rates. it's wednesday, october 24, 2018, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen, andrew is off today. we have a big staff to cover the market moves mike santoli is on set with us gabriella santos is joining us for the house and we will talk strategy with keith parker hadley gamble has the latest from riyadh. we will start with a check on the markets. let's look at things after wild ride yesterday the dow futures down by 87 points yesterday the dow dipped by over

500 points it ended down 126. clearly a lot of uncertainty people with questions. we'll hear from more companies today. earnings season pushed things over the edge yesterday with disappointing results from caterpillar and 3m look at the s&p futures. they're down by 14 points. nasdaq off by 53 again, we'll watch this closely. since the election the dow is up by 37% the nasdaq up by 43% s&p up by 28%. you have seen those gains eroded at some point. we'll see what this means. the dow and nasdaq having the worst month since january of 2016 a lot of things happening today. you're likely to see big moves again. >> earnings are higher than last year a lot higher like 20%

>> guidance. >> revenue is higher maybe not as much as previously, but the comps get tougher. >> they do >> next year and the year after. people are looking ahead and saying these may be -- it will be tif ough to match 22% next y. >> if the market did not really celebrate 20% earnings growth, will they be excited by 7% next year and if the next year has the usual pattern of forecasts getting cut on the way, then will we get -- you know, this leads and lags >> yesterday i had a lot of thoughts i saw people saying this is a horrible earnings season so far. they're pointing to the reaction of the stocks to the earnings. so the earnings had been good. the reaction to some earnings had been bad but they tied it and said it's been less than a year since the tax cuts they were tieing it to the tax

cuts failing the fundamentals and the actual results are good they're 20% higher than in previous quarters. because of the reaction in the stock, you can't tie that -- what put us up 37% is the tax cuts when momentum stalls -- which came first, the earnings or the stocks slowing down? >> globally exposed companies are having disappointing earnings >> is it really -- >> price increases certainly >> if you buy a lot of steel, that's where it hits >> look, caterpillar in the comments yesterday said they would be able to take care of it. >> what's 3m's problem >> that could be an execution problem if you listen to jim cramer >> gabriella, you use post-its anymore? >> i do use them >> it's supposed to be all

digital now. if they placed their stake on post-its -- >> i think 3m should spin off post-its >> it's a paperless society. get out of that quick. >> let's look at what happened overnight in asia. the concerns there were what kicked off concerns here yesterday morning. you saw the nikkei close higher. shanghai composite was higher. hang seng was down again talking about severe declines coming in those markets lookinm. looking at europe and early trading, mostly green arrows ftse up by 0.7%. cac up by 0.6%

dax up by 0.3% italy is weaker, but spain is higher look at treasury yields. across the board, across the serve you did see yields come down a bit more people rushing into some of these treasuries right now it looks like the ten-year is yielding 3.134%. >> trump taking notice of the market volatility and stepping up his attacks on the fed and fed chair jay powell in an interview with the "wall street journal" the president said he thinks the fed is the biggest risk to the economy because it's hiking rates too quickly. this is not the first time he said this. this is echoing recent comments. he said he's unhappy with the fed because obama had zero interest rate hikes. he also took aim at jay powell saying he thought he was a low-interest rate guy. every time we do something great he raises interest rates and it almost looks like he's happy doing it

when asked under what circumstances he would remove jay powell as fed chair, the president said he didn't know. the fed will likely hike rates again in december. powell should have thought about this the last two, it's great to be, you know, throwing the party hey. come on. bar's open drinks on the house. when you have to start cutting people off -- >> in these comments to the "journal," they also say he's clearly trying to send a message to jay powell. we heard from alan greenspan saying this is something that every administration does. >> more and more people flipped to where we were behind the curve to where, all right, you've done six or eight, there's no inflation things are going well. just take it easy. slow down. >> but the fed is an independent organization >> every president likes lower

rates. >> nobody likes to fight higher rates. >> it wasn't as if the reporter said what do you think of jay powell he said what is the largest risk to the economy and you knew that would be his answer probably. >> it was baiting him. >> there are fed people in the past, alan greenspan, who was the one, arthur miller, the one that people -- was the worst ever >> william miller. not the guy who wrote "death of a salesman." during nixon got a bad, bad rep the only person i can remember and his position was fortified was volcker who had to do hard things and raise rates he was very tall >> but he stopped inflation as a result it was a crippling inflation >> but he took the punch bowl away that was a totally different

scenario we had stagflation of 25%. >> he was already dealing with a lousy economy. >> inflation was considered the big enemy. you have to bleed the paint in order to save it. >> bif >> huh >> bif >> yeah, bif lohman. let's get back to yesterday's wild ride for stocks the dow down 550 points before rebounding to close at just 126 points lower so, did the markets get the retest that investors were looking for? mike santoli has that story. >> i think we checked off a lot to of the boxes you would check off to see if this was a reversal if you look at the chart of the s&p year-to-date, you didn't quite get down to that break

even level look at february and march we thought that that first low in february was climatic so you just never know whether the rallies will be sustained after you finally do get a bounce so the worst hit groups were the ones that bounced yesterday. so that just implies that selling is drying up home builders, auto stocks, they all bounced good yesterday some of the less well positioned retailers, that's both good and bad that could mean the trash was bouncing the bulls have a lot to to prove. all the rallies have been weak over the course of the day the market has been down an unusually large percentage of the time i do think it was a good enough low for now. markets oversold >> the number of new lows that were set yesterday, another

statistic i saw, the number of stocks that are already in correction territory and then something like 30%, 35% are in bear market territory. >> yeah. there's a lot of damage done underneath the sur tafaces of te index before we got to this point. all that shows you that this process has been going on for a while. the number of lows yesterday was less than it was on october 11th which was the prior time we were down that's good. you want to see less intense selling. the volatility index did not get up to 25, a flesh holtls threshd it looks like going through the world, how much longer can the u.s. distinguish itself. banks still not doing much

>> let's bring in keith parker from ubs and our guest host for the hour, gabriella santos from jpmorgan funds i was referring to some of your comments, gabriella, but how when it all is said and done earnings should provide support. what if the earnings are from companies like 3m and caterpillar. the opposite happens, it pulls the rug out from underneath it the technicals are bad enough, then you have bad fundamentals 550 points on 3m >> the way i think about it, this started a few weeks ago with the initial spark that was the rapid move higher in ten-year yields. 20 basis points in a few days that stabilized. then we had an accelerant to that fire, the systematic selling that had to take place volatility jumping higher. that's complete as well.

that's a check chen you're supposed to be left with your fire extinguisher that are fundamentals and earnings. that's where we're going through a little bit of a digestion, resetting of expectations phase. where it goes from, yes, earnings are really good, but we're probably past the phase where we're revising earnings higher and higher and higher now we're thinking about, wait, maybe 2019, 2020 earnings expectations are a bit too high. maybe they need to be revised lower. that's being later cycle, having higher cost pressures. that's about the tariff impact that needs to be estimated better >> keith, you are head of equity trading or u.s. equity strategy at ubs did you check my account we still have ubs. somehow we ended up there from -- >> payne weber >> is my strategy -- i don't control it

>> i think you're good at ubs. >> is it on track? am i down the last couple of days >> we're probably down you had no safety here in october where bonds are down, equities are down. that's exacerbating some selling from the multi asset community as well. from an equity perspective, is now a good time to buy, you're talking about earnings up 22% this year. the market up 2% that is a bear market. you had a de-rating in line with 2015 and 2016. we hit a level yesterday that we had not hit since the depths of january of 2016 when earnings had not grown for 18 months. we had dollar shock. we had an oil shock. you know, we're talking about caterpillar. i looked at the multiple today, low double bridgettes.

>> double digits >> are you calling that a low? >> i think so. 25% tariffs is a cost shock. that will work its way through some companies acknowledge they're trying to find other sourcing i think a lot is priced at this stage. >> a lot ispriced at this statement assuming it is temporary. >> yes >> we heard some say they are moving out of china because it will be a long-term issue. >> right >> at the lows yesterday, santoli, what are we from the s&p from the highs >> about >> gut wrenching for not even a garden variety correction. >> i think we have to set our expectations for this kind of volatility for the rest of the cycle. that's our belief.

last year's low volatility is not likely to come back this year it's typical late cycle. everyone is more antsy we have to get ready >> i don't want us to calm down, then the market has to do more to shake the complacency you go back to that election of 2016 if someone told you you will be correcting 8% from 27,000 on the dow, they would have said you're out of your mind there's no way that that is going to happen. it's amazing the way the market works. it always tries to shake as many people off as it can these point changes percenta percentage-wise, we act like it's 500 points. we have not recalibrated, have we what's 500 points, 3%? >> 2%. >> 2.5%. >> we were down 6% to the lows, 8% from the highs.

>> so 2% would be 540. >> yeah. >> our thanks to keith parker. i don't think you looked at my account. when you go back, will you check? >> i will. >> if he's not up to the task, you're jpmorgan. >> we're up for it. >> i don't know. >> i'll get back to you. sorry to all the losers who didn't win the lottery really are you a loser? i'm not a loser. one lucky person -- >> not in that respect >> right one person in south carolina is waking up 1$1.6 billion wretche. mega millions officials confirming a single winning jack to the ticket was sold in that state. yesterday they were saying 75% of the combinations were out there. 1 in 4 chance that there wouldn't have been a winning ticket if it was 1 in 4 odds, i might

buy one. so it's in south carolina. even if your state is the one that has the winning ticket, it's a huge win for you. that's as good as your odds will ever get it won't be you. it's as close as you will get to winning this thing did you buy a ticket >> no. i think my wife might have bought a ticket. >> i round down. chances are so low, but watch the vending machines because you have a better chance of one falling on you. when we come back, more from saudi arabia on the killing of jamal khashoggi. and tim cook says the u.s. needs to be more like europe when it comes to data privacy. right now as we head to break, a look at the biggest premarket winners and losers in the dow. so far it's boeing leading the way, up by 0.70%

that company will report earnings we'll get that number at 7:30 eastern time

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tim cook delivering a strong message about privacy in brussels saying privacy is a fundamental human right calling on u.s. regulators to take action to adopt privacy laws like the general data protection in the eu. >> not only here in europe but around the world, regulators are

asking tough questions and crafting effective reforms it is time for the rest of the world, including my home country, to follow your lead we at apple are in full support of a comprehensive federal privacy law in the united states >> he went on to say companies need to treat data like precious cargo. the saudi crown prince giving his first international speech since the killing of jamal khashoggi. hadley gamble joins us from riyad riyadh >> just few hours from now we'll hear from saudi arabia's crown prince this is the first time he has spoken out publicly since the murder and basically the investigation began into what happened to jamal khashoggi. that has not stopped some 55 billion in investments coming to this davos in the desert investment conference, when it comes to what's happening next, the investigation is ongoing and u.s. president donald trump is weighing in

>> they had a very bad original concept. it was carried out poorly. the cover up was one of the worst in the history of cover ups. bad deal, never should have been thought of >> u.s. president donald trump saying this entire investigation and what has been termed the saudi cover up has been utter chaos. we know that the secretary of state, mike pompeo, said they have revoked the visas of some 21 saudi nationals that they believe was involved in the death of mr. khashoggi here at this davos in the desert summit there's been a lot of regional support that's ongoing for the crown prince yesterday king abdullah was here, so a lot of regional support and a lot of deals being made at this conference.

>> hadley gamble, thank you very much. coming up, a read on retail. what the ceo of target told us back in august >> very healthy consumer environment. i think this is the healthiest environment i've seen. >> in a new cnbc exclusive interview courtney reagan asked him if his view of the consumer changed. we'll show you his answer next as we head to break a look at yesterday's s&p 500 winners andiand i losers sfx: [phone ringing]

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning among the stories front and center, president trump as we've been talking about upping his attack on the fed. the president telling the "wall street journal" that the central bank is the biggest risk to the economy because it's raising rates too fast president trump also took new aim at jay powell saying every time we do something great, he raises interest rates. >> i don't think it coincides. >> no. for all the talk president trump said he has not been reaching out to him, he did admit he was

trying to indirectly send a message to jay powell. >> he thinks -- never an untweeted thought, we know if you raise rates, and you have all these other things that he sees that are so positive that you are working hard to do, then you see this as a headwind, why not. presidents are allowed to use their bully pulpit >> they are. if something turns down, it's good to have somebody you have already been pointing to >> yesterday president obama was talking. he said remember who started economic growth. he said that i actually answered hamilton with a question mark isn't that the guy who -- who started economic growth? was it adam smith? >> you're right, you do spend too much time on twitter >> people liked that i got 90 likes but that's a good answer, isn't it >> the first treasury secretary?

>> he was part of it who would you say? adam smith >> he described it i don't think he started it. >> who started it? he wanted people to say -- someone told me he thinks he loosened the jar on the pickles. facebook's messenger app is getting a makeover there's a streamlined version of the app. it's hidden away some features like games and payments and narrowed its nine tabs down to three. the update has started rolling out to the 1.3 billion users i can't get enough of those funny faces. it's another busy day for earnings reports from at&t, boeing and u.p.s., those are expected to cross the wires after 77:00 a.m.

u.s. equity futures at this hour look worse but if you factor everything in, dow jones down 677. dow jones down 67. deutsche bank saying third quarter profits fell 65% ouch that was on a slump in trading revenues, but deutsche bank says a turnaround plan is taking hold the ceo noting the bank is on track to return to profitability by the end of the year. texas instruments under pressure they reported a revenue miss, slashing fourth quarter guidance and roomba vacuum maker irobot shares sharply lower despite an earnings beat that company says they will take a $5 million hit i the fourth quarter due to china tariffs. irobot says it will not raise prices on the consumer to ward off the impact of tariffs. target rolling out i h

its holiday strategy >> brian cornell said he never felt better about his readiness for the holiday season than he does now i asked him if he still thinks the consumer is as strong as he's ever seen >> for the u.s. consumer, you know, they're at work. they're seeing wages rise. their confidence is strong they've been very, very active in the marketplace our traffic has been up. i think for the holiday season, this is going to be a strong retail holiday season. our focus is making sure we capture market share and delight the consumer throughout the holiday season >> so no changes from august 22nd >> not that we've seen not in the u.s. today. we have to look to 2019 and beyond, as we look at the consumer each and every day,

they're in our stores, shopping online, shopping multiple categories and as we check consumer sentiment it's still high. >> it is the first holiday season without a toys "r" us so for toys specifically target is buying more inventory, expanding selling space in stores and doubling new and exclusive items. >> we're playing to win in toys. we've been looking at market share even and every week and we're growing each and every day. it's a time when toys will drive traffic to our stores. >> now overall target's focus for the holiday season is making shopping easier. you will hear that word in marketing, easy. giving shoppers seven different ways to shop, buy, ship including free two-day shipping online for the first time with no minimum order that starts on november 1st. he also said in some of our media briefings that while

target plans to high 120,000 holiday workers. we wonder where they'll come from, they already got 100,000 applications, and that applications at the warehouse are up 40% he said they're being competitive in the markets in which they compete because amazon upped their pay to $15 an hour, target at $12 with a path to 15 by the year 2020 >> 100,000 applications for 120,000 slots is not great do they have to increase the pay? >> we asked that many of us asked him that question in multiple ways, he did not stray. he said i feel confident we can hit those numbers and get our 120,000. we asked is there internal debate over trying to push that wage higher. he basically said we're competitive in every market. if there's a market where we have to pay more we will >> the question that raises if they have to pay more than they had been anticipating would that

cut into markets that's was investors would wonder >> exactly he goes back to saying they have lots of different levers they can pull lots of different categories are strong that's how he answered the tariff question. we're not concerned with tariffs in 2018 because we're a multiple category retailer if prices go up in one area, effectively we can offset it with strength of sales in another category. gave no indication of margin pressure from rising wages or higher tariffs >> if they can't hire the 120,000 people, does that slow down the pace of sales or the effectiveness of delivery? >> it very well could, especially because they're offering all these different ways to serve the consumer with the combination of the online and in the store two-day shipping for free is a huge shot at amazon, but amazon when they say it will get here on time, they are usually right. if you promise it in two days,

can you deliver it >> that's a huge test. walmart has been saying the same thing, free two-day shipping on millions of items. so they will be put to the test. brian cornell talked about the hits to margins from that. we said if everybody takes advantage of that, that's going to be an expensive endeavor. he also said we have other ways to fulfill these orders. the restock option is $2.99. so they're paying for that cost. didn't seem to be too concerned about it but it's something we need to watch for sure those are great questions to ask. >> joining us now to talk more about the retail sector and the make or break holiday shopping season is brian neagle, senior equity research analyst at open

hi o op oppenheim. what do you think about these companies ability to hire all these workers they want to hire? >> from my vantage point, brian cornell is right, this is a solid consumer spending period wages are probably not where they should be, but they're better and let's not discount weather it's cooler. that helps, too. i think the overall spending volume is solid. toys "r" us and sears, the issues that those two companies had are a benefit for other companies like walmart but when you have these big events, like in the case of a toys "r" us, liquidation, it creates a feeding frenzy out there. we saw that years ago with circuit city and best buy. best buy was much better at taking market share from circuit

city when circuit city was bleeding it out. when city cut city liquidated, you had a feeding frenzy going on i wonder if we'll see that in the toy category here. >> so we think it will be a big potential win but it might not be because so many players are trying to catch the same fish. >> right i don't necessarily cover walmart, but my colleague does we talked about this walmart is making a push in the toy category plenty of smaller companies are doing the same thing >> let's talk about the issue on whether all of these retailers who said they'll be hiring lots of people will be able to find those workers without paying up. what happens >> the numbers courtney gave is interesting with target. they are looking to hire 120,000 and have 100,000 applications. what will most likely happen,

these companies do have flexibility in adjusting the labor model in the stores. if they can't get everyone they need, they'll adjust >> people will work longer hours. but you have to pay overtime for that potentially that's an expensive proposition. are these companies prepared to be dealing with it is the retail environment so good, the consumer environment so good that that will overshadow those concerns? >> this is an example of late cycle pressures. demand may be solid. the consumer has so much going for it, but you are running out of supply, you are running out of available workers maybe one solution is to pay existing workers more, but maybe another solution is to get economic output that was postponed. >> so people who don't actually make the purchase because -- >> exactly or investment decisions, hiring decisions not done that's our expectation for next

year, growth slows down as a result of the supply side pressures to something that's closer to blah we can do in the long-te long-term, closer to 2%. >> brian what do you think about home depot and lowe's? the slack we've seen in that part of the industry, people not buying new homes analysts saying look out, that will affect this but the counter argument is if people stay in their homes, they will make sure they fix them up >> i have out-performers on both names. we're watching this closely. clearly right now the market is takie ining the view that home t and lowe's are in the crosshairs of a weaker housing environment. i'm not sure at this point they're different than other housing plays. whether it's home builders or manufacturers. like you said, a big chunk of

home depot and lowe's business is people maintaining their homes. what really drives that, age of homes, overall economic environment and hope price appreciation a lot of noise out there but by all measures home prices are appreciating >> i may want to upgrade and get a bigger house, but if i do i have to go from a 3.5% mortgage to 5% mortgage, so maybe i'll stay and fix it up >> generally speaking that's a positive we saw a dynamic where home sales weakened but also home prices collapsed previously that was bad for home depot and lowe's >> brian, thanks for coming in today. >> thank you. coming up, chinese exporters are rushing orders because they anticipate the possibility of

future tariff increases. and then crude prices tumbling 4% yesterday. what's that mean >> biggest drop in one day since july >> we're saying it's saudi arabia and we'll show you what the kingdom did to spark the price drop was that really it are we worried about global growth later some big earnings reports set to hit the tape. the quarterly numbers from at&t, boeing and u.p.s you're watching "squawk box" on cnbc

the ongoing trade dispute between the u.s. and china has chinese exporters worried about future tariffs they're now rushing orders eunice yoon has more on the trade story. how are you? >> i'm doing well. i'm at the canton trade fair, it's the most prominent export fair it just wrapped up for the day the fair runs multiple weeks and it's based in the manufacturing

heartland. the point of the fair is to connect buyers from all over the world and the united states with chinese manufacturers of cons e consumer products. this year the fair is all about the trade war. people are nervous about it. the main discussion is what to do to minimize the impact of president trump's tariffs. so they are trying to work out ways to tweak things to avote tariffs. one buyer said he worked it out with his frying pans by not including gift wrapping because that would be subject to the tariff the american buyers are saying they're still dependent on china and it will be harder to move supply chains than you think this is what one american buyer told me earlier today.

>> these supply chains have been developing for 30 years. so just pulling out is not an option for my company or for many companies these are robust supply chains not just the factories, but the printers that support the factories, the other suppliers >> what i found most surprising here is how chinese manufacturers are working out deals for non-americans. there were several people from the middle east, india, pakistan and one indian buyer said he was surprised how low chinese manufacturers would go in terms of pricing while these buyers are getting cut better deals because chinese manufacturers are worried about the trade war, american buyers are trying to work out the costs which they're seeing much more of guys >> eunice, as part of this discussion that we're having, in

the past month there is a detectable downgrade of the prospects for a near or intermediate-term resolution for this whole mess. at least i'm hearing that from a lot of guest there's a come on here i'm hearing cold war years. decades. that the u.s. is interested in more than just intellectual property and tariffs, but even the words regime change actually bandied about. is it the same way where you're -- are you seeing it over there as well that it's decidedly more pessimistic >> yeah. i've heard cold war. i've definitely not heard regime change that's not something that the state media or the communist party would wanted to be talking about. but there is that level of uncertainty here and people say we just don't know how long this

will last. that's why chinese manufacturers are looking for other places to drum up business the overall perception in the white house has been that if they continue to keep hitting china with tariffs, you would see exports shrink to the united states and also that maybe global supply chains would move out of the country what i'm learning here is there is a limit as one american buyer told me he doesn't see any other country that has the size and scale of china. >> things can change quickly i hope all the tv sets didn't go off over there when i said regime change. friday with canada, they said no, no we're walking away by sunday we had a new thing we'll see. interesting how things work. we went black here she's gone

>> your fault. when we come back, crude prices tumbling 4.2% yesterday now down 11% from the four-year high we hit earlier this mthon we'll talk about the saudi move and whether that's weighing on prices that's after this.

not long ago, ronda started here.

and then, more jobs began to appear. what started with one job spread all around. because each job in energy creates many more in this town.

all right we are checking

out the earnings from at&t, adjusted earnings 90 cents a share. consolidated revenue $45.7 billion. i'm not sure that either -- >> either way, the revenue beat. it's the earnings per share that's a little night. 90 cents, the estimates were for 94 cents that may be why you see the stock down slightly. have to dig into this deeper though they do have a lot of moving pieces this time more media included in the resul results. they said the cash flow grew by double digits. >> and free cash flow still at the high end of the range. affirming that >> again, right now that stock looking down to $32.80

>> our guest host this hour gabriela santos. so the opening we're seeing today, positive, you would say >> so i think it's still an ongoing digestion of earnings expectations that we were talking about earlier for 2019, 2020 we're still thinking about late cycle implications or cost pressures. still thinking about tariff impacts through a stronger dollar so i'm not sure we're done with that process >> and, you know, yields -- they didn't get a huge bid yesterday in treasury bonds, but yields are down so it seems like that's no longer the thing that's right front and center >> the initial spark has calmed down for sure. it's much more about the earnings side right now rather than the actual move higher. that was a spark a couple of weeks ago. >> sure. thank you, gabriela santos coming up, big earnings

coming out just minutes away boeing and ups expected to post their report card. we'll talk to adena friedman first on cnbc. "squawk box" will be right back. ♪ ♪ ♪ ♪

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wall street's wild ride. futures points to a lower open after yesterday's whip saw the dow now down 5% this month sounding off president trump stepping up his attacks on fed chairman jay powell plus don't forget earnings at&t, boeing, and u.p.s. all ready to roll out quarterly results as the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york, this is "squawk box. welcome back, everybody. we are here from the nasdaq market site in times square. joining us for the morning is markets commentator mike santoli. it's a good thing because we have a lot to talk about today after that wild ride we saw yesterday with the dow down by almost 150 points at one point during the session, ended up with the dow down by 125 points. this morning you do see some continued red arrows, but these declines have lessened throughout the morning right now. the dow futures indicated down by less than 25 points s&p futures down by about ten. the nasdaq down by 3637 let let's start with at&t. earnings coming in at 90 cents a

share. that falls 4 cents shy of what the street had been expecting. at&t also says it continues to anticipate that its full year earnings will come in at the high end of its projected range. also talks about a lot of different things their warner media is accretive to a gain of 5 cents to the eps. and they say they're on track to hit two times ebitda by the end of 2019. talking about the north american wireless net adds were 4.3 million. we'll take a deeper look at that through the morning. shares of texas instruments are tumbling in the pre-market trading. the chip maker did beat estimates by 5 cents but revenue was short of forecasts and the company also issued weaker than expected guidance and right now that stock is down by about 6.7%. >> u.p.s., i've got here >> all right u.p.s., it's what we've been waiting for.

>> convinced this is -- i'm not convinced this is so great 1.82 zl$1.82 is the estimate. and the first number is $1.73. revenue $17.44 billion and i believe they're looking for $17.49 billion and we've got international package revenue, domestic package revenue. that is an earnings per share gain of 20%. but it is below where expectations are unless there's some in there. we've got the stock down about 2% so far just on the initial first blush for this number here i don't know if there's a special charge >> adjusted eps is $1.82 u.s. domestic revenue up 1.8%. >> to the $17.44 billion we've got. is that what you have? >> yeah. for the revenue.

yeah >> okay. >> david abney, the ceo there -- >> it's the gap number >> yeah. right. adjusted would be the $1.82. david abney who is the ceo there talking about how they're really seeing a lot of the actions they've taken contributing to what he calls performance gains on this. they generated margins and strong free cash flow. say they're confident in the outlook for the business that outlook is what so many of the analysts and traders have been watching for this time around because even with strong numbers, it's the outlook that everybody wonders what happens u.p.s. closely tied to the u.s. consumer we heard from target, brian cornell saying he still sees this as a strong consumer environment. calling thilt the strongest he's seen in his career >> reaffirming its 2018 guidance it still seems to bracket what they're seeing right now

talking about 703 per share. the street estimate is $7.25 that change takes you on both sides of that. but with more below the consensus than above >> they expect fourth quarter earnings to increase despite head winds in emerging markets but that talk about currency is one we've seen floeg through every one of the global companies that reported. they think they can handle it even with that currency head wind right now it looks like u.p.s. is down by about $2. we'll see as that continues to trade. >> fedex and u.p.s. have lagged >> folks, we're also going to get earnings from boeing that's expected at the bottom of the hour they're expected to post profits of $3.40 a share on revenue of $28 billion. that would represent 28% jump from a year ago. one important thing on the

economic calendar. new home sales for september that hits at 10:00 a.m. eastern time economists are looking for a drop of 0.6% after august 3.5% jump u.s. equity futures this morning as we mentioned are down but not nearly as weak as we had seen earlier this morning. right now the dow futures are down by about 52 points. we have full team coverage of this wild market ride we've been watching for the last day or so. mike santoli is here dom chu, brian sullivan with oil, phil lebeau on earnings watch. and we'll talk market strategy with sam stovall of cfa. we'll start with dom chu and yesterday's selloff. the bulls try to reverse course. >> they made it a long way back. it was down 548 points at the lows as the day progressed yesterday, i remember sitting there either on the markets desk, on our news desk with "power lunch,"

everybody watching this move higher a lot of the concern was whether or not it would move off the lows they were very much not higher but off the lows the curious part about it was a lot of the volume we saw during the day was very front stacked during that selloff portion. and so traders look at things like volume weighted price it indicated that most of the selling pressure happened in the beginning. but if you are looking for places where people either found that deep value trade trying to buy off the lows or tried to cover some winning bets on the short side of things, it is places that have seen the most weakness so far. we looked at the s&p 500, looked at all the stocks that made the biggest moves from their intraday lows to the highs on a percentage basis. 27 stocks in the s&p 500, guys, moved 5% or more off of their lows to their highs. i'll give you a sample right now.

netflix. those shares moved up. that second -- that right-hand side is what we saw intraday we saw a move higher there with netflix. another one to watch is on the transportation side. one of the airlines out there that's been hit really hard unlike united continental, you have american airlines on the other side that stock was down big during the course of this period. you can see a huge move off the lows another one to watch here, regional banks interest rate's a huge focus here many of these regional banks it was an earnings driven catalyst it is still down year to date and caught a bit off those lows. and the other one we want to look at as well is the home builder side of things we made a lot of hay that they've been in a down trend for awhile if you look at poulty group, maybe it was short covering to a certain degree or maybe people did feel this was a low point to buy

if you look at that chart there, if you took a short position early on, you're winning and maybe that was the catalyst to get in there and cover winning bets it's not to say everything is short covering, but it feels as though many places that caught the biggest bid were the ones you could have seen down trends for awhile play out. people say, hey, this is a good time to cover. >> that's one of the quibbles with the rally just that while, of course, the junk bounced the other one is just not a lot of climactic feeling panic it's a methodical comeback selling dried up and it lifted throughout the day so i think there's also a watched pot problem. i mean, we're all talking about a successful retest before it happens that everyone wants to call it. and you just never know if that's self-fulfilling or just a head thing >> right one statistic i'd seen is that for the last three weeks, retailer investors have been the buyers it's been the hedge funds and

the institution theal investors stepping out i wouldn't call hedge funds smart money with some of the returns. >> what i would look at is the real money that's the etf-type managers out there. they're dricven on flows they will invest money or buy stocks when they have inflows in and they have to put that money to work. so whether or not you have asset managers like a fidelity or a vanguard putting money to work and that's driving it up, it's going to drive us on the action. >> dom, thank you. >> all right let's move on now to oil the saudis have pledged to pump as much crude as possible. that's putting pressure on prices brian sullivan has the oil story. more on that from cnbc headquarters hey, brian >> hey, joe. good to see you again. oil having its worst day in months yesterday at one point down 5.5% opec is over-supplying a market that is already over-supplied.

this is a market commodity when there's too much of something, the price goes down and seems like everybody is producing more you've got fears of a slowdown of the economy out there you keep producing more oil and that's what you're going to get. the saudis yesterday at that conference in saudi arabia saying they are, quote, in produce as much as they can mode so we're seeing the saudis raise up production. we increased the production by 500,000 barrels per day. it's not just them in opec, libya and nigeria also have been ramping up production as well. of course we reported extensively about the united states, guys permian basin, they're producing more north dakota, it's a million too. and the rest of the world as well wants to take advantage of

higher prices. all of that is reducing the price of oil and investor world in some of the stocks. the xop which dom has talked about. he's the master of the etf etf down 12% this month. a 12% drop, guys we've seen some big cap oil names down 16% in just about three weeks time the price of oil has fallen. oil stocks have fallen if you're looking for energy stock relief for the overall market, maybe that group to help pull the market up, it is not only nod been helping, but it's been sort of a lead weight swimming with the fishes >> brian, saudi arabia pumping as much as they can, is that in reaction to the outrage that's come at the khashoggi killing? or is this just something they're doing because they need the money?

what's the explanation about that >> they don't need the money they don't need the money. okay this question is a good one. darn you for going right there because here's the thing our president as you know has been putting pressure on opec which is really the saudis to increase production to try to bring prices down. the midterm elections, gasoline prices are something we see every day out there. lower gasoline prices are something that people, i.e., voters like to see now, whether or not we are seeing some kind of a reaction in the markets to the khashoggi innocent, it's impossible to know however, it comes as a time with the cover of the president of the united states effectively asking opec to do this weeks before the khashoggi incident happened the murder of khashoggi is out there, but the saudis had already been under pressure. call it what you will. there is an increase in production, but it's not just

them nigeria has been producing more. libya has been producing more. and that is more than the decline of venezuela becky, i know you know the oil markets very well. the cure for higher prices is higher prices. when prices go up, everybody wants to pump more which leads to over-supply >> and it's a lot faster am i right we can turn the spigot a lot faster we go back and forth how quickly we can do that with the new technology >> it's faster than it was 30 years ago. but the u.s. is not absolved in this permian, record production off shore at 1.9 million that's a record high everybody the u.s. included continues to pump more china's now the biggest importer of oil but yet it may not be enough to support the big jump we're seeing which is why oil is at 66, 67 bucks. brent's higher, obviously.

>> all right bri, thank you >> you're welcome. >> for more on what we're seeing this month in the stock market and some of the big swings, let's bring in a market veteran. sam stovall, chief investment strategist at cfra if you put in his dad, we got like 120 years of market knowledge, right we do. and your dad's still watching and you still talk to him. >> pop's been on wall street since 1953 worked with lowell. >> '53, mike >> that's overlapping, though, 120 years. >> i was just talking about raw investment knowledge >> i thought you were saying i could add a new wrinkle on things >> well, you are and mike's going to like this because sam is attributing a lot of the price pressure on pes politics and elections >> politics and earnings >> no, it says politics and elections here

>> all right that good too. it works >> usually there's work in the s&p the second and third quarter prior to elections that didn't happen so do go on. >> do go on, i say yes. what we normally see is a negative return in the second and third quarters because of the uncertainty leading up to the midterm elections. traditionally the party in power loses 22 seats in the house, 4 seats in the senate. that's probably not going to happen this time around or at least according to the pollsters in the senate. the republicans could pick up a seat but they're vulnerable in the house. so i think we're seeing a lot of the selloff be attributed to the elections, but obviously to be attributed to the earnings and whether we're seeing a peak. because going back to the 1940s, we have had earnings peaks, not necessarily declines, but peaks

in earnings on a year over year basis. a company declines of 10% or more so usually people -- i mean, investors are like hyperactive first graders playing musical chairs they're trying to out-anticipate the other as to when to sit down >> how do you really figure out when the music ends? >> that's the problem. because right now we're in a technically driven market. technicians, we all know that prices lead fundamentals i think the fundamentalists are scratching their head saying do i fade the fundamentals and adopt the technicals or are the technicals misreading the information and therefore i should stick to my guns? so i think that's the real question right now we're seeing valuations come down into a much more attractive area so we would have to see earnings estimates come down dramatically, i think, to make fundamentals feel they got well too ahead. >> this is the second relatively sharp pullback this calendar year i know you've looked at that pattern. >> only 26 times since world war

ii >> which is interesting. it seems as if -- everyone comes into this would say it's going to be more volatile. this is what it looks like >> well, let's start with right now, october we are 40% more volatile this october on an average intraday basis than we've saw in the last nine months of this year october's not a surprise it is normally the most volatile month by about 15% relative to the second volatile month which is january but then as joe was stealing -- i mean saying, the research shows that we've had 26 years since world war ii which like a whale came up 5% and went down for at least a second time and unfortunately about 70% of the observations were deeper the second time than the first time. so there's a possibility that instead of us turning around right here, that before all is said and done, maybe we end up with a 12% decline down to the 2600 area on the s&p 500 which i

think would reset valuations quite nicely and also just reset the emotional dials. >> all right deeper the second time >> it would be above the early year lows, though. >> above the early year lows that's correct that's why i still call myself a bull but with a lower case "b. i think what we're doing right now is simply adjusting the angle of ascent that we expect to see over the coming year. >> thank you, sam stovall. bob taught him everything he knows. really i think only about 10% of what bob knows >> you're probably right. >> thanks, sam when we come back, nasdaq ceo adena friedman is in the house. actually, she's in the house every day because we're at the nasdaq we're going to talk about her company's latest corner. we'll get her outlook for ipos and what the recent market volatility may mean for those ipos stay tuned you're watching "squawk box" here on cnbc [ upbeat music ]

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a share. revenue was a little below forecast but right at $600 million versus the $605 million the street was expecting joining us is nasdaq ceo adena friedman tell us how you got to these numbers. what cross currents do you feel? >> the first thing is we had 5% organic growth across our revenues 6% in our non-transactions businesses and 3% in our transactions businesses. so the entire organization is really operating at full capacity we're really excited about all of the benefits we're seeing in our revenues i think that in terms of our information services business, it's really growing because of our index business it had a 21% increase in revenue year over year and in the technology business 13% organic growth those two are the shining stars in the group every part of our business grew year over year i think that's a testament to the overall business >> the market volatility we're seeing right now has a lot of investors unnerved

in the biggest broader picture, it has questions raised about whether companies will be able to go public whether ipo business will be harmed by the volatility granted, it's not crazy volatility it's just relative to what we've been used to recently. things feel a little more erratic. does that concern you at all do you hear anything from companies you've been courting to take public >> i think it's a little too early to know whether this is just a short-term disruption in the overall market trend or whether it's a longer term trend. right now we're not seeing any changes in companies' ipo plans. we've had 168 companies go public on nasdaq this year versus 96 year to date last year so it has been a strong year for companies wanting to tap the public markets in terms of looking forward, we still have a healthy pipeline of companies looking to go public before the end of the year and then in the first half of next year i think it's just -- you know, in terms of the market volatility, we'll have to see if it persists. >> any change in appetite among

chinese issuers? that's been a big source of listings >> we have had a good year for companies looking -- from china -- coming to the u.s. markets. most of the companies, larger companies have come to market. so there are a couple that are considering it they may have moved a quarter or two in their plans, but right now it's not that they're canceling anything they're just kind of moving them back a bit >> adena, the big kind of whales that we've been waiting for, some of those massive unicorns that have been out there, some of them are expected to come early next year. people talk about uber, lyft, and other companies. i know you've been frustrated just at the idea at how much longer companies are staying private. how much longer it takes for them to go ipo do you think that as we see less liquidity out there, that companies will be forced to come to market more quickly than they have been the last couple years? >> i wouldn't say the companies feel like they're forced to come to market. there's still an enormous amount

of equity to be put to work. we just had our 200th private transaction in the nasdaq private market last week we've accommodated other $10 billion of private transactions so far this year so looking into next year, i don't think the companies are how the markets feel pressured to do it they're just ready they're ready to work -- >> you've spoken publicly about how retail investors don't get a shot at some of these companies because they're staying private so much longer they don't want the scrutiny from either regulators or the media. >> that is one of our great frustrations just making it so the public markets are an inviting place for the companies to come. you're right there are more companies looking to come to the market next year that have stayed private for a long time. it would have been nice if the investors had an opportunity to invest in them years ago and be able to rise their growth. i agree they're looking at the public market. >> i just feel like you're getting to the point where maybe the music is winding down.

if the fed is trying to dry up liquidity, there's not going to be as much out there in the private markets to keep these companies private. if they wait until that dries up entirely, there's a chance it could be a rougher public market >> well, i actually would say that the private capital that's been raised is long-term capital. coming from a plethora of sources. so i don't believe that you're going to see that suddenly dry up we're talking about many, many, many billions of dollars available to put to work for private companies. in terms of the terms that those private companies might get in a less vibrant environment, they might have to accept different terms to get that capital. that might make it so they look at the markets differently it's good for them to be -- they're taking a healthy look at the public markets now and realizing that this could be the right time, the right environment for them to come into the public markets. so we're hopeful >> do you feel you're winning against that other place >> well, we've had 71% win rate so far this year

76% -- >> farley gave up. trying to compete, he threw in the towel. >> one of the great staff we have is we have 90% of venture companies have chosen nasdaq this year. >> you didn't even take the bait he's a friend of ours. >> i look at it as healthy competition. >> makes everyone better >> i absolutely agree with that. because of competition, we innovate every day >> thank you adena friedman >> coming up, boeing

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♪ good morning, everybody. welcome back to "squawk box. we've got earnings out from boeing right now let's get straight to phil lebeau he's on the ground covering this dow component boeing just out. let's get to phil lebeau >> this is a beat on the top and bottom line, but there are three important charges along with this quarters's earnings as well as new guidance. start off with the earnings coming in at $3.58 a share that is 11 cents better than expected revenue of $25.1 billion

about a billion dollars more than analysts were expecting operating cash flow, much higher than expected at $4.56 billion the expectation was $3 billion free cash flow also much higher than expected. $4.1 billion the estimate was for free cash flow at $2.4 billion three important charges here the first two are non-cash the first one, $691 million. that's 93 cents a share. that is for the mq-25 and tx trainer defense programs two programs that the company has won and is putting money aside. $60 billion market opportunity and it's going to be a hefty charge but they believe that this is money that's well spent on the defense side there's a $412 million charge. that is a tax settlement for an audit of their returns in 2013 and 2014 and finally there is a cash charge of $179 million yet another charge for the

tanker program they have had numerous tanker charges over the last several years. now totaling $3.6 billion. let's quickly talk about guidance two important changes here full year earnings was in the range of $14.30 now moving up t $14.90 to $15.10 the streemt estimate is now at $14.65 and revenue. it was between $97 billion and $99 billion for the full year. now boeing is saying it's going to be between $98 billion and $100 billion that would be the first time ever boeing would hit $100 billion in revenue if that's what it achieves through the fourth quarter so there you have the numbers from boeing. a beat on the top and bottom line back to you. >> the guidance is the lead. i don't know about those charges. anyway, the guidance is huge stock's up ten that's 70 points the dow went from down 50 to where it's trading up to 22.

the industrials moved higher on the big jump in boeing stock >> boeing is today's mcdonald's. >> it's the anti-3m. >> boeing is this quarter's boeing because in april, caterpillar said on one day that first quarter was going to be the peak all the industrials got smacked. the next day boeing had good numbers. people got reassured however, that wasn't at all clear. >> we should also point out. if you want to take a two-day look at boeing shares, boeing got dragged down yesterday it was the worst performance among the dows because it was concern of where they were that stock is bouncing back. if you saw it yesterday, it was dragged down significantly it was the third biggest declining component. >> three weeks ago it was at $392 it's not new highs but aerospace, i think a lot of people will say is the strongest part of industrials in a lot of ways >> china worries with boeing

that's where people are worrying about seeing it. you're not seeing it at this point. in the outlook, you might -- >> you might hear something or potentially any increase in costs because of tariffs that's what we heard from a lot of these companies that's what the concern was with caterpillar yesterday. or part of the concern with caterpillar. again, to see this performance today, maybe that does stabilize things overall trying to take any hints from what you hear. foreign currency would also be a big impact was currency mentioned in that currency head winds, potentially? maybe we lost phil already currency has been an issue that some of the big global companies have pointed to. those are particularly the ones with weakness like 3m yesterday. >> do we care enough about the premarket to where -- we're now up did we not -- we opened down can we count that as an opening down this morning? you know, because cramer -- people like jim this morning

were saying we definitely don't want a big, strong -- but we already had down 150 or whatever it was early on. so by rebounding now with data points from boeing, does that count as not opening up or are we opening higher only to fail again? >> fix on the s&p. that's the traded strimt >> indicated down about four points >> the issue is when you get in these periods of trying to see if there's a good trading low in or something like that, the overnight low in the futures often has a pull on it you kind of revisit -- well, that's actually an exception to the rule you never actually revisited that low a lot of times on a routine basis, it's going to say there's a magnetic force there >> the dow is where you saw the problems but that bled throughout the market at the end of the day, the s&p was a little weaker. >> the reason we're talking about the nasty reaction to a lot of industrial earnings is

because amazon's 300 bucks off its high all right. so amazon went up $400 on nothing. on sentiment, momentum it's down $300 off the intraday high that's not protecting the market as much as it did at one point microsoft has held up. apple has held up. i think that exposes the weakness >> and you have the dow in correction territory russell 2000 is, too, for small businesses >> most important dow stock to me is jpmorgan because it was the bank stock that was kind of bulletproof much of the way. and it's, you know, showing vulnerability. >> all right at&t also reported another dow component this morning. earnings falling 4 cents short revenue, though, was above forecasts. at&t also says it continues to anticipate that its full year results will come in at the high end of its projected range stock down about 2.25% joining us on the "squawk" news

line, jennifer fritzsche what is most noteworthy and what should we be most concerned with with at&t at this point? the new at&t or the operations of kind of the legacy at&t >> thanks, joe i think it is the new part of the story meaning the time warner part was actually quite bright and they did very well there seeing nice revenue growth in each of the three segments wireless and the legacy at&t was also a pretty bright spot. i think the concerns part is they have so much on their plate and many plates spinning in the air. enterprise is a concern in this entertainment group which is really the video products coming from directv and other ott products really continue to feel pressure >> yeah. probably not a huge surprise are you surprised by the stock still being -- still keying off of what happens in the legacy business >> no, i'm not and i think, you know, i think

the at&t longer term strategy is very much on target. but it's just going to take awhile to get there. remember, this is the first full quarter where they had time warner in the fold and there's just a lot of other initiatives going on this is also a company very exposed enterprise enterprise revenue continues to feel a lot of pressure even in what i call the good part of their revenue, strategic services was flat. which is somewhat strange on the heels of ten months after this tax reform >> we had you on for verizon too. how do you compare the last three quarters of the two companies? >> you know, this is where verizon is's strategy of just not doing a big deal and sticking to what it knows best is to put up cleaner prints. at&t did put up positive adds on prepaid growth on wireless so wireless is very good however, verizon put up 300,000

postpaid ads it allows -- it's a more nimble story because it's honed in on wireless >> okay. jennifer, thanks for being there for us again today for this report as well we appreciate it jennifer fitch of wells fargo. when we come back, media mogul tom werner will join us. first, though, as we head to a break look at the u.s. equity futures. again, dow turned positive and continues to push higher on stronger than expected earnings from boeing and raised guidance. looks like right now dow futures are indicated up by about 6:6 points s&p futures down but only by over three points right now. the nasdaq negative by under six points stick around "squawk box" will beig bk. rhtac obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities.

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the futures this morning, holy moly. up 80 now. and the s&p within spitting distance >> nasdaq is >> could turn positive both of them are less than two points away from positive. i think it'll be interesting to watch to see how this -- now i'm

still unclear on whether we call this an opening or if we then -- i think you use the premarket. >> i still think boeing is today's mcdonald's you just wonder if there's a today's 3m to counteract it. >> you've got three hours before you call whether the open is negative or not. >> play with us. our next guest was up late last night watching the boston red sox beat the l.a. dodgers in game one of the world series while he's not focused on baseball, he's invest iing his money. let's welcome tom werner he's won half -- one-half of cai and werner favorable outcome for you last night. are we going to see more of that i guess you think so, huh? >> we have a great season.

but we have three more games to go since the beginning of april when his team got off to a remarkable 19-2 start, the red sox have been just playing great baseball it was fun to be at fenway park last night >> speaking of fenway, i know in the past there were probably times you wondered or where the city wondered whether to stick with it i can remember how much i loved crosley field versus river front in cincinnati. i think it was brilliant to stick with fenway and watch everybody else go to these new stadiums boston, that's the most beloved stadium in the country, is it not? >> we like to think so our goal when we came in was to find out if it made sense to not just stay in the ballpark but create modern amenities in the back of the ballpark and have that same experience when you go there, you obviously

feel the ghosts of babe ruth and ted williams it is a magical place to play baseball as i think it's the number one tourist attraction in new england. but our group invested $350 million to preserve and protect it so we didn't just keep the old lady the way it was. we've actually done a lot to make it a modern ballpark. >> so where's this theater going to be? all around fenway over next to it there's -- i'm trying to figure out i know it pretty well there. there used to be -- >> joe, if you hit a home run behind center field, where ted williams hit his home run, it's in the property we own right behind center field. you know, you're talking about fenway the neighborhood when we got there was a bunch of parking lots, pretty much. it's become a very vibrant neighborhood we're going to invest another

over hundred million dollars in building a 5,000 seat indoor theater. i think it's just going to create even more interest in coming to that part of boston. >> what will it be -- who will perform there? >> you know, there are a lot of acts that, you know, we book about ten concerts a year at fenway park for peoplelike billy joel and paul mccartney. but there are a lot of acts. take somebody like james taylor who sang the national anthem last night that would be performing in a sven you slightly smaller than that outdoor arena. i think boston needs an indoor arena for about 5,000 people and we're going to partner with live nation. we're just in the development phase. but i would expect that we could book almost 150 events next year, whenever that's up and running. >> talk about "the conners,"

your show. i think we need to book you another time to talk about this. i know it was on last night and people were watching but let's just quickly -- i guess the players are happy because the two biggest payrolls are meeting again in the world series so i guess you need to pay people and all the players are going, see so players must be happy the two biggest payrolls are meeting in the world series looks like that's the way to do it >> you know, it's not always a correlation 1-1 of high payroll produces winning but we do have a great blend of players who we're paying a lot of money to. when we look at our outfield of benintendi, betts, bradley, these are all players who we have under our control it's just a great blend of

veterans and younger players. >> two great clubs two storied clubs. i love games out in dodgers stadium. that may be my second favorite place to watch a game. i'm going to be able to watch on friday and saturday. i don't know why you don't, you know, have them start earlier than when i go to bed. but i'm going to definitely be watching this weekend. and baseball's back. it's great. >> what i love about it, last time we played in the world series against the dodgers was 1916 and babe ruth was pitching for us >> that's a good factoid tom werner, thank you. appreciate it. good luck. >> thank you, joe. when we come back, we have this morning's biggest stock movers stay tuned you're watching "squawk box" on cnbc broke my personal record.

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all right. when we come back, bawe're goin to get the street's reaction to boeing that stock single handedly lifting the dow futures. we'll talk about that after this not long ago, ronda started here. and then, more jobs began to appear.

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7pgñóo i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. all right. boeing raising forecast and beating for the year that stock single handedly lifting the dow futures this morning. bringing us back into positive

territory. right now stock is up. joining us now is aerospace and defense analyst at jeffries. thank you for being here it's a busy day for you. boeing has been pretty spectacular mover this morning again, really lifting markets up overall. there's a lot to dig through here what did you find? what's most important? >> the company's raising revenue guidance by about a billion. that's half according to defense. half what service is what really surprised us to the upside is commercial aerospace marg margin despite some issues with the 737 and ramping to 52 a month, the company came through and delivered on that business >> that guidance is a key number were there concerns that that was going to be under pressure why did we see the big selloff yesterday after we heard from caterpillar and others >> i think just trepidation around tariffs and impact of

china, general macro fears hit boeing probably yesterday. the volumes had trouble on the 737 but the profit delivered i think that was the key here. they maintained their delivery guidance >> what will you be listening for on the earnings call because obviously there is some unease amongst investors right now just generally speaking. people worried about what the future's going to bring. what are you going to be really cued into? >> the global air traffic, what's going on with that. a third of the 737 so i think boeing is very in tune with the administration buzz also with its customer base it has a dialogue there. yes, it is the biggest exporter, but it employs about 1 million people across its company and supply chain base. >> very quickly, you have a buy on this stock? >> we do have a buy on the

stock, yes we like the free cash flow we have a target price of $400 and that's on 7% yield but if we applied a market free cash flow yield at 3.5% we'd get north of $500. >> sheila, thank you very much great to see you >> thank you all right. coming up, the state of the u.s. economy. o s rht president trump or the fed that debate coming up next who says our bank isn't tech enough? everyone, look at your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market!

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earnings alert, the new numbers from at&t, boeing, and u.p.s. >> president trump taking aim at the fed again. is he right? we'll take a look at key sectors of the american economy that could be derailed by rising interest rates the big business of chocolate. >> my chocolate. my beautiful chocolate >> the ceo of hershey is here to talk manufacturing in america and finding skilled workers. "oomp the last hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

good morning omaha joe kernen along with becky quick. if you went away, if you saw us down a hundred we're now up a hundred on the dow. 125. the nasdaq is also positive now up 13 and the s&p is now up too. the futures have been indicated lower by 150 but turned positive after boeing's report. boeing shares surging after the company raised its full year guidance in addition to beating estimates on both the top and bottom lines for the -- that's over a hundred points in just boeing. >> we have a couple more big earnings alerts to tell you about this morning at&t reporting 90 cents a share. that's 4 cents shy of what the street was expecting

however revenue did beat that stock right now down by about 3.1% a lot of numbers to go through wireless numbers the additions look good. but compared to what we saw from verizon yesterday. verizon obviously the pure play on getting into this but verizon had had a churn of 0.8%. still comments about warner media, that getting mixed in for the first time added about 5 cents to the bottom line on eps this time around again, that stock down quarterly profit on $1.82 a share for u.p.s. is what they were expecting u.p.s. did have expressed confidence in its outlook. that stock down by 3.7% right

now. and we'll dig a little deeper into that. $1.82 on the adjusted basis is what they were anticipating. talk about what's going to be coming particularly with e-commerce coming up when you dig a little deeper >> i think there's a concern out there that the stress point in the whole logistics chain for e-commerce is u.p.s. and fedex have to eat the cost so they don't have great leverage necessarily to the strong activity. >> right >> okay. president trump renewing his criticism of the fed he says the biggest risk to the economy because it's raising rates too fast the president also took new aim at fed chair jay powell. he said every time we do something great, he raises interest rates it almost looks like he's happy doing it the fed has raised rates six times since he took office and i don't think the president thinks he's only done six great things so it's not every time the

president does something great >> maybe you should point that out. what are the six great things? >> he would have had to have raised a couple of hundred times based on all the great things that the president -- anyway it will likely hikerates again in december as the economy strengthens. i'm not saying that in a -- with any commentary but he certainly thinks he's done more than six great things. >> yes >> so powell is way behind >> that's right. >> way behind. >> maybe it's one basis point for every good thing >> that could be it. >> there you go. all right. the recent selloff has highlighted the debate between two camps. the market bears versus the economic bulls our senior economics reporter is here as you know because he just spoke up steve liesman has a look at the case made by both sides. >> it's an interesting one there's a bit of a reversal here traders focus on the bad news coming from earnings reports while economists keep their eye

on essentially upbeat economic data here's our ckon econ bulls vers market bears who has the upper hand the bull has the high ground but the bear looks well positioned to defend him or herself in this situation. on the left, earnings are a positive according to our buddy juan who does this, it's -- >> it's the outlook shaking things >> gdp we're probably going to do 3% for this year. we're 3.2% on the third quarter. probably another 3% in the fourth quarter unemployment falling inflation continuing on the right side, tariffs a big question mark. we don't know how much that's going to be negative for the u.s. certainly there's a possibility of negativity for the s&p 500 companies. housing and autos two interest rate sensitive sectors

let's take a look at the s&p 500 by sector. and since the top of the market on october 3rd it does look a little bit like an economic slowdown trade you've got utilities and consumer staples areyour best performers go to the bottom there energy, materials. maybe mike santoli, this is a sort of normal thing that the first time when they sell off, this is what they do >> it's obviously global cyclicals are the bottom performers right? so i do think the one thing you have to maybe bring up when you talk about reconciling the economists versus the market is the earnings stream of the s&p 500 is pretty global so it's not just necessarily a thumbs down on how the economy looks. >> the counterargument to that would be the russell 2000 is immune from that >> but it's not. >> it's lower quality more leverage companies >> it's worth remembering 2017 growth got a pop from unexpected

growth overseas. didn't account that the globe slowed down more towards normal. most sides agree economists generally see the effects of the tax cuts wearing off next year and the year after though they debate how much. stock watchers know that as much as half of current earnings gains could be from the tax cut. that's where the debate is where earnings growth goes next year we've got guys who say we go to -- >> trying to go up against tougher comps. >> everybody knows it comes off. i don't think that's a factor. right? you don't see i'm not going to count on another 20 next year. >> but you're still dealing with lower taxes that you're going to be paying. it's just it doesn't -- >> the comps it doesn't comp again. then what do they do with that tax cut? does it lead to the productivity story? but i think that debate is between are you a pfeiffer orf n

tenner >> what? what if it's eight >> no. i'm not going to tell you. >> i think eight's pretty good i think five is the one that would be disappointing >> stay here, steve. you can continue to talk about this joining us now for a look at the broader markets is david bianco of the americas for dws group. also howard ward of gabelli funds. that's looking pretty good with numbers -- >> we expect to slow with groet from 2018 to 2019. the reason for the slowdown is one going toward more normal earnings growth. 5% to 7% but we think it's going to be challenged by the tariffs. stronger dollar and curbed oil prices we don't think wti spends much time above $70 on average in

2019. >> that five, okay, is it equal to and even a little bit higher than overall growth of the u.s. economy? so companies maintain their profit share and they even grow it a little bit if you do five that's what you do >> yeah. that's right and you would expect that just because of the retention of earnings >> so that's good five >> yeah. it would be concerning if we drop below that. but earnings growth should still support a nearly 18 trailing pe as long as the 10-year treasury doesn't exceed 6.5%. >> are you looking at -- >> we do both. applying some business cycle analysis to the portfolio is helpful in how you build out your sectors and holdings. >> where do you come down on that >> we'd still be in the 10% camp for earnings growth next year. above 20% this year. a lot of that due to the tax cut. we'll still have fiscal

stimulus capex spending is now doing well look at the payroll numbers as well what we're seeing in the stock market right now, we're pricing in a slowdown which is to be expected because we do have the higher rates, the higher oil. these things -- >> slowdown of growth. not an actual slowdown >> slowdown in the rate of growth we still have an economy that's growing around 3%. correction in the stock market of around 10%. >> which we're not there yet. >> the nasdaq hit it s&p got down to 8% we're close enough so it's -- ub fortunately stock market corrections are fast and frightening. >> and you miss it >> good news is they're relatively short

this is it because frankly while the fed is tightening, the fed doesn't control long rates long rates have been stuck in the 2.85% area for months now. i don't think they're going much higher and if that's the case, stocks should be bought here. >> if you think the market right now is truly kind of can the fed engineer a soft landing? we've heard that in previous cycles then you have to see a huge tier of the market being underpriced, right? would that be where you're looking? >> well, not so much in the cyclical side. the reason is, we are seeing slower growth. we are pricing in slower growth. we're going from peak growth with second quarter of this year, 4.2% gdp now we're around 3%. next year maybe the high twos. i want to stay with my growth stocks which is what i love.

>> let's talk about the ones you like netflix, google, paypal, nvidia. you're in the technology group that's been leading the way. >> you think you have to be. these are the leaders in what i call the new economy new economy consumer technology stocks and how many people have been waiting for an opportunity to buy netflix? okay folks, belly up to the bar this is your opportunity the stock's down 20% >> you actually pounded the table. >> they've reported a terrific quarter last week and raised guidance you're going to have explosive earnings growth over the next five to ten years. this is it >> a bargain at twice a year -- >> 140 million subs. we love comcast. 140 on its way to 350 million. folks, this is what it's all about. >> david, how much does your view of the effects of the tax

cuts color your investment outlook? by that, i mean there's two stories out there. there's the story from kevin hassett and i think the believers in the tax cut which is the tax cut engineer a change to the dna of the economy. and they end up ultimately changing potential growth. so the number we slow down to is a higher number. whereas the fed and most -- a lot of economists i talk to on the street don't see it that way. they see us slowing back down to that 2% growth one top down way of looking at stocks is just how big is the pie? how much is the pie growing? >> to answer that question -- >> what's your take on that? >> the easiest thing to describe is that the 25% earnings growth in 2018 we expect for the s&p, a third is from the tax cut. then when we just think about what the tax cut has done to the dna of the economy, i believe it has raised the longer term growth rate from what it

otherwise would have been. >> that's the wrong answer for steve. >> it's not. the right question is -- the follow-up is how much. >> probably a half a point, maybe one full point >> you think we could be at 2.5% underlying growth. and as i've said many times, joe, if the tax cut ends up doing that in a way that the debt created by it is not hurtful to the economy, that's a huge win it's a huge win. >> we think growth will continue at a slower pace but still a healthy pace and investment spending is occurring. particularly on intangible assets, r&d, that's why we like growth stocks and we like growth stocks out of asia >> you like the same stocks that howard is literally pounding the table on >> and we like similar stocks out of asia. >> so you're a 10% guy you're a 5% guy. it doesn't really matter >> the direction is what is

important. going back to that concerns about the economy and the tax cut, the capital spending thing is big cap spending is growing at 8%. this is what's going to drive increased productivity and as you know, we have to have the greater productivity to get that growth rate of gdp up and sustain it it's the only way to do it the labor force, it's growing at 0.8%. you got to get the productivity up it's going to take awhile, but it's happening and i think faster than anybody would have expected six months ago. >> great gentlemen, it's great to see both of you. we appreciate your time. steve, thank you coming up, market volatility for investors here in the states but there's plenty of opportunities overseas including in china we'll look at some of the best opportunities around and coming up, the ceo of hershey chocolate maker. i thought god made chocolate for all of us? you're watching "squawk box" on cnbc

as we head to break, take a look at shares of boeing surging after the company posted better than expected results. "squawk box" will be right back. ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest. you might or joints.hing for your heart... but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. whooo! want to get a move on your next vacation? tripadvisor now lets you book over a hundred thousand tours,

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smart investors look for buying opportunities joining us with portfolio picks outsds outside of the u.s. market, head of equities of europe, middle east, and asia pacific. i think it's finally time for you, alex. were you early >> a little bit. i think it's building. october's a great month to put some money to work in. >> a lot for the last couple of years. and i've sort of asked them why, but it always seems more cerebral to say, i like stocks but i like -- you know but it's been better to be domestic for the last few years. maybe now this is your time to shine. >> one a valuation there is a big discrepancy now europe asian markets trading on earnings i mentioned the earnings growth is stronger here

i don't expect the earnings growth to hit the same level you're not going to have the tax cuts -- >> or the deregulation or the -- >> there's austerity lifting we're seeing that clearly. about trying to get some of that austerity off there. >> you still have the cumbersome single currency approach that some people think is just doomed to fail. >> again, as an investor you don't have to be in every market you can choose your battle >> you've got issues italy, for example that's not totally resolved at this point >> they're taking a leaf out of trump's book of being very difficult. then they'll bargain down to somewhere that suits both sides. markets are about looking forward in a medium term we're investors trying to take a two-year view and pick the right stocks to get good value >> are there places better than europe >> asia still interests me a lot.

you take adidas. half of them are made in vietnam. that was -- that 50% was made in china about three years ago. so you're seeing trade move around and opportunities created on the back of that. >> how about markets even further out along the risk continuum? what about middle east africa fron ti frontier markets? >> you have that driving some very big issues as an investor where you can get maybe capital appreciation and get killed when you drive it back. i think we would take a more cautious view. you know, take a more cautious view go for utilities, some of the materials i think are underpriced. and some of the financials >> michelle would want me to ask you about south america and brazil especially with the recent elections. >> yeah. again, some value appearing. i think it's for a brave investor to look away and sit on

it for a year. >> you would recommend that people talk to janice henderson to get involved with this? they can't do it on their own. >> latin america is not one of our expertise. europe we've got a big expertise. >> which sectors in europe are most interesting >> we're seeing electricity prices begin to rise there's a bit of margin help there on the top line which helps things also you're seeing the competition getting squeezed the dominant players there should retain their -- >> would i hurt your feelings if i said i want to stay in this country? >> i wouldn't be advocating -- >> i think i'm going to buy netflix. is that okay for me? >> i strug wl tgle with the valuations of these. >> i wouldn't want you to struggle we'll have you back again. >> thank you >> maybe you're right. >> very kind thank you. >> thank you very much >> very polite when we come back, the apple

ceo says the united states needs to be more like europe when it comes to data privacy. what tim cook said earlier this morning at a technology conference stick around

welcome back, everybody. apple ceo tim cook delivering a strong message about privacy

he said privacy is a fundamental human right and called specifically on u.s. regulators to take comprehensive action to adopt privacy laws like the general data protection regulation in the eu >> not only here in europe, but around the world, regulators are asking tough questions and crafting effective reform. it is time for the rest of the world including my home country to follow your lead. we at apple are in full support of a comprehensive federal privacy law in the united states >> cooke said companies need to treat data like precious cargo those were his words gdpr was something put in place in the eu back in may. large companies, bloebl companies based in the united states have had to come ply with it there has been some question

about whether those same sort of privacy rights would be extended here in the united states. if you want to see more of the speech, you can do that right now on cnbc.com. and coming up, hershey ceo michelle buck will join us next. we'll talk the big business of chocolate. as we head to break, take a look at u.s. equity futures turning around now but the s&p is in the red again. we'll be right back. we can do the screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square corporate earnings are front and center this morning. labcorp. below expectations by 14 cents the medical lab operator also lowered its full year guidance shares of sirius xm are higher in premarket trading 7 cents a share beat estimates by a penny and also the satellite radio

operator raised its full year forecast for subscriber additions. tesla shares are also rising this morning stock was rated outperform at jmp securities tesla is developing key aspects of production which would be difficult for rivals to duplicate. stock's back above $300. the hershey company and walmart are partnering up today to talk about a shared commitment to create manufacturing jobs in the united states joining us right now is michele buck she's the president and ceo of the hershey company. she joins us from the west hershey plant. it's great to see you. thank you for joining us today >> i'm pleased to be here. >> all right let's talk about this manufacturing commitment hershey's always made its chocolate in the united states now you really hear this manufactured in america is something that is making a huge resurgence from the top down what is this commitment today and what does it mean? >> so, yes, hershey has long

been a big supporter of the u.s. being in this market over 125 years. we've been proud to manufacture our products as close proximity as possible to where consumers produce them so we're pleased to announce over the past year we have invested $150 million in our u.s. supply chain creating over 150 jobs that's really through partnership with our retailers and also through the growth we've been able to drive on our core brands which have been outpacing the category growth by 2x all of our investments have been behind those core brands >> walmart is one of the big retailers you're talking about it's making a commitment to buy products that are made in america. what does that mean specifically for hershey? >> yeah, it's a wonderful thing because hershey and walmart are two of america's most iconic brands and we have had a long standing

relationship being focused on mutual growth. so their commitment really enables us as they grow our business we have the opportunity to invest more in u.s. manufacturing. so it'll really a common joint purpose that we have together. >> buying things that are made in america when it comes to chocolate, is that something you're seeing in the bottom line at this point? or is this something that with this retail commitment you're able to kind of build and hopefully draw that demand is this a chicken and egg scenario which is the chicken and which is the egg >> you know, i think consumers here in america loved to buy products that are made here. but it's our high quality that we're able to produce in this market place at the west hershey plant, for example, this is the largest most technologically advanced chocolate making facility in north america. and we have over 1100 highly skilled workers who need three months to a year of training to make these products.

milton hershey always said quality was the best advertising. >> i realize you can't comment on earnings specifically because of your report tomorrow. but we've heard from a lot of people how strong the consumer is today brian cornell, the ce ourks of target told us back in august and then confirmed that again this week that this is the strongest consumer environment he's ever seen what do you see just in terms of how willing consumers are to drop money >> so, we feel good about where the consumer is in the u.s i think in a category like food, we don't see as many peaks and valleys because people need to consumer food on an ongoing basis. though i can't talk a lot prior to tomorrow, what i will say is i'm thrilled with the progress we're making at hershey on our strategic agenda in the past several months and

through the year, we've seen sequential takeaway. we feel really good about our acquisitions to meet additional consumer snacking occasions with skinny pop which is growing very strongly this year and the addition of pirates booty to our portfolio we are proud of what we've been able to do to drive profit good profitable growth. and digital commerce to drive the business >> i want to know about your brand in the chocolate and candy area other packaged food companies are experienced area is it different with chocolate is it different with those types of products opposed to other packaged foods

>> every piece of consumer research that's done rates our brands amongst millennials in the top five recently i think we were number two behind google, for example, which we were thrilled to see. while small emerging brands have captured share in many other categories, we certainly see that our large legacy iconic brands have continued to have growth and again are out-pacing the category growth by double in the past three years now, where we have taken advantage of some of that opportunity is we have added some smaller emerging brands to our portfolio. bark thins, for example. or as we've expanded the portfolio across snacking with skinny pop and pirates booty >> and you also are innovating and this was not skinny pop. something that you left, but i took it home and it was -- i'll describe it to you you've got a winner here it was like popcorn covered with chocolate. it also had some pretzels and some peanut butter type things

in it too. i didn't have it for long, michelle i've got to tell you that. i'm not sure it was skinny pop just from how good it was. >> no, i don't think it was. >> what was that >> so i'm thrilled to hear that. that was our reese's and hershey what we call popped snack mix. what we've heard from consumers is they love our hershey and reese's brands and the opportunity in that product you're talking about to combine the confection with peanuts and pretzels and meet a whole different consumer snacking occasion that is more about satiation and obviously based on what you said great taste. >> i put it in the cupboard. and i keptgoing back and back and then it was gone just talking about it, i feel like homer like, i do -- >> drooling. drooling imagining. >> that's one of the great opportunities we're fortunate to have in a category like this and expandable consumption which is what you're talking about >> that's one way of saying it

>> expanding something michele, let me ask you about input costs. are prices starting to creep up? with things like dairy along those items, has that been an issue for you? >> so we manage a basket of commodities, various different things, dairy, cocoa, et cetera. our packaging that go into our commodities. and we just constantly try to be out in the market hedging. and our real goal here is to minimize the volatility that we see in input costs when one is up, the other may be down but this is something that we have dealt with consistently over the years and i don't see a particularly different trend in that area other than freight and packaging which has been a troublesome area for everyone in the industry >> all right, michele. i want to thank you for joining us and we hope to see you back here again soon >> thank you so much

>> in studio in studio, michele. >> in studio so he can get more of that popcorn stuff. >> because she brings gifts. coming up, the technicals -- i couldn't buy that, i don't think. i'd feel guilty. >> you didn't pay for it, it doesn't count? >> i know that doesn't make sense. >> no. >> anyway, the story behind yesterday's wild ride -- but if it's free? you have to sneak a couple of bites. wild ride in the market. dow fell nearly 450 points but we'll get some of that back this morning. we're up around 90 we'll be right back. i know that every single time that i suit up,

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welcome back to "squawk box. take a look at the futures right now. have had a comeback in the last couple of hour dow due to open almost a hundred points that's mostly on the strength of boeing s&p just below the flatline. it was down about half a percent overnight. nasdaq just slightly below the flatline so making an attempt at the comeback we showed you that boeing chart before that is up almost 16 bucks right now. that rule of thumb, approximately seven dow points per dollar gets you more than a hundred points of net contribution from boeing one more name, morgan stanley upgraded to outperform at wells fargo. the investment firm will announce increases in its investment targets in january. let's talk technicals and check back in with katie stockton founder and managing partner at

fehr lead strategies did you think of yesterday was it positive in the end >> it was positive it's really the close that matters. when you look at the high/low range for the day, we saw that relatively strong close versus that high/low range. that tends to be indicative of the shakeout it always feels as bad as yesterday felt i would encourage folks to look back at the s&p chart and look at the april 2nd low which fell equally harrowing in the decline and subsequent recovery. we also saw yesterday a lot of gaps down especially oversea ifs you look at european stocks. those gaps down that occur after prolonged down moves tend to be exhaustive in the same way that a gap at the beginning of a move would be more of a breakaway gap. so these are somewhat exciting to me as a technician especially for the fact that the s&p 500 does still have some support nearby i'm looking at about 2690.

that's based not only on previous lows and highs but at the retracement level to get technical on you and also a couple other measures that we track. >> i figure that the old pros might call us soft though. if you look at all these moves and percentage moves, they're not harrowing. but we feel harrowed, but i don't know whether they really are. they'll say when i was back -- everyone i do it 22% down day in 1987 and if we get 3.5%, really you should see the "nightly news. it's like we just averted, like, armageddon it's good, i think, because you can -- you get more bang for your buck with smaller moves in terms of ringing out complace y complacency. but are you sure we've done enough on the downside >> it's amazing what the impact has been on sentiment. when you look at the market sentiment having been overly bullish at the end of august and now of course overly bearish by

some measures including that index that we track. i think that's really compelling it tells us that the market may be able to keep going even if to some people it feels over-extended. in a way these pullbacks are constructive because they allow better entries so i think those pullbacks which are somewhat orderly at times, this one maybe not as much tend to be entry points for most folks that really get that shakeout in place and take advantage of that. so to me, i think it makes it more sustainable the fact that the pullbacks generate that sentiment. and it suggests that people are underinvested. >> there's no reason to think that fundamentals and trading in the markets should be coincident because that totally, you know, you're not taking into account the discounting mechanism of the market but this selloff is occurring during earnings season that's what i've -- i don't know whether the tail's wagging the dog or vice versa or whether it's just not related.

because i wouldn't -- some people want to characterize this as bad earnings or corporate america not doing well and the market can go into a period like this that has nothing to do with the -- just because it's coincident to earnings doesn't mean it's related, or does it? >> it could be seasonal. october tend to hold more volatility than other months it could be seasonal but it could also be regarding the elections. we actually saw the first intermedian read intraday yesterday for the s&p 500 since the november 2016 election which i thought was pretty interesting as we come into the midterm election so there could be any forces at play there i once heard from someone and this is not really quantifiable that 70% of the move in any given stock is the market and the sector it tells you fundamentals at times won't be relevant when there's a broad base --

>> although those fundamentals could be those are fundamentals for the industry moving it na that's why we saw boeing down yesterday. because of news from other companies. >> i think a good one in the near term would be bank of america which had a negative reaction and really to most technicians would look like a breakdown. if it snaps back very quickly after its gap down which i think is probably an exhaustion gap, that would be telling because it would affirm to me that it's a shakeout and that one's already seeing its reaction to earnings that would be one to watch >> i was just going to say, assuming that these -- we get some kind of a better rally here, the over-sold conditions kind of take hold. the seasonal forces become better what would you be looking for in particular in the character of any rally from here to know if it might actually have legs? >> i think it has to happen very quickly, for one it needs to be somewhat of an immediate reaction to these massive over-sold extremes so it has to happen quickly. and then we also want to see

rotation back into the previous leadership sector. so that would be technology, discretionary. i would also add communication services to that finally i would say we need to see a relief alley in the beleaguered area of the market we're seeing downside exhaustion for one in home builders and in emerging markets and european markets too. we need to see broad participation on that. >> i really feel like i -- did i -- she's been around, but i feel like i discovered her, don't you? do you listen to -- you know what i mean, mike? >> we established that previously that katie and i knew each other before. >> and i think katie speaks on her own. >> success has a thousand fathers. so you're taking credit? santoli? >> i would not be as presumptuous to take credit for her. >> that's a dig at me. because now i'm getting -- now it's turning back on me. katie stockton, thank you. >> thank you

>> well deserved shade, i think. when we return, we're going to talk to jim cramer about today's big earnings reports and president trump's new comments about fed chair jay powell in the meantime, check out the futures this morning what a rally it has been for the dow. coming from down to up 90 at this point again, that's single handedly because of boeing. and it has improved what the s&p's been doing right now indicated down by about 1.5 points "squawbo wl rhtack x"ilbeig bk.

let's check in with jim cramer, he's in philadelphia i feel like i am paying it forward a little taking away from the nine from "squawk on the street," tough, anyway, let me start with -- earlier you you were saying we don't want some big, strong opening. that's the last thing we need. the early market trading is down now, it is up. will this rally fate or have better legs now? >> well, we have been taking a cue from china and it is not that bad and europe turned

around dramatically. s&p looks like the kind of opening that i really wanted at least since there is a big give up. boeing obviously change things i do not want to see a huge up opening because i don't think a lot of people could use it but with that said, other than boeing, i didn't see a lot of rave this morning. i don't know how sustainable things are it does seem over sold at this point. jim, we gotten -- all of us decided more pessimistic of what's happening in china and navarro, they got much more hawkish, i want to get the economic regime change that you talk about could you see president xi changing his economic stance and you can talk about the de facto

regime change is something they're trying >> i missed the october speech by vice president pence that totally freaked out the chinese. he laid out what george cannon lays out about the soviets the speech is copied with the long 8,000 words telegram. it is really what i would say the ambassador from the soviet union. it was a frightening speech if you were the chineschinese. okay, we are now the soviets cold war, of course the united states want the regime back then did not get it until reagan, worked a long time to have it. that speech was a declaration of economic war and potentially a real war i know it sounds crazy go back and read that peaspeech

it is really incredible. when you look at that speech, you have to say that was the turning point. that was the point of no return. it is not being acknowledged enough it was the most important speech of the whole trump administration >> for pence my view whether you call it economic regime change or regime change, i don't see how president xi and he has comment and sort of walk back some of the reforms. there is criticism and i don't think you hear a lot in china but maybe some of the reforms that had been, we thought they're going to continue before, it has not happened. i don't think it is outlandish to say the way they approach it economically, it may not happen with xi and with the president >> it was not about the civil rights it was about the need to protect the minorities it was a speech that president obama never gave

it was a speech about this so-called ally is not an ally at all. it was a recognition to communist country. you are not talking about china. it was a wake up call. i think that's what's really been ruining the market. now we have enough saying china is weak and chinese autos. you have to pay attention to conference calls >> do you think navarro wrote that speech or collaborated with pence? >> i think it is entirely possible i think people need to go read that speech. i think that speech made it so technology is hard to close because it was not -- it was a speech about the cold war. it was a containment speech and might as well written it in '47

about the soviets. >> what's behind me is not what they have in china they're having a liberty bell. they don't got the liberty bell. we should have kept florida as the capitol. >> anyway, thanks jim. we'll see you in a couple of minutes. they got to fix that bell? >> the crack >> be sure to join tomorrow. we'll be talking to brian roberts, the chairman of comcast, stay tuned. we'll be right back. because i'm retired now. so? we're voya. we stay with you to and through retirement... with solutions to help provide income throughout. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that, uh, tie. or the suit. or the shirt. voya. helping you to and through retirement.

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hi everybody, a quick check at the mark. the dow is up 92 points. s&p is almost flat mike, thank you very much for being here today that does it for us, right now is "squawk on the street." ♪ good wednesday morning, welcome to "squawk on the street," i am carl quintanilla with david faber and jim cramer is at the independence visitor center in philadelphia we are coming up with big upside revers reversal boeing beats and raises. europe with some