"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. i'm becky quick along with joe kernen and andrew is off today we have a big lineup mike santoli is on set with us dominic chu and drew mattis are watching the markets we have phil lebeau with us and ylan mui will talk about the china tariffs. let's start with yesterday's selloff. >> the dow dropping 608 points the dow and s&p 500 are negative for the year, the nasdaq is coming off its worst day since 2011 let's check out u.s. equity futures. things are bouncing back

dow futures indicated up by 262 points s&p futures up by 33 the nasdaq is indicated up by 160 points we'll see how things shake out, but all this volatility and nervousness continuing through october. nasdaq is in correction territory, but it's still positive for the year. let's look at how markets reacted overnight in asia. the nikkei down by 3.7%. hang seng off by 1%. the shanghai can claim a victory by ending flat again, all of this concern going around the dmroglobe, questions about what's happening with the fed and tariffs eating into corporate profits. look at what's happening in europe and in some early trading. right now you'll see things are in positive territory. the cac is up by 1.25% ftse is flat the dax is up by a half percent.

stocks in illy and spain are up by better than 1%. italy up 1.5%. so questions on whether the selloff yesterday got into fear territory, whether it was too much and overdone. check out treasury yields. the treasury market here in th united states, the yield on the ten-year at 3.13%. here's a quick run through of the biggest earnings movers shares of tesla are soaring after the company made good on elon musk's promise that it would turn a profit in the third quarter. tesla posted a net profit of 1 $311 million musk was relatively subdued on the call >> we expect positive net income and cash flow in q4, and i believe our aspirations will be for all quarters going forward >> musk also said tesla would one day operate its own ride

hailing service that would compete with uber and lyft ford shares are popping. the company's earnings of 29 cents beat estimates by a pen nichlt r n and revenue topped estimates much more on tesla ford's net did fall. >> strong profitability from the truck sales. >> but down 38% is not good. may be some other things in there. it's an $8stock, it went back to 15 >> $12 and change four months ago. microsoft posted a beat. earnings of 1 17$1.14 a share ts

estimates. with dom saying he liked the four box, i said you can't get decent analysis with a four box. >> which is our answer at the top of the show. >> they did that because i said that >> no. great minds think alike. >> we really did have a six box at the top of the hour >> mm-hmm. >> now we have mike santoli. >> you have the mind of a great producer >> i do. >> a couple more earnings movers this morning visa's earnings of $1.21 per share beat estimate base penny the credit card operator is pointing to a strong u.s. consumer visa shares are slightly higher.

wpp reporting a weak third quarter and slashing its guidance wpp shares are down about 17% in london trading moving on, whirlpool topping earnings expectations. the company pointing to strong shares in north america. >> dominic chu is digging through yesterday's numbers what can you tell us about this >> i was part of that video game generation, i understand hitting the reset button we're back down to flat here if you look at the s&p 500, so far on a year to date basis, the idea that we could be where we are now and have it be the same level that we were to start the year off is something that people did not count on but also something we've seen in terms of following that trend higher the last six or nine months and then having it fall off sharply the s&p 500 has been interesting

in terms of the movements we've seen yesterday's price action echoed some of that the utility spdr, this particular etf, was one of the ones that outperformed in yesterday's trade. elsewhere in the market you're looking at some places where we've seen some of the biggest declines overall if you look at those, talking about technology, no surprise there. mike mentioned the semiconductor space. communications services. those were the underperformers in yesterday's trade those will be key because we have twitter, alphabet, all of these other technology/consumer discretionary communications services reporting today that's one to watch. of course with regard to volatility, when we talk about the vix, we talk about this idea that there's a move there that maybe shows panic. at one point yesterday we got to the same levels we saw during the more peakish parts of the selloff earlier on in the last

couple of weeks. a far cry from back earlier this year when the vix on an intraday basis topped 50. so, joe, this idea that we're near these peak levels of volatility, we've seen worse in the past we'll see if this relief rally today takes this a bit from those elevated levels. back to you. >> i checked the highs and lows on the vix yesterday cramer declared that 2475 is close enough he was looking for 25. it never did hit >> no. we're at 23.17 right now this idea that we have not hit this area of 25. but it's good enough right now >> given the nasdaq yesterday i expected to have seen above 25 >> 4.5%, that's bad in one day >> let's bring in drew mattis now. drew is chief market strategist at metlife investment

management has your universe broadened? do you have opinions on whether the stock market will go up or down now >> i am more fixed income focused but we look at -- >> who is we >> we would be metlife >> isn't metlife mostly interested in insurance type things, fixed income you always come on as an economist. are you going tell me whether the market is bottoming out here >> i can do economics. >> do you it aldo it all? i didn't know we were talking to you about stocks i was surprised. >> one reason we look at the equity market t gives you a sense of how much risk people are willing to take. in this case we've been focused on when we look at the different things people are worried about with regard to the economy and the outlook, there really isn't anything that seems like it will be contagious or worrisome so when we think about where the

next recession might come from, we think it might come out of financial markets and into the real economy as opposed to the normal way, which is real economy affecting final markets a financial markets. yesterday's move is a case in point. people are buying into stories a story of tariffs, rising rates hurting home sales everyone is ignoring the earnings numbers or the good news when that happens, people think the economy is not doing well, the consumer doing well, and if you project that forward that the consumer will keep doing well, we have to look at yesterday and think to ourselves what does that mean for us and the answer is it doesn't mean anything if ceos don't panic and start cutting back on hiring or investment

>> so sooner or later it comes back to the underlying economy and corporate earnings sooner or later. >> sooner or later in the long run we're all dead >> singularity is something we're hoping for are you not hoping for that? >> i'm just -- >> might be an yaafterlife. >> i would be stuck in a commodore 64 >> he would like it when stocks and bonds are correlated, when rates are coming down. it's like wow, this is great when the bond market is probably going to go down as interest rates go up, should we be surprised it's some what correlated or that's when we look for the decoupling? it makes sense because make bonds are going up because we're getting such good growth maybe it does decouple down the road for a while it seems like they might move the same direction.

>> that's the point. decoupling is not necessarily worrisome. >> when will they decouple they're moving in the same direction now. >> yeah. from my point of view they should be already. you should see higher yields because growth is picking up it's not inflationary growth picking up we're seeing a pick up in underlying growth. real growth, potential expectations are rising. >> that gets back to the question, is this happening because of inflationary pressures, because of a strong economy or is this happening because of a global economic slowdown >> so i think what you're seeing now, the kind of concerns that you're seeing now are simply based on yields moving higher. people are not doing the second level math which is is it inflationary growth pushing yields higher? break even yields are low. too low. they need to be higher because inflation typically doesn't run as low as break evens are pricing in

but people are not worried about a jeeld spike. they're saying, oh, 3.10 is too high if that's too high for an economy running the way we are, we're all in trouble >> what does that say about what the fed should be thinking about? do they say fine, full speed ahead here or pull back? >> if you believe in the concept of a neutral rate and you see real yields moving higher because of an expectation for potential growth higher, so they have to swim fast tore get to where they're going. it would suggest they would stay on this path of consistent rate hikes. >> "journal" got the big piece on -- it's like you got to say just the right things to the fed. they're mad at trump for yelling at the fed, because that means the fed can't stop so it looks like they're bending to

pressure everybody says the fed won't listen to what pollpoll politic say? >> the only bias in the back of the head is you don't want to look like you're getting pushed aroun around >> if they have earmuffs on and don't hear anything, they're not hesitant -- >> they don't. the president has a bully pul t pulpit >> to say that they won't listen to him about not hiking them, you shouldn't say they'll then say okay, because he said it, i'm not going to do it >> it may mean they wait to see more economic evidence to pause. >> for paul to say i really would like to pause because i was a little wrong about how strong things are, i would like to pause but i can't now it's going both ways is what i'm

saying >> isn't there enough play right now in what the fed's expectations are for next year two to three more rate hikes in 2019 out of eight meetings that now look like they're live because we will have a press conference there's enough play in there for them to hang out for a couple meetings they don't have to look like they're reversing course to pause. >> they certainly could. they told us they would go three times next year, but they didn't tell us when they could say we're not going in march but we'll still hit our three. >> and they're data dependent. if things really do slow down, they won't raise rates just to show they won't go under >> you know what media will do immediately afterwards -- >> the media will do what it will do. if i was jay powell i would say i'm not listening to trump, i'm

listening to cramer. >> pretty much everybody would be okay with that. >> yeah. >> because you don't want to have that situation from where he really gets mad at the fed, cramer i mean. remember >> they know nothing >> yeah. >> yeah. got that other person a job over at the big place even just from being on that sound bite what was that dress, giraffe or something? you remember never mind thank you drew mattis. coming up, two of today's big movers in the auto sector. we'll dig through the reports from ford and tesla after the break and then we'll get back to the market turmoil and the earnings that could influence what happens today we had good earnings but also some bad ones. bowing should have helped yesterday. mcdonald's should have helped but the market will do what it's going to do. here's the biggest premarket winners and losers in the dow.

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u.s. equity futures are rebounding i don't know whether that's good or bad a lot of times strength in the morning dissipates throughout the session. so far up 230 points after that big loss yesterday in the dow. the nasdaq making back some of the lost ground yesterday when it was down about 4% the s&p indicated up 28on the opening. the earnings reports that we're talking about are already hitting this morning dunkin' brands beating on the top and bottom lines and raising the full-year earnings guidance. a mixed quarter for stanley black & decker earnings above but revenue fell

short. company announcing a 2$250 million cost reduction program ford and tesla both out with third quarter earnings ford reaffirming its full-year earnings guidance as it beats street expectations on the top and bottom lines tesla reported a profit in the quarter and topped expectations. automotive analyst jamie aberdeen joins us from washington, d.c. first we get to phil lebeau. he listened to both of those conference calls last night and he joins us from ft. worth, texas. what did you think >> with ford, this was a bit of a relief for ford investors that they not only posted better than expected earnings but the conference call gave reassurance that ford believes it's on the right path to restructuring but short on details so if you were thinking you would get a clear roadmap, you didn't get that from the ford call for tesla, this is everything you could have hoped for the company posted a surprise

profit, much better than expected results on the conference call elon musk was fairly disciplined i know that shouldn't be a news headline during an earnings conference call, but given the history over the last three, four quarters that is news i think the one takeaway, if there was a takeaway from the tesla call, it was that elon musk believes this is a company that at least for now does not need to raise capital. he reaffirmed that last night. if you're a tesla investor don't be surprised if the stock continues to move higher >> all right let's bring in jamie let's talk tesla first all of that talk on the conference call. he did stay disciplined. was polite in not answering questions. that is something that gives investors a sigh of relief what do you think about these numbers and the prospect on

whether he needs to raise capital any time soon? >> great questions thanks for having me good morning i think the numbers are strong we had anticipated non-gaap profitability so on an adjusted basis they would be profitable buts this were also proofibfita on a gaap basis. i don't see things turning negative in the fourth quarter i think they'll continue to build on this momentum absent some of the corporate governance issues, which they did not address on the call, i was asked straightforward, and elon refused to answer spoke more on operating metrics. if they can get some independence on the board and demonstrate that they have a little bit of a better tact around social media, we can focus on fundamentals again and the stock can work higher from here >> the clock is ticking on when they need to name a new

chairman do you assume that's someone familiar with the company or will they bring in an outsider >> it's hard to say. it would be a guess. i see merits for both. someone with manufacturing expertise, potentially somebody from the technology world that can continue to sort of refocus tesla as not only an automotive manufacturer but the best technology in the automotive industry at this point it's hard to say >> jamie, would you wish for it to be somebody who had auto manufacturing or technology sector what if they picked somebody from the board of directors. >> the most important thing here is that they display their independence that's been the issue. >> is a current board member independent enough for you >> depends on the board member >> not his brother but maybe one of the other ones?

>> i think there's been speculation. >> james murdoch has been speculated >> correct i think that could be a step towards the independence that we're suggesting personally i think we would like to see somebody from the outside, maybe a fresh face. don't forget there's also two other board seats they would have to fill there's a big opportunity here to bolster the ranks and again kind of get control of the corporate governance issues that have been plaguing them for the last few months. >> very quickly, you believe this company does not have to raise capital any time soon? >> i think after what we saw in the third quarter, i had been a believe their they would likely raise capital. we're taking the probability of that down lower today based on the flow through of the model 3. >> let's get to ford there's questions about the restructuring. some short-term relief is there long-term relief when

you don't have details on restructuring? >> the answer is no. ford did a good job on the call do i think reiterate it's intention is to be secure through a typical recession, not like '08/'09, but a more typical recession. they talked a lot about ford specific issues. there were opportunities to talk about macro concerns they continued to point to their own issues if they can provide a road map, that's the way the stock gets out of this limbo it's been in >> phil, what do you hear in terms of those questions, the slowdown in china and how that will be impacting ford >> the international operations are a mess right now. china particular we talked about in the last couple of months, 30% drop in terms of sales over there.

posted a big loss for the third quarter. it will take time for china to turn around. that's market with separate, independent issues in china relative to demand slowing down because incentives from the government have been taken away. that's separate. ford needs to show it can turn around china t can turn around other international operations at some point -- they eluded to this, we will give you more details about the restructuring and where we are are going at the appropriate time so there's an element here of jim hackett and other executives saying trust us. we know what we're doing when you have a stock trading where it's trading now, that requires faith from investors. >> all right phil, thank you very much. also thanks to jamie alberteen. when we come back, we'll talk about the growth of manufacturing and the tallout of

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that keep them satisfied. it is the people that is really the only asset that you have. put your employees on a path to financial wellness with prudential. bring your challenges. welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back comcast just reporting earnings of 65 cents a share. that comes in 4 cents better than the street had been expecting.

revenue above what wall street was forecasting. revenue up 5% to 22$22.1 billio. with comcast's numbers, the adjusted ebita is up to 7$7.3 billion. and free cash flow up 36%. p 3$3.1 billion cable revenue up 3.4% to 13$13. billion. some important numbers people look for here would be customer relationships, they have adds of 288,000 to 30.1 million. high speed internet customers, added 363,000 up from 214,000 a year ago video losses were down by 106. that's less than we saw a year ago. and then look atnbc universal' revenue, up 8.1% to 8$8.6 billion. cable networks revenue up 10.8%.

ebita up 6.9%. >> despicable me made it tough for the films. i want to ask brian about theme parks. japan was a problem. >> some weather issues earthquakes. >> in general it was down a little bit i wonder in a really strong economy i would think that some of the theme parks would be doing better as more people travel i don't understand that. it's been such a bright spot and a surprise for comcast i don't know if it was as positive as thought. i'm surprised how well cable tv did. >> cable networks. >> up 10.8%. >> right don't know where that -- you know, the whole cord cutting worries. 106 down but the high speed internet is vastly outperforming >> it will be interesting to hear where the company thinks

the gapes a gains are coming fr. really weak numbers from at&t's pay tv business. >> but entertainment is a bright spot maybe randal was on to something. obviously we'll ask him -- >> sky acquisition >> he wanted that. actually i was looking at some reasons that they were highlighted, and i don't know if everyone saw the big picture necessarily. people are focused on how much it's costing >> i have seen some wall street firms that have buy or outperform ratings on the stock because they think some of the concern on the price paid for the sky acquisition was overdone >> just the street tends to like the acquisition that was made

after it's made. >> after the fact. it's the anticipation. >> for comcast and other companies, too. >> think not about buying all of that stuff which would have been -- that would have been -- i don't know if comcast ever would have really done that. >> price is everything >> right i think they wanted this >> brian roberts will join us. he's coming on at 7:00 a.m. eastern time time for the "squawk" planner. the ecb is out with its latest rate decision at 7:45 a.m. eastern. on the data front we'll get weekly jobless claims and durable goods orders for september. that's at 8:30 a.m pending home sales at 10:00. the main event today is the brian roberts interview -- no. no the busiest day of earnings season the main event >> it is lots of numbers. >> depends on how you look at things among the reports coming out,

merck, american airlines, twitter and conoco phillips. u.s. equity futures at this hour are continuing to trade higher not as much as earlier we'll see. it's early we have until 4:00 for everything to hit the fan again. no no maybe not. we'll see. nobody knows at this point >> at the intersection of business and politics we're hearing a fresh round of corporate complaints about the china tariffs. ylan mui has that story. she joins us from washington, d.c. >> the trump administration is under growing pressure to create an escape hatch from the latest round of tariffs on chinese goods. this push is coming from both corporate america and capitol hill they want the white house to set up a way for businesses to request waivers from those tariffs on 2$200 billion in chinese imports. we got a copy of the letter to president trump from a major retail trade group it warn's long-term negative impact from tariffs and calls on the administration to do more to

alleviate the pressure on american families. the lawmakers on both sides of the aisle are taking up this fight as well. we obtained a letter from new jersey congressman bill pasquerel a democrat spearheading this push with 27 other house democrats. earlier democrat ron kind got more than 150 co-signers on a similar complaint. the administration allowed companies to apply for exemptions from the previous two rounds of tariffs but this time there's no way out this is the biggest and most painful round of tariff s yet. there's lots of consumer products on this list. clothing, luggage and christmas decorations. so the assumption here is that the administration doesn't actually want to grant any waivers because that would defeat the point of the tariffs. back over to you >> when do we expect consumers to see this hitting?

if these tariffs go into effect, is that something happening immediately on the store shelves or something that takes a few weeks or few months to roll in. >> the latest round of tariffs have gone into effect. they went into effect on september 24th -- >> but when would consumers see that. >> we're already hearing some retailers talk about price increases for the holiday season so i think that consumers are already starting to see some of those changes. there's also been some studies looking at the impact of the tariffs on the washing machines. that was the first one that the administration came out with you saw significant price increases there. with the holiday season approaching and with the potential for tariffs to go higher that has retailers worried. >> ylan mui, thank you very much joining us with his strategy to manage tariff exposure in the manufacturing expect, the ceo of ingersoll-rand joins us. great to have you on the first thing i see in your

press release, this is strong the report you posted and you're also raising guidance for the year we want to get more into that in a second 22% is what the earnings per share growth was that's what we would like for the entire s&p that would be a good year over year quarter, 22%. you're doing your part why was it strong? >> thanks for having us on during your busy day today it's strong because business were strong. ingersoll-rand today is a different company. 75% of our business is climate and refrigeration related. as the world is becoming warmer, more urbanized people are more concerned about greenhouse gas emissions. we have solutions to remove 99% of those emissions in buildings. related to the tariff question, we've been able to manage that because 90% of what we produce in the u.s., we sell in the u.s.

and produce in the u.s china, same there. about 95% of what we sell in china is made in china we're limited a bit with that. we have that residual effect of price increases around that. we feel like if we sell value, efficiencies, we can recover that in price. >> we keep talking about gdp in the macro sense. we talk about tax reform, what it's done for some companies is anything -- beyond your control, has any of those things helped your business the overall economy, for example, is it better now than you remember in previous years >> i would say our thermo king business which moves perishables, food and other perishables globally and demand with trucking customers can now appreciate fully the equipment the capacity they need to open

in the market as result of that in addition to electronic logging devices which limits the amount of time they drive creates a demand for our products so we're creating a huge backlog in 2019 on refrigerated units going on thermo king trailers we saw that with industrial companies initially as they benefitted from tax reform it slowed down as everyone absorbed the impact of tariffs we hope that picks back up again once there's more stability and how that fully plays out >> so you're able to find people, if you need them, mike do you need to pay more? is there any wage pressure you're seeing yet? are you able to raise wages because of tax reform? >> people talk about logistics and tariffs, but there's probably a half million jobs today that are untilled in manufacturing. we think that grows to 2 million over the next decade i think that's real. companies need to not only retain the people they got but

find sources of bringing people in through either a vocational or professional path or using some automation for the more repetitive tasks that people do to help break that curve there's a need to generate productivity it's not letting people go, it's actually being able do do the work with fewer people so we're thinking about that every day. we're looking at all the possible levers to pull to be able to make sure we're producing to demand that customers expect from us >> mike, you raised guidance by 15 crepts for tcents for the yer is that covered by how you beat in the third quarter or the 1.30 for the fourth quarter would put you at 5.57, you're quite a bit above that will you beat 1.30 in the fourth quarter if you raise guidance for the year, there's only one quarter left that could mean the fourth

quarter could be better than where the street is now, right >> joe, you're quick with math >> you're an engineer, i'm trying to compete. >> we're thinking that there's still noise coming through the back half of the year with tariffs coming through. we have that handled through pricing. we expect to have about 25% leverage on the volume coming through the back half of the year tax rate should be more favorable. all in all a great year for us our goal every year is to be a top company in terms of eps growth over the last decade we've quietly grown 700% in terms of total shareholder returns. >> margins are up, too >> yes >> 80 basis points so you're not seeing the cost pressure yet that some manufacturers are seeing, or you're getting them up in other ways >> we're seeing a lot of cost pressure we're gearing up through productiviity and making sure th economic value delivered to

customers is something we can continue to innovate and get paid for >> okay. all right. given you as much time as i could. we may give more time to brian roberts, mike. don't think we like ingerso ingersoll-rand less. that's just the way it is. they're playing us out i hope to see you again. >> thanks. >> when we come back, we'll dig through comcast's results with brian roberts. he'll join us at 7:00 a.m. eastern time don't miss that hour a flood of earnings hitting the tape at 7:00 a.m twitter, conoco phillips, american airlines, hershey, ratheon and many more. you're watching "squawk box" on cnbc

all right. merck out with earnings. originally they reported 73 cents. there's some stuff in there for third quarter. adjusted earnings per share is 1.19 5 cents ahead of expectations. the company is also raising its dividend 15% it had been yielding about

2.72%. so, a 15% raise to that. also an additional $10 billion share purchase reauthorization being okayed by the company. that's an accelerated $5 billion share repurchase program for merck. so that may not have been factored in. sales was 10.7 that might be a little bit below the 10.88 that people were looking for. then if you own the stock, you want to know about maybe some different metrics. they are all broken out. after all is said and done, looks like the stock is up about 1.5% >> guidance a little above >> 5 cent beat, so it's saying the one remaining quarter, you know, it's about online. >> $4.30 to 4.36 for adjusted

full-year eps, street at 4.29. >> exactly >> you learned that from me. from the ingersoll-rand interview, there's one quarter left, so you can look at fourth quarter. >> yeah. >> you had that from barron's. >> sometimes i was able to divide by four >> you can ask mre aboe about i break. southwest airlines out with its latest report. southwest results helped by a jump in travel demand and lower taxes. that helped offset higher fuel costs. southwest ceo gary kelly will be on "squawk on the street" at 9:00 a.m. eastern time he'll talk about the quarter there. coming up shares of microsoft helping the dow's rebound so far this morning. we'll see what happens the company's earnings beat pushing the stock market higher. we'll show you what's ivdring profits at microsoft next.

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microsoft reporting better than expected earnings after the bell the numbers were better than expected the stock's up more than 4.4% this week.

boosting things even in a down market last night. what happened here, you had a buy rating heading into it, what was better than anticipated? >> as it turns out the cloud revenue services grew strongly the upsides were elsewhere there were multiple upsides. we saw the windows business with upside gaming had a good quarter. we yount estimated linkedin, aga again, fortunately, the and classical office business grew as well and classic office business grew as well. the strength of the company with multiple businesses driving the growth, not just the cloud businesses >> this is all things that happened under satya nadella just the broad brush of businesses that people didn't think were going to be great what worries you when you look at microsoft >> well, there's the obvious

macro thing, but that's obvious, in terms of company-specific things, they have been executing very well. they have this broad portfolio they've been reinvesting in that i very much like the fact that the culture has changed. the fact that they're opening up and working with companies like adobe and sab and others, that's a big change that's helping the business. they're investing in things that probably investors aren't even aware of, like silicon this is going to be a great venture for them that microsoft of all things is investing in its own semiconductor technology >> a lot of the older tech companies if you want to call mike is the an older one, they have issues where we have fast-growing businesses participating in the cloud boom but we have all of this is legacy stuff declining whether it's oracle, that's the

story. microsoft seems to not be in that business. there are owe other businesses doing well what accounts for the strength in those older businesses like you said, service and windows? >> that's a thought. that classical businesses would be just that, that they continue to decay the fact is, it's a hybrid world. a hybrid computer world. it's not one or the other. one is certainly growing quicker, namely, the cloud but the fact exists that there's a tool of existing technology. by the way, i see it not only with microsoft i see it with other companies too, that are redeemed as classical or decayed particularly in the manufacturing sector, you just had ingersoll going on, that's a good reinvesting story going on in classical markets >> you had a buy rating.

you had a $125 price did you raise that >> i haven't gotten to that yet. let me just say that the strong cash flow performance underscores the confidence in the upside >> so, yes, i read into that at some point >> jay, thank you very much. >> thank you coming up, comcast just out with earnings. chairman ceo brian roberts will join us after the break to talk about the quarter and business in general plus, the recent acquisition and huge earnings. we're going to hear from twitter. conocophillips american airlines, hershey, dunk can bra dunkin and more.

the roller coaster ride that is the markets >> russ? >> yeah? >> is it supposed to stay upside down like this >> i don't think so. twitter, comcast, airline stocks gaining news as gains were wiped out for the year. >> my eyes are starting to bowl. >> we'll get you down in a minute plus, tom farley joins us for his outlook for the ipo market and what he's expecting for the second half of 2018. "squawk box" begins right now. >> announcer: live from the beating heart of business, new york this is "squawk box.

all right. we're all over the place with the market, but we are getting results, fast and furious. that's where we begin. twitter, quarterly results are out. julia boorstin joins us. >> joe, twitter reporting adjusted earnings of 21 cents versus expectations of 14 cents driven by 715 million versus expectations of 702 million. but the company's user numbers fall short of expectations, ipo users coming in at 320 million versus the 330 million as the company loses its own projections, down 9 amid the single digit decline and twitter signaled another middigit dlienl. daily active users decreased 9%. but that's smaller than the

double digit growth that the company has been reporting in recent quarters. twitter attributing that decline in efforts and to clean up spam and improve the health of the platform, as it calls it the company's fourth quarter guidance for both earnings and guidance far stronger than wall street productions twitter compared to the street's 26.5% projections. ceo jack dorsey saying, quote, we're doing a better job of detecting suspicious accounts at signup this quarter's fine results prove we can prioritize twitter and with the growing number of people who participate in conversation you see the stock up 8.5%. and we'll have that with the twitter ceo ned segal coming up. back over to you >> certainly not keying in on the disappointing user numbers at all, julia. obviously, the other stuff must be the lead story theres right >> well, yeah, no, it's

interesting, joe, if you look at how much twitter has talked in recent months especially with jack dorsey testifying on capitol hill about how they're cleaning up the capital and accounts it's definitely a bigger decline than expected. >> get rid of users every day -- followers i get rid of every day, julia i know exactly what they're doing. i block a lot. anyway, thanks okay a lot of earnings that are out this morning we already told you about comcast earnings comcast coming in with earnings better than expected adjusted gps 25 cents a share. 4% better than the street was anticipating and joining us to talk about that is bryant robeis brian robs >> thanks for having me. >> and not just the ones we just mentioned but as things like high speed internet customer

additions. what, to you, is the most important takeaway from this report >> well, we continue the great momentum and i think there are some folks, perhaps, that lost focus of whether we believed in the core business. and these results, once again, third quarter, i think the last one you just said. if i could pick one or two, i would 363,000 broadband additions in the quarter that's the best in ten years and dave watts and the team are doing a fantastic job. and even growth for the cable company was up 7.6%, that's the best in six years. so, we're seeing a really good transformation of the cable business into connectivity into higher margins, lower capital spending and that's why the numbers all seem to be better than people's expectations and we're delighted. >> yeah, the numbers at nbcuniversal were also pretty strong, too. revenue up 8.1%. and i believe the cable network

is up by better than 10% what are you seeing? what's driving the growth there. brian, i'll repeat that. we were looking at numbers that came to nbcuniversal the numbers were stronger than anticipated. 8.1% growth for nbcuniversal for the cable networks, up better by 10%. i just wonder what's driving the growth there it sounds like we're have something problems we're going to talk more about these numbers. we'll try and fix this in the meantime one of the things we definitely want to point out, just ask joe, we mentioned about the theme parks. a little weakness but that could be from some of the free cash flow they're spending to build a park in beijing. >> partly there, too i was thinking about it, because in previous years and quarters, the theme parks, how do you do comparisons when it was already -- >> impaired to the launch of a new attraction >> exactly

>> and we also have the situation in japan where there was a one-off because of weather and an earthquake. >> it's fascinating to think about "despicable me." >> -- "despicable me 3" it was marketable because of the products that came out associated with toys >> brian also mentioned the idea that you're, you know, so interested in sky, because you're worried about you're existing -- well, now,we know how well the existing business has done and there's a reason, i think he wants to talk about sky, too because i think there's a reason that we went after that. >> let's check in with him again. brian, i don't know how much of that conversation you actually heard. let's pick up where we left off. >> i'm sorry about that. not much >> let's just pick up where we left off and that's with the numbers at nbcuniversal revenue for both overall, up

8.1% the capable networks up by better than 10%? what's driving growth there? >> let me just start in case you didn't hear it before and sorry to be respet tiff if you did the head line is we had the best broadband quarter in years we now have a gigaspeed available more than any other company in the u.s every one of our customer homes has the availability of the fastest internet than anybody has. and we had the best ebit doc cable. by 6%. and our net cash grew 16.6% in the third consecutive business so the core business is really showing great momentum it's been that way all year and i think dave watts and the team are doing a sensational job. at the same time, at nbcuniversal, cable television up 6%. we knew we had "despicable me 3"

last year so film up and nbc, the longest lead over cnn in the key day parts so comcast, nbc and universal, i'm thrilled with the third quarter. and that's why we're able to beat a lot of expectations >> brian, you referenced this at the top just that there will be lingering questions about the strength of the business people wondering if that's why you're interested in an acquisition. how much of the overhang in stock was because of that? and how much it people wondering how much you paid for the acquisition? >> i think when there's uncertainty, it's tough for investors. i understand that. and when you're making a big bet that may or may not be the right thing to do, there's uncertainty with that, too the good news is, this feels like a new beginning the momentum from cable is power

i ing. and now that sky is resolve, we're better together. i'll make a couple points about sky. first of all, it was a competitive process. it took a long time, same for fox. we ended up winning by 10% which is the same margin that disney beat us for fox by 10% that's what it was i think that's the market was and i think the value is definitely there and it will show that over time. what it does for us, you start and you think, is sky a good business for us as a stand alone company? it's a fabulous company. it's not just a company, it's both sky sports, sky news, sky movies are on all of the platforms from different competitors. and they're really leading the way in that most european markets. it triples our footprint in the television business and doubles our footprint in the broadband

space. they're the number two broadband provider people really didn't understand that they're just launching an excitiexcite exciting broadband product in italy. when you put us together, we're the top -- in the top four countries where we operate, we're the number one content producer in each of those countries. and if you look at in terms of the model that has powered comcast to have 23 straight years of ebitda growth that's a subscription and it adds to our successful formula. we think together, we can do so much more. we have a number one platform. number one in u.s. cable number one in u.s. broadband number one in uk-paid tv and that is great for our partners and content providers and technologies as we go forward. so we're controlling our destiny into the future that i think looks very interesting and

exciting. >> brian, if you were to totally just to tell us what you are thinking and you don't have to, if you don't want to, but is this the real outcome that you wanted i know how much you wanted sky and i know that comcast went after the other assets but it seems like that other play made it possible just for everything to work out for sky is this the best outcome for you? or would you have liked the whole thing? i think you always -- >> this is a time i can say i can't hear you anymore and my feed went out. look, we're thrilled with the outcome. i'll let you speculate how the journey got us here. >> yeah. >> but, remember, we did bid for sky before we bid for fox. i think they're both wonderful companies, rupert murdoch and many other people that built a very special company and that's true with both parts of it. but sky does look a lot like comcast, nbcuniversal. that subscription model, that

market leadership, their brand is better than any media brand in the u.s. or communications brand. they really are products company. we have great leadership in jeremy derrick and i'm pleased he's staying with us and he's going to leave sky and work with steve burke and the rest of the team here with dave, myself, mike cavanaugh, and we're going to drive a company that's so unique and now global. it's an exciting day >> it was a long shot, too, i think. you were in that cab, with the way the owner ship was with rupert, right? it was a long shot at the time if you look at the entire strategy, the or tart of war, whatever it was, when you end up here, i don't know what the initial chance are when you thought, sky is pretty effective. what do you think in your mind the initial chance of you succeeding were? >> we knew the prize was worth it i don't know what the percentage would be i learned from my father, if you

don't try, you won't find out what happens and the worst thing is, if we don't prevail, even with these types of interviews, it's not great and i will say one of the things that heartens me the most is the reaction of the employees. if you think about it, the employees at sky, the employees at nbc, and the employees at comcast know this company better than just casual part-time investor with a portfolio. this is all we do. and for most of us, it's where we have most of our net worth. the reaction from the employees is unlike any deal i've ever been part of maybe because it's a long shot maybe it's because it lasted a long time. i think it's more than that. i think it's the enthusiasm to take what they do, now be able to do it on a global scale do it with the best in both continents, comcast is number

one at what we do with xfi and x1 and nbc is now the number one broadcast network. first time in 16 years and fifth year since '18 and the number one in communications to have the parts lead into the future, it's transformative and we're delighted to have the kind of great results to show we can operate well and we have a great strategic road ahead >> hey, brian, let me ask you again about wall street reaction to some of these things. there are a number of analysts on the street who have buy on overweight ratings on comcast. but they've raised some concerns even some of those very same with the street reaction by selling this was overdone. one analyst said you paid a fuel multiple at the top of the cycle and that's a deviation from the normal sort of acquisition that

comcast makes. what's your response to that how do you answer that to say it was worth it >> well, you judge us in 20 years. i try to think the job from management is to put on ear muffs and try to do what you think is right if you had a private company and owned all, what would you do if it was all your own money? and i think the employees, not just me, the senior leadership team, we're all in that this was the right strategic move for the company at the right price we were 10% higher bidders, i said i don't think that's a big gap at a point a 39% stockholder, you needed a margin to outbid the folks. what we're going to do this morning is introduce jeremy and the sky narrative really the first time to american investors. it's is not a stock bid that was wide lly followed over here. they did have large shareholders they only put the three companies together into one sky

in the last few years. and so jeremy is going to take investors on an earnings call a little bit this morning through greater detail and i think as people get more educated and see the answers to the obvious questions, what about the change, how sky positioned to continue to grow they've grown every year they've been in business that's basicallythe same true for comcast. they have the best product we feel that's definitely the case here in the u.s. and the chemistry is off to a fabulous start. it's one day at a time there aren't always answers. but the good news is, all of that is behind us. our priority is to get our balance sheet back where it was as quickly as possible that's the priority and focus now, execute and get the cash flow levels back to what they've historically been. that's what we've told the rating agencies. we know what our work ahead of us is, we're thrilled to have this opportunity and so far off to a great start

it's only been a month so it's been very, vrl earl shg, very ey >> brian, you talked about the net additions of cable and broadband. it's a big industry. where is that market share coming from and can that kind of thing continue and then the reduction in capital spending is that a structural thing or is that just you dialling it down for now? >> well, we've seen -- no, capital spending has been coming down i'll take the second one first, capital spending was predicted at the beginning of the year and revised that and confirmed that and made it slightly better, i believe. the same for broadband can be said, i don't know i never liked to look forward and give guidance that you don't know where a sale will go tomorrow the better way to look at is what happened this quarter and last quarter, which was the best in nine years or so. last second quarter.

so, we've had this momentum now for a little bit i don't know that it can continue to be 150% of the year before or even higher but we are seeing north of 1 million broadband subs year in and year out why is that? well, streaming is our friend. people want the best they have now -- our power users have 20 connected devices. they're using 600 gigabits a month. that's 10% of our customers. that's more than triple what the average customer is doing. and if you had to make a bet in five years, three years, ten years, would you look more like the power user today or will you use less tomorrow? i think the trend has been with smart devices and other things gaming, all sorts of application, virtual reality whatever might be coming next. you need the best network. and that's job one that's why i think it's sustainable >> other people, brian have said, you know, paid tv, we

still have those cord cutting worries. it's worrisome enough to have a big presence in the united states, now, you've doubled down on that whole business in 20 years, i wonder what everything looks like at that point. so -- >> so -- >> yeah, go ahead. >> well, i think that's a very fair question. first of all, we had a good quarter in video that we've seen many, many more competitors here in the u.s and one of the things that i think investors will hear about today and can learn about, the structural differences very significant differences between europe and america in the paid tv market first of all, free to air is much -- there's 100 free to air channels that's not the case in the u.s in some of the market. each market is different from itself there's lower paid tv penetration. more upside in europe, than there is in the u.s. and the difference is that the programming is called sky atlantic, sky news, sky movies, sky sports

whether it's on our platform or other platforms. and there's less new competitors because of some of the those structural differences and sky made a tough decision, and i give great credit to the leadership back in 2005 they started to create light packages, what we would call light packages today you could buy it by the buy or buy just the sports that you're interested in. and so, they compete with themselves and gave customers more choices and that's why the results are balanced and growing but they also have a broadband business, different rules that allow them to have broadband they built some facilities, lease others and have a hard line phone business. and because the brand is so respected, they move and sell new products so, they have a pretty exciting road map at sky for the next several years, and as the market changes, great leadership evolves with it.

this gives us great capability and flexibility that we didn't have before to innovate, contract, do deals i think people will be very pleased with how sky performs, but it's early and we're just going to have to show you. >> just one more, this cord cutting. where is hulu going, what are your plans >> dropped out again, unfortunately. >> oh, really. >> i think he's serious. i think he's serious >> it really did i wanted to give him a chance to say something about -- i wanted to give him a chance to say something about cnbc, in relationship to that msnbc comment. i know he looks -- >> let's take a look at shares of comcast up by 3.25%. $1.38. shares are rebounding off the lows and the concern about what would happen with the business and sky. up by 3.25

>> what about hulu, brian, what you can tell us? >> i can't really -- there's no real new news today, we have a good content relationship with hulu there's nothing driving any imminent decisions we just have to stay tuned it's really an nbc property investment it's been there since day one, hulu and we're back on the board and we'll see where things go from here >> brian, i want to thank you very much for your time this morning. i realize it's a busy morning and you have a lot to do we appreciate you stopping by. >> thanks. let's check the markets again. u.s. equity futures overall at this hour have been bouncing back somewhat from yesterday's steep declines yesterday, the dow was down by over 600 points. this morning bouncing back by 240 points

s&p by 29 points and the nasdaq by 125 lots of earnings coming through this morning dow component merck out with its earnings that beat the street by five cents. merck announcing a 15% dividend increase and another drugmaker bristol-myers, 18 cents better than the street was expecting. it helped in strong growth and sales of treatment by the cancer drug and bristol raising it and that stock is up. we've got google parent alphabet, amazon.com and intel all adding their results to the quarterly numbers after the markets close today. quarterly headlines driving the markets this morning plus, what the white house is saying about yesterday's

selloff. and tom farley will lkta volatility, upstart, unicorns and much more. stay tuned you're watching "squawk box" on cnbc 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.

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. the u.s. is refusing to resume trade negotiations with china without a firm proposal from beijing to enforce technology transfers and other economic issues.

that's according to a report from "the wall street journal" just out this hour negotiations have been on hold since mid-september since the united states announced its latest round of tariffs. but that's exactly what steven manunen told us. dow futures indicates up by 225 points s&p up by 27 nasdaq up by 118 >> what was the percentage the s&p yesterday? >> 3%. the trump administration weighing in on yesterday's 3% selloff. white house press secretary sarah sanders telling cnbc the fundamentals and the future of the u.s. company remains incredibly strong. unemployment is for a record low for a past half century.

business and consumer confidence have hit record highs. women and minorities are entering the workforce in droves we remain focused on the long-term outlook of u.s. economy. where has she been in terms of standing in front of edge in front of -- >> present >> where has sarah sanders been standing in front of that gaggle there hasn't been any. the president has been doing it all himself? >> no. it's been an active month. >> you have seen him take that back -- >> probably because we're heading into the midterms. >> i think that's part of it i think that's part of it. coming up, farley and akwa division, ceo on the acquisition, i just got that, far point from farley, i get it. he's our guest next. as we head to break, here's a look at the biggest movers in the dow. "squawk box" will be right back.

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cnbc we are live from the nasdaq market site in times square. and among the stories that are front and center today the european central bank is about to issue its latest interest rate decision in a few moments investors are going to be watching to see if there's any change in economics. despite the turbulence we'll be getting the economic outlook for the united states. and economists expect september durable goods orders to be down by 1.4% for the month. and ackman has taken a stake in hilton worldwide the stake of 10.4 million shares represents 14% of the total value. and it said it would discuss it further when it issues its third quarter investor letter. you can check out shares of

hilton worldwide up by 4%. time for pops and drops. tesla posting a surprise profit driven by higher production model 3 of ceo elon musk in an understated call, expects the company to repeat its net profit in the current quarter as well >> when means a normal conference call? >> yeah, a normal conference call, exactly. anb shares dropping. and also slashing it, you don't see that every day 20% sliced right off the top >> just look at the chart. the crazy overshoot to the upside now completely online. >> and watching that stock for years and years and years. >> always just kind of a whip-end of the semi conductor cycle. >> exactly >> and ford shares are up at least today. the company earning 29 cents a

share. beating estimates by a penny revenue. also top estimates, sad when 30 cents represents a 4% move anyway, the company also reaffirmed its four-year guidance when we come back acquisition president and former sye president tom farley will join us for the remainder of the show we're going to talk volatility, recent trading action and where you should be putting your money to work. all of that coming up on "squawk. take a look at equity futures, the dow rebounding to the tune of 225 pnt d 234nasdaq down by more than 4 is indicated by up by 128 points "squawk box" will be right back.

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welcome back to "squawk box. to dom chu, the recap of the earnings reports this is like the fifth time i'm

tossed to you, dom >> you're prominent. i'm going to jump into this one. i'm a century deposit kind of guy. let's look at twitter. the social media company posting better than expected profits and sales. and had top expectations but the number of active users became in below estimates. daily and active users show steady use and comcast, and media giant and of course parent company of cnbc, up 5%. after profits estimates driven in part by the addition of high-speed internet, hsi customers and also better than expected results in the nbcuniversal media division. defense contract ratheon on the upside with the development of cruise missiles and the defense company came up with better than average sales and boosted 3% and on the pharmaceutical side

of things, merck, boosting over 14%, adding $10 billion by its stock buy. and bristol-myers squibb, it did boost it's full-year profit guidance thanks in part for stronger demand for some of its cancer drugs back over to you >> let's get to our guest host this morning, tom farley, acquisition and ceo and former president of that other -- have you been here before >> i've definitely been my way before i was picking my way through outside and i wanted to say welcome to the new york stock exchange >> you don't need to be that way anymore, right i mean, i know you were there for a while. >> like reggie jackson said

once, once you wear the pinstripes, you always wear the pinstripes >> so you weren't getting out of there at a time when nasdaq takes over the entire world of creating -- that's not why you were sort of -- >> no, no, i got out of there in that there was somebody better to take my place in stacy cunningham >> but you don't feel allergic here or anything >> no, i think it's more adina seeing me on the guest list here probably isn't thrilled about it but all kidding aside, the competition between those two things is crazy. hatfields and mccoys >> and the competition is good >> right nasdaq does a lot of ipos, they tend to be slightly smaller. nyc does the smaller >> let's talk about your expertise on that, with the ipos

with the market volatility, what does it mean for the ipo market? >> it's going to slow down it happens all the time. it happened back in february go back to march 2016, the european issues, when volatility spiked the ipo market shut the big question will be -- in fact, it will be a little bit about today. does the volatility of yesterday continue because if you see a couple days of volatility, people will shut it down for the year >> do you feel more or less anxio angst when you see days like yesterday? at the big board, you see that, and you have to hope things go smoothly and there's a lot of turbulence but now, you actually got money in the game, right >> right when i was at the big board, i didn't have to worry about the systems. >> exactly now, you're worried about your own money. >> look, markets have pullbacks. >> i stop saying garden variety. i stopped saying that because i

think it makes people too complicit. but that seems to be what you're doing. >> yeah boop i don't want viewer who woke up this morning, they checked their investment account this morning because they thought, oh, my gosh, this is the end of the world >> back on volatility, we hit 40 on the picks yesterday, officially, we never hit 25 that kind of volatility, does it pull ipos from the market? is it 25 sustained for a while or what's the relative volatility >> it absolutely will impact the-i po market. 25 you'll hear commentators say 25 is the long-run average but if you look at the last 25 years that's the highest it's ever been. and going back to the financial crisis there have already been ipos pushed i talked to some of my colleagues at nyc. and there are big bellwether-i

pos hoping to go this year it will be interesting to see if they do or they push i suspect they'll be pushed. >> one got priced. yeti, at the new york stock exchange -- >> cooler than what -- >> oh, cooler, i get it. okay. >> it doesn't price particular really >> no. >> and that will be a signal for other ipos if you want to push ahead, you're going to end up below the range, you're going to end up downsizing. >> yeah. and that's why people will push their-i pos until january or february >> jtom, here's a question i posed to adina yesterday all of the big companies that want to hold off because of the market volatility, i just wonder if there's any pressure on them at some point to wait until you actually get liquidity by the way, some of them are so big it's hard to think of

another round. >> not really because you're referring to uber, airbnb. >> right >> they don't have to do anything he said, we're not going to rush ipo, we're looking at the end of the 2019 they may accelerate it before 2019 but the medium-size companies that actually need the financing, they should feel pressure they should be accelerating their ipo. there's nothing in the windows that the ipo is still open it could slam shut like it did for facebook >> it the head, the bastion of capitalism when you were at the new york stock exchange, and we've talked about sort of a new normal in terms of, since the election, and you were early on excited about the possibility of less regulation and lower taxes. a lot of it has come to pass,

wouldn't you say >> yes, it's been good since the election like, you look at the s&p, it's up 25% since the election. i think that in large part is because of the pro-business policy let's be candid, since the tax cut, the market is flat. and we still have a big open question about china i'm not backing away from our prior conversations, joe, where i said, look, somebody had to do something with china, and that's a big risk >> and having watched stock prices for years and years and years, who knows, you know, some of it is flat since tax reform >> yeah. >> probably up in anticipation >> yeah, up 25%. >> who knows where, i wouldn't even venture a guess, by the end of the year where the stock market is right now. >> yeah. >> in other words, we're flat, now we're down what is it, it's mid-october by november and december, after the election, we could still see

its regained highs i mean, i'm not convinced that we end down for the year in 2018, are you? >> no. no and i think we're still sitting in a very good place i think the policies we put in place over the last year and a half are by and large the right policies from a business perspective. i think the economic numbers are as good as they've, quite frankly, ever been but there's concerns china, how that's resolved the fed, how quickly they raise. and then the rest of the world, frankly, doesn't look as good as we do in the u.s. >> can i very quickly break in we've been waiting for that ecf. it left unchanged. and the deposit rate unchanged the news saying they expect markets to stay at present levels i don't know what supports that up but that may be the one piece of news >> yeah. i don't know that deviated too far from what we were thinking i think people maybe were

pencilling in september for the first possible change for that just looking the it, to me, where this would manifest itself in the markets is the dollar it's flattish today, anyway, the dollar index, anyway, i don't think it's necessarily too much of a surprise. >> will you tell us how to make money with far point and a lot of what you're doing now >> it's a public company i'm pretty familiar with the s.e.c. rules -- >> but we can talk what about you're doing >> yes >> it's great to have tom here tom's going to be with us for the rest of the hour the rest of the program, i should say when we come back, is everyone tweeting about twitter earnings we're going to speak to an analysis about the results also, take a look at where the stock market is, where the stock of twitter is. it's up 14% after reporting earnings this hour better than anticipated. twitter up 3.88 to $31.42.

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♪ now, the answer to today's aflac trivia question. what is the most caffeinated country in the world the answer -- finland. twitter releasing earnings just a few moments ago numbers better than the street had anticipated. although the monthly average users numbers, it came down. joining us now is john edberg. your take away at all of this, john >> yes, i think investors are going to look past short-term user issues. the top lending was up 8%, almost that flowed flew the bottom line. i think the investors are thinking the platforms are important for the future of

viability of it. >> what do you tell people to do with the stock up 12.1%? >> yeah, i think what you're seeing is investors looking at what today's results mean towards revenues and products and just fuch the value off of it i think the tricky part is to figure out how long the issues will be going. monthly after users. >> monthly average users, yes. >> they eventually need to grow that number. it's just how willing they're going to be patient for a few more quarters. we'll find out >> john, you say investors willing to look through the issues on growth but isn't it in fact a result of what twitter is doing? in other words, are you able to get any call on how much twitter is coming its user base to get rid of spam accounts? >> yeah, that's a piece of 9 million quarter over quarter

decline. they also mentioned gdr. and we didn't make money from those accounts anyway. i think if it keeps going for a few more quarters they may get impatient. for now, it looks like they're willing to look past it. >> hey, john, this is tom farley i called my old georgetown friend at twitter to congratulate him on earnings one of the thing he's excited about is the potential to make maus, currently only maus and drive them to becoming daus. and he sees a lot of potential there. do you share that increased optimism about increased user engagement >> there is an opportunity the dau to mau ratio is relatively low, 50%. facebook is 60% to 65% that's a kind of high water mark they need to get to. i think they need to make it a

more useful product for users to get there. even getting past where you were, i think you continue to see the growth improve over the quarters >> john, thank you for joining us today we appreciate your time. >> sure. >> be sure to catch ned segal coming up on "squawk on the street." and coming up, reporting after the break and later an exclusive interview with southwest ceo gary kelly be sure to tune in for that interview and more "squawk box" will be right back.

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when we come back, we're going to talk about after yesterday's market selloffs. stocks hitting the reset button for the year wiping out nine months' of gains. a lot of big movers. we'll tell you what toat i wchn the trading session. and futures, dow up by 200 points

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market bounceback. futures pointing to triple digit gains for the dow. more than six months after the close. big stories, earnings, comcast, merck, twitter. plus, other breaking news, just a few hours away from futures and as the final hour of "squawk box" begins right now. >> announcer: live from the most powerful city in the world, new york this is "squawk box. ♪ good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i know, farley's here.

it's like, where are we? did we move? are we still at the nasdaq but we are, peer at the nasdaq, tom farley former head of the know >> but becky is here >> and adina is not in the building. >> i suspect she is in here. she's great. >> and chairman and ceo of far point and former contributor on the big board. futures right now indicated -- so, about 200. they looked like they were going, breaking above/under 200. nasdaq up by 150 earlier still early on in the rebound with gains right now the treasury yields got only down to 310 at one point or 313 right now one additional comment, because we talk about it a lot

we're down 8% from the highs on the s&p? >> a little more than that >> it was 9.8% yesterday >> it did get there. >> intraday. so, we talk about there are times when we haven't had a 10% correction >> sure. >> and it's been like two years since we had a 10% correction. so they do happen. >> and that would be the second time this year >> it's not like we absolutely have to rebound all of a sudden. because you do see 10% correction >> right i think it's smart to look at this year in the entire range of this year. you have a few percent below, you traded back there in the spring and that's the market >> and then we got to decide by december 31st. because the election will be over at that point and plenty of trading sessions >> to go either direction. >> to go either direction. i wish we knew >> one of the things the market is digesting today are all of the big earnings reports that are out. we've got a lot of them.

many of them have been strong too. in fact, nbcuniversal, parent co-of comcast, the company added 288,000 cable customers for the quarter. its able earnings growth was its best in six years. here's what ceo brian roberts told us on "squawk box" earlier this morning >> the core business is really showing great momentum it's been that way all year. and i think dave watts and the team are doing a sensational job. at the same time at nbcuniversal, the television businesses, cable and broadcast were up 6% comcast, nbc and universal, i'm really thrilled with the third quarter. i think that's why we are able to beat a lot of expectations. >> beat expectations and that's leading the stock this morning check this out stock up by 4.5% back to 35.65. >> is that why everyone around here is in such a good mood. >> well, that, too and dow component merck out

with quarterly results beating the street revenue a little light. merck also announcing a 15% dividend and the stock up up 4% before the company reported after it reported. check it out now, adding to the gainses after twitter posted better than expected revenue last i looked, that stock up by more than 14%. don't miss the company's ceo who will be joining in the next hour, live on "squawk on the street." a few other stocks on the move this morning. bristol-myers share trading higher beat the street and the drugmaker is raising its four-year forecast it's a different story at stanley black and decker revenues fell short. results hurt by import costs, currency and tariffs that stock fell off. southwest airlines, meanwhile, shares also getting hit this

morning. and this despite better than expected earnings and revenues we'll talk to an analyst on that stock in just a few minutes. and don't miss southwest ceo gary kelly is going on on "squawk on the street" in the next hour. and conocophillips stock getting a bounce and look at this one, wpp shares plunging in london trading the ad agency cutting its sales and profit forecast. i mean the entire advertising group is extremely weak. the markets are sort of saying they're dinosaurs. >> what is that, dinosaurs, not in the right area. is this any indication of global >> i think it's the world of digital advertising auctions media buying is not what it was. obviously, these agencies, these comgl gloglo gloglo gloglo gl conglomerates were not great companies. >> exactly

>> it's a real problem >> maybe it's the market. >> but, it's broad-based. >> yeah. >> it's broad-based. it's not just wpp. >> it could be a lot of things visa share, on the other hand, trading high on an earnings beat. the card payment volume jumped 11% from a year earlier amid a stronger u.s. economy. that's one of the grow stock favorites that has come in a lot. in the meantime, we have a big lineup for you today covering the markets from all angles, mike santelli is here. dom chu, and our guest host tom farley and our senior economics reporter steve liesman we're going to start all of this with dom dom, what are you watching? >> you guys have talked about the fact that we've seen pullbacks of this kind of nature in the past. just so far, just this year, we've seen a number of them, not to the degree we have. of course, we saw them in early

part of february and march when we saw that big decline in the s&p 500. but for the most part, you can see with the trend line, we found bounce areas and we're waiting to see whether this area, this deep mover along the low-trend line really is an area that people can find a bounceable area. let's check outwhat else is moving in the markets because we have seen some of the internals. some of the, i guess, symptoms, if you will, perhaps, the environment that we're kind of in, that manifests itself in a broader base with the s&p 500. if you take a look at the s&p 500 stocks right now, 164 of them are above that long-term trend line. that 200-day moving average, something we've been talking about. meanwhile, the vast majority of them, 341 are low the long-trend term lines that's what we talk about the momentum slowing also something to watch, whether or not stocks are making new

highs or lows. within the s&p there are 39 stocks trading 52% or better of 52 weeks or high how many are trending 5% of their 52-week lows 169. if we talk about the stocks losing momentum it's because the constituents within them are losing their momentum. that's a broader look at the internals within the stock market, guys that could be leading us to feel more negative about the current sentiment. back to you. >> it's turn to oksana and jeremy i think you were both here when we were talking about what happens between now and the end of the year. we could be up, we could be down would you feel more comfortable if i gave you until june 30th of next year to tell me what you're thinking oksana, do you think we'll be higher by midnext year we'll give you more time

we don't need to make these things up by december 31st but are fundamentals going to take over? are they good? >> well, first of all, especially in light of your comments with the pullback thus far and we've had in total 16 pullbacks since the beginning of this recovery that have been 6% or more. certainly, nothing about, simply, the magnitude of this one tells us really anything and the interesting thing about this one, though, it's been highly correlated with the bond market so, before investors kind of had that safe haven. we haven't seen that this year and if whether you look from the beginning of the year or the stock route. in terms of where the market is heading, certainly if you look to credit, and i'm certainly a credit-watcher, right? >> right >> we're seeing rich valuations but companies in the lowest part of that market, as far as

quality being able to generate cash to debt so we're certainly not seeing any stress >> jeremy, you got the big job at ubs so are you good enough to do december 31st or kick it off to june 30 jth. >> i'll take the extra time. >> will we be higher will we make this back up or go to new highs by then or is this, you know, more problematic. the end of a secular movement. they do end. >> bull markets do end but we do not think it will end between now and next year. markets tend to overreact in both directions. looking in the third quarter of this year, the s&p 500 was up almost 8% in a total return basis. despite the fact that trade tensions were escalating i think the markets got a little too comcomplacent. and we got the rate shock. and we heard from companies we're starting to see pockets of

growth i think we've overreacted to the downside with this almost 10% pullback valuations for the s&p 500 today are back to february 2016 levels on the price to earnings basis so, i think we got a little complacent at the end of the september and now we've overshot that >> when you point out that the market is not reacting to the 22% gain in s&p earnings, when you point that out, by definition, that means valuations have come down. >> right >> because if earnings up 22%. and stock prices down -- >> and the more the market anticipated that these earnings would be here. >> well, bailed out right now. >> i do wonder what gets us out of this little bit of a cycle, though, wheres, sure, we know interest rates are going up. we need to make sure they're not going up in such a way that hurts valuation.

do you see us getting any resolution of these things? on the one hand, treasury yields have pulled back a bit maybe those are pressure relief values in the short term >> it could be look, we are still very much in the low-rate environment with everything that the fed has done and what the fed has done is a reaction to a strong economic backdrop nothing about what the fed has done thus far has been a surprise for the markets if you look back at the last several years of the fed on this normalization path, every time they've guided for a certain amount of hikes, they followed through. so there's nothing about this should should be spooking markets but certainly as the fed and ecb now start to come out of their extraordinarily accommodating mark, that's going to have impact on the amount of money sloshing around in the system and that absolutely will have an impact on valuations across the board bonds and stocks as well but nothing about rates is prohibitive in terms of company

profitability. >> oksana, jeremy mentioned trade tensions other than that, i haven't heard much concern about tariffs there's been a number of companies come out recently with earnings and they're blaming missen on increasing impact on tariffs big deal, no deal? how do you view the tariff situation right now? >> can certainly evolve to be a big deal probably not a big deal thus far. although certainly, i think some of the apprehension we're seeing is trying to figure out which way is this going to evolve. but perhaps more importantly, when you think about rates and what implications they have for portfolios, because certainly, they are the back bone of everything that happens in this market what's going to drive them more so than perhaps any of this noise is simple the dynamics of supply and demand. the fact that we have an exploding, or growing, i should say, deficit and the fact that the largest demand provider for the treasury is pulling out of the market as is china, less treasuries,

japan, less treasuries, russia, not a major demand contributor but certainly has reduced its allocation as well banks are deregulating so there's just significantly less demand. and that is what likely will continue to push rateshigher and have impacts on portfolios more so than some other noise. >> jeremy, do you need the big names, the faang, do they need to go to had ynew highs? because they were stressed, weren't they >> given the fact that tech make up 30% of the sector of s&p 500 you do need to see resilience in the sector on the yourn ton it's focused on countries that have global growth and china the sectors and stocks that have outside exposure to china, they're down 13%, 14% in this 9% to 10% pullback. more so than the older

leadership needing to be the continued leadership, i think we need to see some stabilization until trade talks. i think in order for the markets to get more comfortable that tariffs are not going to take a big bite out of s&p 500 earnings >> what if they have a 20-year cold war with china? we're never going to recover from that. >> look, right now, with the tariff level it's not overly punitive to companies. it probably hurts earnings, 3%, 4% and escalates into where we put a tariff on $200 billion imports. what's harder to quantify is the second round reduce in confidence and to some degree, that's why we need clarity on the trade front. >> okay. the last word, jeremy. thank you, oksana. >> thank you >> jpmorgan assets management. >> and jeremy zirin wealth

management america when we come back, the tale of two airlines. southwest air down by 6.5% this morning. american up by 4.5%. we've got analysts pulling up to the gate to talk about it. following the 600 drop in the dow, the futures bouncing back at least a little bit dow futures by 222 points. s&p looks like it will open up 27 pouvnltints, the nasdaq up b0 points stay tuned, you're watching "squawk box" right here on cnbc. in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives,

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all i need access, tools, connections. high-speed connections. is the world ready for me? through internet essentials, comcast has connected more than six-million low-income people to low-cost, high-speed internet at home. i'm trying to do some homework here. so they're ready for anything. all right. welcome back to "squawk box," everybody, we've been watching the futures this morning we're seeing a bounceback. dow down by 608 points yesterday, today up by 228 and nasdaq up by 130 southwest and american airlines results out this morning. the results this morning --

actually not just today, but certainly today with southwest air and american airlines. joining us barclay senior equity analyst brandon swalinsky. >> joe, thanks for having us on. airline investors getting hit harder i think american airlines is down 40% this year southwest is down 15%. that's actually a quality company, arguably. but, you know, this is really, i think, a sector opportunity for re-evaluation. stocks that are trading single ps with rics low to mid-teens. that's just coming up very low on relative valuation with the s&p. we saw this in the railroads years ago. warren buttet bought burlington. i think there's real deep value opportunities here

the industry just needs to how to deal with fuel volatility >> that's what it is and southwest over the years has approached that in different ways was there some type of misstep in the latest quarter here >> well it did drop some pretty bad news today saying its cost receipt is up 3% this year i think the street, we were looking for something low 1% so, that's a lot of nonfuel inflation for southwest. >> what's the problem? >> you know, they're talking about network investments. airport investments. some stuff on the technology side southwest, even till today, can't take foreign currency bookings they need to really catch up to become a more international competitor >> the street doesn't like it, but is making long-term investments a good thing over the long haul? >> i think southwest is moving in the right direction the issue is, i just look at american airlines trading at a 5

pe, and southwest at 11. >> on those extremely low pes, though, i do think you have whole parts of the market that are now being priced for, okay, end of sector for this cycle whether it's housing, autos or airlines the rule of thumb has been tonight against buy secular stocks is that not the concept anyway >> it's a constant trend the u.s. economy is very strong. gdp is close to 4% near as we can do, across the universe you could have a dichotomy where people are very worried about global outcomes but the domestic economy keeps going with tax cuts and revenue for airlines that are very favor only right now. >> what do they do, add capacity or stick to making money, finally? >> well, see, this is fair critique we've had downed margins in the airlines for three years we've added capacity as fuel

came lower but as fuel comes up, not a lot of capacity comes out and margins continue to come down. that's the real challenge. >> there's a lot going on in saudi arabia these days. in the area where there's a spike to fuel prices, something goes awry with our relationship with saudi arabia, is one of these airlines better positioned than the other, because of hedges that they've put up >> well, in that specific scenario, i think southwest would be a relative safer play they are hedged, i believe, through 2020, or 2021, with upwards of 30% of fuel exposure two or three years out but keep in mind, that doesn't change the underlying economics of the business, because you roll out two or three years and southwest is going to facing the same fuel headlines every everyone else is. >> very good thank you. coming up the latest read on

jobless claims and durable goods. and later, tesla, the electric automaker in the fast nehila ts morning. stay tuned you're watching "squawk box" on cnbc

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minutes away we'll be getting key reads on jobs and manufacturing and everything matters this morning given the wild ride in the market it's late u.s. equity futures indicated higher up by 200 points s&p up by 26, nasdaq up by 23. and the treasury market keeping 9%ack of the ten-year. 3. well below that 3.25 that we've seen stick around, "squawk box" back with that data one second. barely enough time for this man to take a bite of turkey. but for cyber criminals it's plenty of time to launch thousands of attacks.

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just seconds away from weekly jobless claims. jim, the numbers please. >> hey, guys, we got a whole slew of data i'll try to break it up in order of importance. the durable goods, doesn't look as good as last months and air transportation, plus 1 and under the jobless claims now, the claims numbers have been historically great, this one came in as 215 still very, very slow. continuing claims came in as

1636 which is a little lower than expected again, these numbers are the lowest numbers labor numbers have been outstanding lately, and this does nothing to get on the way of that. on to wholesale inventories, a plus .3, we were expects plus .5 a little more than expected. the stock market was buoyant coming in. up 20. nothing has changed that up 21 now in thes&p. yields 314 yields stayed about the same the volatility in the stock market, remember, i think is about interest rates going higher so that's the relationship we're going to look at today about two days ago i blinked when the stock market was on its beat low, the two-year actually came down a bit. that's the bigger deal today back to you, becky >> jim, appreciate it. steve liesman is standing by reaction to the data you've been digging through the numbers. what are you taking through? >> becky, this is a kind of

mixed bag driven by the one-off items here first of all, it's a good number because we stay on the right side of that positive line because of that august number being up 0.6, being up 0.8, much better than expectation. but it was given buy aircraft and parts up by 118% basically, you cannot model when this money is coming through from either the defense department allocate by congress and/or being accounted for by government civilian down 3% after a 63% rise the prior month. if you're getting the picture this is incredibly volatile data not only volatile with components but they come back and revise it all the time the number that economists key in on is busy investment proxy here down 0.1% after being down 0.2% the prior month. then up 1.5% we're very much watching capital spending to see how companies

are reacting to the tax cuts and seeing what kind of impact that has. we've seen better capital spending some of it energy-driven. some of it outside of energy that's the key component, going forward to the extent to which the stocks are having impact on companies and bring up potentially productivity and job support. if you go to the screen right now, you'll see mario draghi, the president of the european central bank is stepping up to the podium there good switch, guys, in the back and he's going to give his press conference and the issues are, they're about to say in december that they're going to end they're quantitative easing. keeping rates at minus 0.4 through the summer and the key here is how he talks about things like the dangers from brexit. the dangers from italy pretty much a slowing economy although not all that slow joe. >> let's get back to our guest host tom farley, former

president the farley acquisitions when was that, tom >> i left friday it was like farrah fawcett passed away the same day as michael jackson, nobody realized she left i left and stacy cunningham became the first woman to ever one the new york stock exchange and that was the end of me >> that's it and you begged to come on here >> i guess three months later, four months later, you finally let me on >> what are your plans in terms of how you raise this company? >> what far point is we raced $402 million for an investment company called a spac, a special acquisition company. it's fairly large in spac terms. but secondly, we're going after

special technologies companies and we're looking to buy a part or all of business that sits at the intersection of finance and technology and has an enterprise value of a minimum, we'll call it, $2 billion. >> interesting, and where are you in that process. >> for me, it's better to be lucky than good. this pullback and the market turbulence is actually perfect when you're out hunting for deals when everything is going great, everybody looks into the future and says, if i just call farley back a month from now, the market will be up and i'll get a higher price but this kind of volatility really shakes the trees and things are going well. >> in any event, you feel comfortable with letting things rise in these negotiations you expect more volatility is that what we should read into what you said? >> i do expect to see more volatility it takes more than a couple weeks to taper off, and in some cases, a couple months

but it's just been interesting to me, the last three weeks the number of conversations i've had has really decreased and people start being pragmatic about their portfolio and saying maybe we're at the top of the market cycle i don't think we are but if you're risk tolerance is low and you have a lot of embedded gains in a particular asset, you look at this volatility and you say, if i wait another year, i could have egg on my face >> and kind of a gold rush of things headed towards technology what parts of it >> it goes from every app, any other utility? >> you're an expert in tech? >> i'm not an expert in tech but certainly fin-tech i'm focusing in the areas where i'm expert market data is a great example behind all of these innovations that we're talking about this morning, and generally is this

inex orab ab inexorable data. and probably the largest p purv of equity. that's where we're spending our time >> will you pay cash for what it is how are you doing? >> we're talking businesses that are $2 billion that begs the question, that we will most likely put more cash in the business. i have a partner in my endeavor. third point, the $18 billion assets by hedge run by dan lowe who is eager to put money to work in perhaps the best situation. and we often will look for a seller to roll a significant portion of the ownership we're looking for two partner deals, whether it's private equity or a big company that wants to move out a subsidiary >> for me, i like it a lot because i like the public markets.

i know i'm a homer for public markets and given my past role, but this combines things that i'm familiar with with the fast markets. >> will you -- i keep putting you in the position of defending capitalism do you think that eventually there becomes a renaissance, and people maybe that are younger for us, the lights are left on for capitalists. do you think we come back? we're in a strange thing with a certain segment the population >> i think the pendulum has swung one way, joe, and it will swing back i would say capitalism is the greatest force for good the world has ever known and every one of them would laugh at me. they would think, okay, that's really funny granted, it's over the top and i knew it would have impact. but nobody could raise their hand and say, wow, he's got a

point. poverty is down 80% buduring th guy's lifetime because of this capitalism sometimes, that means markets go down like they did yesterday, but that's okay. and we need to celebrate that and embrace that as one tiny part of capitalism >> all right sorry to keep putting you out there. >> i don't mind. >> okay. when we come back this morning, shares of tesla are in overdrive. elon musk's company posting a surprise reaction. the street's reaction. and more than 10%. we'll talk about that in a moment first before we led to a break, check out the faang stocks you've got alpha bet reporting netflix bouncing back by 2%. same story for amazon. stay tuned everyone you're watching "squawk box" here on cnbc

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box," everybody. we are watching the futures. positive territory today, but we have come down from the highs we saw earlier this morning the dow futures are up, well above 200 points earlier the dow futures up by 172. s&p futures up by 23 and then the nasdaq up by 105. in corporate news. tobacco company altria is

pulling e-cigarettes from the markets of dissuading the youth of similar products. it will continue to sell ciga-like products, ones shaped like cigarettes. and discontinuing flavors. the products will stay off the shelves until the fda issues an order or the youth issue is otherwise addressed in some fashion. tesla turning a profit in the third quarter. the electric carmaker beating expectations on both the top and bottom line. joining us colin rush, managing director and senior research investor at onnen heim and company. shares of tesla up 10% this morning. colin, obviously, a lot better numbers than the street anticipated. what else is underlying support? >> really this is about the bull case coming to fruition. historically, the casehad been that they would reach some leverage in terms of the operating model. and they've held operating

spending in check. actually came down a bit this quarter. and they're showing the possibility of the manufacturing base i think folks underestimated the power of that model. we actually got more bullish in august on the potentials of wall street to beat and we're seeing that come in here. >> so, mission about accomplishinged? >> no, just a start. they have a lot of work to do. and the competition is coming but it's coming slower than most there's a couple models out. they're not great. and they're not really competing in the 50,000 market >> and for tesla to really be a success, it's going to have to make that cheaper version and bring in the masses. and i just wonder, see lone musk has been pretty outspoken on his twitter the can and other places making sure people get out there and buy their vehicles this year while they can still get some of the fed deductions after they go

away this year how big of a problem is that >> we're not real concerned about that the cost reduction in the industry is pretty robust. and tesla is getting better at making cars. they're actually quite efficient at that at this point. getting the car that they can make money is a challenge. nobody is condpused about that, and they have a lot of work to do but i think they're keeping asps, north of 60 here in model three, in the third quarter. they're going to stay above 45,000, 50,000, for at least two years. >> you mentioned the bull case coming to fruition the bear case most likely isn't going to go away i wonder what's being thrown at you. for one thing, people talking about how this particular quarter was inflated on the ratings line with reduction in r & d spending in other words, did they pull any levers to make a big number this quarter >> to quote my clients, they shot off all the cannons this

quarter. and that's clear the question is are they spending a decent amount, as manufacturing and volumes increase, then we do think they have more cash to work with. so the big question in our view is, one, how do they deal with the balance sheet they got this 360 dollar trike price that comes due in march maybe they can convert that. >> maybe why they shot off all the cannons. >> of course, why they shot off all the cannons, right if you look at the bear case, it's been 150,000 cars a year. the bull case is more than like 500,000. we think they can make about 350,000 next year. fansd they're able to do that there's enough leverage in the model to kind of support it. but then they have to get to that 300,000-vehicle number so they're going to need to increase manufacturing capacity and start advertising a little more and that's the real crux of this, in our view. >> colin in, the midquarter meltdown, i was an outspoken critic and i thought it was

unfair to investors. but oddly, i almost thought it was a good thing for the company because the settlement will pass through a filter and bring additional governance to the company and let him focus on being a jeagenius >> i think the patience of a lot of senior managers we're seeing some linkage on that front which is a concern for us. i do agree the structure they may get out of this could be helpful. i'll agree with you on that. how they implement that is a real concern there's still a question who the chairman ends up being i'm not going to speculate >> does it matter if it's somebody on the board or an outsider >> i think it does i think it would be good for an outsider to come in. i think that would help everybody. especially somebody with the strong will. whether somebody wants that job or not is a real question. it doesn't sound like a great job, to be honest.

>> thank you very much leisman is listening to draghi are you going to give us the lowdown? what's the headlines >> yeah, he said weaker momentum is what he said about the economy in europe. he said it boils down to a company's specific things. he mentioned the car sector in germany. the exports. the stalemate between u.s. and china. talked about brexit. talked about italy and by the way, he made some indirect politics comments about italy saying it's very important for countries to adhere to the eu standards when it comes to budgets. obviously, italy is an issue when it comes to adhering to those deficit issues more importantly, he said significant support is still needed to underpin inflation set protection film, emerging markets and financial market volatility are all risks to the economy. but overall, no broad change, guys, in the outlook for policy. but you can see there's a series

of issues that draghi is dealing with from italy to brexit. to a slower economy, that's really slowed right now towards trend growth right now for a stronger year in 2017. so, a lot of kind of modest volume estimate around his comments in the euro and in the -- say, the ten-year bund. but nothing really dramatic when it comes to the market reacting so far to what draghi is saying, joe. >> okay. we got plenty of stuff over here >> yeah. like i said, we're just monitoring it so you don't have to, joe. >> good. i hope he doesn't say anything let things calm down here. anyway, when we return, jim cramer live from the new york stock exchange sttures right now are off their be levels, but still up. stay tuned you're watching "squawk box" on cnbc constantly evolving. and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices

and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights. so you and your company are ready for today. ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest. betty called me at she thought it was a fire. it was worse. a sinkhole opened up under our museum. eight priceless corvettes had plunged into it.

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with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. jim cramer joins us now. so many things i could ask you about. the market is up. do we want it up >> no. i like the fact that it is coming in a little. you can't have a sustained rally unless something changes in washington. it wasn't about earnings

yesterday. i do think that the last four days are seasonally unbelievably good. it has not been stocks. it has been all about the fed raising rates. we had a series of people on yesterday who continue to insist that things are good. it's obvious that things are not good. it does matter that the economy can turn down on a dime. we saw it turn up on a dime and it is going down on a dime. >> you think it is two issues, though i thought i heard you say it was not just the fed but also tariffs and potential for higher prices. >> what's the last question sue was asked? how are tariffs affecting you? supply chain, how is it impacting? this is the tenor of the calls. the president is not going to let up. xi in china is not going to let

up. the more the president attacks powell, powell is not going to let up. if the president were to say we need to tighten and we need to tighten fast i think powell would do the opposite. it is that bad. unless we resolve washington all of these great earnings are for not. >> maybe powell falls back has nothing to do with trump on data dependent. >> i think he says the more i learn on this job the more i realize we will not yield. >> i think if he is supposed to ignore what trump says he should ignore it both ways. he should say maybe i shouldn't have been so -- >> i agree. >> there were some reports that says labor is tight. this is about the main street now, not wall street.

be careful what you wish for. there are going to be a lot of people you will be able to hire three months from now. i think mr. powell should recognize you can have a strong economy and three months later a weaker economy. if you decide to have a fight between the president and the federal reserve. you can look at all of the base books you want. these base books are history. once again, the fed will make the wrong move. >> your good friend tom farley from the nasdaq. i'm a little disappointed to hear how sober you are on the prospects. i'm much more glass half full at this moment, but i share the same concern you have about how was the trade issue with china resolved. you and i talked about this a bit. how do you see this ending i'm not sure anybody knows. >> vice president pence basically called for regime

change in a speech that is not getting enough attention expect for in beijing which is saying because of what you have stolen for us, we need a new government to deal with. we love you, but weneed a new government. i don't think they are going to be negotiating to stay in power with president trump. that seems like a sucker's play. tom, i'm with you. it's man made. if the men and women who are making these decisions in washington were to change their minds and blink, we would be up as much as we are down. somebody has to blink. it is about geopolitical trouble and whether we have a policy of containment or whether it is just a negotiating ploy. to me it doesn't seem like that anymore. we didn't sell a lot to the soviet union or china during the cold war. >> we will see you in a couple of minutes. coming up on "squawk on the

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we're out of time. we want totha thank our host to farley. >> i like it here. >> "squawk on the street" is coming up right now. ♪ good thursday morning. welcome to "squawk on the street." the premarket is steady and green after yesterday's selloff. now the only major index up for the year. we have a big ceo lineup today. gary kelly of southwest will join us. lisa su of amd. amazon, alphabet, intel all report tonight. our road map begins with futures fighting back. the volatility remains on this