830,000 have been sold in north america. if you own one of these, take it in jobs number with a quick recap for you. number of jobs added 140,000 you did see the employment rate moved from 3.9% to 7%. futures are flat right now have a great weekend everybody make sure you join us on monday. right now it is time for "squawk on the street. ♪ good morning, welcome to "squawk on the street," i am david faber along with jim cramer we are live, carl quintanilla has the day off today. let's give you our futures, we are half hour to the opening bell and trading >> that's not much >> thank you >> given the fact it is going to

be -- >> it is not much. >> i got the longest report in history today. take a look at the 10-yr note yield. that's the driving force for the market action. yesterday you saw it there is the 10-yr you see it there. just backing up a slight bit of 3.21 and crude oil. let's get to our road map this morning. it starts with those, well, the stock futures, kind of mixed this morning it was not some what of a disappointing jobs report. jobs growth slumped in december. the lowest level in 50 years >> '69, great year for new york sports plus, musk verses the sec. the battle, the ceo is mocking the federal regulator on twitter

calling it the short seller enrichment commission. tesla shares as you may expect going down a little bit on that. and the stock price, if he can get the shares up by more than 50% during the next four years did you see that contract? >> why not lininining flannery shareholders >> it is quite rich, i want to talk to you about it let's talk about the september number for employment. they did show us job growth. hurricane florence may haves played a role in those results the unemployment rate is 3.7%. that's the lowest level since december 1969, average hourly

earnings up to 2.8% a year ago wage growth was 2.9% of the last report we got, jim you were saying 2.8 and being sarcastic about it but that was the highest level we have been at some time, 2.8 or 2.9 >> should we not allow workers to make eight cents more than they did is that what it is about with jay powell >> i know jay powell, there is no way that he would feel badly if they did not let these people have a few more. >> you want that without a doubt. >> thank you >> you want people working and you want people making more money. >> what are the ceos making? >> a lot more. >> actually we know to a certain extent because the sec rules disclosing comps verses your average pay workers. >> hundreds of times >> the most ill advised man in

america. >> he's insane >> you are jumping all over the place. let's get back to this >> i get angry when i see this is an inflationary number. >> average weekly earnings rose by 3.4%. that does match the best levels since august 2007, jim >> right >> the likes of peter book farve and he argues this -- most of the labor markets are young people and those are just high school dip employlomas. >> there are minimum wages but, i just think that when you see where the employees are, it is no longer in places where we had felt like under the obama administration, healthcare, it is no longer the hot area. manufacturing is almost as hot as healthcare. that's really good we want manufacturing jobs

this little change over the month. that's not good for workers. that's where you want to get jobs that's where people can get not high skills jobs i look at these numbers, maybe it is fine some of these factors are good we can't worry about ten cents >> let me put it in perspective for you. by the way, in 2016, it was 195,000 for the 12 months and in 2015, we averaged 226,000 jobs job machine continues. may be coming down a little bit of the last three months >> that's why the administration going to 3.5 we got to find out who's selling all these bonds. where are they putting their money. that's ridiculous. you know i look at 3.21 and it

is a lot more than 2.2 >> i refinance this level aggressively >> yesterday, we had a significant sell-off at the stock market mark you don't believe it was deserved >> i think the market had been up i think the biggest worry of this market is amazon, is the $15 number that's causing all retailers to go down but the cloud stock, they went down people feel on a discounted cash flow j. powell says we can be in an inflation environment. >> i think that's wrong. i think that we are not endanger of run away. i just don't think -- >> today's jobs number does not do anything to change your mind?

>> no. transport costs are higher and oil is higher. the president took out about 1.4 million barrels a day from venezuela and iran venezuela dropped about 1.4 million barrels in the last seven months we have 1.5% growth of oil this year verses the trend line of 1% remember we would have enough oil. >> had not pull out the nuclear agreement with iran. >> i am saying we are not in dire shape, most of the hedge fund managers, i think we are people are concerned of the new china 4 a that we are talking about and military problems with china. >> pence's speech yesterday was noted assort of that was perhaps -- >> china is responding like they used to do in 1955

the lingo they are using is much of what we saw it is rather amazing >> yes >> they are back in insult mode, man. >> i am looking at some one else here of the trade issues with silo and other geopolitical issues with pence's speech kicking off an effort to inform the american public of u.s. allies of china behavior >> we are retaliating against years of china david, zte is down really badly. i watched alibaba go down at a pace that's shocking given the fact that the quarter were quite good we have to stay close to what we are doing to china >> let's move onto tesla here. the shares are down in the

premarket. elon musk if you did not see this yesterday mocking the security exchange in a series of tweets this is days after settling with the sec over fraud charges that he misled investors in terms of making false statements back in august, august 7th, in relationships to take tesla private. musk tweeted that he wanted to say that the short seller enrichment commission is doing incredible work and the name change is on point >> justifying their fraud settlement as fair and reasonable i can remember judge rokhoff >> you can't dismiss the judge here in terms of signing off on it jim, what's wrong with this guy?

>> this is classic extreme bipolar behavior risk taking the writer jim stuart talks about that i am talking about behavior that's obviously being kmexamind by many psychiatrists. this is not what a ceo should be doing. it is not rational whatsoever. his irrationally can reflect, i don't think the sec have seen anything like him so they're not sure of what to do >> they're going to rescind? >> they can't rescind. >> his behavior is so medically interested not financial interested >> i can see the stock has found 3% let's not forget they're going to find a new chairman now and let's call it 40 days who'll take over for at least three years in that row and directors will be added to the board and

all of this and as a result of sec settlement they're supposed to keep an eye on all of this twittering, tweets >> that's what i am saying anything that he was going to be releasing about the company. >> david, this is the new mocking agency this is assign who's a man who's completely lost his ability. i would think to understand what matters. >> if he shows this to the general counsel, e may hahe may your users >> ill advise. this kind of behavior is not going to take this stock to $1 trillion. >> no. >> we hear many managers talk about it, $1 trillion. >> it sends a signal that it is not over >> he's erratic and unstable >> his erratic behavior that's rarely seen in america it is extraordinary to mock the agency like this

>> i could not agree with you more it is just bizarre >> to make fun of the agency when you are in front of the agency >>. >> can he focus on the tasks at hand >> model 3 >> not with tweets but with production numbers if someone has to get to this man, someone has to get to h i am very soon and explain to him that he's his own worse enemy and he needs to spend a little time >> has somebody tried? >> yeah, we forget the whole story that jim broke that if you don't fight the sec, i am going to quit. that's also erratic here >> it was. >> all right, speaking of boards of directors, general electric expressed confidence in its new ceo, larry culp, ge agrees to pay him as much as $21 million

for four years with the potentials of $20 million more will be in ge's stock. larry is improving executive and long track record of execution nearly 90% of his annual pay will be at risk and his one-time grant will only pay out if there is a between 50 to 150% increase in ge's stock price. >> 150% we are talking >> we are all upset of payroll rising by 8% and john flannery was doing his best and he had a chance to make $21 billion >> why should i feel good about that >> by the way, that's our

prooe previous occasion. musk is out of line in terms of it >> why would it be something i want >> i think mr. flannery got really bad hand and had to do a lot of dirty work. >> but a basal flannery of $2.5 million, the appreciation that he could get and everybody in america would like that that's a contract that if you are performance is oriented, it is the best performance oriented i have ever seen i don't think anyone seen it better >> well, listen, there are a lot of shareholders with extraordinary pleased if the stocks does arrive everyone to 18 or so and it will be roughly 15% and take it up from there,

jim. >> and of course the greatest comp is danneher i think this man is not going to fill the plan. he's going to do exactly what flannery did if he's going to do exactly what he did, they would not need to fire flannery. >> he's embracing the strategy we'll see who's right, whether i am right or you're right time will tell >> i am so tired, i am not going to use the term from that company. i am going to sit back and watch. >> you look very nice today. >> this is my friday outfit. >> you are going out >> i was going to city bike later. >> where did you get this pants,

target >> are they the sonoma, kohl's pants that i like? we'll talk about cannabis. what the ceo told jim of the big investment yeah, in cannabis >> also, trump's strategy on trade and tariffs. let's take a look at the futures, we are looking better in terms of that open than 15 minutes ago. more "squawk on the street" live from post nine after this. i think that she's a very nice girl...

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this 10-yr note year is key to the market. i will ask jim in a moment we'll also get the "mad dash" as we count down to the opening bell

♪ not long ago, ronda started here. and then, more jobs began to appear. these techs in a lab. this builder in a hardhat... ...the welders and electricians who do all of that. the diner staffed up 'cause they all needed lunch. teachers... doctors... jobs grew a bunch. what started with one job spread all around. because each job in energy creates many more in this town. energy lives here.

we got about eight minutes before we start here lets get to our "mad dash. elastic. >> is that where we play the tom thumb club >> we want to talk about roku. >> roku is a company that many companies know this is what i want to talk about of a powerful growth story, price to perfection there is a lot of high gross stocks square yesterday and roku and paypal that came down because a lot of pop feel they become priced in perfection i want to watch roku this is a great company. it is usually a price target 30

times at multiples and $73 is it price target he's not saying like sell it like he did like netflix it is one of those companies that's doing and has an ecosystem. advertising command. it is very good. this is one of the great companies. they gave it away when it became public, everyone thought that amazon were going to kill it amazon did not kill roku than cbs. >> it is a streaming play and those who believed that would not be able to gain shares >> and it did. you know the ceo >> he comes on a lot >> spencer did a show yesterday from zillow. >> neck and neck >> john ledger can be my co-host again. >> not for a while >> oh, i missed it >> at some point, it will come

back >> we still got months to go key to this market is roku >> really? >> this is the best growth stock of this era other than square. >> okay. >> look, i can do cloud, i mean there are a lot of cloud company obviously. i am worried about roku. if this stock is coming down a lot of others come down with it it is like an etf. >> got it. >> avengers are coming soon. >> you will see "a star is born" this weekend >> no. >> it got good reviews >> 134,000 jobs added. unemployment rate at 3.7%, let's see how the market reacts to those numbers en wwhe get to the opening bell in a few minutes from now

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enthusiastic for this search company that does systems that locate near by riders for uber when you shop at walgreens, they will help you find the product >> david swipe left, my friend. >> 40 times over subscribed. >> that's going to allow open here >> what are you looking for? >> we are over come by macro forces right now there are thing that is are very good people just say okay, treasuries and interest rates up again, can't buy housing stocks or retails or wages i am not buying the negative story line but it is enforced right now. the big mutual funds right now are really worried that things could really come down because of cloud stocks and everything they clustered in in the

industrials because of the new chinese -- >> how important is the 10-yr note yield in terms of what it is going to mean for trading >> i think it is incredibly important. i wish it were not i think j. powell really stoked it i think he's a considered man. i think he recognize his words mean tremendous power on wall street i got to sell walmart right now because obviously the chinese or the factor there is tremendous verbiage of what tariffs will mean you are trying to figure out who's going to eat, higher cost and the company and supply change >> that's a key question for so many, how much am i passing along. >> that's why the conference call is for people who want to

know why people are so worried about china. it looks fabulous analysis >> they don't have to worry about rising wages as much as walmart but they're already fairly high. >> told you it would be loud there it is, opening bell here on this friday take a look at the sec back in our headquarters kind of mix scope this morning and that appears to be the case. that was last i celastic. it is celebrating. kodiak sign focusing on therapeutic treatments overall >> well, you know david, when we look at things like the long-term jobs growth that i showed you during intermission we have fabulous friend line

like no other country on earth you can argue that we should have high interest rates and the deceleration of growth from china you can argue our rates should be higher. i accept that. i do know that hedge fund managers do not want to own stocks during a period where they are tremendously quick. >> would it be nice to have normalize interest rates >> the days when we actually 4% or 5%? >> i agree >> i am talking a bout this week 20 years ago, do you remember? the feds whatted had to do an ey easy >> i got to remember that well >> i saw 50 bases point cut, wa

it >> exactly right >> nothing ever could get past you. 25 years, you remember everyb y everything >> i try back to your point, where were we, 6.5? >> that's why i don't fret as much as the younger portfolio manager who only knows how to plug things into the computer and out come the answer of what to do. it is a strong number with the revisions and the weather, david, it does not change the higher rate narrative and sector waiting. i think that's really important. >> i think that's what i am concerned about. i don't want to be i want to be concerned of how good costco's actual earnings were amazing david, we have not talked about constellation brands they're going to make money, not just in corona or madello.

>> let's take a listen of the ceo of constellation as a guest on "mad money. rob sands. >> i would say the political front is developing very quickly there and i think that in the united states, you know, we believe that it is an inevita e inevitability that the cannabis will be at the federal level >> what government is he listening to >> okay, have he talked to jeff sessions or d.a.t >> it can be classified as class

one felony the chuckles that i gave you, excuse me, they did not have cbe. the chuckles i gave you. >> that's not cannabis infused water however, correct >> cannabis infused wate water -- cannabis infused water. >> did he indicate when they have products in the canadian market >> yes, it is not so much of canadian market. it will be which states are going to allow distribution. i see it is far more relevant in the west than the east >> even though it is federally legal. >> they'll not do it if the

farmers passes cbd from marijuana, only certain states will allow it you would be able to go to the convenient store and buy cbd water and cbd coffee and cbd beer, this is happening so much more quickly that people don't understand it is not a defensive move by constellation. their double digit growths high double digit growth in --s is what matters is cbd is going to be added to the company further than people realize. constellation is a buy >> ge is a buy this morning for

investors, too we talked about the pay package for mr. culp it seems to be encouraging investors in ge. >> oh may, a 4%. >> after john flannery taken from his job >> this man is one quarter away and through his incentive package. what i think really matters here is people think that he has a plan and we don't know what the plan is. the drilling side and the surface side of oil have not increased whatsoever everyone if oils are going up. a lot of it is there are big oil companies have not been exploring and mexico is not exploring and the major nations have not been exploring. that could be next year of 2019, that would mean that baker use by the way a ge company could indeed be sold

i think this span uniquely is not going to set baker use in ge company is sold first. people have tremendous -- they saw the magic, the magic that he delivers almost david bland likes magic he fought the two numbers in my head last week. >> how did he do it? did you have him over to your house for private viewing? >> he's not a magician it is entirely science fiction >> is he not even real person. >> it is a compassionate man he's a genius. my number was 35 and he said do you think he's 35 yes. he was in my brain he was in my molar

i am talking about the fillings in my molar, they said he's 35 >> right >> while the russians are monitoring everything you say because they have that transition in your molars. >> they use the tiny dancers >> apple for the record said over and over again, please, that story is not true >> i know they did >> can i say this is astounding. larry culp, i think he's going to do the job. ge's behind even the worse industrial >> jim, i want to talk about dell which is not a story that we have revisited in while but one that are worth doing now there is a show down between dell technology and the tracking stock of 81% of vmware, spreading opposition for plans

to buying in the strtracking stk and versing michael dell to consider alternatives or drop the plan all together. go become to july 2nd, that was the day dell technology buying in the vmware. their transaction take dell public and also allow michael dell to pocket a large portion of $13 billion difference at the time between the value of vmware tracking stock and the stock itself the morning of the announcement right here michael dell explained to me why was the chosen path. >> the option was very much there. you would then later probably

convert the tracking stock in tto the public common. you create a little more complexity so if you can do it in one step that certainly is easier >> but, three months since the deal was announced, opposition to its terms requiring majority holders to approve have been consistent >> if the head funds and only funds that i have spoken with are good to their words, the company is not going to have enough support to get the deal through. it is an opposition to the current plan as are almost all the head funds that own the stock now schoenfeld argued for 20%

improvement in the e-- this is what michael dell was referring to by buying emt would benefit him. in a lett-- increase considerat of the shareholders. perhaps, let me tell you one thing here, there are some pretty lofty valuations for an ipo that dell recently received from investment banks that were pitching it. dell may be more incline to consider the ipo route after taking account of exactly how high those numbers would be and remember if it went public, it

would then be in a position to buy in the tracking stock at a 20% premium to its trading price. now, according to people of knowledge of the estimates, take a look at, jim, i want to get your take on this ranging from a low of $90 to as high as $135 whether they were using some of the parts and consolidations or multiples to ibita the numbers also included jamie dimon showing up and moynihan showing up were well above the 79.77 values of the current deal >> hpe at 10.5 times and cisco at 16.8 times. if you say you are going get an 11 pe. you are still getting close to 11 buc

100 bucks. those numbers got their attention. would they go the ipo route despite the fact that many believe it to be diluted they're going to need to figure something out because at this point, it does not appear they'll get this deal through. >> vmware is one of the best stories i have covered so i would tell you that if vmware, if dell has 8% of vmware, it is probably worth close to $100 billion. they do some of the parts and multiples and get to 125 to 135. >> i have no problem of that analysis >> vmware where the company is

on board of amazon web service everyone who is on oracle who wants to be. this is the way do get on. the secular force in technology, they're the leader vmware is the way you do it. this company is only worth $6 billion are you kidding me michael dell does not impress me >> deleveling quickly and generating a good amount of cash and some of the parts of vmware is not public. it will be interesting we'll get to the filing soon we'll get a date on the vote it is going to be this battle which they're not going to give him on the dell side and shareholders say we are voting against. hpq is worth $41 billion and vmware is worth more i would say the highest. >> let's get to bob pisani now on the floor we got a lot more moving today,

bob, take it away. >> it is sort of a flat open, that lies the drama underneath all this we are figuring out what's the meaning. i will make it simple for you. the only thing that anybody cares about is this going to change the rate hike pass for the federal reserve. are we going to get more or less it was confusing because the job growth month over month was weaker, some say it was damped due to the hurricane we had big revisions in the prior three months the trend is still strong. wage growth is the key issue, 2.8%, that was in long a little strong but not eye popping and not 2.9 or 3.0 but sort of in the middle. lowest since 1969, that's a headline and everybody is trying to say okay, how is the fed going react to that number lowest since 1969. the bottom line is the streets are confused of how to interpret this you want to look at the futures, i will show you, we move in the

18 or 17 points range. that shows up or down positive or negative. that's why we are getting the relatively flat open take a lookt t at the sector we have the trending week of yields moving up banks opening on the positive side they're up slightly and healthcare and tech up slightly here you can see mixed market overall the key story is ten-yr is up 16 basis points this week. we started at 306 and we have gone to 322. the yield curve is steeper take a look at banks, it is up this is the trend we have been seeing all throughout the week put up regional banks this week, it is up 3% or 4%. bank of america has a good week. jur jp morgan is up. what's the big trend

continuing strengths in the u.s. economy, rising rates and midterms are coming up marginal movers are quiet. we have a nice ipo here. elastic, i am calling it a search company th that's above the price talk of 33 to 35 dow is up 34 points. guys, back to you. >> bob pisani on the floor for us now, let's head to rick santelli been over an hour and 15 minutes since we got the jobs report, rick >> yeah, the pit behind me is still active with 10-yr and 30-yr options. if you look at one week of twos, you can see that we did not look at any grounds today the market is the best divider how to interpret the day of today's revisions. we are up 7 on twos.

one week of tens up 15 on the week. 30s hit a new high a little earlier in the session the best level on a closing basis since july and 2014. now let's get into an important trade. let's look at tens minus bund yield. 265, it was 270 on the close on wednesday and today was three or four basis points wider than that that gap is important. it is not only important for mario draghi if we look at the high yield market which were so well behaved with investment, they are basically high yield hovering at the lowest spread since the crisis or maybe a tad

before look at barkley's high yield now. you can see it is coming down. that all makes perfect sense there is credit differentiation going on yields in the best offer going up and may be more discriminating when you reach four yields in the lesser credit finally let's look at what's going on in the dollar index, it is down about an eighth of a percent right now but half a hearse percent on the week. jim, david, back to you. >> thank you, rick >> the market is up. >> you didn't expect that? >> no. i told you that the narrative had turned negative for fang and fang -- >> all right, coming up, a lifetime of leadership from wall street to washington we'll talk to the former sec chairman, william donaldson. he once led the stock exchange

"squawk on the street" will be right back.

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>> here's a look at fang you can see the only winner so far is facebook. everything else inudcling netflix down 2.5%. up next, stop trading with jim

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last stop trading of the week what have you got? >> i'm concerned about this market and it's rolling over rather rapidly but there's a piece talking about don't throw away facebook. they say it's good enough for a hated stock. instagram is strong, instagram video is good. they're talking about time spent per user this is the most positive piece i have read about facebook since the july 16 heyday. >> came back from the west coast telling me how everybody hates facebook. >> it says pricing good enough for hated stock so he agrees with me. i don't like this market i do not like this market. >> you sound like horton. >> i do not like this market. >> that's "green eggs and ham. >> yes, it is. >> what do you have on "mad money" tonight. >> i told you this cloudera deal

is important so i have the ceo of cloudera. >> of course you do. >> and i'm going to have those chuckles infused with cbd and we'll have a dynamite time at the mexican restaurant you like so much. >> we haven't been to our mexican -- not your mexican. >> i want you to have a great weekend, spend time with your kids. >> i don't know if they'll spend time with me i'll spend time with them. still to come, we'll talk with former treasury secretary larry summers. i want to hear what he has to say about today's employment number keep it here

♪ good morning and welcome back to "squawk on the street. i'm david faber along with melissa lee and wilfred frost. we are live from the nyc at pos 9 here let's give you look at where we stand a half hour into trading you can see not much the fang complex for the nasdaq comp is suffering other than facebook and as you see the s&p, which had been up just a little while ago is undertaking a bit

of loss but still in the green our road map starts with the september jobs report. the unemployment rate falling to its lowest level in nearly 50 years but job growth does slow. former treasury secretary larry summers is with us to weigh in on the jobs number and the economy. >> plus musk mocks the s.e.c the ceo of tesla taking on the agency days after settling fraud charges. shares are falling this morning. >> let's get to the story of the day, that would be the monthly jobs report. the unemployment rate falling to a 50-year low as david mentioned, continuing the tightened labor market non-farm payroll coming in below estimates. i'm going to ask you guys similar questions here diane, this is not a clean number because of the impact of the hurricanes but what is the headline when it comes to what the fed might or might not do. >> i think the headline is that

while we took these numbers and the fed will continue to tighten rates in december, we'll see another rate hike in december and we're set up for a fairly sharp deacceleration in wages in the october data which comes out in early november so that is going to be sort of shifted into spillover in month of october data chb which will be before the fed meets in december so i don't think there's any question this changes the fed's course. labor markets are still strong the one caveat we've been watching that we would like to see more improvement is long-term unemployed ticked up and the long-term unemployed, those people unable to be reengaged in the labor force, that is something we've seen is a long time wound of the financial crisis we know those workers have had an erosion in skills and they are suffering from both mental and physical problems that the rest of the labor force is not seeing as much this is making them harder to reengage. >> very detailed headline from

you diane. david, i want to ask you the same question as it pertains to stocks what is the headline we should glean from the latest report >> i think the unemployment rate is -- the labor market is tighter than the fed thought it was going to be. their estimate for the fourth quart over stwee2018 is 3.7%, t number for september is 3.68%. so it's possible we'll average a 3.6% for fourth quarter. i think hurricane florence took about 25,000 jobs out of the payroll number we have the upward revisions and a strong employment number so it's a strong record. i'm not seeing that much wage inflation still. it's remarkable we have a year over year wage growth of 2.8% in an economy of year over year cpi of 2.7%. so i think we will get some follow through on wages but wages are subdued given the tightness and strength of this

economy so to me it's not about inflation, it's about this is a strong report that will keep the fed on track to raise rates in december, march and june. >> the way the yield curve is reacting, whether this week or today and moving up in a pronounced fashion alter way the fed will think about this data or not >> no, i think what -- long rates were too low and real long rates or two low i think the fed's movement to reducing its balance sheet by $50 billion per month, i think that is pushing up long rates but ultimately i don't think the yield curve will tell us anything about recession or slowdown i think when the yield curve is inverted it means it's expected that there are des and i don't think there's anything pointing to a near-term ease so i'm expecting to see an upwardly sloping yield curve into the middle of next year and i think the fed keeps tightening until they get to 3% and they think

they're at neutral. >> diane, average weekly earnings rose by 3.4%. that matches the best level since august of 2007 any take away whether we'll see an acceleration from that level? >> we are set up in october on year over year wages to see strong gains david makes a good point we've not seen the average hourly earnings numbers pick up. we've seen other measures move up but there's still a shadow of what they once were and that's something that still bothers the fed but won't stop the fed from raising rates. full time employment and professional hires is picking up relative to temporary hires. those include jobs with benefits that's a change from earlier in the cycle and what from what we saw in the late 1990s so even though wages aren't picking up as much as we'd like, we are seeing compensation pick up because hours work will pick up next month but two we're seeing

those benefits come back in which were strepped away from many employees during the crisis. >> david jeff dunlap at double line capital is making the commentary that the 30-year yields -- we focus mostly on the 10s but the 30-year yield looks like it's broken out of a multiyear base at this point and that was the last man standing when it comes to points on the yield curve. his point was now that we've broken through the multi-year base that it -- if this means higher rates overall for the markets, this is going pave the way for the rest of the yield curve to move up. >> i think the mystery has been how can the dynamics of the demand in the bond market keep rates so low in an economy which is doing so well there's going to be further pressure because if you look at it on a not seasonally adjusted basis, november is the single

strongest month in the year in terms of payroll employment so as companies try to ramp up employment for the holiday season it will be tough to hire people and we may see strength in wages and that could upward pressure on bond yields. >> there's been a lot of focus on equities selling off in light of these rising yields but the selloff has been more pronounced internationally in emerging markets but also europe. does this stronger u.s. with its stronger u.s. yields have a much bigger negative impact around the rest of the world than the u.s. diane? >> i'm sorry, i thought you were asking david i think one of the issues we're seeing is the tariff issues. we saw some of the nafta, it wasn't nafta 2.0 a friend of mine from mexico called it nafta 0.5 which meant it's more regressive than

progressive. it constrains the ability of mexico and canada to deal with china and certainly the trade tensions with china are further escalating and will continue to escalate and that's bringing concerns in addition to what's going nonrates relative to the u.s. markets what will the spillover effects of a weaker china mean for emerging markets and what could be the contagion for the rest of the world into 2019. >> diane and david, thank you. have a great weekend. >>. elon musk going after the s.e.c. days after settling fraud charges. he tweeted the short seller enrichment commission is doing incredible work and the name change is so on point. musk called out black rock and other financial firms for helping short sellers. these new tweets come after elon musk reached a settlement with the s.e.c. under the terms of the deal he'll step down as tesla chairman, pay a fine and he

agreed to have tesla vet his social media posts that could continue material information. we assume the vetting hasn't begun yet. >> well, this wasn't necessarily material but it's still hard to imagine days after a settlement of that type he would do something like that on social media. >> clearly the sock sold off the short term is whether the judge decides if this punishment isn't severe longer term is if everyone thought this is going to put pressure on musk to be more mainstream and sensible but that hope has kind of evaporated. >> it makes it difficult for even the longs who believe in the fundamental story of tesla to stick with this stock purely because of concerns about corporate governance, concerns about the ceo being phi four asia on the behalf of shareholders if you would ask any shareholder out there, the judge has not

accepted the settlement, the judge has asked you to file a letter saying why the settlement should be accepted on both sides and that's due on october 11 in that grim speared you, if we asked you would you thumb your nose at the s.e.c., yes or no, 99.9% of ceos would say noshares and he tweeted a video of naughty by nature "opp" which some people think meant operating profit positive because of their goal of becoming profitable. even if you believe that, it's more and more difficult to be long because of the corporate governance. >> does it make it harder, this behavior, to find a new chairman that has correct and will only take the role and think if they have the power to act as they see fit? >> it's going to be difficult to a certain extent

to melissa's point he's not changing his behavior some believed he would be chastened and so, yeah if you're put in that position and you're going try to execute the job as a chairman and you have your ceo and founder and 20% plus shareholder doing this, it will make it difficult. not many people will want to take the job. >> the other lawsuits outstanding against tesla are still there. shareholder lawsuits filed by short sellers. this perhaps gives them more fodder for their lawsuit because he says he is now more convinced that short sellers should be maligned >> he says they should be made illegal. the level of arrogance that the rules and state of play shouldn't apply to him. >> former s.e.c. chair bill donaldson will join us later this hour. we have a big show still ahead. we'll take a deep dive into the economy as the unemployment rate

falls to the lowest level since 1969 larry summers will join us, former treasury secretary. and later goldman sachs chief economist jan hatsius. and let's get a look at the top performing stocks on the s&p ge off its highs of the morning but that huge incentive plan is 'rurininsts. wee back after this. oh really? thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

when we come back, musk mocks the s.e.c. is a settlement in jeopardy? former s.e.c. chairman bill donaldson will be with us to discuss. up first, larry summers weighs in on the jobs report let's look at the major averages as we are in the red across the board with the nasdaq feeling quthmo pn. "sawk on the street" is back right after this duncan just protected his family

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welcome back to "squawk on the street." dom chu back at hq looking at tech for us. >> those fangs are in focus given yesterday's bigger tech-led selloff looking for a bounce after the nasdaq's underperformance are getting some help and some hurt from facebook, amazon, netflix, google, parent company alphabet hence the nasdaq's drift back to negative territory if you look at facebook, one of the fangs in positive territory trying to hold on to those on the day. amazon, netflix, google parent

company alphabet trying to extend losses. facebook and alphabet have broken down below their 50 day average prices some of the funds will includes the first trust dow jones internet funds which is heavily whited xlc has facebook, alphabet and netflix but not amazon and the i shares u.s. tech etf, ticker iwy which has facebook and alphabet but not amazon and netflix so those etfs could be more affected by today's trading action back over to you guys. >> thank you,dom dom chu at headquarters. the unemployment rate hit the lowest level it's seen in almost 50 years. meanwhile, non-farm payrolls came in below estimates at

$134,000 joining us for more analysis and insight, larry summers, harvard university president emeritus, former treasury secretary under president bill clinton always nice to have you secretary summers. one job you didn't get but almost had was chairman of the federal reserve so i'm curious, if you were in that position now with this data, would you be following the same path as chairman powell? >> in general i think the fed is on a good path. >> they need to be mindful of the legs between monetary policy and the real economy when you here in a shower, if there's a long lag between turning the faucet and the water getting hot or the water getting cold, it's very easy to scald yourself or freeze yourself because you turn it and don't feel much and then you turn it again and turn it again and the lags catch up with you that's the kind of thing that's

the risk with monetary policy and so they need to be careful and the chairman has signaled a desire to be careful about raising rates precisely because of those lags. those lags operate on the u.s. economy and operate to impact the u.s. economy through their impact on the global economy. >> i'm curious to see your take on inflation broadly speaking. 2.8% year over year increase, 2.9% last month. but amazon this week at 15 buck s. do you think we are facing inflationary pressures that

aren't being adequately us issed out disruptive firms enter many different industries i don't see the kindling for a substantial inflation fire as being inn place at this point and i also think we need to be thoughtful about hour objectives the fed has a 2% inflation target we here in the 10th year of expansion if you mean a 2%

average inflation target we should be somewhat above our 2% for a little while here relying on the fact that even with our best efforts. so i'm quite serene about there not being a major risk that inflation will accelerate and also think it's important to see the 2% figure as an average, as a target and not as some kind of ceiling on what constitutes acceptable inflation. >> what do you think ends this expansion as you look out at the global economy and what the fed is doing and the pace which the fed is doing it? what do you think is the greatest risk? >> there are three risks the first is the fed misjudges the lags and overadjusts and

that that sends the economy into recession. i think the second is that complacency is as it was in 2006/2007 and again was in 1999 and 2000 people lend too much, people spend too much, asset prices get too high and there aren't more b buyers and a process that went rapidly on the upswing unwinds and you're dealing with the consequence of substantial asset price declines starting at a moment when assets have been very valuable relative to the economy. i think you have a great deal of

brittleness i would not expect a recession in the next year secretary summers, how will china's economy react to the sharply raising rates back here in the u.s.? i ask because the hong kong stock exchange down 4.5% china has been shut all week i guess it's a risk on monday morning. china opens significantly lower in a week when the vice president is up to the rhetoric against china. >> i know bet than to try to make day to day stock predictions. the hong kong situation is a little different because the currency is formally tied with the dollar whereas that is not

through in china but i think china does face substantial economic challengs.s on the other hand, maintaining the adequate momentum of demand and that means there's a narrow ledge that the chinese authorities are going to be walking along in the years i think that are likely to face some very real challenges. on the other hand, they have an extremely competent economic team and the other side of being as controlled an economy as they

are doesn't have many levers that it can pull i might just add, if i could, that i think the single most historic challenges that faces us over the next decade and beyond is establishing a mode of cooperative co-existence with china that respects china and respects its system and at the same time protects our interest. and i am very troubled by the extent of confrontational rhetoric and we're starting to see confrontational action in both the economic and military spheres between our two countries and my hope would be

that there's some ability to step back and bhang i thimanage think is the most important geo strategic relationship for the first half of the 21st century. >> thank you so much, larry summers. >> thank you when we come back, the unemployment rate hit its lowest levels in 50 years goldman sachs chief economist january hatzius weighs in. and elon musk mocking the s.e.c. a week after a settlement. "squawk on the street" is back "squawk on the street" is back right after this well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so.multiply that by her followers, speaking engagements, work experience... credit history. -that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies

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good morning, everyone, i'm sue herera here's your cnbc news update at this hour. the nobel peace prize was awa awarded to congolese dr. dr. dennis mukwege and yazidi activist nadia murad

mukwege celebrating the news with his colleagues. the death toll from indonesia's quake and tsunami rising to 1571 this is this as the rescue and cleanup efforts continue in palu hundreds of survivors gathering to pray and also remember the victims. france has opened an investigation into the disappearance of the president of interpol. meng honkwei he arrived in china at the end of september there has been no news of him since. according to the south china morning post, he was taken away for questioning when he landed in china. >>. and first lady melania trump going on safari in kenya to learn about steps the east african nation is taking to conserve wildlife. she later signed the guest book and took a tour on foot to learn about wildlife conservation. she's on the third leg of her four nation african tour you are up to date david, i will send it back to you. >> thank you, sue, i will take

it welcome back to "squawk on the street." i'm david faber along with melissa lee and wilfred frost. we are live from post 9 of the nyse we got a jobs report two hours ago. not doing much in the markets. nasdaq comp is the lowest of them the fang complex not having a great day other than facebook. joining us now is goldman sachs chief economist jan hatzius. clearly the headline number was a miss but everyone saying overall this is a positive release. >> the headline number was noisy. there was a significant hurricane effect the labor department said it there was weakness so i think it was a decent headline number maybe it's worth $50,000, or

$60,000 or so. there was big upward revisions to prior months and a strong household survey so overall it's a solid report. >> in terms of immediate reaction looking at the note you put out, you have increased your tracking number for gdp. >> yes, that was more driven than our 3.3%. that was more driven by the international trade report which showed a smaller widening of the deficit. that's more a mechanical thing the jobs report, though, says that, you know, away from the kind of month-to-month or quarter-to-quarter gdp tracking the labor market is solid. >> it confirms your expectations and forecasts fed rate hikes for this year and next year? >> yes very much on track we're expecting a hike in december and then four hikes in 2019 so that's still somewhat more than market pricing despite the recent selloff in the bond market. >> the headline inflation numbers have seen benign with what the fed is expecting. is there any concern about your part that perhaps these

government numbers are not telling the full picture when it comes to inflation we are seeing higher interest rates and wage increases amazon increasing minimum wage to $15 across the board from seasonal to full time employees. kevin warsh referred to this in his interview with "squawk box" saying it's running hotter than what the government numbers show what do you think? >> the headline inflation numbers are above 2% core innation flation is 2%, thh core pce index and no number is perfect but that's a reasonable estimate of the underlying trend. we have seen an increase in oil prices that matters but it's unlikely to be as persistent of other come poenponents of the inflation indices. there's not just one reality there's different realities and it makes sense to focus on core

pce as a measure of the underlying trend that said, 2% is higher than where we were. we were at 1.3% at the bottom in 2017 so we're add the fed's target the problem wouldn't be a problem if we went above that, 2.25%. that's consistent with a symmetric 2% inflation target but also consistent with the fed hiking rates and probably more than what markets have been pricing. >> is the ten year a hundred basis points higher a year from now? >> we don't have it going up that much but we still have it rising mainly because we think the markets still underestimate how high the funds rate is going to go and how sustainable the increase is going to prove it's both of those things that matter for the close. >> when it comes to sustainability of the fed funds

rate why are you mozive t ivepo that >> our general view has been the certainty that the mutual funds rate is as depressed as many people in the market have been saying for the last several years, that that's misplaced we think the reason why we had an extremely low interest rate environment in the last decade is primarily that we had a big crisis, big recession and hang over effects from that recession that took a long time to disappear. >> normalization. >> yes, and somewhat more cyclical pattern to what happens with interest rates but these cycles can be extended so i think a lot of what we've seen has been cyclical rather than structural. >> are international yields going to be dragged higher as

well what does that mean for the u.s. dollar >> well, i think they have been dragged higher obviously if you look at what's been happening in the markets. in the short term you should expect a lot of spillover. longer term it depends more on the economic situation say in europe or japan vis-a-vis the united states. the u.s. is much further advanced in the cycle. the fed could be more hawkish than what they have been but there's much less of a case for that in europe european inflation is still 1% unemployment rate is much higher japanese inflation is lower so central banks should focus on doing the right thing for their economies. >> is there a yield at which you start becoming concerned about the impact when it comes to corporate profits and profitability? when you look at what

corporations have borrowed during the easy money cycle and where their credit ratings are and where they debt may adjust, do you get worried >> in aggregate not necessarily because there are winners and losers from higher interest rates so the direct affect is not going to be that large that said, higher interest rates are a symptom of being advanced in the economic cycle. we're not forecasting a recession any time soon but a lot of cyclical improvement that we're going see has happened the unemployment rate was 10%. we're now below 4% and while we think we're still going to come down further, most of the improvement which has been boosting profits and helping the equity markets are behind us so it's a tougher environment at this stage in the cycle from the equity market perspective than

five years ago. >> jan hatzius from goldman sacks. the senate is holding a cloture vote on supreme court nominee brett kavanaugh. ylan knew see in washington with the latest ylan >> we will get back to ylan in just a moment. we have lost her at this moment. let's check in on the markets for the moment they're essentially flat following the jobs number earlier. we saw yields rise after the jobs number, the 10-year went back above 3.2%, its highest number since may, 2011 and markets have been around the flat line since they opened 1:10 ago. when we come back, another day, another tweet this time elon musk is mocking the s.e.c. days after the two reached a settlement former s.e.c. chairman bill donaldson with us to discuss

sweet will be right back don't go away.

the hottest stock of the year plunged double digits in less than a month. we'll tell you what it is and if thwot oe rsisver on tradingnation.cnbc.com more "squawk on the street" is coming up.

the spotlight back on elon musk and this settlement with the securities and exchange commission after the tweet from musk late yesterday referring to the s.e.c. as, quote, the short seller enrichment commission musk then doubled down on the remark in a series of posts including this one saying, short sellers are value destroyers, should definitely be illegal there is talk this morning the new tweets could potentially violate the main principles of the settlement could lead to more penalties joining us now at post 9 in a first time cnbc interview is bill donaldson he served as the 27th chairman

of the s.e.c. under president george w. bush he's also a former chairman and ceo of aetna and the new york stock exchange he famously co-founded the pioneering investment firm donaldson lufkin and jenrette. he's out with a new book this week, "entrepreneurial leader, a lifetime of adventures in business, education and government." man, you've done a lot of stuff. wow. you haven't been back in this place in a long time. >> i haven't there's a few changes. >> guests on the floor now, right? kind of different from the days you were here. i want to talk to you about so many things. i'm curious as the former chair of the s.e.c. when they see something like that from elon musk do they do anything more than to say this guy is making us angry? >> yeah. not really i mean, you know, that's part of the job of running the s.e.c.

and being chairman or being a member of the commission you just have to take the barbs wherever they come unless it's something that affects the markets. and then you say something. >> the settlement the front of the judge. can a settlement that was entered into be revisited? >> i would rather not comment on my sense of what kind of judgment is going to come down i just don't want to mess into it. >> all right why did you write the book >> huh >> why did you write the book? >> why did i write the book? good question, good question you know, i've done a number of different things in my life and i've had a number of people

suggesting that i should write a book about it and decided that i wasn't going to write a book until i got to the age on that right now. >> it does look like the vote is 50-37. one republican senator, lisa murkowski, voted no on this procedural measure to limit debate on the nomination however several key swing votes including jeff flake of arizona and susan collins of maine they voted to advance the nomination. one democrat joe manchin crossed the aisle to vote in support of advancing this nomination. this will set the stage for a

final confirmation vote. even though senators might have voted to advance the nomination on this procedural measure they reserve the right to perhaps not support the nomination in the final tally. susan collins said she will announce her final decision. back to you. >> ylan watching closely sorry to have interrupted you. you were discussing the reasons behind your decision after this illustrious career to write a book. >> i figured that i was going to keep my mouth shut i thought if i don't write something now i never will and that's what i did. i thought there was

qualifications to it for the people that would be interested in my vie s vies based on the ts that i've done it achieved pun electricity and going on to several positions and ending up as the chairman of the s.e.c. which is a totally different experience. >> when we consider the history of the investment firm of dlj, when you look at the landscape today and the way securities trading in particular makes up a smaller portion of the total pie for the likes of goldman sachs, do you think that's an idea that that part of the business is going to come back for today's investment banks.

>> when you look at the markets and how they're structured today, we have the massive rise of passive investing and etfs. a lot of americans own stocks that are etfs and etfs -- could there be a possibility of a liquidity issue in a lot of the same stocks are owned across etfs, is there a structural issue to this market >> well, there are but they've been offset by the pooling in vai various vehicles out there and there's a lot of offsetting volume that goes on. however you can have interruptions which we've seen a number of times in recent years when the whole market takes a hiccup and they have to close it down until they get it back on

what it should be. >> your firm was sold to credit suisse how do you see the balance now between u.s.-based investment banks and european banks in terms of who has the balance of power and where that's likely to go likely to go moving forward. >> i think the balance of power now is you still have a listing of major -- you have a lot of competing exchanges in other parts of the world, so there's a lot of competition but i think more potential danger in all of this is hiccups that come from the whole system with freezing one way or another. >> we have to leave it there thank you. nice to see you. appreciate your joining us

congrats on the book. >> thank you nice to see you all. keep up the good work. >> his book, "entrepreneurial leader" is out now jon fortt has what's coming up on "squawk alley. >> we are watching the ipo of elastic, an enterprise search company set to open, priced at 26 looks to open higher than that and turbulence in tech stocks we continue to talk about that coming up on "squawk alley." isk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. what if numbers tell onat t. rowe pricey? our experts go beyond the numbers

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let's get to the cme group in chicago, rick santelli with the santelli exchange. hi, rick >> hi and good morning the jobs report, the headline wasn't good, everybody realized it could take a toll between revisions and notion that wages aren't out of control, the bond market speaks for itself, basically holding gains, sticking like glue like it has for most of the year. long end carves out a range, stays there, kind of feels its way around, pops into a higher yield range and establishes its sideways activity there. right now, the fact we are closing so much higher than 311 is unbelievable. and it has been a big week in

the news i like to have fun it has been a stressful week my top five movie quotes regarding some things in the news that i considered the biggest stories, with number five jay powell out everywhere with other fed officials. when questioned about the econo economy. the italian bond market is all over the board and not in a good way. mario draghi asked about what did you tell and think about italian investors in the fixed income market. he said shaken, not stirred, with regard to elon musk all of the issues with the sec, he is still tweeting what was the last thing he said when he left the parking garage at the sec i'll be back congress congress has been in the news everywhere have you ever seen so many low blows? i have never seen anything like

this obviously cool hand luke is the only way to go when it comes to congress what we have is a failure to communicate. the number one answer someone said when the president was asked what he thought about the stock market this we can making new all-time highs, what lies ahead, think toy story to infinity and beyond let's see where rates close. back to you. >> rick, thank you very much for that of course markets won't be closed until 4:00 p.m. stay tuned coming up on "closing bell" we will be discussing trade battles with china former prime minister of australia, kevin rudd joins us to cuss that. and connor mcgregor gearing up for a big fight dana white joins us. don't miss that 3:00 p.m.

eastern time guys, markets are sitting flat line, down ten basis points on the s & p nasdaq is down lost earlier impetus from the open in the premarket. >> i will be watching faang. it was slaughtered yesterday we have facebook up. >> utilities are the best performing sector. up next, musk mocks the sec. what it means for the ock d stan more coming up next on "squawk alley.

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