facebook investors the stock whip ssawing after the company posted a mixed quarter it's halloween, october 31, 2018, happy birthday, penelope i remain under a spell ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is off today. joining us is mike santoli and our guest host is portfolio manager at douglas c. lane and associates and a cnbc contributor. let's jump into the markets. let's look at the u.s. equity futures. the last day of october is here.

anybody who has been long the markets is ready for this month to end the dow futures indicated up by 108 points s&p up by 15, and the nasdaq up by 56 if we were to close down today for the s&p 500 that would be the 17th down day for october. that would be a record that's nearly 50 years old. the most down days in a month since 1970 we'll see if that holds out. yesterday you did see the bulls make a comeback. s&p at this point, even with the gains yesterday, is looking at the biggest monthly drop since may of 2010. the nasdaq is looking at its biggest monthly drop since october of 2008. jim cramer said yesterday there were five signs that made him think this is a time to get back into the market. overnight in asia, the bank of japan holding interest rates steady while slashing its

inflation forecast the nikkei jumping 2%. stocks in hong kong rose 1.6%. the shanghai composite was higher by 1.3% in europe, you will see at least at this hour green arrows across the board there as well. biggest gainer is the cac in france, up by 2% the dax in germany, up by 1.1% the ftse 100 up by 1.34% treasury yields, the ten-year is yielding 3.142%. social media giant facebook beating on earnings but missing on revenue and daily active users. the stock was whipsawing after-hours trading. here is mark zuckerberg on the call explaining the challenges facebook faces as it shifts from the news feed to more ideo >> beyond the mission challenges

of individual video, even thouge video more community oriented and minimized displacement of social interactions, as video grows it will displace some other services where we probably make more money. >> michael graham joining us that's one issue, that transition i don't know how long it takes people said they had warned the street that the results wouldn't be as great as people thought. and some people were relieved. the way i look at it, as far as stocks go, i couldn't believe that it quickly became almost a 4$400 billion company but they have monetized whatever it is people do on that site they have monetized it

it's a real deal there's regulatory issues, they got to make sure that they monitor what goes on on their feed feeds. >> i agree the growth relative to valuations are attractive the thing that moved the stock higher last night was facebook for the last few quarters has been going through this process of saying we're a media company. we're recognizing that in our core areas, the ad load is getting high it is starting to turn users off. it's the same thing that happened to radio and the radio industry never dealt with it properly facebook is trying to make sure they deal with it properly and keep engagement high across their official of use cases. they are moving into things like video, messenger, stories. as they do that they're moving

into less monetizing areas i think investors understand that the thing that helped the stock ultimately through the earnings call was they came out and said that the profitability outlook is going to bottom next year in 2019 whereas coming out of q2 they said it might be 2020 or 2021 saying we can see the bottom of the estimate ramp for facebook >> the old -- if i look back at the way the company has grown, earnings per share for recent years, it's a huge deceleration. but the multiple is not that high anymore it seems like it reflects that what about the overhang from all the things that go wrong we never know what will happen next week. they got compromised here this happened is it worth more or less than 20

times earnings >> i think it's worth more with all the stuff that could go wrong, that has been reflected in them taking operating margins -- >> we have an election coming up are you sure everything that's gone wrong has gone wrong? >> i'm just saying to combat that stuff they took 10 points off the operating margin, from 45% to 35%, spending on engineers, security, safety. you know what mark zuckerberg said last night is we'll never be perfect but we'll try to outrun the hackers some of these are state-sponsored hackers that they have to invest a lot in in order to beat. >> the issue that i've been focused a little more on is just the idea that there are younger users who either stopped using it, removed the app or don't use it nearly as frequently. you wonder is there an age group where they think it's not cool anymore. instagram has been drawing a lot. they own that, too

is there a concern that at some point, you won't have the same addicted user base as younger ki kids come along? >> i do think that's a concern especially in the united states where the revenue per user is many multiples of what it is in other countries in the world they come out with stories, taking snap in the cross hair and trying to make sure they don't lose that. >> they are so big they probably can't buy the next facebook. >> they need to make sure across different areas they're getting their fair share of that usage they always struggled a bit with that younger demographic it's more of an adult property, which in a way is good >> which makes it uncool >> it is also more lulucrative >> i could make this thing so

uncool i could. i could top this stock out today. >> by joining? >> yeah. >> what about when you look at the company, you mentioned messenger and whatsapp, but those assets have not shown up in the valuation the growth of something like a whatsapp which globally is so big, how do you put a value on that to say down the road when facebook is not as important, what does that mean to the stock? >> it is definitely an area where there's upside potential if you look at facebook messenger and whatsapp, these are two areas with, you know, a ton of users and almost no revenue. they're just starting to put in place a business to consumer revenue stream, they're allowing small business to use whatsapp as a communications tool with customers, starting to charge for messages and things like making reservations, or seeing

if your dry cleaning is ready. we'll see how that goes. they've been very careful not to push that too quickly. they don't want to turn the users off. >> the bear case on social media now in general seems to be advertisers are feeling like they don't want to interact as much in that world because of all the privacy concerns, all the hacking and everything else. is there any evidence of that that we're seeing in the numbers? the way you present it, facebook can just dial down its ad market share when it feels like it needs to to make things better for users. is that always the case they can determine how much advertising market share they claim? >> that's a key point. what we're seeing now is this cross roads between television and brand advertising and social media and more performance advertising. most of the time when an advertiser goes to social media, it's i want somebody to download my app, i want someone to buy my product. television has been about brand,

impressions. google and facebook have taken nearly half of the ad market that's an incredible statistic you know, what we're seeing now is advertisers are trying to decide if they've gone far enough into the performance social media world, if they still think brand advertising on television works television has held up okay more recently so the next couple years will be interesting in that regard >> are you on, santoli i cannot imagine you on facebook >> i'm not >> you're not, see >> you're a mom. >> i follow my daughter on instagram. >> but you're not on facebook. >> i have like a public page >> can i get a high five >> you have a what >> a public page >> my man. see? i can't imagine. i cannot imagine i don't know >> i can imagine it, but -- >> at least you're somewhere between the normal person that's

on and me. you're midway between. >> halfway between you and normal that's where i live? >> yeah. still quite a ways i wouldn't be on that. you on >> i am, but i only have 17 friends. >> he would have to be, he's covering the company how can you tell -- >> you have a business you're trying to advertise or something. >> no i'm on facebook but i don't use it often >> i use it all the time it's great for keeping in touch with family. >> my family is very -- i have a -- my family unit is within easy reach i don't need a computer. thank thanks >> all your friends, too >> why would i -- yeah they know where to reach me. >> a couple other stocks to watch. shares of arconic are up

sharply. a reuters says apollo global is in advanced talks to buy the company. a deal may be worth more than $11 billion. that is up 8%. samsung reporting record profits on chips for data centers but the company is forecasting an earnings decline in the current quarter due to seasonal weakness in the memory chip market. yum china posting better than expected results. same-store sales fell led by a 5% drop at pizza hut electronic arts earnings and revenue beat forecasts it released four new versions of its franchise video game in the last period. the company gave weak guidance for their holiday quarter. it's down 2% janet yellen is raising a red flag on the u.s. economy she spoke with steve liesman yesterday and said that she thinks more rate hikes are needed to keep the u.s. economy from overheating she also warned there's a risk the fed could tighten monetary

policy too much. yellen also spoke about the u.s. deficit calling it a major problem and adding that the national debt is on what she calls an unsustainable path. her words on this, if i had a magic wand i would raise tacks and cut taxes and cut retirement spending yellen also spoke about tariffs saying she is concerned about the impact they could have on investment spending over the next year. but she only sees a small and temporary impact on inflation. yellen also defended the fed's independence against criticism from president trump she says she would do exactly what her successor jay powell is doing, which is keep calm and carry on let's talk more about the broader markets and the economy. joining us is rob martin

our guest host is still here also let's start with these words from janet yellen and the month of october you don't think what happened here is because of the fed what do you think happened >> if you look at how fast rates moved, the markets had to readjust i think more than anything else you had a couple things. one is the tariff issue. a lot of people think we would get a resolution at this point that's still an overhang you had the elections which will be in a few days if you take that together, markets have run quickly almost historically every 11 months we get a correction these things are normal. not something to get too overly concerned about. when they come, there's a lot of emotion of wait i just gave back my gains for the year. >> do you think it's been overdone >> i do. i think there's some good

companies that have been sold off. if you look at the financial sector, some of those stocks are trading at single digit multiples. we had a good earnings season through the banks. looking at industrial stocks, they're talking tariffs. some hold building product stocks are off i think it's too far for some of these stocks to come down. you can find good stocks to buy with good balance sheets corporations are still flush with cash. they have not been able to buy back stock the quiet period i think the opportunities are still there. a lot of people sold first on the news and said let's wait for the next quarter >> rob, jim cramer has this thesis that there are signals saying it could be a decent time to jump back in. we've seen a lot of things happening. one thing he thinks we need is weaker nick data that would be the type of thing that would give the fed a reason to not continue to raise rates at the same rate everyone is expecting. we get the jobs number on

friday what do you think would be a good number for the markets? >> we think we'll get a slew of bad data over the next few months mostly from tariffs and from the manufacturing sector that will get the fed to push out hikes until may. so we think -- >> you don't think they raise in december >> we think they skip the december meeting, the march meeting and they next hike in may. the underlying bones of the economy are strong tariffs will hit the manufacturing sector hard. we have a lot of new manufacturing start ups out there, and those are vulnerable to a change in cost. >> you think we'll get an update in the next six weeks for a market to go from a 75% chance of a hike to it going away >> we do on friday when we get the employment report we'll see real weakness in manufacturing employment that adds to the weakness we've seen over the past couple of months. when we get the spending numbers

for october, and when we get the november jobs report, that will be enough for the fed to come out and tells that you they're not hiking in december >> is that what the market wants to hear? it's one thing if it's hazy information, stuff that doesn't necessarily point to sharp economic growth, but if we're really seeing signs of economic weakness, is that good news for the markets? >> i'm not sure the markets will take that well the markets will take better news if the fed says we're more data dependent we'll raise in december if the fed says we're not raising in december, we may go back to a 2016 area, where we are going from inflationary area to stagflati stagflation, and investors who think things are going well are now thinking we're going into deceleration and it could be a knock-off effect

>> that's a tough target to hit, a cinderella in between the two. >> that's the goldilocks scenario >> sorry, goldilockgoldilocks, cinderella >> that's something we need to be careful of. we have not gone through this ever where the fed has gone to negative rates and raising us out. even today you could say we're flat if the fed signals we're slowing down because we think that growth is still there, but we don't want to stop the growth as opposed to, wait, growth has stopped and now we have to pull back >> rob what did you think about what janet yellen said >> i like how she's having it both ways. i'm worried that the fed is hiking too slowly, the financial imbalan imbalances, but make sure you don't go too fast either so she's kind of each direction on there i think what she's worried about is the spending. she's worried about the fiscal

stimulus boosting the economy too much at the moment from our perspective, mifiscal stimulus it out there, but we've seen a fundamental growth story. the new manufacturers are at risk from the tariffs. it's been a good year. we think it will be a good year next year there's just a soft patch in between >> her idea if she had a magic wand she would be raising taxes but also cutting retirement spending is that a play on social security >> everybody knows that we can keep pushing it out there but our untitlement meng entitlemen unsustainable. y i would rather cut spending. the simpson bowles model brings both sides to the table. >> there's no question it's unsustainable. >> you have to do means testing or something

her -- i'm sure he's a great guise. won a nobel prize, her husband, he teaches at berkeley he won the noble surprise with stiglitz not for work totally out there, but she has her own predilections. that used to worry me when she was fed cheeief. >> thank you very much for coming in, rob coming up, jamie dimon is joining the club i saw t we still have the bug up on some of the shows i think -- didn't we top it out. has it ever gone back to the very first day we put the bug up, did it go back to that level? it's been sitting at 6,000 for -- it never changes. we'll show you what he said yesterday at a conference in l.a. we had to bleep some of it

and at 7:00, we may need the bleep button again for sam zell. the billionaire investor, in my day he you was a stockbroker he bought railcars, stuff that was rusting, and sells it at the top. as we head to break, the biggest premarket winners and losers in the dow. alpha seems more elusive today.

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the global investment management businesses of unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back jamie dimon has been a reluctant bitcoin barber he called the cryptocurrency a fraud back in september of last year but later said he regretted his choice of words. a year ago he said he wouldn't talk about bitcoin anymore, but yesterday at an axios conference

in l.a. he was asked about changing his mind on bitcoin >> i never changed what i said, i just regret having said it i didn't want to be the spokesman against bitcoin. i don't give a [ bleep ], that's the point, okay? blockchain is real it's technology. but bitcoin is not the same as a currency >> he speaks his mind. he does openly today is the tenth anniversary of bitcoin it's only been ten years right now, $6,258. >> did we bleep out damn >> no. >> he said i don't give a damn >> no, i don't give something else >> he is talking about blockchain that's what most companies are talking about now. >> i think it's the safe thing, if this becomes a thing we have to become involved >> use the dog >> the shih-tzu? >> yes >> you uncomfortable, mike

okay jamie dimon also weighed no, i don't trade war with china and he suggested it be called a trade skirmish >> a trade war is people stop trading with each other and they immediately change supply lines and that will rattle the global economy. there's no question about that that is a lot of movement around the world. then you can have foreign trading partners taking actions. through can offset -- it can cause a recession. it's not a war a war is people, you know, pick up guns and people die >> all right that's an interesting point. what he described as a trade war is something that could be down the road if you see people picking up supply chains and moving things. that's probably the bigger market concern at this point we thought we would have a resolution and we don't. >> it's the uncertainty baked in, beam saying we resolved the

nafta issues what people will be focused on is after elections, will we get a resolution there >> is there a chance the new nafta blows up >> there's always a chance, but the markets are more focused on what's going on with china at this point we talked about manufacturing, talked about companies with uncertainty about hiring, how we go about intellectual property that's where the technology companies are looking. if china decides to do something that will affect the s&p earnings we're looking at. >> jamie will be in davos, right? >> i sure hope so. he goes every year >> always a highlight for us >> what he says off and on camera. when we come back, we'll talk to the u.s. ceo of siemens.

right now as we head to break, a look at yesterday's s&p 500 winners and losers

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you're watching "squawk box" live from the nasdaq market site in times square. >> welcome back. time for the "squawk" planner. tough word when it's all scrambled up >> not when you work on a show called "squawk box." >> another big day for earnings. look for results from gm, yum brands and kellogg after the bell, express scripts and fitbit we get the latest read on the health of the jobs market with the adp private payroll report u.s. equity futures, if we add yesterday's gains, it's like -- it adds up a little. adds up to 600 points in the

dow, which is better than another 600 down, i would think. >> sure. >> there would be some frayed nerves >> getting a bit close >> not to say it won't happen, but good action yesterday. you notice i tried to fake you out into thinking they're doing it again >> right everyone conditioned to the fact that every rally fades this one didn't. >> the leadership by some of the best companies in the world, you know what i'm talking aboutful. >> the bellwether. >> it's always obvious after the fac fact >> no. i said comcast before that >> yeah. mike, you made the point that everyone is selling the high-tech ones -- >> the rotation is now into not the top five stocks.

>> those are the most expensive on a valuation basis, if you do rotation, you'll get out of high stock prices and you can go into the bond market, 3%, or you go into the other sectors that have been completely oversold. our next guest is moving her manufacturing company towards a digital revolution we welcome barbara humpton you took over as siemens usa ceo back in june of this year. since that time it's ban difficult market for industrials. major overwhelming issues that the market has been focused on about trade, the potential for tariffs and how that will impact industrials. how have you been weathering things >> at siemens we take the long view we are a company that's been here in the u.s. for 160 years we have 50,000 people across the u.s. working in all of the sectors you've been sharing with

the audience and we're working closely really around the globe to weather those changes. >> have tariffs had any impact on you to this point is it more a psychological issue? >> no, this is a very real issue. we've been advocates for fair, open trade it's important to have enforceable rules around the globe. these are all factors that we need to have the certainty that's required in the business that we lead you can think of siemens as a big infrastructure company the work we do depends on planning cycles of 10, 20 years. it's important for us to have stability. >> in terms of the tariffs, it's making customers rethink before they set long plans? or is this an issue where rising costs are affecting you, too >> there's a bit of everything we're seeing major shifts as people think about where they'll source certain materials the fact is that tariffs and

quotas don't help us they disrupt supply chains that's hard on customers that has a knock-on effect to employees and shareholders as well >> what are you hearing so far and having watched how this played out, do you have a positive outlook on this are you worried by what you see? >> i would agree with the statement that this is not a trade war. reasonable parties will come to the table. we are encouraging people to go to the table and have multilateral discussions that's what it will take to work these things out and we're doing everyone we can to assure those supply chains. make sure we keep the growth rolling. we are a large manufacturing company here in the u.s. we have employees in all 50 states 50,000 strong in areas that are critical to our national interest

the infrastructure, energy, automation, these are all items that are vital for our future. we're confident folks will come to the table and work these issues out >> ge struggles are focused in on the power business. is there something structural in that business that is dragging down the entire industry how is that going for you? >> there's big shifts happening across the energy sector now we saw the first signs of this several years ago. in 2015 we began to make moves to tighten our belts, make sure we react to those changes. i can see the aggressive with a sense of urgency change, is that have been taking place within the siemens corporation. we're making those adjustments siemens is focused on large power where we know we can make a contribution to the world energy resources here from the

u. u.s. we have a lot to offer we're also bringing new technologies to the table in storage, in distributed energy that shift is happening as we speak. companies around the globe are really scrambling to react >> you have 1500 jobs that are open across the united states now. are you having trouble finding people to fill those jobs? what do you do in terms of digitalization >> thanks for asking this is probably the biggest issue facing manufacturers today. it's easier to fooind skills from t find skills from the old manufacturing than it is about the future the manufacturing sector is becoming more and more automated. we need a combination of skills from the physical world, the mechanical, electrical engineers that we've needed in the past, the on-site workers, welders, but at siemens we transformed

ourselves into one of the top ten software companies in the world. bringing the virtual know how into the physical world we helped to build. so we're working on programs bringing digital skills into the work force we're spending $50 million a year on training we developed apprenticeship programs in nine states and shared our playbook with the u.s. government so they can provide that to others as well that helps us and our customers. and we're reaching out to the u.s. military. veterans make some of our best liar highers. barbara, thank you very much >> i look forward to seeing you again. coming up, our newsmaker of the hour, dr. scott gottlieb will join us to talk about the trump administration's plan to

lower drug prices. we'll talk about that straight ahead. calling all witches, goblins and ghosts, in the next hour sam zell is our guest host will rising rates spook real estate investment? what will haunt investors in the fourth quarter hang around to find out. we're going to have a scary good time

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welcome back happy last trading day for the month of october check out the equity futures right now maybe a bit of a treat for the last trading day of the month for the bulls. dow futures indicated up by 148 points after gaining 400 points yesterday. s&p futures up by 20 the nasdaq up by 68. time for the executive edge. cvs is testing a new membership program in boston to help it

compete with amazon. for a $48 fee members can get free delivery for prescriptions and most purchases amazon acquired pillpack earlier this year but has not integrated prescription delivery with its prime membership program buyout interests in papa john's is rising reuters reports bain capital, cc cvc capital and roark capital are trying to acquire papa john's if the deal with not be reached, john schnatter is battling to regain influence after being ousted as chairman earlier this year >> he's a huge shareholder in the company. so anybody willing to do a deal

may be saying we'll let you back in to have a job if you go ahead with our deal. when we come back, president trump's new drug plan is shaking up the pharma industry just yesterday the ceo of pfizer told cnbc that the new proposal to tie drug prices to an international average would be bad for patients we'll get the administration's take next. fda commissioner dr. scott got le gottlieb will join us next gottlieb will join us next at&t provides edge-to-edge intelligence, covering virtually every part of your finance business. and so if someone tries to breach your firewall in london & you start to panic... don't. because your cto says we've got allies on the outside...

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♪ ♪ last week president trump -- we'll talk about this plan to reduce prescription drug prices. that's the music i hear when i

think about importing price controls i do then other times i wonder, let's see what dr. scott gottlieb, our fda commissioner thinks about this plan. the plan would cover half the country and base drug prices on an indexed source of 16 nations. places where they shouldn't -- where it makes no sense. because they don't innovate over there. they just steal our stuff. is that what we want to do we want to -- you're part of the administration are you down with this idea? >> well, it's not -- i don't think it's as spooky as your music. in medicare part b, and we're talking about medicare part b so injectable drugs right now medicare pays an average price across the sales in the u.s. market what the administration is proposing to do is to bake into that average price the average across the oecd countries. we know a lot of those drugs are

sold for less money in europe right now. we want to make sure patients here are getting the same deal that european patients are getting. we long talked about having a world price for developed markets. this is going to move the industry in that direction and also remember, when it comes to medicare part d, these are not subject. we also talked about subjecting that market to the price competition in medicare part d where different plans compete with each other to get better deals than those drugs moving those drugs into a competitively bid system maybe they'll rethink that asp the way we pay for those drugs is a price fixing model. just a high price. >> so this is a negotiation? >> that's the way to do it okay so just -- it's too simplistic to say that we're going to import price controls from the rest of the world. because you're not for those i mean, those are a negative for

innovation but i started to come around watching it the way some of our companies here sort of game the system they get a lot of good deals with patent exclusiviviatent exy that's not good enough for some. they want more if we could do it the way you said where we use our buying power as the government to lower prices, that would make sense. just importing what they do, price controls -- >> this is an old price system you're taking an average of all the sales -- >> do they -- >> you're adjusting it for gdp per capita the purchasing power across different nations. this system asp plus 6%, it was put in place at a time when these biologics were in each category there was no competition now we're in a world there's not just multi-source drugs within

each, there's also biosimilars yet we're not taking advantage of that competition by having these drugs competitively bid. >> i defer to you on this. so you -- it got a chilly reception, obviously, from the pharmaceutical industry. but you're good with this. you think this is the way to do it you're not an anti-competitive guy or someone that wants to cap drug prices at all, i don't think. so you're good with this idea? >> it's disruptive and it's going to nudge the pricing model in the right direction if you look at medicare part d which is the small molecule drugs, american seniors are getting a better deal than patients in europe because that's a competitively bid market i was on the other side of this. i could tell you some of the prices we get in medicare part d are lower than the prices that patients in europe are getting those drugs for because of the vigorous competition there is no competition in

medicare part b. the industry has resisted that competition. i've long told them that asp, the way we're paying for those drugs, is a price fixing model they were happy when it was being fixed at their very high price. but a price that can be fixed at a high price can be fixed at a lower price. and this might nudge them that direction. in the near term, it's going to help american patients get lower costs on their drugs >> i like what you do. you come into these things with negotiations this reminds me of what you did with the vaping industry saying you're going to work with us or you're going to face the consequences is this a series of negotiations you're doing with the industry >> secretary is leading this charge i think he's very serious about implementing this model and the president is as well this is a serious proposal that they're going to pursue through rule making. and they have the authority to do it. i think an alternative if the industry doesn't like this approach would be to try to move those injectable drugs to a

competitively bid system they do have an option, they have a choice. they've resisted that. that's been an idea put on the table as well. this is going to help patients get savings in the near term this is something that could be implemented in a reasonable period of time and try to move towards a global price. these drugs are being sold in europe at much lower prices than they are to american consumers and these are developed nations. we've long talked about having a global pricing system where you have one price for developed markets. one price for the developing world. and the industry said they support that, yet they're still selling the same drugs in europe relative to what they're selling more than consumers. this is going to put pressure on that pricing model >> we know most of the drug companies are opposed to this. is there anything you think is a good partner at the table who's been willing to work with some of these ideas >> i think as these ideas get implemented and there's other proposals the secretaries have been working on, i think the industry is going to start to

negotiate and start to try to work more cooperatively with the administration on these ideas. because there are things that are longer term that we could be working on together. i think as we start to implement some of these things, they'll realize that, you know, they might do better by trying to work cooperatively with the administration on this >> great thanks to dr. scott gottlieb really is a doctor there's doctor inflation with all these ph.d.s there is with these ph.d.s. we can't call them all doctors we can't but you are. so thank you, doctor >> thanks. also our thanks to sarat sethi who has been with us the last hour. good luck to your daughter who's been up early too. she's got to go to school now. our next guest is sam zell he will join us on set to talk testringe wild markets, si inre rates, and much more.

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markets in rally mode. despite trade tepgss ansions and rising interest rates. sam zell gives us his outlook for the markets, the economy, and where he's putting money to work right now zuckerberg's vision for facebook >> i want to be up front that assuming we get to where we want to go from a feed only world >> the street's reaction is coming up. plus general motors ready to report the company's new cfo joins us as a second hour of "squawk box"

begins right now ♪ good morning, everybody. welcome back to "squawk box" here on cnbc we are livefrom the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli in for andrew today we've been watching the u.s. equity futures on this halloween day, a bit of a treat for the investors. at least the bulls dow futures up by 155 points s&p futures up by 20 and the nasdaq up by 69. we are watching three big stories this morning number one, markets and the earnings futures as we showed you pointing to a triple digit gain this morning after another wild rideyesterday where the dow finished up by more than 400 points today it is all about earnings number two, facebook mark zuckerberg talking with analysts street reaction coming up.

and then we have china we will check on markets overseas and here's what's making headlines at this hour facebook shares are rising in premarket trading. company reported quarterly profit of $1.76 a share. revenue was slightly below forecast as was user growth but facebook's expenses were less than the street had anticipated. we will have much more on facebook's quarter coming up stock indicated up almost 4% at this hour. and we are a little over an hour away from the morning's most significant economic report. adp will be out with its october report on employment economists think it will show 180,000 new private sector jobs for the month. today marks the tenth anniversary of the invention of bitcoin. since then it's fluctuated in value with value up to $20,000 and has settled down in the

$6,000s for much of this year. shares of arconic -- it sounds like a superhero to me -- are up sharply reuters report says that apollo global is in advanced talks to buy the company. a deal may be worst more than $11 billion. it could come as soon as next week electronics arts earnings and revenue are up it released four new versions of the games including fifa '19 fifa, soccer oh, be quiet shares are down today as the company gave weak guidance for the holiday quarter. fi fifa >> fi-fie-fo-fum >> let's bring in sam zell one of the things over the years we've come to you for are common sense valuations across all the different markets. and you with zero interest rates for such a long time, you have

had a raised eyebrow for equity prices for i don't know how many years. >> yeah. long time. >> going back years and years and years. so recently we've seen some recalibration as rates are moving up. you also hate the idea of debasing our currency which is what we do when we stay at zero. so i just wonder you're probably happy rates are headed higher. do you think the recent pullback in the market is the beginning of a bigger revaluation where where the stock should be? or if the economy is good maybe we built some fundamentals that support the market at this point. >> well, i think i previously said a number of times that i didn't think zero interest rates were good for business that zero interest rates effectively, or very low interest rates took away the sense of urgency and the sense of the need to

accomplish things. and so consequently, i think that that long period of very low growth was assisted by the fact that interest rates were so low that there was no penalty if you didn't wait to do it tomorrow >> but should interest rates be based on that psychological effect or should they be based on inflation globally they should be where they are based on inflation >> i think you could look at it another way. interest rates is the cost of money. if the cost of money is free, the discipline is not there. if the cost of money is expensive, the discipline is there. i advocated and said over and over again that when there is no cost of capital just as there's no cost to doing other things, discipline goes by the wayside

and so i think rising interest rates is healthy for the u.s. economy. now, each extreme has its own limitations. you know, for 25 years, the risk ha free rate was 5.2% now it's 2% and something. based on the amount of debt we have outstanding, i don't think this country could afford 5.6% so i think there is an artificial cap on interest rates. but between give or take probably here and 4.5%, i think maybe a rise in those costs of capital is more positive than negative >> even though we may feel it in the stock market if we go there. >> well, you know, i keep, you know, reminding everybody that the stock market is interesting.

but the reality is what's the gdp, what's the growth, what's the demand, what's really happening? stock market is theoretically supposed to reflect futures. stock market has a habit of being both right and wrong but i think what's going on on the ground is a much better harbinger of the future sthan anythi -- than anything else >> what is going on on the ground >> i think things on the ground are less than 100% stable, but actually i think doing pretty well you know, for a long time, we talked about how the u.s. economy was impacted by the lack of confidence. and that people, you know, were reticent to make significant future commitments when they

were as uncertain as to what government policy would be going forward. i think there's a lot more clarity in public policy i think there's a lot more clarity in regulation. >> for now >> i think that clarity translates into a higher level of confidence. so i think the economy is doing pretty well. >> so if the democrats take the house, you don't see taking back a lot of the clarity on regulation and all those good things happening on the ground >> i don't think that -- i mean, if the democrats take back the house, there will be undoubtedly a lot of histrionics and a lot of investigations. >> yeah. gridlock >> but, you know, as long as the president is trump, i don't see

any significant impact coming from a change in the house other than i think less gets done if there's a democratic house. >> the first thing you talk about is deregulation. and i'm sure that you were positive on lower corporate taxes to some extent as well although, you know, it does, you know, there are times when you need to pay for things and the deficit is ballooning. we're paying for defense we're doing all these other things we didn't -- tax revenues were above where they were last year even with the tax cut. but it's not with the spending increases, we haven't kept up with it. but you mentioned deregulation immediately. i think all the businesses i've seen you in in the last 30 years, i always talk about your rail cars and i bought itel for my clients back in 1982. >> '80s, yeah. >> we have a lot of people that have never been in your position

that sort of pooh-pooh the idea that regulations can make a big difference in productivity >> we layered hundreds of billions on the economy over eight years. did we not >> that's correct. >> and if you just stop layering them on and actually take some of them off, you're seeing a reflection of that >> well, i had a conversation a couple weeks ago with a friend of mine who's in a highly regulated industry and i basically said to him, what's the difference between then and now and he said it's really very simple for eight years, we spent almost all of our time talking to the regulators about how much the fine was going to be now we spend our time trying to avoid the conversation and avoid any kind of activity that might

lead to a fine so you think about you're running a business and you have a regulator and your regulator has a real incentive to help you. and i don't mean help you by changing the rules help you by providing a consistent environment for you to make business decisions that's a big plus. >> right >> and when the regulators focuses punishment, that creates a very different attitude. and results in people operating their businesses very differently. >> right i never understood the confrontational approach to the private sector it always seemed -- where someone that wanted to create jobs and wanted to, you know, bring the economy out of the very deep, you know, break that we had in 2000, i never understood why you would approach in such a confrontational manner because that's where the jobs

are created. unless you think you can create jobs by expanding government which makes no sense because you've got to pay for the salaries with private sector tax dollars, don't you it never made sense to me. >> you cover politics on this program. >> we don't, really, anymore we're trying to to >> the answer to everything you just said is politics. >> you can't divorce the two >> it's whose ox is being gored and who protects it and who doesn't. we have a political movement in our country that talk about free everything they don't talk about paying for anything >> they don't talk about freedom. they talk about free things. >> everything is free. and nobody's allowed to ask how you pay for it that's kind of how we got into this situation we're in today. >> so you're not empathetic. anyway, sam zell, stay with us you know, what i really miss

is -- i do miss andrew when you're here. >> yeah. no offense, but they're both good looking so -- >> i don't think that was meant with offense >> no. but i always like to see the interplay. >> he just wants you to smack him down >> no, but people at home are like, this is -- one guy preaching to the other guy in the same choir which, you know, it'd be nice to have -- >> bell, andrew is not in our choir. >> no. not normally anyway, neither here nor there didn't want to go there, necessarily, but you're right. let's look at the futures at this hour. as we showed you, you are looking at gains across the board. dow futures indicated up 178 points after a 400 point gain yesterday. the nasdaq up by 75. when we come back, how much would you pay for the most expensive hotel room in the country? here's a hint. it's more than the median annual

income robert frank joins us now with a preview. >> it is the largest and most expensive hotel room in the country. the hotel unveiling its 10,000 square foot penthouse. we'll tell you what it costs per night and reveal some stories about e esthguts and the pets that have stayed there coming up after the break. place, the xfinity xfi gateway.

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♪ what would you pay for the most expensive hotel room? robert frank joins us with the answer to that good morning >> good morning. it is the largest hotel suite in the country. the mark hotel in manhattan just unveiling the grand penthouse. 10,000 square feet, two floors, and costs $75,000 a night. that's got five bedrooms, six baths, library, living room with 26 foot ceils that you can turn into a ballroom, a dining room that seats over 20, and a master bathtub where the water pours from the ceiling i'd never seen that before now upstairs you've got a 2500 square foot wraparound terrace

with dining and views of central park also a gourmet kitchen for bringing your own chef or you can get the room service from downstairs. you also get access to the hotel's 70 foot sailing yacht and a chauffeur if you want to go shopping at berdorfs even when the store is closed it's a favorite from oprah and mark davis and gee igi hadid. >> we started building in paris. so we have the mark paris coming in 27 months we are actively looking in london and l.a so the first phase would be paris, london, l.a we'll take it from there >> and this hotel suite is often booked it was booked by one family for 16 months. they just left that's why we're just able -- >> and they paid $75,000 a night? >> they got a discount but even at $50,000 -- >> $75,000, you still have to be

out by noon the next day >> yes >> and you can do it for one night? i'm thinking of events >> have your wedding there >> exactly >> and they were talking about the one guest who stayed there had a $40,000 room service bill for one dinner and another thing they've done is had a dog owner there, they% put special grass on the terrace so the dog could go on the roof and didn't have to go outside on the street they do whatever you want for $75,000 a night. >> i would guess, yeah robert, thank you. >> let's bring back our guest host sam zell. let's talk one of the things -- i talk about rail cars and everything else, but you're best known for real estate. selling things many times with very good timing have you done anything recently? do you have a feeling of if you were going to do something,

would you be a buyer or a seller and there's all different kinds of real estate, obviously. rates are going up >> you know, first of all, i think that making any broad generalizations is dangerous and real estate by definition is still a local business so you have to be a little careful you don't get a little asset crazy responses. but generally speaking, i think the real estate industry, the commercial real estate industry is slower than it's been i think that slowly the amount of excess capital sloshing around is beginning to diminish. whether it's the fed reducing liquidity or, you know, the amount of real estate asset

class allocation is starting to reach, you know, fulfillment but it's very hard in this environment at these prices to justify adding to your portfolio. over the last four or five years, we have been primarily sellers. and have been frankly very comfortable holding the cash >> it seems more like ten years. >> it hasn't been ten years. >> what was that sell -- >> february of '07 we sold equity office. >> okay. that's 11 years. so you did buy >> apartment buildings and things >> and then you sold more of those. >> but on balance we have been sellers since the recovery and the recovery in my opinion has been a little too optimistic >> robert frank can tell you about anything that costs $50

million or more. single family dwellings. >> you owned the waldorf in chicago. it was the most expensive hotel sale in chicago. but you are buying hotels overseas where do you see the investment opportunities outside the u.s. and why not in the u.s.? >> well, first of all, in the u.s. the hotel business has a lot of competition and although the great recession stopped new development for four or five years for all practical purposes, the activity level has increased dramatically we have also seen in the hotel business and they periodically do this. you know, they all of a sudden define new categories. so the no smoking hotel, the no sex hotel. >> that's a big seller, i bet.

>> but point being, right now they're building tiny hotel rooms. and they're building 10,000 square foot hotel -- you know, all of them are attempts to figure out is there a depth of the market available that by changing designation we might in effect generate additional value. the reality, frankly, is that a hotel room serves a purpose depending on what your economic conditions are you decide to what extent you want to be spoiled or not spoiled. and i think that's more the determinant than anything else but supply and demand. for instance, we have a significant portfolio of hotels in india it's an underserved market it's a growing market. country is growing

business is growing. and we're optimistic about the future we're also running a middle class hotel operation in latin america. you know, pay one price, you bring your family in it's "x" dollars a night, period you get unlimited food and drink. very popular 96% occupied very different market than in india which is all business. to the extent that you can identify a particular unique slant where there is a preponderance of demand. that's how you invest. >> robert, thank you for joining us >> thank you. >> sam's going to be with us for the rest ofthe program when we come back, general motors set to report results we have the reaction coming up and gm's new cfo will join us

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coming up, earnings from general motors a first on cnbc interview with the company's new cfo is straight ahead plus facebook reporting mixed results. emkestock up more than 3% in the prart. we'll talk about the report in we'll talk about the report in just a bitup. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. they all lead here. cme group - how the world advances.

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general motors results hitting the wire phil lebeau joins us now with more >> hey, joe. this is a beat on the top and bottom line and a beat by a wide margin on the bottom line. in the third quarter general motors earned $1.87 a share well above the estimate of $1.25. now, there's about 30 cents of benefit including from a number of items including a lower tax rate but even if you strip that out, they beat the street at a buck 57 to a buck 25. revenue coming in at $35.8 billion. up 6.4%. much better than the analysts' expectation of $34.8 billion overall the company earned $3.2 billion in the quarter that's up 25%. big drivers, north america and china. in north america, earnings up

33%. $2.8 billion with the 10.2% profit margin. china had record equity income -- from a richer mix of vehicles and lower cost in that country. the rest of its international operations lost about $400 million. but gm financial contributed a half billion dollars in the quarter. in terms of guidance, the company is not changing its guidance for the remainder of this year. but it does expect to be near the top end of between $5.80 and $6.20 a share. again, you've got a beat on the top and bottom line. coming up, we have a first on cnbc interview with the new cfo dhivya suryadevara there's been concerned about the consumers slowing down here in north america. that's not what general motors

saw in the third quarter back to you. >> phil, thanks very much. here's what's making headlines right now. adp will not only issue its october jobs report next hour, the payroll processing company is out with its own quarterly numbers this morning 9 cents above estimates. meanwhile, t-moblie shareholders have proposed its acquisition of sprint they still await regulatory approval into the first half of next year. our guest is sam zell. sam, we were just talking about commercial real estate you said when it comes to that area, the valuations of prices don't make you want to add to the portfolio at this point. where do you see deals where have you seen things and thought this is where i want to invest >> i think that we have generally been reticent investors in real estate in the

last three or four years equity residential which is our manufacturing company, we just bought two buildings in denver that fit within the overall strategy of what we're doing but that's been the exception. >> i remember years ago you were maki making millennials not staying in the -- does this buy into the same thesis? >> right now equity residential as early as 15 years ago i think was in 35 markets. we're now down to seven. the customer that we're serving is basically give or take 28-40.

>> i think we lost your microphone hold on one second we'll get it right here. we can fix it. so go ahead. the idea just that you're serving a customer who is aged 28 up to -- >> 40. that's our primary customer. but those people, you know, very much want to live in the city. they're interested in walking scores, not expressway frontage. they tend to stay longer so they're nowhere near as much turnover in those kinds of buildings. and we think that this is a long-term trend. we don't think this is a short-term scenario. >> i'm guessing you don't necessarily think that the kind of millennial centric office concept, the we work sharing building, do you think that has much of a future in terms of a way of mapping out work?

>> you know, the concept of sharing office space goes back to the late '50s there was a guy named fejan who did that for the first time. he did it in an up market and he did great until the market was no longer up then it was followed by four or five other companies all of which, you know, focused on sharing office space. all of which did very well in up markets. and all of which went under in down markets you know, the concept, it's called sharing space but what it really is is creating marginal space that will be the first to be given up in the event of any economic environment. i don't think those have changed at all maybe just the street has given a concept that's per pos trous

>> so back to millennials. you don't think the trend is changing but millennials are eventually going to have kids and maybe want houses too. or is it just a delay of that entire process >> i don't think it's a new dna. i think this is all about we have over the last 30 or 40 years seen a very significant delay in marriage. that significant delay in marriage means that people are having children in their 30s, not in their 20s that means we have a huge group of zpoels income that we need to address and deal with as customers. and we eventually think they'll buy houses and have children

but a much more connected approach i'm not much of a bull on the housing. i would think that close suburbs are going to do very well. >> we have seen some numbers just for housing starts and sales that have been pretty surprising i think i just read something last night that said in southern california housing sales and condo sales were down 18% for the month which was a pretty shocking number. what does that tell us it's the worst since 2007. >> sure. housing prices have recovered

even though demand hasn't recovered. prices aren't down that doesn't necessarily make sense. i think we're dealing with a changed housing market we're dealing with a housing market that is much less dpebt on starter housing than historically has been the case so i think we're going to produce different numbers. >> is part of the affordability factor the raising rates you said it makes people think it makes sense but is that part of the factor >> it certainly is everything affordability, i mean, it was a statistic that came out yesterday that said that our savings rate was now back down to the lowest it's been in history. >> if yo r you don't have savings, it effects the economy. if you don't have savings, you

don't make down payments therefor the housing market is down dramatically. >> sam zell is our guest host. he is with us for the rest of the morning. and coming up, the future of facebook mark zuckerberg laying out his plan with the conference call last night with emphasis on messaging and video. here are the futures at this hour looking to build on about 1.5% gain yesterday. dow up 180 and the nasdaq helped by facebook up 73 at this hour. be right back.

♪ ♪ ♪ ♪ ♪ comfort. what we deliver by delivering.

all right. that's a lot of cavities welcome back, everybody. facebook exceeding expectations on earnings per share.

but falling short when it comes to both revenue and daily and monthly active users joining us now is managing director at jmp securities i know you like the stock. what did you think after you heard the conference call last night? what was your biggest takeaway >> thanks, becky there are a lot of takeaways it was mixed overall, but i think the biggest takeaway was maybe that advertising isn't slowing down as perhaps the company or we thought that it might. that engagement is relatively stable across the entire platform but even in the u.s. and canada and europe relatively speaking, and that yes the big surprise was this ramp in investments coming through next year but when you think about where these investments are going, they're in products that we think we can see a path to modernization. so you can see it going forward. you asked what are the takeaways? it's business are going fine engagement is holding up relatively well. and the investments, it's going to impact profitability. but we should start seeing the

benefits here maybe even in '19 and beyond >> what do you think it means longer term for the stock's valuation? obviously this is a bit of a relief trade, it looks like today. a lot of upside between here and where it formerly traded in terms of valuations. do you think it's capped at some point? where might that be? >> that's a good question. frankly, it's been a wild earnings season where companies have done really well. talking about investment stocks came down. companies that, you know, amazon for example have growth issues or at least the concern is growth in the 4q. if all of a sudden these investments around messaging an video and newer ad products launch, if you can start seeing, you stabilizing/accelerating growth particularly in advertising and as engagement remains steady, i don't see why we can't get back to where we were before. at the end of the day, you have

2.6 billion users on this platform hard to see any other rivals out there. and they're executing on what they can do relatively well. so there's no reason to believe why they can't get back to we lowered our price target because there's more risk here just given the additional call it 13 to 15-plus billion dollars of spend next year but if you can see these results start coming through numbers, there's no reason we can't get back to where we were and beyond >> ronald, thanks. >> thank you general motors up about 10% after reporting strong results and giving upbeat guidance phil lebeau joins us now with more detail. obviously the stock had been on a slide. this looks like a sharp reversal of that trend though >> yeah. i think what a lot of people have been sort of baking into the expectation from the automakers is we would start to see a slowdown, a fairly dramatic slowdown especially in north america that even though sales have been strong, that we would start to see some impact

perhaps by some pricing pressure, perhaps because of higher commodity costs, maybe the tariffs having an impact you're not seeing that with general motors this is a company that grew profits in north america some of that is because of a richer sales mix with more trucks, suvs, crossovers but they also got the pricing power right now. in fact, there is a briefing that the cfo is conducting right now with reporters and she's just been asked about pricing. she said, look we still remain very confident in the pricing that we're seeing we're not seeing an erosion there. all of these vehicles we're seeing at dealerships right now, the new vehicles, they're in record high prices they are getting the consumer who is willing to pay those prices even as we start to see interest rates move higher of course we're going to be talking with her in about five minutes. so it'll be interesting to get her perspective as she looks at what impact higher interest

rates might have on the consumer here in the u.s. >> when we talk about higher interest rates when it comes to cars, obviously we have a consumer that's conditioned to say i'm going to buy as much as i can for my monthly payment right now. then we have all these incentives that come around the edges of that. what do you think gm's message has been on that so far? >> they've been consistent with their message. they are trying to remain as disciplined as possible within this industry. and i know it depends on what your competitors are doing but generally speaking, this is an industry that has not gone to its historical trend of goosing up the incentives as they start to see some pullback with the consumer now, we're not seeing that pullback yet in showrooms. although i have to tell you, i've talked with a number of dealers who say they have to work harder to get those vehicles sold. >> thank you phil lebeau who's been covering gm for us this morning when we come back, a first

on cnbc interview with the new cfo of general motors. she's going to join phil after this break and again, shares of gm up by almost 10% this morning. "squawk box" will be right k "squawk box" will be right k baa. what do advisors look for in an etf? "squawk box" will be right k baa. i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. 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, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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it's halloween, everybody. let's get to the stock mover of the morning. phil lebeau joins us with a special guest this morning phil, take it away >> let's bring in dhiri from the general motors headquarters. this was a much stronger quarter than analysts were expecting you beat the street by 62 cents. as you look at this quarter and clearly north america is a big part of that beat. did wall street not appreciate the strength of the business and the pricing in north america >> yeah, phil. it was certainly an outstanding quarter. we had $1.87 adjusted and really driven by all of our segments. north america we had 10.2% margins really driven by the strength of our all new full size pickup trucks and pricing across all of the segments here.

china we had record third quarter income so the beat you're seeing has been certainly helped by all of that and we had a couple of tax type items as well that we're hepping. but strong operating performance across the board >> when you look at north america and you see the strength of the average transaction prices which i believe are close to a record high for general motors, are you seeing any pullback of resistance from the consumer right now are you hearing back from your dealers i'm not sure not that we don't want to sell vehicles for more, but we're seeing some of that pushback >> we're seeing continued demand and receptivity. across the board, our pricing discipline, we have seen no negative reception to that we're going to continue

executing our plan >> let's talk about china. you had record equity income from china for the third quarter. and that includes a september where you and others saw sales dramatically slowdown. the reports out of china is we are going to see similar numbers in october how concerned are you about a slowdown in the auto business in china? >> it's certainly something we're keeping an eye on and it's been top of mind for everyone and it's been on the news as well what you're really seeing come through here is our execution within that environment. and we've had an intense focus on cost for the last several years there. and that cost discipline is really showing this quarter as well we've had record cadillac sales in china and we're up 20% year over year. in an overall strong luxury market, cadillac is doing well as well. these factors are really driving

our performance within this. but it's something we're certainly watching >> but do you need to see not just general motors but the auto industry, do you need to see some type of a sales tax cut there to revive that market from a couple of weak months? >> it's certainly been in the press reports. it's speculative at this point but if implemented, this would be a tail wind for the industry overall. and in the meanwhile, what we're doing is controlling the things we can control in executing our plan >> you had about a $400 million increase in commodity costs. clearly you know what is being pushed up for general motors in this quarter alone we've had headwinds. it's over a billion.

we've had to offset that through other means and strengthen other areas of the business. but it's certainly been a head wind >> i know mike's got a question in the studio. >> wondering how the company is now thinking about the larger electric vehicle opportunity, challenge, whatever you might think about it just in terms of once this auto cycle as long as it lasts peters out. what's the next one going to look like? what does it mean for general motors' financial model if that's a much bigger part of the mix? >> we remain to an all-electric future and as we look at the next several years here, we have a number of products we're going to roll out. we remain committed to it. we've had several years with that and we're going to leverage that and see a number of successful vehicles come out of

that >> the cfo joining us from general motors headquarters. today they beat by a wide margin guys, back to you. >> all right, phil thank you. stock looks pretty good. coming up, much more on the markets as we close out what's been a pretty scary month for the stock market check out the performance of the s&p, the dow, and the nasdaq we'll find out if things will turn around in november. in novss we'll find out whether things are going to turn around. anyway, "squawk box" will be right backr eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness ♪

it's halloween on wall street futures are pointing to big treats for those investors dressed up at bulls this year. what's a vampire's favorite stock? a faang name, of course. facebook shares rising apple getting ready to report. we've got the names you need to know straight ahead. plus this is no trick. there's breaking jobs data just 15 minutes away and it could be market moving. don't be scared as the final

hour of "squawk box" begins right now. ♪ good morning and welcome back to "squawk box" here on cnbc in addition to everything else about the original, whoever thought up this music just amazing. >> we play this every halloween. this is our -- kind of a thing we've been doing for years and years. >> sinit's the night he came ho. >> why are you laughing? it's not funny and did you see we had some tape >> we're laughing because you can't see the screen >> oh. no, what's happening >> oh, nothing >> oh, okay. that's all right that doesn't -- that's not worse, i don't think, compared to the way my hair looks in this lighting it's hard. i'm trying to explain to people that when it's dark at 6:00 a.m., we light it a certain way. then by 8:00, it's totally light so they have now idea how to

light our hair so it doesn't look like -- i don't know. >> i don't have that problem >> yeah, sam you're fine. you're fine. you don't have that problem. but the idea i would sit there with tinfoil on my hair -- i can't even get my hair cut anyway, that was live new tape from "halloween. the new one which is a big universal hit. we are at the market site, nasdaq market site in times square it is halloween. i'm joe kernen along with becky quick and mike santoli andrew has got big stuff going on today but not here with us with "the new york times" dealbook conference. and anyway, futures up right now. he's lucky though because sam is here and he doesn't have to put up with sam in arguing anyway, the treasury yields this morning are as you would imagine. when the market is up this much, almost 200 points on the dow, the yields are actually under

control. $3 3.14% on the 10-year here's becky >> that's right. we are minutes away i from the p jobs report. that woush down from 230,000 last month general motors topping third quarter profit expectations in a big way. the automaker also saying that it expects to hit the top end of its earnings outlook for the year not a surprise given the blowout quarter they just reported revenue came in almost a billion dollars above estimates also and gm ea's cfo joined us momens ago. >> we had $1.87 record q3 and driven by strength across our segments north america you mentioned, we had 10.2% margins really driven by the strength of our all new full size pickup trucks and pricing disciplines here >> check out gm shares up earlier by 10% up now by 8.3%

and yum brands reporting better than expected earnings the parent of kfc, pizza hut, and taco bell compares with estimates of 83 cents. the company's ceo will join "squawk on the street" come up few other stocks on the move this morning adp beating quarterly earnings on the top and bottom line sales came in at $3.3 billion. and estee lauder topping expectations as well the cosmetics maker raising its quarterly dividend stock up 2.5% at this hour wrote it and composed all that music himself john carpenter dom chu joins us now with a look at the biggest drops we don't know how to look at it, dom. it's a scary month on stocks or a great month to buy stocks

historically i guess it can be both >> i think it can be both, right? i'm always an accentuate the positive kind of guy there are values out there for folks looking for that because stocks are on sale they have been for awhile now. the better part of a month as we talk about the moves, of course we've got some nice bounces today in stocks like general motors, other parts of the market that have been perhaps a little bit hit harder than others. we'll look at home builders today and everything else. maybe some of the bank stocks, defense contractors, those but if we want to look in terms of market value, the ones that have been the biggest hit have been the ones in the market. we want to give up perspective how much money in market value some of these companies have lost we'll start with the biggest company out there which is -- not the biggest company, but one of them. amazon.com which has been hit harder than many of the other faang stocks out there in this recent pullback. because of this pullback we've seen, it does translate into about $200 billion of lost market cap just for a point of reference,

that's like losing the size of a boeing just in the course of the pullback we've seen since september 20th, the last time the markets hit a closing high for the s&p 500. alphabet has lost about $102 billion. that's roughly the size of a salesforce or ibm. microsoft, $75 billion in lost market value berkshire hathaway, $45 billion. and apple has held up well in this current market melee with a drop just of $33 billion not nearly the size given the trillion-dollar market capitalization if you are looking for an accentuate the positive story, one thing traders will be looking at is the valuation of the current market we do have on a next 12 months basis, how much you pay in stock price for forward earnings coming up. check this out because if you look back, this is now trading at a level just around 15.5 times next year's earnings for the s&p 500 it was up around 18.5 earlier

this year. so if you are looking for a reason to be bullish, the pullback has given some traders a reason to think that valuation could be a little more compelling back over to you guys. >> we have a couple of guys here one points out the earnings. 23% earnings with lower multiples seems like you're cheaper just on an absolute basis. right? >> i would say this, too, joe. there are folks out there that mock the analyst community all the time they make -- >> that's me >> joe, you're one of them if you're going to look at forward price attorneyings ratio, you've got to kind of believe that the analysts are right about their earnings expectations for the coming year so it's just a way to look at it on a next 12 months basis, that's what it is. by the way, i didn't put up the last 12 months but you get the idea the market is trading at a

discount compared to the past 6 to 9 months. >> if the companies beat the analyst expectations 80% of the time every single quarter, doesn't that tell you that the analysts are pretty crappy at what they do why don't they raise their estimates? >> you know what the silver lining is there, right >> i don't know. >> they're underestimating it. >> i was just referencing one of our guests phil orlando, head of client portfolio at federer investors you're the guy i got the -- you point out 23% on the s&p in terms of earnings gains. as stock prices come down and earnings go up, multiples have gotten more reasonable charles campbell is here as well both of you gentlemen hang a lot of this on powell and the fed. not all of it, but that's what's different about october. probably those comments about being a long way from neutral. >> well, it's been a mosaic. and you've got the s&p down

about 12%. the russell down about 16% and certainly what's going on at the fed, the concern about trade and tariffs, the concern about the fiscal policy implications of the blue wave next week all of those things, i think, have contributed to a pretty significant downturn here in the market over the last couple of months andrew gave me a hard time over the summer becky was here we took chips off the table end of june. he said why are you doing that, market is going to keep going up we said, look, there's a potential for an air pocket here for the third quarter and we want to put the money back to work at better prices. we think there's going to be a nice rally at the end of the year october is the month that bear markets go to die. i think that we are going through that bottoming process right now. we're hitting our sign posts earnings as you talked about coming in better than expected, we hit our 3.5% gdp number on friday we think we're going to get a good jobs number this coming

friday and we think the election next week is going to be less bad than the market fears. all of that, we think, will contribute to a nice year-end rally. >> we just had a jobs number that was just right. >> that's what happens the older we get >> okay. charles, do you agree with phil? you also think it's somewhat the fed. it's part of the -- if something's ailing the market, that's where you'd point >> powell created what i call a first year mistake when he said we could go neutral or beyond neutral. throw on that his comment we're in extraordinary times and the problem is the markets are looking at the exact same data and they see lots to be concerned about. they're discounting the future they see trade issues, decelerating economic growth in china and eurozone we saw pmis from last week we had a pmi manufacturing report that was poor the weakest

seasons -- take out inventory it was up only 1.4% but powell says things look great. and it is disconcerting to many investors. they get troubled by that. at the same time the fed is undertaking an unconventional tightening policy by not only raising rates but normalizing the balance sheet. because the balance sheet was expanded to $4.5 trillion in an unprecedented fashion, reversing it and closing that procedure out is a grand experiment. and caution and handling it delicately probably would make a lot of sense given the economic uncertainty that's out there but when he talks with confidence and conviction and changes the statement to reflect that conviction, it unnerves participants >> we've got to be out by

8:12:10 because we have an adp number we have to hit on time. do you think we hit the bottom both have five seconds. >> lower >> we can go lower all right. >> we'll remember it thank you, guys. when we come back, we have breaking economic news the p onicadecom report minutes away stay tuned you are watching "squawk box" on you are watching "squawk box" on cnbc ♪ and 4% on entertainment. now when you go out, you cash in. what's in your wallet?

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click or visit a retail store today. okay welcome back, everybody. we are a few seconds away from the adp private payroll report thismay give insight on what t expect from the government on friday >> 227,000 adp reporting that october payrolls in the private sector rising by 227,000 september revised down by just 12,000 to 218,000. by my count, that's 7 of the last 12 months at 200,000 or above. goods up 38,000. that's a good number the nonfarm payrolls 188 and we're in an overshoot area where i would not be surprised to see some economists revise their expectations for this friday but there's an asterisk. i'll get to that in just a

second now i want to show you by business you see that large business leading the way. 102,000. bit of a trend there mark zandi said in the release it's because small business have trouble finding workers. they lose the gain or they lose the contest to the biggest businesses with the better benefits here's one of the things i really like about this report. i'm not going to read you the individual numbers by sector but if you're on the radio, do a mind image here. you see a lot of good positive numbers. what that means is a lot of sectors had good growth. so it's broad based. that's what i like about it. 61,000 for trade/transport leisure/hospitality, 40,000. education/health services, 31,000 construction also doing well up 17,000 the asterisk i have here is i

don't know how all the hurricane stuff factors into adp versus how it -- >> adp i think it generally doesn't effect it doesn't change people's payrolls you know, they still have the payroll data for employers that are happening on those so it may affect the government number, but i think i've asked zandi about it before. >> exactly so we had hurricane michael in october. it was just around the reference week it wasn't quite on the day, but it was a little bit before it certainly might have affected it then we had hurricane florence in september there's always going to be some up and down. >> on the market today, there's been this expectation that the market wanted to see slightly weaker numbers it means the fed would be less likely to rise this is better than expected number >> all i have said all along is is that which the fed said it's

going to do is what the fed said it was going to do there has been almost no change. when i went back and looked at -- when did the fed start to pencil into its forecast it would go slightly above neutral? that was december 2017 sam zell will know more how markets work but it seems a little weird in what are we, october to blame something that happened in december. now, maybe that's the way the market works, but you've had a percentage point gain or a percentage point higher gdp than the fed had forecast 0. % lower unemployment in that context the federal reserve already raising more than frftz too fast too slow you tell me. >> i don't think it's rising rates too fast

i think the overall economy is doing well i think the $64 question and i actually had an opportunity earlier this year to question a nob nobel laureate in economics, if our system is predicated on 3% expectation of growth. when you have that big a gap, do you have to make up for it before you have the end of a cycle? which goes back to this whole question we're all talking about is where in the cycle are we what inning are we in? tell me when the cycle started and maybe i can give you a good idea of what inning we're in did the cycle start in march of '09? is a cycle and the stock market the same thing

i don't think so and i suggest that the cycle probably didn't begin recovery until '13 or '14 we're probably not near there. >> you're hitting on the part of the story i'm obsessed with. i don't disagree with the idea that growth was substandard. all i know is that like i talked to janet yellen yesterday after the charles schwab conference in d.c. up and down she insists the potential growth rate of the economy is too in that context, it was not eight years of substandard growth it was eight years of standard growth now, i'm notgoing to say we can't. and i'm not going to say we can't do three but the math is -- >> it was eight years of standard growth, then what do we need all that stimulation for? >> we needed the stimulation at the beginning of the process,

sam, that got us -- was supposed to in keynesian terms -- somewhere in the middle. >> you can't figure out that lots of regulation that dampen the private sector and lots of redistribution -- you can't figure that out? >> i can figure it out what i can't figure out, joe -- joe, what i can't figure out is how much extra you add do you know what it is to add a percentage point to gdp on $20 trillion do you know how many additional workers we need? do you know how much additional productivity we need relative to the average? look i want it as bad as all you want it i want the deregulation and the lower taxes. it's just that when everybody else totals it up, they g

get 0.2%, 0.3% show me the math, i'll be a believer >> all i'm saying is conversations over conversations over conversations over conversations we were told five years ago that growth was now limited to less than 2% a year when the president said i'm going to grow at 3%, they laughed a at him >> there's no imagine ib wand. no magic wand. >> now 3.5%. 4.2% taking what you just said. you know how hard it is to move a $20 trillion economy 1%? real hard. we're doing it >> from an economics point of view, nobody laughs at the president's ability or anybody's ability on a short-term basis to

increase the economy by a percent. nobody even laughed he could do it -- >> then why didn't the last president do that? >> do you know how much we increased federal spending the contribution is five times greater under the six quarters of president trump than it was in the prior eight quarters under president obama? >> yeah. >> okay. i'm not saying that means it's all just a sugar high. i'm saying for the initial outset, you had a surge in government spending, cut in taxes that created an increase in retail spending at the consumer level. it may last. it may add yellen likes these ideas she can add 0.2% to potential gdp which she says is probably under. i've got a story, i'm going to do it tomorrow but i feel like i have to tell you today what does it take to add a half a point extra from the labor contribution to gdp?

how many more workers do you need i'm not going to tell you the number i had a bunch of economists calculate it for me. i'll tell you, it's an awful lot of workers you need to find them. we may not have the number of workers to do it >> just to your point about how kind of the fed is on plan based on everything it's laid out for a very long time, i think it'll be a fascinating realtime experience let's say this bounce in the stock market takes hold and we rally up 5% from here and there's been not a peep of variation in what powell has said or any of the fed officials have said. and they didn't give you a signal >> and then we rally anyway. >> and what was it all about we'll see if that happens. and bond market, by the way, has been rock steady with all this >> i like one particular thing you said earlier which is you've had lower interest rates keep companies alive. there was a report recently about zombie companies >> sure. >> like 16% of u.s. companies are zombie companies meaning i believe the technical definition

is their profits don't allow them to pay their interest and certainly low rates have allowed for some of that, if you would call it i d-- to accumulae in the economy we might get certain productivity and profitability out of -- >> there with no bathing suit when the tide goes out >> exactly >> i also think that, you know, that growth ultimately affects deficits an i think everybody's focused on how much more we're spending a like congress, you know, adopting static rules when every indication says if you cut capital gains taxes, revenues increase >> right and let the concede to joe one aspect here. nobody i know, joe, can model the deregulatory aspect of it. there's no -- you do see a surge

in oil and gas some of it linked to the oil price. maybe some of it linked to regulation >> here's how i would meet you in the middle. i would say just watching the policies of the eight years and the amount of regulation over the eight years, how could you not expect the private sector to be adversely affected? maybe because we stayed at zero and doubled the national debt, maybe that generated the 2% where you'd think it would be much worse maybe keep the fed at zero you do quantitative easing then you can sort of get 1.9% with all the bad i mean, except for cash for clunkers the one growth policy that we had that wasn't pure redistribution >> and you have to concede no matter where you are on the political spectrum, the surge in business confidence that accompanied president trump, i don't know how that translates into dollars and cents for the company, but ceos are certainly

more optimistic as are consumers. >> water boarding of the private sector >> except, joe, they added jobs at about the same pace >> well, one is from the depths of a recession we were at 13% unemployment. >> even in the last year of obama's presidency >> -- at 4% unemployment you're adding the same number the u.s. economy brought it down the u.s. economy brought it down it happened in spite of -- >> no, it was nancy pelosi's stimulus bill. >> we'll continue this conversation steve, thanks for being here when we come back, auto stocks on the rise after gm 'll s on stronger guidance too weshow you what's in their report that's helping shares of ford that's next.

♪ all right. welcome back to "squawk box. good morning we're live from the nasdaq market site in times square. economists had expected 180,000

adp jobs this month. shars of cereal maker kellogg taking a hit in premarket trading. kellogg matched analyst forecasts with 1.$1.06 per shar. but lowered profits to reflect increased costs and higher expenditures and sprint, shares are rising following a surprise profit for the mobile service provider sprintearned 5 cents a share for its second quarter analysts had been looking for a 1 cent loss per share. and revenue also came in above expectations one other story i would mention is -- i haven't read the story, but reese's has vending machines where you trade in one candy for the candy you like >> no way. >> that would have been good >> is that part of halloween >> that's for halloween. >> but it dispenses reese's presumably >> or whatever

all the different spectrum of reese's. i don't know if you can -- people used to give fruit. oh, there it is. we got it. the candy converter. can you fit an apple in there? how about the people that gave out apples you pick this up in a field somewhere. that's not going to cut it keep your apples >> nickels >> some other kind of -- like, boxes of raisins no give me a payday or a zagnut or a -- >> what's a zagnut >> you don't know what that? is there any you don't like? how about dots i love dots. >> not a big fan of those. >> i bought some yesterday >> nothing better than milk duds >> they stick in your teeth. >> that means you remember them longer >> anyway, how about that? that's a great -- i don't know how it works, exactly. do you remember when you were little you'd go to the people that you'd remember -- >> who had the good stuff. >> that had the big bars instead of the little bags

>> when i was growing up, there was a candy store around the corner where they sold you one piece of candy for a penny or you'd get two red wheels for 2 cents. >> people give those out yeah that used to make me -- >> those were great. >> how about the people that put the big thing out in front just take one. yeah, sure >> i plan on doing that today. >> you do that it's empty after the first people come, mike. >> not my problem. it's the kids that come late >> release the hounds. no one comes to my house >> shocker shares of gm jumping this morning following the latest quarterly results and guidance phil lebeau joins us again the stock has taken off. it's settling in here. >> right and it's giving a boost to the entire auto sector this is the reason why we don't see this very often a beat by a wide margin. 62 cents, better than expected

and when you look at gm's big third quarter in the big beat, comes down to a couple of things their two strongest markets, profits were up 33% in the third quarter. then when you look at china, they had record profitability in china of a half billion dollars. it comes down to strong pricing and a strong mix it's more people coming in to look for those higher priced either luxuries or suvs, crossovers here's the cfo of general motors talking about that pricing power. >> we're seeing continued demand and receptivity again for our full size pickup trucks. across the board our pricing discipline, again, we have seen no negative reception to that. and we're going to continue executing our plan here. and the launch we have between our full size pickups and our

crossovers have helped >> let's see if there's any resistance from the consumer as the interest rates move higher there is a little bit of a negative in these reports in terms of the commodity costs more than a billion dollars higher this year for general motors and that has to do with tariffs. aluminum is higher steel is higher. that's going up because of the tariffs an the impact there. so far general motors has been able to weather the storm. >> hey, phil one quick question the two issues that have really been facing the stock market, one is higher interest rates the second are the tariffs that's been pretty well telegraphed through mainstream media. how much, if anything, do you think the consumer has been affected by that like, in other words trying to rush in to buy a car now rather than later because they think price will go up >> i don't think -- well, certainly interest rates might

have some factor that there may be people looking at buying a new vehicle saying i'd kind of like to get this interest rate locked in at this time but generally speaking, if you want to look at the state of the consumer in terms of who's going into the showroom, check out consumer confidence. historically auto sales track with consumer confidence and what we're close to or at a record high in terms of consumer confidence and that's why we continue to see strong sales here in the u.s. and the pricing, gm's had record transaction prices or close to it, becky. so they're getting people who are willing to pay on average $37,000, $38,000 for a new vehicle. >> okay, phil. thanks joining us now on the squawk news line, auto analyst at consumer edge research where was the miss in terms of analysts and being so far off on what gm was ready to do? i knew there'd be a lot of truck sales, jamie those are much better margins for the company, right

>> yeah. good morning thanks for having me you're right i think when you look at the comparisons year over year, it's really an exceptional period considering how much truck demand and some of its peers had. that's the first ping. secondly, there's a product changeover going on right now. it usually means higher incentives on the model vehicles that are the predecessor vehicles now and the higher prices on the newer vehicles trying to get a sense of where that percentage rate is now is going to be the key question on the call it seems there's a higher percentage of the new trucks filtering through 3q there was a big tax benefit here too. trying to unpack and understand where that impacted from a segment perspective i think is going to be critical but we kacalculate 15 to 20 cens from the tax perspective

really well positioned core business >> the next move for if you were running things, jamie, is it going to be electric cars? would you spend a lot of money trying to figure that out for gm or when you've got gasoline prices and oil under pretty good -- behaving pretty well, would you just continue to make hay while the sun shines with suvs and trucks? is that what they should do? or should they near term move into the future like a tesla or at least better gas mileage. >> yeah. look you're asking a car guy who still drives a manual transmission, believe it or not. >> i do too. >> on another level, i think gm is well positioned dominant market share in businesses that are going to take a long time to go ev. when you think about the chevy

suburbans of the world which are extraordinarily strong pricing in margin. it's really the other oems that don't have that cushion that are more frantically, i think, investing in evs and trying to get ahead of the curve there with respect to the strempbt of its core portfolio the other part of what makes the gm stock work relative to peers is autonomous vehicles you might be aware of the cruise automation investment and some other investments from third parties there to kind of drive the valuation up that is a key differentiator as well so i think again, evs are coming that's where all of the r&d dollars are coming gm has this cushion related to its trucks and suvs that i think very few maybe with the exception of ford and fiat, very few companies have at this point. >> jamie, just quickly, just

this idea of people pulling forward. somebody points out on twitter that gm sells to the dealers, not to the consumers is there any truth to the idea dealers are pulling ahead of some of these tariffs? >> i don't think so. i know you've had autonation on this week. we cover the dealers as well you know, i don't think that's what's happening what you're seeing a consumers are going to go to the dealerships, buy new vehicles when there's something special and a brand new silverado and sierra is special. number two, the vast majority of the new vehicle portfolio in the automarket is stale. when there are vehicles 25% cheaper, you're going to go there. gm doesn't lease a lot of their trucks or suvs so it's not competing in the same way i think this is a unique standout by no means do i think the industry is out of the woods but this is one of the brighter spots from a lower lease -- >> jamie, i hate to break it to

you. i have seven speeds in manual transmission both of us are going to be in autonomous driving cars that look like the nissan cube in a couple of years. just face the future that's where we're headed. i'm sorry. >> my wife is probably happy to hear that. >> jamie albertine from consumer edge research. when we come back, are investors flocking to the etfs we will ask invesco's dan draper and tomorrow, it's andrew's big day. his special guests include the ceos of blackrock, gm, merck, snap, and google along with steve ballmer, lloyd blankfein, steve ballmer, lloyd blankfein, and pete thiel i blew my ankle out and i got prescribed pain pills by my doctor. if making my detox public is gonna help somebody

stay tuned "squawk box" will be right back.

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♪ all right. welcome back, everybody. volatility has been the market theme of the month futures right now are indicated higher on this last day of what has been such a difficult month for the markets. dow futures up by about 225 points building on the 400-point gain from yesterday.

s&p up by 28 c can. >> yeah. really since the market high of september 20th, we've seen higher volatility and less confidence in the markets. it's a little reminder if you recall back end of january, beginning of february, a high level of volatility. so we're seeing investors who have taken a bit off the table have moved their equities into low volatility equities and away from the momentum driven etfs in particular >> a lot of your etfs focus on the faang stocks those are the stocks that have been under so much pressure lately what happened? are these worried about those stocks and how much exposure is there in the etfs that you manage >> right

clearly in our biggest is the qqq which has a high waiting towards those stocks we had sentiment turn from end of september into mid-october quite negative also you think about october 31st will investor revert back to momentum and growth as has been the leaders most of the year but again, the inflows we've seen in low volatility, shorter fixed income etfs will prevail through the oend the year. >> you mentioned the episode in late january, early february where you did see really a lot of turmoil really the spring loaded moves in the markets now, a lot of that was attributed to sort of the unwinding of these volatility exchange trading products as you know

vix futures, base products doesn't seem like that was an issue right now. but is there any of these kind of highly engineered etf categories that seem like they were a source of exacerbating the volatility >> no. at invesco, we don't offer those lenched or inverse products. but i think in general, i don't think that's a major issue i think the real focus is really just sentiment a lot of longer term investors focus on kind of portfolio rebalancing. i'm not aware of any kind of issues related to products that are not really exchange traded funds. but more as you know an exchange traded note fund 3w i'm not aware of difficulties. >> thank you very much for joining us today i appreciate it. >> dan draper. >> yeah. >> dan draper. you think i'm going to let that slide? >> we were just talking about it over here. >> we played the music from "mad men" coming in >> it's more -- i don't mind the

frivality. it's one letter difference >> yeah. >> also, he said good-bye. st it's not a matter of involving him. >> i want you to embrace it. you can be the other mike santoli for the rest of the day, but when you're here -- >> we'll see facebook shares trading height r hi higher right now joining us on how this fits into the performance of faang this quarter is kim forest. she is partner at fort pitt capital group. the stock is trading higher. but what do you think overall? >> overall i think the company's still doing well, but i think the big story from yesterday is they still are going to have to change how they kind of edit the users. they also need to move the

product on and use stories and that audience they need to desperately to be engaged. so they have to continue to spend money to make sure that we tune in and spend our lives looking atfacebook >> you optimistic or pessimistic about their ability to do just that keep us locked in. >> i'm a little bit pessimistic. we don't own it and it's always been the capricious consumer there's no real mote there i can decide to look at instagram or spend time on twitter or do other things whenever more compelling time wasters come along >> in terms of what it would take to convince you, is this simply a value question? price would have to get better before you'd get back in or is there something the company could do to say hey, this is where i want to be >> well, if they could come out and really demonstrate they had a more edited product, my thesis

is this. whenever youtube came out, people flocked to that and it was the darling and it was going to replace tv. and scripted tv was going to go out. and here we are in -- not only are we getting away from cable, but we're paying for access to scripted, edited kind of content. and i think that's ideally what is going to happen here with facebook but i don't see them kind of moving in that direction direction. the users of facebook are still the writers of facebook, i don't know if that can go on forever i think we are kind of boring. >> if you are looking for the dominant time waster, does it take you towards netflix seems like the market is willing to pay a high valuation for that kind of content producer that gets people hooked >> sure, i think immuned to all of this stuff. i think we are going to see cycles and we have begun to see

that where content providers are not dependent on etflix. disney is going to build its own. i think the whole series sort of thing right now. we have seen this where people switch in the at&t call. people are switching from providers of content and i think ultimately that's what we are going to do is go after the content and not the provider when a provider comes up with some sort of mote that makes it difficult for people to move off of that, i am interested in that sort of investment >> kim, thank you for joining us >> thank you >> how about fifth avenue bar? do you guys remember any of these? >> oh yeah >> we are going to cramer. i deferred to him a lot of a similar demo did you have a favorite big bar where you would go to the house that gave the big bars out what would you say this is the

best house what would it be for you >> the tucker at candy apples. >> yeah, but they were wrapped in -- >> do you have kids come where you live now >> i am decorated and i went to king's last night and i got the biggest. i am one of the guys that let kids put their hands in and it is lights out. >> it is lights out and you got to be there and you are gone >> i like the big bars >> i forgot, bitter honey, do remember those >> do you remember those because it takes your fillings out you got no fillings when you are done with those. >> how many of your thing things -- how many of your

required things for abbott did we get for you >> we got a lot of them. >> we did? >> we get people like masco and a forecast cut, the stock went up 10% i have been looking for forecast cuts and stocks going up and s&p over 6%. we got negative six. look at facebook today everybody cuts the price target, it does not matter, the stock goes up. we got a lot of companies report, the street does not like them but they go up anyway we have mixed data i don't want data that says we are getting real weak. hey, listen, let's do a rate hike and see what happens. that's all i want. i think things are fine. but, i just don't want them to take what's going on now of 5% mortgage and say, you know what, we got to keep pressing our bet one more time and see. i think that's very cool >> i had that weird feeling when the adp was such a good number

and i am thinking uh-oh. they're raising rates, you might as well get great job growth >> we got the tariffs coming in. i think janet yellen recognizes that bring it on a rate hike and let's see. when is prudence ever bad. i never see prudence to be bad in my career i want a rate hike and see what happens. why is that? >> thank you, jim. >> we'll see you in a couple of minutes and i will see you later tonight if you are giving out the great big bars coming up on "squawk on the street," don't miss the ceo of yum brands, greg creed "squawk box" will be right back.

you can find -- we are still talking about business obviously. charleston chu was from th

ththe the 'the '4 the '40st. >> it it is halloween, thank you for being here >> what's your final take away >> i guess i am concerned that everybody is too complacent. i think there are more head winds today. i am hoping we'll be able to pass them. there is a lot of variations here and a lot of things that in many cases represent first time events for us. >> such as what? >> the whole saudi thing we never had an experience like that we still don't understand what it means, what's their ramifications? >> i have avoided to talk about mike bloomberg with you. i didn't want you to say -- you would vote for bloomberg

you were a lifelong democrat >> long time democrat. >> are you not anymore >> i am not anymore. >> how is bloomberg attractive to you if we do climate change and gun control if that's all we do for four years. >> if all we do for your fears of climate change and gun control. that would be terrible and gridlock >> when it is all said and done, you know, michael is a businessman. i think he has confronted a lot of challenges. he ran the most difficult company. >> he ran a great company. >> he's more than anybody else as a praguetimatist >> would you rather have trump or bloomberg >> i can't answer that >> that's a tough one. the show is ending, i will ask you after the show are you here tomorrow again?

>> i am not. >> andrew is back. >> tell andrew that i miss him >> that's right. or, we can have andrew >> sam zell, great to see you. talk to you soon folks rierk folks, right now it is time for "squawk on the street. ♪ goo wednesd good wednesday morning, i am carl quintanilla and david faber and jim cramer happy halloween. facebook and gm is going to hel out today. adp, the biggest jump in eight months despite those back-to-back hurricanes and 227