it is 5:00 a.m. in new york and your top five at 5:00 is truly bring global china stock market having one of the best days in years beijing riding to the rescue saudi stocks though, they skid again. new questions rising about the death of journalist jamal khashoggi, live in riyadh. italy front and center the eu raising red flags dick parsons, cbs executive stepping down. it's the story that has everybody stepping down. the mega millions unwon growing again now to an insane $1.6 billion.

the cash option is going to blow your mind on this monday, october 22nd as "worldwide exchange" begins right now ♪ ♪ all right. good monday morning. welcome from wherever in the world that you may be watching i am brian sullivan. thanks for joining us. getting off a big week here. stock futures are not having a big day. mildly in the green to begin your week. the dow down about 4% this month. more on the u.s. markets this moment your big money story is not the united states, it is in china. look at this what an overnight session it was. the chinese stock market having its single best day in many, many months. beijing saying that it will do whatever it takes to support its economy. the shanghai composite up 4% a big run there. hong kong stocks up just over 2% let's get right now to our own nancy hungerford in singapore

with the latest on china's big rally. >> here's something we haven't shown you in a long time a 4% jump for the shanghai composite. overall chinese stock markets enjoyed their best day in three years today. that was led by the blue chips take a look here the csi 300 up 4.3%. overall the tech heavy shenzhen which has been hit hard was higher by almost 5%. this markets the second straight day of gains for stocks on the mainland all as government authorities have really come out in force pledging to do more to shore up confidence. we've seen comments from the pboc advisor today saying that tax cuts next year could amount to some 1% of gdp. all of this comes after regulators on friday promised to make reforms for securities markets. we've heard comments about providing apple liquidity. so altogether if you consider that weak gdp we had out on friday for china, officials in

beijing looked at the reaction in the markets they saw how worried people were and now we have beijing sending a very clear message that we will do whatever it takes in so many words and today markets like that message that they're getting. >> they certainly did. nancy, thank you very much meantime, elsewhere in asia, that effect, china effect, whatever you want to call it helping other markets. the nikkei rising .4 of 1% let's shift gears to europe where italy remains front and center moodies downgrading the debt rating let's get right now to willem marx in rome >> reporter: thanks. expected to release a formal response to the european commission's concern that you just mentioned there about this draft budget plan by midday local time in theory in the next 45, 50 minutes that ministry will be

responding with its explanation, its rationale why they're willing to raise the deficits so high the italian cabinet met late they've already sent a draft to the europeans. if the europeans come back and say we would like to see revisions it would be the first time in eurozone history that has happened of course that's having a pretty significant impact for markets we've seen the bond prices rallying this morning on the back of that stable outlook for mody's. >> yeah, willem. let's talk more about the moody's downgrade. the headline sounds bad, moody's downgrades italy's rating. it wasn't nearly as bad as what the market expected might happen. >> reporter: absolutely right. you look at how things have been priced in. it seemed like people were expecting slightly more negative mood out of moody's.

they said we have concerns but it's not that much worse than we thought it was going to be they were talking about the growth assumptions those are quite questionable some of the measures being included in this draft budget they say are not comprehensive in terms of the reforms needed in italy and there will be a positive short term impact about 1% a year. they say that's not good enough. if you look ahead for the rest of the week, s&p reporting their latest rating on italy we heard last month they went from stable to negative. >> willem marx in rome, willem, thank you very much. outside of equities, here's a global look at commodities and currencies oil ends up a little bit still below 70 gold is fractionally lower bitcoin can't get out of its own way.

let's get you set up for the markets and your money joining us is jeff hirsch. chief market strategist probabilities fund management. >> good morning, sir. >> good morning by the way how are you? >> i'm okay. >> we're better than the dow september usually stinks, it was good october is usually good now we're down a little bit of both. >> everyone forgot about october phobia the last month of the worst six months is october. >> should we feel good or bad about the fact that we're down 4% is that a good or bad thing? >> it's a good reset we took a lot of that frothy sentiment off the top there. fundamentals are still supported. we're looking for confirmation this sets up really well for us with the four year cycle sweet spot dow's up 20.3%

nasdaq's 32% so this really refreshes and gives us an opportunity for a year-end rally. >> you're confident. you called it the sweet spot of the four year cycle. what does that mean? >> the best consecutive three quarters. >> because of the way the mid terms, presidents. the last quarter -- >> of the mid term year. >> and the first two quarters. >> of the pre-election year. >> are the best quarters >> you've got this historical pattern of mid term lows to preelection highs being under 50% for the dow, about 70% from the low and mid term high for nasdaq so in correction like that makes me pleased that cycles are working, in play >> if somebody goes to the office and you say what are the -- >> q4. >> the first two quarters of the year following the mid terms >> yes correct. >> do we have any idea why because politicians are

promising a lot of stuff >> that's exactly it that's what happens. politician says, mr. trump has done here, pushed through a lot of policy initiatives. some of the least savory things that one might want to do. as they get ready for their re-election campaign they start priming the pump and doing more things you have a whole lot of mek ck h mechanations. >> history often but not always repeats itself. >> it rhymes. >> it rhymes my question is if we don't get this that you have spoken of, how worried then would you be? >> a bit more. we're going to get some sort of technical indication from market price movement we're seeing people in the tech world -- >> moving average conversions. >> you're going to say that at 5:08 in the morning.

put a dollar in the jar. we're going to have a jargon jar. >> that's part of my dna >> there you go. so we're looking for -- we worry about it but we're patient here. we're looking for that technical confirmation you can use anything you'd like as a trader or investor to get back into the cyclical sweet spot we'll wait for that. it's setting up for a much nicer buy indication. >> there's still a chance. it's almost like some money -- >> that's why. >> meanwhile, the black jack table at 2:00 a.m., maybe it's time to go back to the room. >> yes, which a lot of people don't do. >> they end up with nothing in the morning. >> people tend to do that on wall street in october you have the october 31st deadline you have the end of the third quarter rolling into the fourth quarter. people trying to lock in gains,

position themselves, a little window dressing for the year end and that's what creates the volatility. >> holiday reality. >> watch for the january break that's been more robust. once we get into next year with comparisons being much more difficult with the juice that was added into the corporate economy this year sort of wearing off next year. >> okay. but you remain optimistic. we like the historical patterns. >> patient patient. >> optimistic but patient. >> obp. >> sure. who's down with obp. >> i am. jeff hirsch, probabilities asset manager. on a more serious note, we continue to follow the latest developments in the death of jamal khashoggi. saudi stock market falling again. pressure mounting for the saudi government to provide more answers about his death and what seems to be an ever shifting story. let's go to cnbc's hadley gamble from riyadh.

>> reporter: hey, good morning, brian. that's right over a billion u.s. dollars wiped off the saudi market turkey's president vows to release his version of events over the weekend and the saudi government finally speaking out. let's listen in. >> the reports we were getting from turkey did not comfort to the reports the team provided to us when they returned to saudi arabia we asked the public prosecutor to launch an investigation we discovered there were discrepancy. we discovered he was killed in the consulate. we don't know how. we don't know where the body is. the public prosecutor put out orders to detain 18 individuals for questioning and possibly facing trial and the king also dismissed a number of senior officials. this is to be the first step in a long journey we are determined to uncover every stone. we are determined to find out all the facts.

>> reporter: that was saudi arabia's foreign minister. just to give a quick rundown on what we know from the saudi side of things. 18 saudi nationals are being detained two very high level folks who are in the crown prince's inner circling being dismissed they are being held responsible. they continue to talk about this as a rogue operation that the crown prince had no knowledge of certainly whether i bipartisan backlash from capitol hill they're really coming under fire brian? >> hadley gamble live in riyadh, saudi arabia thank you very much. coming up, more trouble for cbs. dick parsons resigning from the board just six weeks after being named executive chairman. plus, trouble for taser. the new york city police department pulling nearly 3,000

body cameras after one exploded on an officer over the weekend totest on that sry your markets and your money coming up. ♪ ♪ (buzzing) gather new insights, leave your data protected on-site,

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stepping down. frank collins is here. >> good morning, brian in a statement parsons said he is facing multiple myeloma he's been brought in as a steady hand after les moonves was forced to resign over allegations of sexual misconduct parsons had developed a close relationship with schaar ri red stone who with her father are cbs's controlling shareholders parsons will be replaced by straws strauss zelnick. one of the top priorities will be to pick the next ceo. chief operating officer joe ianello was named chief operating officer last month. >> we'll see you in a bit. thank you very much. cbs is one big stock story

here are three others. fiat chrysler is selling to japan's kalsonic philips third quarter profit missing. they're blaming currency head win winds. check this out the new york city police department is pulling 3,000 body cameras across the city after one officer's device caught fire in staten island there is a possible defect with that model which is made by axon they are formerly known as taser. they are working with the police department to investigate. no trade in action xon now. lotto fever.

mega millions fever swelling first, retail detail earnings season and the holiday shopping season all just around the corner so why are retail stocks falling the great jan rogers npoheipn re to tell you what's what. for your heart...

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and 35, 34 seconds of course, obviously this is kind of an important time of the year for retail, but if you have not been paying attention, retail is quietly back in a rutt the retail etf, the biggest one, the xrt, is down more than 10% over the past 30 days. could this all change as we gear up for retail earnings season? let's bring in jan rogers nippon ceo. why do you think you're not a stock analyst per se why do you think we're seeing this kind of weakness rolling into the most important time of the year in probably the best economy in 20 years? >> but i do play one on television occasionally. >> you and i both, my friend >> when i talk to people out there, they're investing in retail every day they say to me, is it going to get any better than this i really believe that's what's weighing on these stocks people look at it and say, okay, things were fabulous last year in the fourth quarter, things

were great in the first and second quarter can it keep going? they're saying to themselves, no i'm saying to myself, yes. >> we're very pithy in the media. you're not buying into the peek retail theme >> i'm buying into the this is as good as it gets but i think it could stay this good for a while. we have 3.7% unemployment. we have rising rates 704 fico score for the average citizen for the first time in history, the best it's ever been. >> wow. >> people can spend, have the capacity to spend and they're relatively happy if you believe everything but the politics. >> okay. okay that said, i hear you. i'm going to say the most poignant thing that our viewers and list eners heard all week which is the stock market is not the economy. the economy can do one thing but stocks can do whatever they want >> well, i believe that. >> you're telling me the economic story is good do you think the stock story will be good it hasn't the last couple of

weeks? >> i think the stock story will be good. i think people are concerned 2019 will be good. they're wrong. i don't see anything going on with my consumer and my companies to make me believe 2019 won't be strong just like 2018 has been strong and like 4q 2018 won't be strong something has to happen for retail not to be good. we have to see some problem with employment or some problem with wages. something has to go wrong. if something is going to go wrong and they're smart enough to figure that out, but they're not. >> we're starting to see housing and auto sales weaken. we've talked about the car and house indicator. when people buy houses and cars they cut back on other spending because obviously it's expensive to buy those things. if they're slowing down on these big ticket things could that be good news for the macy's of the world? >> it won't be bad news.

>> something else has to be bad for consumer driven retail that's all affected, what you just described, by interest rates. my consumer is not affected by interest rates until something starts to weigh on the economy >> tariffs any indication that some of the tariffs -- not all tariffs have been slapped on. we have to remember that. >> right >> any indications the ones we have are negatively impacting the consumer >> no. there's some indication we could see compression in market because of it. if it is a big problem, that's where it will start to weigh on the stocks i don't think the tariffs are a big deal they're so distributed and any one small retailer might be affected my kind of retailers, big guys. >> we did the matt on wex, 1/3 of the gdp of maryland was going to be negative overall economic impact. >> yes >> let's get specific.

nordstrom, a winner? >> total winner. think about it, they already pay $21 an hour to people on average. they're not going to have any compression on the wage side and they'll have plenty of people to work for them. what i worry about is we run out of people to run the register and we have to raise wages i'm a big fan of nordstrom. >> what about sax which also by the way owns lord and taylor. >> in the short term i'm a fan of sax because the upper end is good lord and taylor is being wound down i'm not a big fan of hudson's bay but i am a big fan of what sach's is doing. that whole business is struggling. >> with 63 days and 18 hours left until christmas, i have a feeling we have not seen the last of each other. >> i have a feeling you're right. jan. thank you very much.

let's get a check on this morning's other top headlines including a very tough scene at clemson university where a party turned tragic. phillip mena with that >> good morning. president trump threatening to pull out of a landmark nuclear arms agreement negotiated decades ago with russia. now nato says russia is in violation of the agreement john bolton will kick off high stakes talks. a homecoming party had a floor cave in. cell phone video shows people dancing here at the off campus party when the floor gives way and thankfully none of those injuries were life threatening paul and rondo throwing punches. >> things heating up over in l.a. after that hard foul. lakers brandon inge gram shoved

james hardin and that ignited a brawl ending with chris paul and rajon rondo throwing blows all three were suspended ingram slapped with four games rondo gets three chris paul only receives two financially paul took the biggest hit. he was fined almost half a million followed by rondo with 186,000 and ingram with 158,000. brian, it took a fight like that to upstate lebron james home debut in los angeles. >> i don't know if you had a chance to see it, phillip. it looks like rajon rondo spit in -- paul pushed his face with his finger if you look at it in slow mo, it appears he spit on paul before he did that. we could see these fines go up. >> we'll see it's only the beginning of the season, too, brian they will meet again. >> yes, they will. it will be a big year in the nba especially out west. thank you very much. still ahead on the very busy

monday, the great china comeback the shanghai markets soaring overnight. we'll tell you how much and why. later, the countdown is onto the mid term elections we're going to break down the key factors at play with your money in regards to the mid terms all when "worldwide exchange" returns. stick around

the great comeback china stock market having its best day in nearly three years beijing coming to the rescue

more in the megarally overseas ahead. meantime, the countdown here is on. the mid term elections two weeks away we'll break down the likely impact on your money speaking of money, mega mania. mega millions jackpot now at a billion six, probably going to two. break down your odds of hitting it big and how much cash you will get in one check when you win. as "worldwide exchange" rolls on ♪ ♪ you could have many bmws if you win this we'll give you the exact numbers and how much you get if you take the cash option. it's unbelievable. hi welcome back thank you for being with us. i am brian sullivan. let's kick off the second half of the show with frank holland back with those. >> good morning, brian here's what's leading cnbc right now. pressure mounting on saudi

arabia following the death of journalist jamal khashoggi treasury secretary steve mnuchin says it is premature to comment on sanctions against the kingdom until we learn more. however, the saudi stock market is tumbling today down more than 2%. in corporate news, dick parsons resigning from the board. they say it is health related. fiat chrysler is selling the auto parts unit to japan's kalsonic for $22 billion it's the first big deal for fiat's mike manley >> frank, we'll see you in a bit. meantime, here's how your money and investments look right now we are halfway through the 5:00 a.m. hours stock futures mildly in the green. we've had a volatile october futures turning back a little bit negative flat but let's be clear, it has been a wild month.

volatility like we haven't seen. it's hard to say what's going to happen all eyes on the bond market. you're smart, you watch cnbc and the ten year bond yield 3.91 3.25 the number we watch the yield is down fractionally on this monday morning the big money story today is not here, it's in asia china having the best day in nearly three years beijing, the government promising to jump start the economy. let's bring in patrick chauvanik. i don't know how much you guys at silver crest are invested in asia, but do you like the fact that the market there be seems to be trying hard to make a comeback with the support of the chinese government nkts i spent a large portion of my time in china, china's part of the global economy so you have to watch it

and it can affect the rest of the world. i am not encouraged by the headline china stimulus raises markets, i have lived with it many, many years i think it's always been off base in the sense that what china needs to genuinely lift markets in any kind of sustainable way is real reform and real reform has been on hold because they keep on going back to stimulate and they keep on pouring more credit which generates more over investment which digs the hole even deeper. i'm not encouraged by those kind of responses to what the market's doing in china. >> because you are also in addition to your day job, you're an adjunct professor at columbia university's school of public affairs. it sounds like in a fancy professor speak way you're not buying into it. >> i don't know how fancy i'm being. what i would say is i've watched china for many, many years they are stuck in low gear in

terms of what they need to do with getting their economy back. this doesn't have to do with trade wars i think china would be seeing the after effects of once again last year going back to the stimulus draw. once again pouring more and more credit and relying -- over relying on investment to generate growth instead of the things they've said several years ago that they needed to do. >> okay. let's get back to the united states, patrick. is it just me or maybe the myopia of the media and myself which is that a couple of months ago we were worried that interest rates were not rising enough, that inflation was going to go out of control now we seem to be worried that interest rates are rising too much and too fast which maybe should lead us to believe there's some kind of weird goldilocks happy medium happening here. >> as you say, a couple of months ago the big concern was that the fed was hiking rates

and longer term rates weren't responding and you'd get an inverted yield curve an inverted yield curve usually means a recession coming the fact that longer term rates are rising suggests to me especially in the absence of a significant pickup in inflation that there is greater confidence in growth. if you look at stocks, two interesting things the first is that despite al the good news, and there is plenty of good news in terms of economic momentum in the united states, the 12-month trailing pe ratio for the s&p 500 has come down almost three full multiples from a year ago, from 21.5 to 18.5 the equity risk premium which measures how much additional return you can expect to get over treasuries, that is at 5.4% that's over 1 percentage point

higher than the historical average. that indicates that actually there's room for equity valuations to absorb higher interest rates. >> that was my question because the bull can make the argument valuations have come down. the market is more reasonably priced the bear though could easily make the argument, i guess i'll play one on tv, they are still relatively high historically in a rising interest rate environment with an economy that is probably as good as it's ever going to get in other words, it may not have anywhere to go but down. >> we are closer to the end of the cycle than the beginning >> well, for the next six months i think the numbers suggest that we're in the clear after six months there are a couple of things that start to kick in. the first is that you don't have the one-time bumps from the corporate tax cut or from the surge in corporate buy backs that we saw this year so earnings growth comes back down to organic, which i would say is

something more like around 5%. the second thing is you have various events happening on the international front. six months from now you have brexit so we might be talking about a different narrative about what's happening in the world. is the second quarter 4.2% gdp growth the new normal? no, it's not i think that we're going to be talking about more realistic expectations some people will say, oh, but all the good news is built into the market and none of the potential bad news i disagree because those -- that decline in valuations this year suggest that people are, in fact, pricing in more realistic expectations for what's around the corner >> well done have a great day and a great week, patrick. we will call on you again soon >> you, too, bye-bye switching gears, we are now just 15 days away from the mid term

elections and a new nbc wall street journal poll shows republicans are narrowing the gap to control congress to 7 points that's among all registered voters but among likely voters to the democrats advantage has risen to 9 points. i think the story is that's not a probability. it certainly looks like it's become somewhat more likely to happen i still don't think it's going to happen. it seems like democrats will take the house it will be narrower. we're not talking 50, 60 seat wave >> by the way, i have met people, i don't even say that they're republican or not.

i don't know i don't ask people what their political affiliation is unless they volunteer it. they believe the gop will keep the house because polls as we know have been off they've been wrong no other way to say it. >> listen. , yeah have they been off that much in 2016 the presidential polls really weren't that off i think the story here is that you have both sides are pretty energized and engaged particularly for a mid-term election even though you would expect democrats to do well, republicans are engaged but there's been a lot of other races leading up to this where both sides have been engaged, where democrats have still won but i think that the next day, when they're done counting the votes is that you're going to have a republican with the senate, democrats with the house and then they have to figure out what the next term is going to be like. is it going to be a term of just democrats investigating the president or might they come

together on something like an infrastructure plan? >> okay. so this is cnbc. so like i call them political companies, not political parties. the democrats are big companies with billions of dollars at stake. this is cnbc we take the investment angle if you are listening and watching and you believe the democrats take the house whether it's one seat or by 20, if the democrats take the house, could you buy infrastructure stocks and let it ride because you believe that will get done >> boy, i'll tell ya, i think if we lived in a sane world you would see how that would be a very obvious thing, democrats have an infrastructure plan that republicans have also talked positively about infrastructure. i mean, everybody has as you well know so you can see it getting done that said, i'm still very skeptical you'll get that kind of bill. i just wonder if at the end of

the day that democrats are not going to want to give the president some sort of big win and take that issue away you can see democrats wanting infrastructure maybe republicans wanting it extend the tax cuts. nobody cares about the deficit let the good times roll. i think it may be let the investigations roll. >> if republicans keep the house, people say they won't, but if they do, if they do more tax cuts >> oh, brother >> you know what i'm talking about. >> bring them on let the good times roll even faster not worry about what the fed is going to do. we'll brow beat the fed into submission i think that's what the administration will think. >> more tax cuts and fed brow beating. somewhat slight chance of infrastructure and maybe more investigations if democrats keep it i can't wait for the next 25 months. >> don't expect to ride that bullet train from d.c. to new

york. >> at this point, jimmy, we're going to be walking. we're going to be walking from new york to dc or get an omnibus pulled by six donkeys. >> that's a lovely war picture. >> it's a pack animal. i should have chosen yak i already need a shower. up next, get behind. elon musk tweeting fresh details, speaking of going fast on a train how is the hyper loop coming along? we'll let you know and you can test it for yourself later on, going global the big international markets that need to be onou yr radar. watching "worldwide exchange." watching "worldwide exchange." stick aroundhe heads of hundreds of families, he's most proud of the one he's kept over his own. brand vo: get the most o. of your money, whether you're using quickbooks smart invoicing to get paid twice as fast or automatically tracking your mileage.

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zwroo trending store ris this morning. the first hyper loop tunnel will be open for public rides musk tweeting the first los angeles tunnel opens up on december 10th. you're a west coast guy. new york to d.c. i'm from philly. i can't imagine getting to new york in ten minutes. that will be amazing. >> it will be amazing. it will never happen but it sounds amazing. >> why do you say that >> because we can't get our trains to run now and they're 150 years old. >> you were talking

infrastructure >> all of the glowing optimism has been squeezed out of me. >> new york, a lot of traffic. >> a lot of traffic. halloween scaring off the competition. according to com score the universal film bringing in an estimated $77.5 million. ticket sales in north america over this weekend. pretty good opening for a horror movie. second biggest of all time mega mania rolls on. mega millions at 1.6 billion the next drawing is tomorrow night. >> do you think we'll be at 2 billion. >> i don't know we'll get there. it has to be slowing down. everybody is buying tickets. if you go to a convenience store, one person for some gum, 15 people for the lottery. >> they take forever by the way. >> i know what i could do with that money i've been thinking about it. lump sum you have to take the lump sum. >> the random and interesting, you'll tell us what the lump sum is and i think that's pretty

cool. >> let's find out now what is coming up on "squawk box." joe kernen, jeremy siegel, rick reeder are you going to ask them about the lottery, joe >> that is exciting. instead of not winning 1 billion you can now win 1.6 billion. >> become a billionaire overnight by buying a ticket i love america. >> that's going to happen, bri yeah, all right. jeremy siegel will be on we might have an idea of how you could actually build some wealth which will be good we're going to talk about his long-term call and just the strategy itself of buying. he's been around a while he's well known but i have not been around quite as long. i saw the dow at -- >> he's on tv commercials now, joe. have you seen his commercials? i'm jeremy siegel, buy divide s dividends! >> that's steinberg. that's wisdom tree along with the other -- who's -- there's

another hedge fund guy that's with them. yeah, there's three of them. you know what, this is like "jeopardy. way too early. this is like -- i know the people on "jeopardy" but i can't come up with the answers >> wisdom tree co-founder for -- >> it's michael steinheart i'm not on the bengals bandwagon. >> looked like the bengals of 1998. >> the odds makers said the over and under would be 54 1/2. they were exactly right. kansas city got 45 and the bengals got 10 which is so horrific anyway, brian, you know, we kind of petered out onfriday although we ended up closing a little bit higher. we've got a lot of earnings this week be right in the -- sort of the sweet spot for that. markets are going to be interesting with the election coming up in a couple of weeks i think it's two weeks from tomorrow >> do you think there's a better

chance than not that the gop keeps the house? >> i do. i do you know, look at those rallies. people waiting 24 hours, 10,000 people can't get in. joe biden got 130 people so we're trying to figure out a good nickname for biden. which one do you like? do you like pee pee joe? creepy joe that's the one they came up with last week. trump did. back to you, bri >> wisdom tree we'll look forward to it >> we are going global the top four international hot spots that need to be on your radar and they're basically flat the dow is down 4% china, the huge story overnight. that market soinarg. we have a lot more to do in the ten minutes we're together we're back right after this. valerie: but we worry if we have enough to last. ♪ cal: ellen, our certified financial planner™ professional, helps us manage our cash flow and plan for the unexpected.

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call nomura, 13% up side. weird call the analysts say they are not sure, literally their terms, not sure if this is tactical or a longer lasting call but does believe intel will be the only semiconductor company that boosts guidance either this month or next month. the analysts admitting i don't know where this is going but i'm upgrading the stock to a buy the stock is reacting. intel up 2% in the premarket let's go macro and bring in our friend, larry mcdonald head of macro bear traps report editor with all of these titles there's no time left for the interview thanks for joining us. i'm kidding. moody's downgraded italy that's the headline but they did not cut italy to junk so the market likes it. is that the right response >> well, you nailed the expectations game. the bar was very low heading in and the one thing you have to

remember each year every single year wall street sell side comes into a new year with a pitch last year it was the reflation trade and by the third, fourth quarter people had given up on higher yields, bonds had rallied. steel stocks were in the tank and then a couple of months later the reflation trade came about. in other words, the street had it wrong in january. this year, this year the trade was global synchronized growth the most long trade in january was in emerging markets and long the euro, long eurozone assets and now here we are in the third, fourth quarter, fourth quarter now, and the entire street has given up on global synchronized growth. we've heard it a thousand times in january. >> it didn't work out. people lost money.

>> absolutely. this has been happening every year over the last seven years the trade consensus for that january, by september back up the truck and european stocks, german equities down here. ewg, etf, european banks, you want to be moving into these assets because the street has just thrown them out and they've thrown the baby out with the bath water >> let's talk brazil brazilian market is soaring on the idea this right winger is going to become the next president of brazil. the market likes it. i'm trying to figure out why do you like it >> we do we do. there's a real populus alliance in this hemisphere that is fascinating, you have mr. macre, mr. bosolnar, we love mexican equities, brazilian equities commodity producing companies with higher yields is the place

you want to be and at the end be of the day if the fed softens the policy path a touch because of this global -- the global wrecking ball that is the u.s. dollar, brazilian assets rally. >> there you go. they have been larry mcdonald, have a spectacular day. time for your morning rbi. today it's what else the continued lotto fever. if the mega millions drawing swells to 2 billion tomorrow night it could, your cash payout would be 1.1 billion that's what you'll get in one check. of course you'll owe some taxes. let's have fun you could buy the new orleans pelicans or memphis grizzlies. maybe the tampa bay rays baseball team. you could buy the world's most expensive yacht and still have 400 million left over. you could buy 25 tons of gold or one one hundredth of apple if you win $1 billion your current balance is $1

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good morning breaking overnight chinese stocks soaring the shanghai index rising 4% we'll have a rundown saudi stocks are slipping after the kingdom changed its story about the can i go of jamal khashoggi. it's the biggest week of earnings 1/3 of the dow also set to report we'll get you ready for -- shaking your head.

we'll get you ready for the corporate report cards on this monday, october 22nd, 2018 "squawk box" begins right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's check out the u.s. equities futures s&p futures are indicated up by 5.5 points nasdaq up 2 by 46 points the dow futures down by 47 worth keeping in mind that last week you were talking about both the dow and the -- both the dow and the s&p 500 i should say breaking three week losing streaks. nasdaq was down for the third week in a row. if you're looking at the broader terms for the month you ar