what's happening to bitcoin? >> i think it is good that we are here >> 6200 bucks right now. >> andrew is wondering why there is not a rush for safety for bitcoin? >> that's not going into bitcoin. >> relatively flat which is not bad. >> tom, thank you. everybody have a great weekend, make sure you join us on monday. right now it is "squawk on the street." futures is pointing to a 300 points the s&p looks the break a six-day losing streak, down 43% in two days. good friday morning, welcome to "squawk on the street," i am carl quintanilla with david faber and jim cramer at the new york stock exchange. mnuchin on "squawk" today. nikkei's highs over night. our road map begins with stocks set to come back

dow future is down at more than 300 points >> plus, the fundamentals are very strong as mnuchin tells cnbc that wall street's two days plunge is apart of a natural correction >> jamie dimon offers up a warning on rates and geo political risk that's where we'll begin jp morgan revenue ahead. >> look, i think the key take away when you contrast charles evans. >> yeah, just listening to him >> what jamie dimon is saying is good right now but it could get bad. he does not want to say bad.

that's my term he's saying that i would say things are good but we could be playing with fire and things won't be good. that's the opposite of what the feds say the fed is saying we don't care what's going to happen this is what we must do. i will take jamie dimon's view about what can go wrong over any one in the fed any day of the week i think the fed is vastly out of touch. charlie feels things are robust. why does he not go to pueblo, that's where they make cars for this country what they're going to see is stacked cars this high >> why are you so against normalization of interest rates? >> because i will take down every single company that i use in 2019 numbers. i am in favor of hikes >> higher wages and increase costs. >> trillion dollars of deficits and cyclical stimulus.

>> don't we need a fire power, where are we going to be if we get cut? >> that's outrageous that's outrageous. they're stepping up from k-mart to macy's because they make 70 cents more an hour >> what happens to the 3,000 or $4,000 the average households going to get from tax cuts >> and how about healthcare that went up? we are going to annualize and anniversary, no tax cuts, okay >> true. >> mr. tough on china is saying whoa, it is going to be an impact, is that what i am hearing from you >> to slow the economy that's a collateral damage to make it so they -- 2025, owning everything that we have. >> you are willing to take it but your point is it isgoing t have an impact

>> mr. evans from the fed like 2005 and 2007 when they were fed to should listen to what's happening. like jamie dimon, he's a bomb thrower? you know what the president said the other day, they know nothing. he's much stronger than i am >> mnuchin did not sound nearly as concerned as you when he talked to jeff at our 7:00 hour. >> our u.s. earnings are strong. i think it is a natural correction after the markets are up a lot there is no new information on the fed or trade on that matter. so i really see this is a reaction of markets tend to go too far in both directions and they have natural corrections. the markets traded up a little bit over night and i think it is a good thing >> the markets have been up because the chinese decided to stand there. they came in right around the

time that all defense broke down for eli manning that ran for his life >> he does not move quickly. >> not ever. >> timmy freedman earlier on today, he played for the penn state team i am concerned when i hear the level of complacency from the fed. >> let's so say somebody not watching us for a couple of weeks and they are listening to you now, two weeks ago, what changed? >> the fed says we don't need to think anymore. we are just going to rage not matter what. at the time that ford is struggling, gm is struggling >> because of the costs they got from tariffs

>> so you don't disagree with the notion that this white house is stepping on the accelerator and the brakes at the same time? >> that's really good. the president is making this case very badly. he's saying the economy is as strong as it has been so we should not tighten i said it was strong 5% mortgage, okay? david, your house loses val value -- do you check your house on zillow? it went down last night. >> i am looking at jp morgan numbers and listening to the calls, does not sound like things are poor right now. >> he is using the term "so far. >> they had a return on intangible equity and credits seem to be solid

our capital is going in the right direction. i am just talking jpm here >> totally agree that quarter was a good quarter but you know what i deal with in a world right now because someone was saying the other day china is a really good numbers no kidding you know how much buying was done ahead of the tariffs? >> a lot >> so their numbers are inflated >> a lot of people and a lot of people have been taking inventory because they want to beat the 25% tariffs coming. >> that's one argument why we may see strengthen gdp last quarter on this. you had an interesting tweet over night regarding the chinese stock market commonist dictator ship taking out -- >> you have no i am empericempe

evidence of this, right? >> they just stop trading. >> oh, they delayed it >> oh my god >> volatility. >> you know what i am trying to do >> what? >> protect you from yourself >> let me do that. >> oh, i am so glad. someone has to look out for you. >> i do. >> it is not my brothers keeper. >> the other thing we have, guys, we got mnuchin and jp morgan and we are talking about no current of manipulation label. we got a slew of upgrades on netflix and microsoft, we got buy ratings at 3-m >> it is always great to see a

buy rating but he's wrong. i am hung on this stuff. a lot are putting on neutral there was a piece out today about ge did you see that piece >> i did not ge were waiting for the other shoes to drop. i come back and i say yes, i think tech is doing much better. but here is what we are getting, not the evidence slab saying will the real gap number please stand up should have been please stand up >> that was ge >> i am trying to cover a lot. >> we got time >> although it is never enough >> i will show it by my home at 3:15 the only person that listens to me is me facebook, there is a piece by morgan stanley today, everything they say is negative but they did reiterate.

a >> well, we had a really good feel for the market peng, people kno know that. back to the banks a moment, wells fargo, any read for us there, 113 was the netted income and actually $6 billion. >> did you see the loan growth here >> yeah, i do. >> i thought it was suboptimal >> return on assets and return equities on 12%. >> the stock is down a lot >> i think warren buffett is still licensed the quarter is fine. tim is doing best to recover from a perfect storm of corruption i use that word lightly. i love the city.

it was fabulous. >> how about buying back >> citi is up nine >> this is my fourth anniversary today. do you know what demand brought back 20% of the stocks since he came in? >> really? >> they came back funny if they keep the buy back. >> don't you think that's interesting? >> yeah. >> meanwhile dimon reiterating on the call his believe in a 4% 10-yr. where is the pressure point in the near term? >> the pressure point has to do with trade >> in terms of levels on yields. >> i want the fed to sell it and reduce it down and sell it to a long-term paper. >> a move to 3.5 is not troublesome. >> no. i am okay with that. what i am not okay is we'll strengthen the dollar which is going to hurt exports.

i am concerned that the world freezes because of trade that's my worries. i wa >> certainly not the manner they are being approached to surrender. >> feceven if they did, dimon gs to italy and argentina and saudi arabia which got a ton of discussions this morning with mnuchin. >> this is what i worry about. 50% international -- this quarter was great, i want the next quarter to be great carl, this is what i am talking about. i don't have a lot of companies. mr. evans if he does what he says, i am cutting number for every single company i do. stock market trades on earnings,

there is not a single company that can forecast better numbers if evans does what he says they'll say to you hey, we are not in stock business. we almost nationalize our banks. >> you know there are plenty of people pointing to all sorts of signs of inflation that are out there that's not being necessarily picked up. that's why you are an dotidotal and emperical means you did your homework because you made a lot of calls >> you are talking about a trade war and higher costs of goods. that's i mperical >> i want the feds to see how it faypla plays out. >> janet yellen would say let's do one and see how it does and suddenly that's no good?

we have to be more than neutral? janet yellen does not talk about neutral unless she's driving that car for god's sake. >> i finally picked it up and all the trump stuff and everything else. he wants the fed chair >> i would take that job >> you are putting in -- you are sending in the signals >> hey, i was a judge at "the apprentice." >> we are going to gear up for this strong open after the two-day sell off jim's talking a lot about watching the 2:00 hour >> everyday. >> we'll take a look at futures at the premarket, back in a minute alerts -- wouldn't you like one from the market

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of course so many things have changed and we have been through it before. i also point out of just

probability that rates could go higher people should be prepared for that i am not surprised about it. i am always surprised that people are surprised >> that's jamie dimon on the call >> what's important of what jamie is saying is that they can raise rates and still do a lot of business. it is the other side that i am concerned about which is the president's side which is the navarro side and all those different countries that could present a problem. it is different than what i spo i -- when i spoke to him in philadelphia he was not ra chynowetchet up >> ratchet up in terms of china/u.s. >> yes >> we are still talking about it

$250 billion is not roughl roughly -- as an overall i of higher costs of goods and so many other things that goes into other things >> the other day the qualitative measures that could take and have taken at his view >> how about golden week confiscation if you brought back the products >> with today of nuclear technology, for example, we are cracking down on chinese ability to buy >> everyday. >> it is a war >> thank you >> we are retaliating. they have been beating the heck out of us. for the point that i have been trying to make for a long time there are unintended consequences and we don't know what they are. >> jamie dimon is worried about it and mr. evans is not because he has a game plan

his game plan is way too sangly. >> how long did you expect shanghai to be 25 and us to be down one from the all time highs. >> good point. i don't know >> president xi is going to do everything he can to hold that level. i got news for all of us when you hear the elites and the mainstream media talking about well, he's president for life? that's not necessarily certain they don't have mistedterm elections over there how about the 70s? >> there is political risks for him. >> it is still a country with people it is not as stable. it is not a democracy is what i am saying. >> does not have midterms. >> they don't have midterms. >> oryou want to say it

it -- communist leader leaders -- communism is not a system that works. >> thank you the market, we are talking about a system that does work. before we get to your "mad dash" or everything else, we have not talked about it. is this putting a hole this morning? every time i hear a concern of index funds and it flows into index fund stocks. that seems to always be a concern when we see these downdrafts of 4% or 5% or 6% >> what happens yesterday, we always have situations where it does not and we find out later the vix. 7-1 buying of the etfs that have a lot of magnification

the market is over sold. the bank stock is not going to hurt us. i can say the market can over sold bounds. i am not calm. we have a lot of upgrades today and people are feeling pretty good all i do is worry about what jamie dimon is worried about i am a camp follower of jamie dim dimon. >> we'll get to some of those upgrades and buy rating on comcast and snap and 3 m and we'll get to the opening bell. futures looking decent s&p is on track for a third week down where he back in a minute. i think that she's a very nice girl... ...you never got the brakes looked at? oh yeah. no.

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i think the time to be aggressive and selling happens if we get anything good out of china, we are going to say why don't we do some buying? >> that's jim last night on our markets and turmoil special. you says id no need to be a her but you can buy small. >> some of the tech stocks are very not cyclical, the cloud stocks are not some of fang has been very over sold i think amazon is a very good buy. i don't think web service is slowing. i think it is accelerating

this pivotal research where they are saying listen, time to start buying snap and -- >> time to start buying snap >> wow >> speaking of fang, let's get to "mad dash" because i know you want to discuss netflix. >> let's say you did not have a buy on netflix like every other person in the world including the guy that shines my shoe and my bank teller, citi came out of the optimistic operate to buy. they're reporting next tuesday a total growth of 27%. he's well above consensus. this is a piece which is kind of what i am seeing the selling has stopped and the stocks are down. it is such a momentum down it is currently valued at rou

roughly and discounted back. they'll be free cash flow positive in 2021 i am not saying it is an incredible growth story. >> it is not my upgrade. >> i do think a lot of what people are talking about is a good calendar of shows >> by the way, he did not change his target, 375 remains. >> unlike facebook my, morgan stanley cuts their numbers. they're saying next year it is going to be 768. he was using 858 i mean that's unbelievable how bad they think yeah, yeah, instagram is up so big. it is still the place to get the demo, david. they don't make as much money on instagram as they do on facebook people spend hours watching

instagram. >> facebook are moving 800 pages, singly and randomly by choice a little disturbing to some. >> i record that as disturbing >> facebook is still kind of doing what it does it is an imperial chinese empire >> it goes do the multiples at this point >> it is 20 times earnings they are looking at the possibility. >> it is still growing faster. >> that's what i am worried about for a lot of the economy, if mr. evans does what he wants to do which is saying you know what -- my crystal ball says the 2019 is a barn burner. really is that great? for housing. barn burner for housing.

>> it was the worst of times larry yesterday was -- >> of all the years i have known larry kudlow, did you not know him? >> it is going to be 25 moving into 30th to complete some initial reviews. >> in the ubs note, they're saying it would be great if they're using gap numbers. i think he has to try to figure out how to translate what they were doing and start using real numbers. >> ge is down about 1 quarteron of a percent

let's get to the opening bell here, it is allogene and anap n anaplan. >> we don't have a lot of margins because the markets are slipping up. the etfs come in -- some people may feel we may have a crescendo. the rally started too early. that meant there were no fire power left at 315 and not at

248, we'll have a good day i think the market is fine because we are most over 6.8 we are fine. watch this we also have the weekend where the president tends to speak a little off the cuff. i think we should wait, 315 is when i want to see the rally starts, the second level >> the leaders of the opening here, amazon and anvidia is that what you want to see >> i don't want to see amazon and nvidia to be the leader. i am worried about them. the gaming -- "call of duty" is

very strong. i do think take two is up. i do think we have to be concerned of amd made a huge number of chips in order to take shares from intel. >> let's be a little careful d amd. i want to see micron hold. >> you are not convinced it is time to buy the chips though >> no, i am not, other than qualcomm i think the company is doing incredibly well right here and right now. we saw a dramatic decloining in sales force. that's the kind that i like. i am not getting the same read from semis >> we are seeing the fang complex very strong and amazon's up and netflix is up 5%. >> are you against that?

>> i am not against or in favor. i am just stating the obvious as usual. >> amazon web services is just on tifire >> and we hear this all the time they market opportunity when it comes to the clouds. so enormous. >> available market. >> addressable, my friend. >> it is enormous. people use the word with the t trillions. it is not as though amazon's success is going to come at the expense of microsoft or -- >> i agree with that google cloud service has to do best >> i like diane greenberg very much but we are not getting numbers from them. and notice from vmware quarter where they're indicating how strong service is. >> twitter and snap are

participating on the back of the pivotal upgrade. thinking back to morgan stanley who has been skeptical on the rally argued on the note called no margins on the era and tech is more cyclical you don't believe that in. >> micron proven me wrong on that i thought micron gotten a little more long-term growth and not commodity. there were not a lot of d-rams prices are going to be down badly like flash if that's the case you are going to see, nxpi, it turns out it was cyclical and one was recommending nxpi this morning, but it was down so much. micron, the industrial iot change is not as strong as we thought. it worries me. this autos -- >> yeah. >> i am just trying to think through what you are saying, io and autos and when i think of

iot, i think of autonomous which is years ago >> gary dickerson, have you seen that stock >> yeah. >> it is like a two for one split at this point. they're telling me don't worry and things are different it turns out that people did not need as many machines that they make and that's asml. he was a little more -- a bully as you pronounce it than he should have been in retrospect and he's a concerned man the semis are cyclical but not the clouds >> s&p is up 1.3%. and in verse yesterday with utilities and staples under performing just a little bit >> their quarter should not be good they got big supply chain problems

emerging markets and dollar. they got it all. >> they do >> they got mary % chilondon the mall, we have not mentioned sears. yesterday you talked about being a share donor, the revenue they provide to a pretty big market and they're getting diluted. >> they're running out of revenues to help blow home depot. >> yeah, there is not much left. i am relying on reporting from the wall street journal at this point, the lend eers or creditos are pushing for liquidation. >> bonds are sitting in the former i don't know -- i do know that

there are a lot of people that don't watch the show and sears closes their door on monday, there will be people who think is the fed nuts? they don't know sears is a shell of its former self >> if that's a problem, what about the companies rated triple b now half of corporate debt in an environment are rates are going up you got at&t and all the other giants that finance with debts >> as long as it is fixed rate and floating rate then that's trouble. >> yeah. >> again this is what i am concerned and mortgage rates went up so quickly these numbers -- you can see and people are going to be worried about credits when sears collapse >> jc penney you can argue

because of ron johnson and bill akman. >> there are always people that don't know and they genthner genthner -- nervous when a store is shut. where are all those people going to work? >> i want to ask you about the buy back we got the "times" today talking about the absence of buy back and you got starbucks accelerating $5 billion. >> kevin johnson is putting money to work furiously. when you look at what kevin is up to, he's just recognizing and this is a cash machine >> kevin is not saying this quarter is going to be strong. he has never said that >> it is not this quarter. starbucks could have a good china quarter. >> it could. >> jack ma is delivering >> right >> it was unexpected when they

had zero comps >> well, that was a shut down by the chinese government by the way which is a communist government it is not a democracy. >> thank you >> one of the great pillars of democracy. >> who acts like that? >> xi is a statesman >> did want to get back on the ongoing fight between campbell's third point going after all. the board sees it there and they have been following along. i think it ends in november 29th is when we'll get the meeting. cal bell comes out of what they call their fight deck and all the different reasons they cite for why you should support their

nominees or their directors as a result of the current strategy and how they changed strategy and what has been going on for the consumer products and consumer goods area that we know and detail they do spend a lot of time attacking the third point. that's the kind of stuff we like read the rest of it. when it comes to the third point fight, what do they say? they call it an nt agenda, they say third point and current tax and really we want to get as ceo in there that's effective and put the company in a much better footing and execute better that's not really true all they want to do is sell the company. they call it an empty plan full of generalizations and buzz words. as they did in their letter last week, the store has been short this time to which i say so what they're not now.

i want ted to note that. since we are on the subject of food, i want to take a look at papa john's, it was an ak file it does appear that papa john's are in violation of some of its debt they cured their corporate debt and they put ak out to tell us they moved of what is allowed by their creditor agreement maxing it 5.525 times ibida, what is enforcement note here is clearly ibida has been going down >> those two companies will tell you that you want as share donor? pa papa john's.

my only point would be that does not seem to be the best candidate. >> how is that campbell's balance sheet is holding up after that brilliant snack bite? >> all important points. dow is up 3 clnt.45. bob pisani is on the floor >> let's take a look at the sector quickly here. emerging markets tough week, they are bouncing nicely and communication services are up. consumer staples, what there is your value play. that's lagging banks, we got the earnings in. the bottom line is good enough it was a lot of concerns of loan

growth by and large, most of the companies did well jp morgan results, long growth of 6%. most banks are averaging 1% to 2% loan growths and car sale volumes are up 12% not bad at all about the turn around, why the turn around? the most obvious answer is the correct one here we have drastically over sold conditions in the last couple of weeks. thatst t that's the main thing that's powering the turn around right now. we have the meeting between trump and xi we have mnuchin and kudlow coming to defense of mr. powell as well. on the margins it is all important. don't kid yourself it is the drastically over sold conditions that matters. the last couple of weeks of what we have done here with home builders and retailers and materials and the russell 2000 and semiconductor. this is not in a year, it is

about two weeks. we got a strong economy. a couple of encouraging things, i have been telling everybody, up to watch the vix curve. we have seen the curve flatten dramatically today yesterday the cash index was 28 and today is 22. the big index and the second one there going into october that expires wednesday. that comes down drastically about 18 the november contract is 21 and it is now down to 18 the curve is flattening. traders are freaked out of the next few weeks and calming down futures are way out there have been flat for the whole week it is a good sign. another interesting sign fund flow, oh my god, thaur goi they're going to sell out all the etfs taxable bond fund of particular high yield did have some out flows this week. let's talk quickly of the buy

backs. the buy backs have been titanic. in tlahe last 12 months of $646 billion repurchased buy backs can continue through blackout periods as long as companies announce that they can do a regular program on a preannounced bases, the important thing is they can continue take a look at the "trader talk" on cnbc.com today. you will see apple and jp morgan currently buying during their blackout period. you can buy around that period we are strong today of 338 points up in the dow back to you. >> bob pisani, we'll see you in a bit watching the 10-yr at 315.

let's get to rick santelli good morning >> good morning carl, i know it is fascinating we have seen yields moved down a little bit but not commencing it with the signal of the stock market putting forth over the last several days and not including today. maybe the pressure market is smarter, we'll have to see the final few pages of the trade go foreign stocks look at the one week of two-yr drifting down. we are up one across the curve yesterday. twos are down three and 30s are down sevens and all those downs on the week are how far they are down from the high yield historic closes. last friday represents the high closing yields of the year if you look at two-days of tens, pay attention to the lows. i am a closing, closing is the most important price yesterday we touched briefly

312. why is that so important everybody talks about how fast rates have moved they spent time in the 280s and 290s, i was giving you long stretches of how many sessions usually in the 20s look at the next chart, this shows us what's going on with regards to 10-yr verses bund when we cross to 311 of the highs that was established in may, we were all talking about what happens was the market really shot up traders should have been more prepared and i think it is evidence now you see bund and tens are in the 60s. these are historically wide. today i will have jean-claude tr trichett of what it means. the high yield etfs around thanksgiving of 2016, we have

seen the credit spreads on barclays and the etf on the equity front is a little wild. if we look at foreign exchange, very interesting we know the euro is over 50% of the dollar index, we get it. let's look at june 1st of the u.s. dollar, pay attention to the 116 area, it is trying to get to where most of its trading would. it can't quite get through look at the dollar index, you know it is going to be the mirror image but it is an important mirror image the dollar index on the other hand is holding the high volume area between 94 and 95 that's very significant. finally we want to pay attention to not only what's going on with spreads and overseas but the yield curve and it has been a flattening week is evident by how much lower the tens and 30s

are. take a step back, we are still flat jim, david, carl, back to you. >> rick santelli, good one thank you for that >> watching the bounce here, up 311 and a few components in the green. >> i think a lot of it is the caution that jamie dimon expresses that could happen. and the first note on his cheat sheet page was this concern. i think people are taking it seriously, jamie dimon has changed, his view, and things have gotten a little too tense i read it as being it may not be a tariff squirmish >> at some point in the future, it may have negative effects in the economy.

>> geopolitical is bursting all over the place >> he kills his own stock and i beg him not do do it >> i don't know what it is that moved him to make light of it in this way him to make light of the this way >> make light of it? >> make light on it. >> well, leslie picker has been listening to the calls all morning. more highlights? >> just to touch on the risks he did mention, brexit, italy, trade, reversal of qe, turkey, argentina, saudi arabia. but overall he really did kind of walk back those more concerned comments in lieu of optimistic comments from ceo jamie dimon as well as the cfo marion lake. if you look under the hood, as one analyst wrote this morning, quote, it's always tough to call the end of the cycle but there's no evidence of the end in jpm's

results and we don't think 40 basis points on the 10-year is enough to choke things off on the analyst call, dimon brushing off concerns saying investors need to look at the reason why rates are rising, not just the fact that they are rising. >> the why is more important the economy is strong, rates are going up most of us consider it a healthy normalization. and going back to a more of a free market when it comes to asset pricing and interest rates, etc and we need that to me overall it's a good thing to keep the economy strong so i expect rates will continue to go up. >> dimon reiterated his belief earlier on a media call that ten-year yields should be around 4% and he didn't rule out 5% as a possibility. and as for the credit cycle, he noted the traditional cycle downturns are triggered by rates rising but he doesn't see a downturn before next year or even the year after that now, wells fargo's call set to

begin in 15 minutes while citigroup's is after that. shares of both are gaining, outperforming j.p. morgan despite those two posting mixed results this morning, guys. >> good stuff. thank you. important to listen to every word of those calls, jim. >> yeah. i think citi will tell us more positive things. they got 50% overseas. look, jamie -- jamie did not -- i interviewed him. it had to be -- it was three weeks ago and he told me not to worry about these things and now he's worried things have changed at the margins. i think j.p. morgan's quarter was great, okay? i will read his words with caution and i said to myself, i said listen, i don't want that level of caution because it seems so -- it's so out of sync with what i heard three weeks ago when we were having a cheese

steak. >> where are you going to be at 2:45 >> chained to my desk, including 2:45 a.m. and p.m. i will be focused. i will be focused. i'm getting people call megaa chowder head on air. >> i wonder where they get that. >> dow is up 325 we're back in a moment your company is constantly evolving.

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let's get to jim in stop trading. >> people are wondering why i was up so much i'm looking at switch tv the amount of viewers on call of duty black ops 4 blackout, three times, right now three times the views of fortnight. that's remarkable. so it makes sense because call of duty, it's crushing it. crushing it, david. >> what's on "mad" tonight, jim?

>> okta. and then it continues my reputation with everything that has to do with pot, marijuana, they call it cannabis now. a little fancy we used to call it weed. call it cannabis i never inhaled. >> are we doing the show from canada next week >> we should. >> i don't know why we're not taking the whole thing >> there's going to be lines around the block. >> are there really? >> that's the word there's not enough dispensaries. >> jim, we'll see you tonight. what a week. ad money," 6:00 p.m. dow up 350 as we watch the rally and see if it styx back in a minute every road in the world is now an information superhighway. and the car has become an accessory to the smartphone. ride hailing, car sharing carpooling... mobility services are proliferating.

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welcome back to "squawk on the street." our last bit of breaking news for the week, university of michigan october preliminary read, we're expecting a number north of 100 we end up with 99.0. so a bit off expectations and sequentially following 101.1 should it stay at 99 in a couple weeks and we get the final read, 96.2 is august last month's 101.1 was the second-highest number of the year the first-highest number of the

year in march was the highest since january of 2004 so fairly lofty number let's go through important components one-year inflation outlook, 2.8. this is key. we want to pay attention to that the five to ten-year outlook on the other hand flipped, almost like a curve flattening, right it went from 2.5 to 2.3. so we lose sense on the wider scope and we gain a tenth of the one-year expectation something to consider. rates holding steady from opening levels carl, back to you. >> all right all-important numbers, rick, thank you very much. rick santelli, welcome back to "squawk on the street. i'm carl quintinilla with sara eisen and david faber from post 9 of the new york stock exchange it's been a tough week 1300 points in a couple days with the dow getting at least 342 back at the moment. our road map for the hour starts with the markets. stocks surging as worries over rising rates seem to ease. tech shares are rebounding. natural correction, treasury

secretary mnuchin weighs in on wall street's big day drop. and what j.p. morgan, citi and wells have to say about the rising rates, trade and the economy. stocks are staging a comeback after the two-day selloff that saw the dow fall more than 1300 points. s&p down more than 150 points. nasdaq down 408 points treasury secretary was on our air this morning he commented on the big move in stocks talking to us in bali. >> i think the fundamentals are very strong. the u.s. economy is strong, u.s. earnings are strong so i think this is a natural correction after the markets were up a lot. >> really no new information in the market on the fed who are on trade for that matter. so i really see this as a reaction of markets tend to go too far in both directions and they have natural corrections so you can see the market traded up overnight and that's a good

thing. >> on this day, inflation is under control in his view, not a concern. weighed in on the chinese nuclear option, what would happen if they sold a bunch of treasuries, saying demand would be there for other buyers. >> he's not losing sleep over that, which is interesting the japanese are big buyers as well so we'll see if that comes to fruition. what i'm wondering and talking to some investors this morning, does the market agree with the president? you can criticize the president for the way he's gone about calling out the fed publicly it's obviously a big taboo we've seen other presidents complain about fed policy. i don't think we've had them call the fed loco. but as far as the message and substance of it, trump says he likes low interest rates guess what the market likes low interest rates as well. trump says the dollar is too strong a lot of corporations would say the dollar is too strong as well and it's hitting corporate earnings this has to do with the fact that treasury yields reached multi-year highs after fed chair

jay powell said we're nowhere near neutral interpreted as they're on autopilot and they're raising rates and are determined to do so so much like jim cramer has been talking about, i wonder if the market message is that they agree with the president on this idea that the federal reserve needs to chill and look at some of the data. that's just some of the conversations i've been having. >> even dimon on the call says i've never seen a president who wanted interest rates to go up then you had evans with liesman saying with unemployment where it is, you could go restrictive, meaning 50 basis points over neutral, nobody knows what neutral really means but you could do that and still be consistent with the fed's mandate. >> and the other factor is we have seen interest rates cool off and bond yields so that was the big source of anxiety. things are looking better on that front we had word that xi and trump would be meeting at g20, so things are better on that front as well. hard to say whether we've seen the worst of the selling

we got the funds flow data in from bank of america, merrill lynch. big outflows from bonds, unsurprisingly, and big outflows from technology. and these, as bank of america points out, are the two biggest beneficiaries of the bull market, low interest rates, qe trade starting to reverse. >> there's an overall concern giving the preponderance of investors who now get their equity exposure through index funds. and this is one we hear time and again when we have a downdraft like we did the last few days of what, give than percentage ownership that is index funds or etfs, what happens if you get significant outflows from the index funds themselves given we don't rely on them for price discovery, we rely on value investors and others throughout far but they may have not have the funds to make up any difference >> but it's a constant concern. >> and an interesting debate, especially with the selloff. is it systemic trading is it hedge funds who are just rotating out of momentum into

other names? there's been conflicting evidence on both sides. >> there has and sara, when it comes to investors as well, though, i think there are some who are concerned about the picture next year, given the prospect of heightened tariffs with china, even though it's still a relatively small overall number, that 25% increase in the cost of goods. the wage number, $15 from amazon we spent a lot of time talking about, what that's going to mean they wonder whether margins next year will be flat in a year where you're going annualize the gains in the tax reform and therefore will you have multiple compressions that's a part of what's been going on as well. >> already the warnings have started to unnerve investors we don't often talk about the fastener economy, but there was a lot of chatter in that conference call about rising costs because of chinese tariffs. they warned about barriers of doing business in china. there's a lot of fear about the global supply chain and what

what china will do to make life difficult for some of these corporations >> china sales in september just out, down 43% year on year a lot of that is product missteps. >> and it's 25% tariffs that the chinese have imposed they went up 15% from what is typically i think -- i might have it backwards but it's hard to sell automobiles when they're 25% more. joining us now in the cnbc newsline to talk about this and a first on cnbc interview is mark haefele, the global chief investment officer at ubs wealth management overseeing approximately $2 trillion in investment assets. mark, have we seen the worst of the selling? >> well, you never can tell as everything's been shaken out but we believe that over the -- sort of the near term we will get through this and that's why we're staying overweight in global equities now. >> what gives you that confidence that we're going to get through it and that stocks are the place to be?

>> well, first, let me tell you what we've been observing as you mentioned. we have a very large global business and we've been talking to clients around the world and, you know, when we talk to clients out in asia, we're seeing equity invests or rotate somewhat out of growth stocks but certainly no panic we're seeing fixed incomes investors starting to look for opportunities in asian credit right now. in europe, we have some very sophisticated investors, they're even looking to sell volatility here they're certainly not panicking. and in the united states, we're seeing some of that rotation out of growth and into value stocks which typically would not be doing well if this was really the end of the cycle but what i think this global picture highlights is that the rest of the world has already sold off they've been going through a lot for all summer long and so for

the rest of the world to give you that global perspective, what's happened today in the united states or in the past few days in the united states is a little bit of a realignment but certainly not enough to upset the strong things we see in terms of global growth and what still we believe will be a strong q3 earnings season. >> hey, mark, we've seen a lot of signs that fund managers are overweight u.s to a degree we haven't seen since 2015 if that changes, where do they go given some of the ongoing risks that, say, j.p. morgan is outlining today about the rest of the world >> yeah, well, i think that certainly the allocation in the u.s. has come down a little bit and for us i think we look at a variety of countries around the world, for example you look at canada now, they can benefit

from some economics, it's a relatively cheap market, and they can benefit from oil. aipac has -- the asian markets have really been hit, especially china. so we still have allocations there. so when it comes to equities, i think not expecting the u.s. to continue to outperform global equities and then playing it through just the broader kwoo e index is the best way to go from this point forward. >> mark, what's your take on this debate we're having about whether the market agrees with president trump on the fed, that they're moving too fast and they should cool it down a little >> well, i think that the interview that steve did this morning with president evans gets to a lot of this debate and because what president evans was saying was that, you know, we're comfortable with even moving up above the neutral rate at some point given that

unemployment is so low and they remain data-dependent the issue with that is that there are so many other things that investors focus on, like tariffs. and so if the fed is watching a certain set of numbers and then they get broadsided by tariff concerns which are beyond their control and an international factor, they're going to find that out the same time the market finds that out. and that's why i think what you said about some of the earnings that have come out this week, just how closely investors want to see if that tariff impact is going to start to already hit now for the q3 earnings. >> certainly in the guidance as well as those tariffs went into effect late september. mark, thank you for jumping on the line and weighing in on the market with the dow still up a little more than 300 points. >> great pleasure. emerging markets, as you know, coming off a volatile few sessions the etf down more than 6% over

two weeks. bouncing back a bit today. joining us first on a cnbc interview is mobius sounding partner mark mobius formerly of franklin templeton good morning, great to talk to you again. given all the pain of the last couple weeks, at what point does it make sense to take a flier with what we know about turkey and argentina and saudi and so forth. >> well, you know, the fact that these currencies and markets have come down so much in emerging markets, there are tremendous opportunities opening up in individual stocks. of course, you can't buy the market itself, but it's best to buy individual stocks. just to give you an example of how things can turn around, if turkey releases the path to the u.s., immediately the turkish market will respond in an upward movement so it can be quite dramatic.

these changes from the bottom can be quite amazing and very fulfilling and profitable. >> how much of your thesis is pivoting around fed policy and in turn what the dollar may or may not do >> fed policy is very, very important and with rising interest rates, we have to be very cautious of companies that have debt in any direction so what we're doing is saying let's look at those companies with exceptionally strong balance sheets because interest rates are going to follow the u.s. as they go up in the u.s., they'll go up elsewhere. so this is very, very important. i would say that fed policy is critical to what's going to be happening in the next two weeks. >> so does it depend on what the fed does next or the message that the fed signals, mark, before you pile back into emerging markets valuations are so much lower than those in the developed world, especially united states. >> that's right. there's so much -- they are so much lower

no, we don't wait. there are opportunities now because a lot of the countries have actually come down so much and have seen the fed moving in interest rates and expect the fed to continue moving on interest rates so what they're doing is, of course, selling down their markets and that's an excellent opportunity. >> mark, there's a lot of discussion here stateside about the saudis and the future investment initiative and who's going go and who's not going to go the treasury secretary says he's still planning on going. jamie dimon says they wouldn't discuss that on the call how much is at risk here regarding u.s./saudi relations and the future of what they once tried to make? >> i think it's a very, very important development and everyone is talking about this a lot of people have already canceled business to saudi arabia and, of course, it's not only this incident with the

journalist in turkey but it's a number of other things that the saudis have done the relationship with qatar and other elements in this whole picture which makes it not very good for saudi arabia, i would say. >> so mark, we're anticipating the release of this new treasury report next week where they may or may not call china a currency manipulator. secretary mnuchin wouldn't budge on hint this is morning in other interview. what would happen one way or the other given china's currency has weaken so far so fast against the u.s. dollar, but unclear whether that's an all out manipulation to get a trade advantage. what would be the consequences >> well, i think the consequences first of all would give the chinese freedom to go further. in other words, if they call china a currency manipulator they may say okay, we'll let the currency go up -- or go down, go up against the u.s. dollar much, much more than they are now so the consequences could be very

grave. and, of course, relations with china would deteriorate even further. >> mark, i have a feeling we'll be talking to you again in the next few days, i hope. mark mobius, always good to get your temperature, especially regarding the rest of the world. thanks very much. >> pleasure. when we come back, a big banks report we'll dig through the reports of j.p. morgan, citigroup, wells fargo. plus, it has been a wild week for stocks. a look at what the moves are signaling to the fed and what they say about the economy former chairman of the council of economic advisers, jason hu san with us a gehow ahead on "squawk on the street." dow just off the high of 300 points "squawk on the street" will be right back 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

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stocks catching their breath this morning after a turbulent week on wall street which saw the dow's worst two-day decline since back in february bond yields still dominate the investor agenda. here's treasury secretary steve mnuchin speaking earlier on cnbc this morning. >> the bond markets, four weeks ago people were asking me if i was concerned the yield curve was too flat and whether that indicated recession for next year and i said absolutely not four weeks ago i said markets aren't always efficient. so you've seen a normalization in the yield curve which makes sense. so the fact that that's occurred at the same time is a correction in the stock market. >> jason furman with us, harvard

kennedy school professor and former council of economic adviser's chair. welcome back, jason, nice to see you. >> nice to see you. >> do you agree with the treasury secretary do what you think the big move up is telling us about the economy? >> i think he's basically right. i wasn't particularly worried about flattening yield curve i'm not hugely comforted by the steepening of the yield curve but this is a move in the direction of normal and the only justification for the high valuation of stocks has been the low interest rates now that we're coming off that. you're going see a lower valuation of stocks so i think that a lot of this is an economy moving towards normal. i'm not overly nervous. >> there's a lot of talk about the president's criticism of the federal reserve and moving too fast on high interest rates. do you think that will have a

psychological problem with the fed? >> the president's criticism was completely off base, completely stupid but he's gotten himself to a place where he's completely ignored. he has a set of fed picks, some of whom like marvin goodfriend, who are quite hawkish. he says one thing about exchange rates, he says his policies move exchange rates in another direction. so i think he's just ignored at this point that's a bit of a shame but i don't even know how much of a negative it is. >> jason, if you're powell, what do you do if you decide in december that it's time to pause for legitimate reasons how do you do that without looking weak >> i don't think the fed should be targeting the market. it should be targeting inflation and employment but the market affects inflation and employment over the last week, financial conditions, the change in them,

is equivalent to about one quarter point hike if you look, stock market off 5%, yields up about ten basis points that's the equivalent of one fed rate hike so if things are still in a place like this, they should say they're data dependent, that financial conditions have tightened, that's moving us in the direction they wanted and continue taking a break in december that would be a welcome thing for them to prove their data dependence in that way. >> jason, jamie dimon, the chairman and ceo of j.p. morgan, which reported its third quarter results this morning, chose to include in their press release right at the top his -- what appear to be increasing concerns about increasing economic and geopolitical uncertainties which he says at some point in the future may have negative affects on the economy do you agree >> i think geopolitical uncertainty is only a down side risk right now and how we're

going to get out of and resolve this situation with china right now has been s to me not something i can see to the end of and something that can be k get worse before it gets better. >> do you expect it's going to get worse before it gets better? >> i think so. we have the tariffs ratcheting up again at the beginning of next year. and we're making a set of demands of them that i don't think china can meet we were willing to take yes for an answer with mexico, with canada would we be willing to take yes for an answer from china i'm much less sure of that >> do you think the u.s. economy is slowing, jason, from these super fast levels that we've seen on gdp in the last few quarters >> i think it is we've seen -- of course it is. you're not going to have 4% growth every quarter going forward. we had a lot of fiscal stimulus this year. we're going to have more injected into the system next

year, then it will start coming out. our trend growth rate is still 1.5% to 2% and, you know, our employment can't keep improving forever. we're going start heading towards that trend again, i don't think that's a huge worry, but anyone counting on a continuation of what we've seen lately i think would be foolish. >> jason furman, always good to check in with you. thank you for your thoughts on the economy, the fed and this big market selloff kind of week. >> which we are seeing if that can be reversed today. the dow is up 262. quick programming note as we go to break, national economic director -- council director larry kudlow will join scott wapner on the half after speaking to us yesterday about this, you don't want to miss that. dow is up 256, s&p up 37 back in a moment

time for our etf spotlight mike santoli here to look at the first names to sell off before this week that might also be the first ones to rebound. >> that's the hope for weeks, actually months

talking about the cracks in the ice in the global markets. the big index fell through that this week. looking to see if they balance and maybe some of the selling pressure is easing up. that starts with china if you look at the fxi, that's the greater china etf, it's bouncing nicely, 2%. but i wanted to do year-to-date charts to show how depressed they are it's almost as if they weren't bouncing you would worry more. eem very similar story, the emerging markets etf also up nicely today so that's basically the same as the china story, slightly shallower losses but still a bad chart. the u.s. market, small caps and home builders are two of those areas that really were pulverized really kind of weak bounces, i have to say, it's not showing you there's a tremendous amount of bargain hunting in the russell 2000 or the itb, the home builders, of course itb dealing with its own issues with rates and all the rest of it but right now i would say

minimally acceptable bounces there you see housing is not even bouncing today, guys. >> wow. >> all right, mike, thank you. mike santoli. when we come back, markets divided. pulitzer prize winning columnist jim stewart weighing in on this week's wild ride for stocks. his take on what it means for quk t seey.f the countr "sawonhetrt" will be right back place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. good morning, everyone i'm sue herera here's your cnbc news update at this hour. a turkish court ruling to release american pastor andrew brunson from house arrest, sentencing him to three years, that's time he's already served. the lawyer for brunson who was

at the heart of the diplomatic spat between ankara and washington says he will probably go back to the united states the death toll from michael, the most powerful hurricane to hit the continental u.s. in more than 50 years rising to 11 in places like mexico, beach, florida, no property was left undamaged. some 900,000 homes and businesses in florida, alabama, georgia, and the carolinas are without power. pope francis accepting the resignation of washington cardinal donald wuerl after he became entangled in two major sexual abuse and coverup scandals the pope asked him to stay on in a temporary capacity until a new archbishop is found. and britain's princess eugenie marrying jack brooksbank at windsor castle. the 28-year-old bride is ninth in line to the british throne. queen elizabeth and her husband prince philip attending the wedding along with the other senior royals. and she looked beautiful that's the news update

sara, back to you. >> second royal wedding of the year. >> absolutely. welcome back to "squawk on the street." i'm here with carl quintinilla and david faber live at post 9 at the new york stock exchange the dow was up more at the open and still stocks mostly down a little more than 4% for the week but let's see this action. technology is leading us higher. nasdaq up almost 2%. >> big banks are the story of the morning. j.p. morgan, citi and wells are all out. though jpm and wells have gone red, leslie picker has been looking at the numbers >> the wells fargo call under way. a lot of questions from analysts as to whether the market is really miscalculating or not understanding the true fundamentals of banks at this point in time. a big concern surrounding these results overall is deposit balances for wells fargo, declining $40 billion, about 3%

in the quarter although net interest margin rose slightly to 2.94% as interest rates rose, that's a big concern surrounding this turnaround the company is going through right now with ceo tim sloan speaking on the call he reiterated the turn around is taking place amid the fallout from their sales practice scandal. >> there is more work to do. the substantial progress we are making on our goals demonstrates how hard our team is working to transform wells fargo. we are addressing past issues, enhancing our focus on our customers, strengthening risk management and controls, simplifying our organization, and improving the team member experience >> now, wells fargo beat on the top line while missing by about one cent on the bottom line on an adjusted basis. its shares have reversed gains from pre-market trading and are trading a bit lower. citi is the one firm who's been able to stay in the green this

morning. the firm's revenue growth came in better than expected thank to vix trading and investment banking fees it showed clear progress in the cost-cutting plan they have been going through. analysts say third-quarter results show the firm is on track to potentially surpass its full year expectations we'll be looking for more color on citi's results on an analyst call in the next hour. j.p. morgan along with citi posting trading revenue. top and bottom lines were above consensus with average core loan growth up 6% deposits up 5%. >> leslie, thank you very much stock reaction very interesting. don't miss an interview later on "closing bell. we'll talk to wells fargo cfo jo john shrewsberry we have the broader market

up 3%. the s&p were off the highs of the morning but regaining a bit of the steeper losses we saw earlier this week. amid this volatility, one outlying question. there are just 25 days until the midterm elections. could fears of a sustained down turn in the market have an impact on the way voters choose? joining us now at post 9, pulitzer prize winning "new york times" columnist jim stewart who looked into that question. good morning. >> yes, i did. fortunately for me, ubs had done a big study of every midterm election since 1950, there have been 17. to me the somewhat surprising conclusion was the incumbent party loses seats and it doesn't really seem to matter what the stock market is doing or the economy. there's simply no correlation whatsoever between how the party fares and how the market is doing or even how the economy is doing. and i think all else being equal, of course a good market and a good economy is going to help the incumbents but all else is never equal in all of these examples, some

other issues overshadowed the electorate and sort of swamped any meaningful boost they might have gotten from that. >> i was going to say, it reminds me of a recent gallup poll in which voters said the economy in general is not a high priority >> it seems to be true when the economy is good like it is right now. you would think the republicans would be beating the drum about the low unemployment and, by the way, i think president trump is totally wasting his breath attacking the fed because, you know, for the average voter to try to make the link between interest rates, the fed, the declining stock market and how this may somehow affect the economy is just -- that is too much the average person is not focused on that. >> you think it's more gas prices and mortgage rates? >> it's their own personal financial situation and it's broader cultural and political issues i suppose the supreme court may be a big issue in this election. and the overall republican governance here. have they really accomplished a

lot running both houses of congress or not? >> i'm really interested in the impact of the trade war because a lot of the retaliatory tariffs from europe and china have been squarely aimed at trump country. a lot of the places where his base is, the farmers, a lot of those exporters. yet we've done a number of reports over the last few months, visiting those industries and companies that have been hit and the political reaction is less clear even though they're getting hurt by it, they're cheering president trump on for taking a stand and being tough against china so i think the political calculations around trade will be interesting and maybe counterintuitive. >> it's complicated. i did a column on iowa and farmers out there and i interviewed quite a few of them. they're not happy about the tariffs in most cases but they were definitely taking a wait-and-see attitude and saying well, some good can come out of this, we're all for it and they agreed china does cheat. i think that will be one of the most interesting things to watch

in the election, how these farm belt areas are affected the most by tariffs and, of course, the administration has thrown them a bone in some subsidies they all told me we don't want subsidies, we don't believe in subsidies, we want a healthy market for our product. >> but like auto workers, for instance, they're not getting additional help and that industry is really struggling. >> right so i think that will be interesting. but the good news for investors in all this, particularly given the recent market decline was in all but two of these midterm elections, the market rallied quite strongly from the end of august preceding the midterm until the end of march following it and, look, there are only 17 of these so it may be a statistical anomaly but it suggests investors overpriced the risk of a midterm election and the loss of incumbent control time and time again the market does go down before a midterm election and then it rallies strongly the following months. >> let's talk a bit about the

market given you're a veteran market-watcher there's been a growing chorus, jim cramer certainly leading it, that says the fed is moving a little too fast, perhaps a little too aggressively given warning signs. where do you come down people believe that may have contributed to this downdraft we've had. >> basically i think this little correction, it's not quite a correction but the pullback i think is healthy i think it's surprisingly fast give than there's been no radical change in the economic thing. i don't have any quarrel with what the fed is doing. i have no reason to second guess them what i think do we see is we have a very strong economy going on we have very low unemployment which mean there is will be upward pressure on wage prices we're seeing some upward pressure on raw material inputs and interest rates are going up. that's a tried-and-true prescription for lower profits down the road. and it's not bad it doesn't mean the economy is collapsing but i think it does mean you've

got to bring those evaluations down a bit to accommodate a slower growth and profits going forward. >> there's a great piece the journal about how you would rather have a selloff in a rising rate environment than a selloff in a declining rate environment. >> definitely. and another thing i've seen over the years is that it's not these sudden selloffs that accompany bear markets or start them. but the typical bear market is this, like, grinding slow down down, down, down, a little blip up, then down, down, down. it grinds on it's not the sudden downdrafts like this. >> well, some of these momentum names have had no funds since july, right? >> and i think that's another reason why i don't think there's any reason to panic we haven't had a period of what i would call euphoria in the market all year and certainly u.s. stocks have done the best but the rest of the world has not been doing well at all i wouldn't say we're in any kind of, like, bull market mania.

>> although the broader market has done very well since you began speaking, jim. up about 1.5% on the s&p jim, thank you. >> sure. thanks. when we come back, former ecb president jean claude trichet will join rick santelli. and let's get a quick check on the fang stocks which are bouncing back after a wild week for the group. looks like green across the street, netflix in particular up 5% it was down more than 20% off the his.gh we'll be right back. don't go away. looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

it's been a wild week for the markets. what are the key levels to watch on the s&p 500 right now find out on tradingnation.cnbc.com more "squawk on the street" is coming up.

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>> thank you, carl i'd like to welcome my special guest, former ecb president jean claude trichet i want to get right into it. i want to discuss reversing the grand experiment some say it saved the world. some say let's see how it ends before we weigh in but specifically, mr. trichet, we had jason furman, a former adviser, economic council adviser to president obama on our air saying that a big chunk of the good trading in u.s. stocks in particular has been the low interest rate environment. well, rates are moving up and the equity markets didn't like it europe's equity markets are in the red as are china what does this mean in your opinion? can equities get along with rates and what does it mean for europe's equity markets? >> well, first of all i would say, rick, that we are in a universe, of course, when the market goes up and down and it's always very dedicatiededicated.

there are two interpretations on what has just happened either it is a healthy correction because we had augmentation of the asset value which is has been very, very important, very significant so it's not bad that you have a correction at a certain moment and it's always what happened from time to time. another interpretation is that it is the start of a big correction, something like a new trend on the market. i will remain very prudent and cautious i would say on a short-term basis, taking into account the fundamentals we have in front of us, i would say the likelihood of healthy correction is higher than the likelihood of the start of a new trend, which would be downward that being said, on a longer-term basis, if you take the medium-term perspective then of course at a certain moment we

will have another trend and a number of elements are suggesting that things at a certain moment will appear to be clearly indicating the new trend. i would say myself i'm particularly alarmed by the level of overindebtedness that i observe in practically everywhere in the world, you know the level of leverage, public and private, in all economies practically is very high and continues to be higher and higher after the crisis. but that is for the medium-term. but it's reason to be very vigilant, obviously. and to take what's happening, what happened yesterday and the day before as a useful wakeup call. >> excellent listen, mr. trichet, a big question in the u.s., we have a very clear federal government overstructure. we understand who guarantees our central bank and all its holdings which are guaranteed by

the full faith and credit of the u.s. treasury. in the european union, it's a lot more complicated a simple question -- who guarantees the balance sheet of the ecb? and if it's based on the capital key, which means the proportion of the securities of each country that's been purchased by the ecb, that's not good for france and italy your final thoughts. >> i would say we are a different universe in the u.s. and in europe. in europe, the central bank -- and it is the european tradition -- has an enormous level of capital that is the property of the bank, of the central bank, the property of the euro system as a whole. with an enormous amount of gold, with enormous amount of, i would say, securities of all kind. so you have to take that into account. the ecb is extremely solid in terms of capital and that is,

again, the tradition in europe on top of that, of course, you have the various capital key of the various governments which are there as a last resort but the likelihood of being obliged to likelihood of being objeliged to ask the government to cover losses of ecb seems to be zero all the purchases in my time, in the time with qe have been extremely profitable for the bank, extremely profitable we made a lot of money because of course we purchase on the basis of when we are to fight against the speculation the purchase at low level and we gained a lot when we had to recover the value behind the purchases, i only mention that,

but i have new problem i have to say as regard the solidity of the ecb. >> mr. trichet, i really thank you. the only question we have to discuss next time is are all the assets held by the regional central banks worth their advertised value that's the question. thank you for your time. david faber, back to you >> and thank you, rick santelli. time to send it to jon fortt for what's coming up on "squawk alley." >> business software company is going public in a few minutes, we're watching that. and stacy cunningham joins us coming up on "squawk alley." 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.

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someone that covered the packaged food industry, yes, campbell's has underperformed the s&p 500, it is orange up there, but pretty much in line with some of the broader problems in the packaged food space. they say it is the center of the store piers, the kelloggs of the world. this is part of the company's defense. we recognize there's a problem, not just us but the industry lobe is not saying anything new other than we want to sell the company, we are alread exploring ourselves. and you said, david, not as juicy or nasty >> he is still trying to win over the idea of winning over family it is an uphill battle in terms of a proxy fight. >> given 10% of shares >> i think 7, around there mr. loeb would say this company

doesn't have the ceo, its board allowed the execution to lag from some of its peers and pursued an acquisition strategy that was faulty as well to deal with some of the problems, and you well know, they're selling international and fresh. >> they would say we are dealing with the problems, fired the last ceo, denise morrison. they say the search is under way, they have a number of candidates that stepped up they say they will announce a new ceo by end of the year he said that would be irresponsible with the current board and they're not going to get top talent that's where the fight goes next >> the larger question, sara, how much value is there to create at campbell's campbellgi- >> a lot of these food companies are having trouble figuring out

what millennials want, how they're buying it, how to compete with small brands. >> p and g earnings are a week from today see what the space is in for. when we come back, rising rates, what they mean for the consumer former chairman alan bliennder we will ch and we will chat with stacy cunningham obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

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quick look at anaplan with a 44% game the market week as tumultuous as this one, good to see it have success. we'll keep our eyes on prostate. it is 11:00 a.m. on wall street. "squawk alley" is