentina sparking fierce fears. seema mody, what's going to happen >> they gained 25% last year and this year the index is down about 9% yes, we've seen three major currency crises this year in argentina, turkey, south africa. going into the fourth quarter, china will likely be a big driver of this space a growing number of analysts say we could see the chinese economy feel the impact. tariffs are starting to take a toll on the world's second largest economy. as the trade war escalates it will not be easy for the chinese government to continue to use public spending to boost investments due to the mounting debt china does have other tools it can use to alleviate the pain. monetary policy. wang lee said friday here in new york that china would be hosting

the first ever international import expose conference in 2018 the upcoming election in brazil will be closely watched. the front-runner was stabbed in early september but is still leading the polls ahead of the first round of elections on october 7th but there was a massive protest over the weekend so that election uncertainty could potentially weigh on brazil in the near term. back to you. >> thank you let's now bring in tim seymour, cio cnbc "fast money" trader q4 is going to be better than q3. >> french jeans? >> i could have called them seymour something. >> going into the fourth quarter, we came out of the third quarter, which is the best since 2013 and yet nobody -- yeah, feels like it was. you know, we're well positioned

certainly globally to recover and to do on a relative basis besser than we had, what happened with the if he had, that the market is comfortable seems not to be working. the trade news very significant. nafta probably shouldn't matter that much for europe and e.m this morning you're getting that bounce technically watch this down trend line on emerging markets struggling to get above this 25 times it's failed since january. it looks like maybe this time is different. don't bet the house, but i do think the rest of the world which has really underperformed is maybe the story of the fourth quarter. >> do you think people put too much trust and faith in the eetm people buy it, think they're getting diversified.

most of them are china, a couple of core reis is that a bad bet if you believe in emerging markets, that etf? >> well, look, at this point it's not a bad bet because of some of the names thrown around. is alibaba a victim? they were well flagged we had earnings out of tencent and baba that were pretty decent to some extent if you are playing the fact that investors have used these as proxy plays, it's probably a good bet investing away from the smei index, it's tracking an index that is very china heavy and it probably should be as we see all the time, get a lot of money by betting in

places where you have consumers and banks and discretionary plays that do well. >> is there a market you like ex-china and ex-japan which is not emerging but you get your point. >> i do think you're going to see mexico rally a lot of that move in the currency started back in 2014, 2015 when the dollar was beating up oil and this is as much of an oil proxy. i continue to believe that mexico will recover. i think parts of asia, china if we start to see the proxy play for asia that will continue to be, i think, very conducive to u.s. policy even if the u.s. doesn't get a deal done with china. china is the big gorilla you need to see that deal but i think in the short run actually that is still a place that you could be outperforming in the fourth quarter. >> we love the insight i'm so disappointed.

i can't believe the seymour something went -- >> i'm halfway into my coffee. >> the day is half over, seymour. >> thank you very much >> purveyor of skinny jeans. finally to your monday rbi if you want to make some money investing in hedge funds, find a manager who drives a bull ring car. hedge fund managers who drive what they call, quote, powerful sports cars take on more risk, trade more frequently and prefer lottery like stocks but they do not deliver more results if you're going to interview a new manager for your money, do your due diligence camry good, ferrari bad. random but interesting stocks set to soar japan is doing well. it is going to be a big day here return engagement on "power

lunch" 1 to 3 eastern time you're welcome, america. that's it for "worldwide exchange." "squawk box" and a soaring market coming up next.

good morning breaking overnight the u.s. and canada reaching a deal stock futures soaring. elon musk settling his case with the sec he'll keep his ceo title but he'll step down as chairman of tesla. california's governor signing two bills into law one has prompted a lawsuit from the trump administration it's monday, october 1st, 2018, and "squawk box" starts right now. ♪ ♪

live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc are we playing the cnbc music for women in california who have been appointed to publicly traded boards? we'll talk about that in a second i'm andrew ross sorkin and i'm here with melissa lee, becky has the day off. we'll explain why the answer is in nafta in asia, china, hong kong the markets closed japan's nikkei closing higher by half a percent european equities at this hour, we'll show you those as well as we flip it around. green arrows there finally treasury yields at this hour, ten-year note is trading right now at