facebook jumped about five percent on wednesday. with the stock under performing two weeks later. we want to thank our guest host today, tom lee. thank you very much. that does it for us today. make sure you join us tomorrow. right now it is time for "squawk on the street." ♪ good thursday morning, welcome to "squawk on the street." november begins with the bulls aiming for a third gain in a row. dow futures up. claims, productivity, auto sales and apple starbucks earnings tonight. we did get the best back-to-back numbers on productivity in about three years.

new month, new market momentum. stock set for another positive open. >> leading the rally stronger than expected earnings from cigna and dow dupont. >> inflation watch. clorox, coke, kellogg, apple among many hiking prices. stocks are looking to begin november on an upbeat note following the volatile october. for october the dow saw a five percent decline. nasdaq losing nine percent and the russell down almost 11%. as for the last minute rally of the month, then there was the last minute selloff in the last few minutes. >> russell is where a lot of the

rot is. holy cow. it is so obvious that that is the point of pain because i think that directly reflects the idea if the fed keeps raising that is where the real weakness is going to be. let's go back to what i think has to happen. i don't want to put too much pressure on tim cook, but that apple quarter is so important. it has to have a big number. >> let's say it is fine, but not the greatest quarter does something bad happen? >> that is a suboptimal situation. apple has hung in. if apple doesn't in line number -- companies that do in line numbers in this period have been greet would tsunami. apple is to important. we can try to for a moment

rationalize. we have seen over and over again that this whole mathematical equation that if it is bad for apple it is bad for 79 other companies. you know how it goes. >> the momentum world that we live in it is buying begins selling and buying begets buying. >> you speak to the ceos who say why is my stock being sold >> it seems to be the market we are in. those who typically engage in more price discovery or bought on fundamentals -- we have hedge funds closing up. wall street banks might have been a part of the process. you have algorithms growing. >> you can't give it off to the algo people.

>> we have the note about decel rating app store sales. 11 in october, 20 in september, 26 in august, july. they point to china. >> that is exactly what -- if that is the in-line that is bad. you need them to be able to say something that -- those who have kept the stock up here versus the amazon decline. alphabet is barely down now. i had -- we will be talking about inflation. i don't think people understand that self-driving cars -- a lot of people are saying that this could solve a lot of the shortage of labor problems within the next two years. >> within two years there could be self-driving trucks and

because there is a driver shortage it would be very beneficial and they will replace people who have employment. >> he is talking about -- he says for the first time we see temperring of economy. he is saying we have about 50,000 drivers short. that is what is going on and drivers make very little money versus ten years ago. that plus amazon paying the drivers $15 an hour. clorox managed to grow. the driver shortage is what i hear. you look at the kellogg number, any consumer -- it's trucks. i almost feel like that is the problem? trucks yes. >> in two years. that's aggressive. prices can move a lot.

>> millennials won't drive trucks. they need to make more money. they have so much student debt. they need to make more money. the inflation adjusted truck driver is making half of what they made ten years ago in part because i think the millennial people are more in tune. >> you mentioned clorox. they are part of the story of the journal this morning about inflation highlighting several companies that are hiking their prices so passing on higher prices for fuel, metal and food. some include clorox, mcdonald's coke, american airlines, apple. computer prices up 20, 25%. >> same story, i think. >> they watch our show and do the story because that's required. david doesn't believe me. i will read what he said so he has empirical analysis.

we are missing about 50,000 truck drivers in this country today because the job of a truck driver is less attractive today than years ago. as a result, for every available truck there are seven available loads. >> we get the transport. steel up 38, aluminum up 8, fuel up 40, tariffs up 10. it is more than just moving things around. >> we had a man made shortage. that's to protect the steel industry. >> i'm coming back around apple because of tariffs. that's the one thing that -- come on. you know if they actually put a tariff on the -- >> then the market goes slower. >> or any of the other things that have been exempted. >> apple is the battle ground. it's the lurking concern.

>> yes. that is why you can repeal the whole gain over the last two days. >> all it takes is a couple of tweets. >> look at spotify this morning. spotify comes out and the numbers are good. they say they could be a million shy in the fourth quarter. i just think that the way they do it sthit is they look at evey single line. if one is missing they sell the etf. >> that is the world that we live in now. we don't know what they own. >> how do we change it >> i don't know. that is market structure. i don't know. >> i attacked them last night. >> who >> etf people. i say i wish i had not -- now that the people have ten different etfs, i wish i had never created it. the only reason i created it was

because it was funny. i picked the stocks because it is good. now it is f.a.a.n.a. because google changes. they make what a starting nfl player does. people may think they do it in order to avoid single stock risk. they create fees and created a weapon of mass destruction against f.a.a.n.g. >> i wonder if larry fink will discuss this with andrew. >> he is not afraid to tell the truth. most people are afraid. they can't handle the truth. >> no, they can't. >> do you think the performance of black rock shares are sniffing out any of the concerns you are talking about? >> larry fink laid out that this

has become a commodity. two days ago mastercard had an unbelievable quarter. this is good. the stock was down four. there is a think called the -- it took all the fin techs down. yesterday mastercard was up ten. >> that's the world we live in. you find out about etfs. >> we have to put this in the context where people understand. it is so crazy. i don't think people recognize how ridiculous this has become. i talked to a lot of people on air who are acting as if it is

rational. it's not rational. >> it's not new. what is new is the three major central banks around the world with negative liquidity injections starting about now. >> the fed has a lot of people who come on air to justify everything they say. nick aikens is saying it is broad-based weakness. he is not a 28 year old who checks things. he is a ceo of the largest power suitor. i bank on the people who went to harvard business school and are 28. this guy is on the board of the rock and roll hall of fame. i saw him on mad money.

i just think that the fed ought to watch the damn show when i have the ceos on. >> the conversation about inflation, you forgot about that. >> i didn't forget about it. i analyzed it and decided it was an ill-advised tact. when you have ceos who say the economy is slowing, i represent the largest conglomeration of power. i have the figures and business is slowing. why isn't that better than a beige book is that the color of the book? >> i guess so. >> i just can't take it. i did not go to college to get stupid. >> your concerns have not been reflected in consumer confidence. >> i look at the electricity numbers. they can't lie. the consumer confidence when you get 18,000 people bought out at

gm, how about the consumer confidence in the power unit or in atlanta after that? >> we made it through an entire block. >> when we come back, dow dupont up after announcing a beat as the company prepares for a three-way breakup. take a look at the futures. we are expecting auto sales. we'll get all of that when "squawk on the street" comes back.

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shares of dow dupont are climbing. i have to tell you something, they announced another cost take out. they started at 3 billion and then 3.3. now it is 3.6 billion. we have to ceo of dow dupont ed breen. it is on the phone, i know. you will hear his accent.

he is from the next school district over from me. ten percent organic sales growth. how did you get there? >> it was interesting. the ten percent was across the board. it was in every division and every region we were up double digit on sales. we clearly outpaced gdp across the board. a couple of areas i would just mention because i think they have been in the news a lot lately is our china sales were up 18% at dow dupont. our auto sales were up ten percent and industrial sales were up eight percent. we continue to see strong demand across the board. >> could you speak to why you decided to do a buyback right now? is that because you think that the stock has come down a lot? >> clearly with the stock

trading where it is at, we wanted to get going on the share repurchase. as you might know we were waiting to get our capital structures done for the companies. we will be announcing our financial policies next week at our investor day for the three companies. we wanted to get started immediately after this earnings on a share buyback. that 3 billion will happen in a short period of time. we will accomplish that in the next five months. i would also just add that the three companies are going to be very friendly with policy. we clearly will be talking to the boards of the three companies about share repurchase as we move into the splits. >> ed, it's david. there is frustration on the part of your shareholders who sat there for three years. when you did the deal which is coming into culmination, the

idea was to create high multiple specialty agricultural businesses. dow was trading at about 14 times. now you trade at 11 times. i don't get it. neither do your investors. do you when is this value creation that you did all of this to get to going to show up in the stock price? >> you know, i think it's interesting. i have split up companies before. the excitement i think will very much build as we get closer to the separation. when you look at it, we are creating the number two ag company in the world and the only big ag company that will publically trade in the market. i think you have a very interesting play there. we are creating clearly a world class specialty company and all the metrics stack up very well. we have the best material science company. you will have three great companies. when i look at the sum of the

parts and i know every investor can do their own work on it, i think everyone would come to the conclusion that we are significantly under valued. i think excitement builds over the next few months. >> so is it going to take them being three separate entities before you see the value creation that many expected would take place previously? >> my personal opinion, i don't think it will take until then. clearly that will help. some investors will be -- but generally i think people are going to see the disconnect between where we are trading now and the value of the sum of the three. when you start getting closer to it i think it is a great buying opportunity. >> one of the reasons i think your stock fell is people know you are involved with auto and auto is supposed to be terrible. i think if you can speak to the idea that all auto parts are not created equal and that dow

dupont has faster growing ones. >> a couple of results i saw, one was auto paint which was after market in auto. we got hit by that. what we do with auto and the reason we have grown double digits every quarter for three years in auto despite what the builds are doing, one of the reasons we are able to do that is we are secularly in the right part of the auto sector. we are doing the electricification of cars. the second big thing we do in auto is we are the big player in lightweighting of vehicles which obviously everyone is working on from a regulation standpoint. as the auto industry continues to chip either high performance turbo technology into electric cars or hybrid cars, we have more and more content that is

driven into those vehicles. i see that trend continuing for us. >> final question. what about tariffs it is sort of the shadow that seems to hang over a lot of industries. i would assume it is the case with yours, as well. has it been harmful, helpful to your business? give us the sense as to your expectation snz. >> -- expectations >> if we add up everything in the last quarter in the company it affected about 50 million of our business. 50 million in the scheme of our numbers is nothing. we grew our china sales by 18%. we did move a couple of supply chains around to make sure we were protected. i see no impact in the fourth quarter on the tariff front. >> excellent. we look forward to seeing you on investor day. that is ed breen, ceo of dow

dupont. thank you, sir. >> we will get cramer's mad dash >> we will get cramer's mad dash and count down to th instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, bell in a moment. don't go away. bell in a moment. partner with pgim. the global investment management businesses of prudential financial, inc.

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acan echo throughout ane entire community.nge that's why we proudly support, invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. the opening bell is sponsored by u.s. bank, the power of possible. >> we have just a couple of minutes before we get to the opening bell. time for mad dash. mxp was a one time deal for quaalcomm. shareholders said you are not

paying enough. quaalcomm gave up and the stock went to 69. today what is happening? >> it is microcosm for the entire market. nxp, i can't stress to you how great phil lebeau was yesterday. it said stop putting the hate on everything auto. you might have bought nxp if you listened to phil. they reported some very positive numbers. they did buy $4.6 billion of stock back. that was part of the $5 billion purchase. these numbers are very strong across the board. third quarter revenue up four percent. nxp is an overreaction to how bad autos were. >> and the numbers show it. >> quaalcomm, everyone is hoping for resolution out of that.

it won't be tonight. >> probably not. >> let's get to the opening bell. at the big board it is a battery maker celebrating the acquisition of alpha technology. at the nasdaq is orchard therapeutic. a big part of the gm story was higher prices and same story at fiat just now. >> they had far fewer incenti incentives. higher average selling prices of trucks and suvs. so my hat's off to gm. i don't know how sustainable it is. the gm quarter was very important because it made people fly back to a lot of the stocks.

i don't know how long lived those moves are, but they were quite contrary to the themes we have been hearing. >> we will look at gm. as far as breen's comments go, do they fit with ppg and clorox and sherwin williams >> they were not hurt. they made that point. a lot of people felt that they would have to eat it. we are trying to figure out who has to eat it and who doesn't have to eat it. clorox they have four percent growth, but they had to eat some of it. david, you have to decide who eats, you, the retailer or the customer. >> the customer. >> i think who eats is the theme of this quarter.

>> who eats? >> you are right. it's not an across the board solution for each company. >> kellogg ate it big time. they had tony the tiger. >> i have a dog that i got at a shelter, really bad habits. doesn't know the difference between inside and out. >> you can break him. >> this is a continual theme because every -- they would like to take train but train is too slow so they have to use truck. >> that is the whole point behind just in time was to get it off the rails and into a truck. >> they have this new probiotic.

they did not have it in the stores because the supply chain problems and they lost share on what was one of the greatest growers. throughout the system there were people who were not ready for the surge in business and certainly not ready for tariffs. the president really has shotgunned everything. everybody has to be thinking about how quickly they can get off. mass said they can get off quickly in the rest of southeast asia and said we are switching and putting more production in the united states. they said that the knockoffs that they go against are 100% sourced in china. i think this is very -- the president should visit and have one of those rallies. >> i'm aware of the rallies. >> i'm aware of the rallies. >> they are not really in new york city. >> does that make you want to

buy some of these? >> they executed so horribly it was really scary. i don't know. i do like -- we have seen a lot of these companies come down. it's tiresome, but tech has gotten overly sold. nxpi is a very good example of what has happened. nxpi did four percent. prices are going down and also micron has china exposure. i am saying that the industrials -- have a look at boeing here. >> still not good enough. >> that was off of flash pricing coming down. they have a joint venture in china. i look at companies like united it technologies. if the deal goes through you will regret that you didn't make a move. >> who will regret you didn't

make a move? >> you own the stock >> they expect the deal is going through. it is november 1. >> no way, no how some say. >> you're right. we don't know. >> what do you hear? >> the total tonnage of what i know that you don't would stop a herd of buffalo in its tracks. >> that's very illustrative. >> overall, we are waiting on i.s.s. yesterday they came out with their presentation. >> which was much better than the company. >> you thought it was better. >> he is in favor of bringing up value. >> campbell's gets wrapped up as it did yesterday in the worries about the companies such as kellogg.

>> and millennials. >> i have not -- >> just because the map is so difficult. >> i think he picked a bad target. >> he picked a tough one. >> they can fight all they want. they will see how they do. maybe they can negotiate for a board seat or two. there is a hope that perhaps it is the same candidate that the board will have and that something will really happen there. >> you know what we didn't talk about yesterday was the move in the financials. it was really substantial and based on absolutely nothing. i tried to figure out when the financials called all the banks. >> the regionals still had their worst month. >> the money centers, i speak to all of these. no one knew why the stocks were up. this is again the kind of thing that we are dealing with. it's really incredible when the ceos are calling me saying why

is the stock up? >> i was going to ask the same question. what do you think of that? >> they don't know. nobody knows. i blamed an etf because it was gratuitous. >> fit bit 21% gain. revenue ahead. >> i think that was good. i felt that might be good for apple and watch. i'm very worried about china and apple. starbucks, i'm not as worried about. they have a good relationship with very important interests in china that i think you get to speak to. >> they do. i feel like when it comes to china these days it is difficult to have a true understanding of what is really going on. >> how did dow dupont get 18% growth is china going to kill you they said no, we are fine.

i was like sure. they are right. i was too cynical. >> i want to get to a deal we had this morning and the movement in stocks is very notable and kind of buying newfield exploration. they are valuing it at about $5.5 billion. >> is it the beginning of the wave we have been waiting for? >> take a look at the price. >> this is not uncommon any longer for a lot of buyers. it's not a good sign for m&a. it's 2.6719 for common shares. >> i thought it was such a good deal. >> there it is. it is down 15%. the premium has been significantly eroded as a result

of shareholders' response to the deal so far. you have forgotten more than i will ever know about stuff like -- tell me about it. >> this is diverse so they are in all the big bases. you have to do that. i was shocked. i looked at it and said this is what we have been looking for. >> why are shareholdersso -- >> this group is so hated. do you know, here is a statistic for you -- >> i'm telling you it was a great deal. i remember more than crow have forgotten. i just saw -- i thought the cigna stript scripts was a gre. >> you heard buyer -- >> you have to have bets placed in all the different -- you

need -- despite the resolution on the battle. >> long term rates 30-year. it will take you -- the dollar is reaching an exhaustion moint st. >> -- point? >> i hope so. if i were a seller of real estate i would hit every bid that is there underneath. the day of multiple bids is gone. >> on residential? >> yes. >> is this your northeast kind of stuff >> the conversation about currency -- >> you know that the 30-year will be reflected in mortgage rates. by the way, there is a lot of buy it and pick it up. i think that construction is

down and will be down. >> we will get spending in about 20 minutes. >> the fed has got so much room to move. oil has come down a lot. construction is cool. we know these electric figures are showing weakness. against that, the fed decide somehow that full employment is 3.7. those other people, we don't want them working. they don't work. >> you better pray for not a three handle on hourly earnings. >> given the way they are set up so the last people are not allowed to work, that is just great. the paycheck's indicator said they are not hiring if they are paying too much. i did want to hit soft bank before we head to bob pisani.

vision fund, saudi arabia, that is sort of clouding things today. they are getting hit because of the plan to list the mobile unit. one of the competitors in japan significantly lowered its prices, i believe. and therefore soft bank is getting hit a lot, down about eight percent or have been. >> guys, a big morning today for someone who has been synonymous with reporting from the floor of the big board. today bob pisani is celebrating 25 years at cnbc. we want to wish you a very happy anniversary. i love that photo right there. >> thank you very much. >> oh, my. >> i started in 1990 and became staff in 1993. that was the real estate days. >> which one is talking?

>> 1997 i came down here to become the stocks reporter. it's been a wonderful 21 years on the floor of the new york stock exchange and a wonderful time being with everybody. a great family to be with cnbc. i never went anywhere else because i didn't want to go anywhere else. great honor to be with nbc and great honor to be on the floor of the new york stock exchange. let's take a look at sectors and get the old pictures out of the way. i dye my hair gray now to look more distinguished. materials moving up. cat and boeing helping the industrials. health care is also doing very well here. november trends, this is a really good month historically. we love the seasonal flow in november. it is the second best month of the year. it has been up 45 of the last 67

years. that's two thirds of the time. it starts the best six months of the year period. the mid term election years is up in the fourth quarter since world war ii. that is a winning combination. also strong, we have been talking about buybacks increasing. it will be a record year. $1 trillion will be announced this year. that will be helping overall for buybacks. earnings here, three quarters of the way through here. you heard the guys talking about the cost pressures with the tariffs and commodities and labor costs. it is who is eating it and who is not. we hear a lot of talk about modifying the supply chain and moving things around. we hear more talk about productivity improvements. the issue is whether the margins can be maintained. my sense is that they are doing a pretty good job maintaining margins. one thing to watch, this will be

an issue for the next few quarters, debt reduction could be a competition for share buybacks going forward. speaking of buybacks, just want to point out a number of companies doing very big buybacks today. dow dupont announcing one. all state a big buyback. the big one, the king of buybacks is apple. nobody buys more shares back than apple. they purchased $43.5 billion the first six months. they will announce another 25 billion back in the third quarter. they might buy back $100 billion this year. they reduced their share count every year 26% lower share count. that is an amazing feat and a significant factor in why the earnings have been strong. finally, we are getting preliminary numbers on fund

flows. i'm looking specifically at etfs. i will show you bond mutual funds. you will see outflows. the big one is agg. lqd is the second biggest one. high yield and treasury. on stock flows, the biggest one of all, the spy, that had outflows. the two more boring ones that are considered investment grade just inflows, a bit of a surprise on that. carl, back to you. >> bob, just wanted to congratulate you, as well, on 25 years. bob is not just a great guy on tv, but he is such an important part of this organization in terms of developing so many people's careers through the years. i have seen it for all the years that i have been here, as well. so many people who you have helped and relied on you. you are a great, great asset. >> you have neglected to point

out that you have been there withme. it is your 25th, too. >> i had mine. it was a great celebration. you started long before me but 25 years of staff. congrats. >> we love you, bob. we are getting ford numbers out. for that we turn to phil lebeau. >> we have numbers from ford, fiat, chrysler and toyota. these are comparisons for a strong october last year. ford down 3.9%. that is a little bit better than the estimate of decline of 5%. the car business continues to be down 17% last month. fiat chrysler, an increase of 15.7%, much better than the expectation which called for increase of 9.2%. ram trucks best october ever up 14%. toyota up 1.4%, a little weaker than the estimate of up 2.3%.

the bottom line is this, we will be seeing pretty strong numbers in terms of october auto sales probably in the range for a sales rate between 17.2 or 17.3 or 17.4 million. anything over 17 million is strong. guys, back to you. >> we'll see what mary bar tells the deal book. let's get to the bond pits. good morning, rick. >> one week of 30s. we extended up to 341. let's zoom out the chart to july of 2014. 30-year bond extending the cycle high originally at 340. that is based on a close. what i'm really trying to show is how the curve has moved. if you look at the two-year the high yield close going back to '08. we are at 287.

so we are about eight basis points away. the third year really is leading the charge. let's look at year to date of barclays. even though we are wider on the year, we are coming down a little bit. you want to see how orderly it is, let's zoom back for a three-year chart and you can see these fixed income markets outside of the best credit. sovereign treasuries still doing well. the dollar index down about 0.23. >> thank you very much, rick santelli. when we come back, fit bit getting a much-needed lift after operating profits did surprise the street. watching to see if we can get a third day in a row here on the dow as we are awaiting

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let's get to jim and stop trading. >> i'm -- one of my big theories is the humanization of pets. the idea that the pet went from the basement to the living room to your own room to now our beds zts is the best way to play it this is the pfizer spinoff remarkable juan ramon, one of the least promotion alcee east coast, look at the job he's done another great quarter from zoetis it's an extraordinary company. if you have a pet, when your pet is sick, you're using their stuff. >> spending on pet halloween costumes was half a billion this year. >> really. i thought they gave out the candy. geez, i wore the bull costume.

tonight we have proofpoint they're under pressure because satya nadella took aim at them shopping centers are not only not dead, they're doing better than ever. justice -- justin gover with gw pharmaceuticals and real kbi cannabis i'm here till thanksgiving. >> good news for us. >> it is. >> and for viewers, jim. >> thank you. >> wn ce ckciheweomba, gna with an earnings beat

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welcome back to "squawk on the street." rick santelli with some breaking news on construction spending for the month of september, unchanged. unchanged. that's following a huge revision to last month, originally up 0.1, now zoom, zoom, zoom, up 0.8. that's pa big revision

ism, our national number for october, chicago is weak, this also a bit of a miss suspe expecting 59, following 17. pn . that's the lightest since april of this year the internals, considering we have an employment number tomorrow, the ism employment index moved from 58.8 to 56.8. so that's a bit of a detier color with ration on prices paid, from 66.9 up to 71.6 no orders, also deterioration, down to 57.4 so prices paid zoom, but that's when you don't want to see higher, a little miss there. we're still hovering near four-year plus highs at 340 yield on 30-year bonds dollar index giveback and, carl, back to you. >> good stuff. important numbers, thank you very much.

good morning, everybody. welcome back to "squawk on the street." i'm carl quintinilla with sara eisen and david faber at post 9 of the new york stock exchange dow trying to make it three in a row for stocks, lighting up as we get softer economic numbers a lot to talk about ahead of apple and starbucks. >> our road map starts with stocks as carl mentioned, in the green just barely to kick off the month of november after what was a rough october. where the market lost nearly $2 trillion is this new month rally here to stay >> the annual deal book conference is under way in new york city. making some comments about u.s./china trade, gm's mary barra is there, we'll take you live. >> and cigna is out with what has been received as better-than-expected results cigna's ceo will be with us exclusively. let's get right to the markets. starting in the green but slipping slightly on the back of those misses in manufacturing numbers. it was a ruff october which

included the worst month for the nasdaq in ten years. larry kudlow commenting on the selloff in technology moments ago in washington at a "washington post" event. listen. >> i think a lot of the big, big tech stocks, the fang stocks, got pretty top-y and they were do for a correction. that's just one man's opinion, not the official white house view or anything like that i think they led the market down correction is probably overdue we had a bigger one last winter so i don't think trade enters into it. joining us, the former ceo of cantor fitzgerald and gabriella santos, welcome to both of you. gabriella, do you agree with larry kudlow that trade had nothing to do with the correction >> for october i think there were three separate stories.

it probably started with a very fast move higher in ten-year yield. remember we got 20 basis points in just a few days that had to be digested. after that maybe it was systematic selling and lastly i think it was about the third-quarter earnings season and looking at trends for 2019, late-cycle cost pressures and we would add some higher cost pressures as well from tariffs so it was a combination of factors and trade had something to do with it as well. >> what about the white house view that this was a healthy correction and some of the valuations in technology, fang stocks, got hot and that the economy looks pretty good. >> corrections always happen so that's not anything shocking and i think the economy looks okay the problem is, what does it look like a year out and two years out? that's what the market is trying to digest. they're looking at earnings and saying where are we going to be six months, a year, 18 months out? it's not as rosy a picture as it

used to be. >> is that why you're lunch ago fund in? >> there's opportunity to drive alpha in the marketplace so that's why i'm launching a fund. but in reality you'll look for interesting pockets and credit won't just be correlated like it has been. >> why not >> why isn't it going to be correlated at the end of every cycle credit gets bucketed so everybody looks at triple bs and says they're all the same this is a nickel wide sor so i should buy it. in the future you'll look at opportunities where credit will decouple and there will be opportunities to take advantage of the long and short side we have four times as much triple b today as we did the last cycle that's a huge amount that has to be digested by someone if it goes below >> this morning it was written the central banks are removing the noise cancelling head phones from the markets we'res.

-- markets ears is it that >> well, a tide lifted all boats equally. that's not the case anymore so it becomes more about looking at specific companies, specific countries rather than just buying everything under the sun but i think it's also a little about late-cycle behavior, thinking about what that play book looks like. not because of an imminent recession but because odds go up further out the next couple years. >> how at j.p. morgan are you advising clients shift around their portfolios and exposures. >> there's no on and off switch. it's not about sell all your equities and go into cash. it's never that dramatic it's much more about playing with dimmers, so thinking are you perhaps to too overallocated to risk assets maybe you didn't rebalance so taking down the equity exposure or credit exposure it's thinking much more company

by company, thinking about which companies are not overleveraged, and lastly thinking about do you have a buffer for the next recession? do you have quality fixed income. >> i think market structure has changed a bit so if you look at the high-yield market, which the fed is looking at saying it's orderly. it's bigger than the high yield market so we've had a shift there where suddenly bank debt is usually par unless it's not performing if you look at private equity multiple, ebita average just under nine so that's the crowding out effect we've lived in a world with assets have been crowded out and it's driven everything tighter and once that starts to unwind, that's when it gets interesting and there will be opportunities

which is 2019, 2020. >> you sound like a man market ago bond fund. not that what you're saying isn't true is there going to be deterioration in credit that creeps into other markets? >> absolutely. credit has been the bell weather that held in so you've had interest rates artificially low caused by the central banks and credit spreads incredibly digti because of that. you've seen real estate unwind, but it hasn't had a knockout effect because everyone is looking at relative value between the asset classes and things aren't moving fast enough once things move that will be the interesting opportunity. >> it's been the opposite. high yield in october has been sort of a source of comfort for the bulls saying, look, it's not disrupted, it's been resilient despite this big route in the nasdaq. >> because there's no issuance it's being done by bank debt so the better high yield is being done in the high-yield

market and the riskier debt is being done in the bank debt market, which is the shadow banking world now. so you're not seeing the frothy element in the high-yield market because it's being done private. >> this is what yellen has talked about there's financial conditions and then there's trade and larry fink made comments about that with andrew ross sorkin. take a listen. >> if the path remains the same in the next few weeks. then we'll have a full-fledged trade war. >> what does that look like? >> the tariffs the president proposed i think china is a very strong, very proud nation. i would have -- i think they are going to stand pretty firm i think privately they will negotiate but i don't believe it's worked for them at the moment so we had similar problems with negotiations with mexico and canada. that was stalled and stalled until we came to a resolution.

so let's hope i'm wrong. let's hope china and the u.s. comes to an agreement. >> so we have the lightest ism since april. prices paid went to 71 can this go on how much longer can this go on >> we had already got an glimpse of that with the flash market pmi this week. we saw input costs are going up. companies are talking about in the third quarter earnings season as well i think the question for 2019 is how much do costs get passed on to the consumer or how much are they absorb bid company ansds th --s and then it's about resetting earnings.ed by compans --s and then it's about resetting earnings so overall we are taking down expectations for 2019 earnings growth and returns in u.s. equities. >> to what >> still very solid -- >> 179 169? >> coming into the year it was an expectation of 10% earnings growth for next year i think it would make sense to be perhaps high single digits given all of these

cost pressures we're seeing. still solid but let than expected >> >> we were talking about trade and a minute ago the president tweeted, just had a long and very good conversation with president xi of china talked about many subjects with a heavy emphasis on trade. those discussions are moving along nicely with meetings being scheduled at the g20 in argentina. also had a good discussion. >> a little lift in the markets? >> perhaps positive reflections although we've seen tweets of a similar type in the past only to be met with more resistance. >> how do you know, gabriella, what is going on you read tweets, you see reports, they're preparing more transfers, things are going nicely it's hard to make bets in this, isn't it >> it's hard to know how trade tensions get resolved or perhaps don't. that's why it's important to think about which asset class

have priced in this trade tension. i would argue somethinglike emerging markets has gotten beaten down already, perhaps reflecting the worst-case scenario when you look at equities so maybe there's an an opportunity in some asset classes. >> shawn, if they make a deal -- big if -- what would happen to the market if they don't make a deal by the end of the year what would happen to the market >> they make a deal, it goes up. but what is the substance of the deal if we look at the chinese, they play in decades, not yearly thought process so i think the deal would be watered down at best so i think it has an initial pop then goes down what the market does at the end of the year, who knows it's relatively flat to down but what is the expectation going forward in the marketplace for earnings that will be the real challenge. revenue growth has to come down because we're relying too much on the consumer to drive real growth in the economy and that

will be a challenge going forward because the consumer will spend every dollar at some point in time but eventually you can't spend what you don't have so that will be the challenge. the housing market rolled over, autos have rolled over and that will be a real challenge as far as wage pressure. >> but consumption is running at four and you can get a job across the street for more money like it's nothing. >> but -- think about housing is rolling over, autos is rolling over major parts of tech is rolling over so if those parts of the economy aren't doing well, those jobs go away at some point so that will be the real test. >> there has been no evidence of that in continuing claims whatsoever, right? >>. >> well, suddenly you go from a great economy to not. >> i think it's difficult to sustain 3.5%, 4% pace of consumption, not necessarily saying it rolls over and we get recession next year but if we

think about the fading fiscal stimulus that the consumer was looking at, next year it becomes tougher so we expect consumption to moderate, growth to moderate, it's about resetting expectations. >> the there is clearly a sharp reaction to the president's tweet saying it was productive with president xi on trade straight line up dow is up 150. we were at risk of going negative just as we began the conversation talking about china. it brings up another issue, sean, which is something we've been aware of. the president watches the market the president watches business news the president judges himself in many ways by how the market is performing we just came off the worst october in stocks in years do you think he's job owning here >> sure, he's trying to get the market up. he looks at his credibility as associated with the market the last couple days of the month in october were people

trying to push their positions as hard as they could to make a horrible month look better so it will be interesting to see what happens in the first few days of this month. >> i wonder if the bulls would say, look, he won't let a deal fall through with china because the market is important to him and -- >> as you said earlier, a deal on what? is it a bilateral trade? is it buying more -- is it industrial policies? state capitalism model it's not been defined. >> i am sure china would do a deal right now buying more products from the u.s. and make that the epicenter of the deal and they would be thrilled so at some point trump has to do a deal because he wants to get reelected and he wants the market to do well so i think we'll probably bend a bit, china will move in and we'll have some sort of deal, it won't be anything longer term in nature this is a long-term fight, not a short-term win that will happen. >> they had offered to buy more

products, just not enough initially. and many people believe this could linger on. we get 25% beginning of the year and there are any number of people who think this could be the new normal, that we don't resolve this dispute if that's the case do you discount anything for a longer period of time? >> i think perhaps china is gearing itself up for a longer fig fight. we've seen them do a variety of stimulus measures. there's where i go back to the idea of emerging market assets have discounted this fight for a long time. perhaps we start getting good news out of chinese economic data perhaps even if the trade fight lingers, perhaps that provides confidence boosts to emerging market assets come 2019. that's comfort i take, that china has been preparing its economy for this fight. >> is there a trump put in this

market the fact he can come in and tweet and lift the market after a very painful pocket? >> no, because you still have powell talking about raising rates so that will be the off set to that. it's hard to jawbone the market forever, you can do it every once in a while but you can't sustain that in any meaningful way which is why he's talking about a middle-class tax cut as well. >> that's supposed to happen by tomorrow. >> thank you for staying on goo that breaking news, schaub maea matthews and gabriella santos. we're all over the market as the president's tweet did move the s&p at least 10 points shares of cigna moving higher after reporting results. david cordani joins with us that then gm's mary barra takes the

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i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. cigna shares are rising after the company beat analyst earnings estimates on its top and bottom line. it raised its full-year outlook. the company says the strong performance driven by favorable medical costs and customer and client retention david cordonny is the president and ceo of cigna david, the last time we spoke in your opinion the midst of the

fight with icahn which you won hand handily, almost 90% of your shareholders saying yes to the express scripts transaction. curious. particularly regulatory developments and things that icahn focused on, have we learned anything more about the regulatory picture for pbm since then have things become more clear and favorable? >> a couple points a lot happened since the last time we talked we had our shareholder vote with 90% which is outstanding from an approval standpoint. we issued our debt and we had an outstanding debt raise in early september. we secured our department of justice approval for the transaction without issues from the department of justice being raised and we here in the final strokes of our state regulatory process so a lot of progress from that standpoint to your point on a macro level, the regulatory environment continues to press for more

opportunity to improve affordability. and that's aligned with what core cigna is doing and core express is doing and the number one reason why we're putting companies together to accelerate but it's off a strong base each company is delivering and there will be continued partnership opportunities to identify ways to improve affordability for individuals. >> stock reacting to a positive quarter here up over 20% since the vote that we were both just talking about. i'm curious if you were able to say something to mr. icahn who thought a yes vote would create underperformance of cigna shares, what would you say >> i'm not sure i would address that to mr. icahn, more to our shareholder mrs. broadly we're a performance-based company, we've delivered tremendous shareholder value over the last eight plus years, approaching 400% this year we've had outperformance in each of our three quarters and we're poised

to step into 2019 with core momentum in terms of organic growth and a tremendously acretive combination and being positioned to deliver outstanding value for clients and customers around the world that's how you build sustained shareholder value which is what we're about. >> a lot of misinformation about health care plans from republicans and democrats with days until the midterm elections. you're hearing everything on the campaign trails in the debates from opioid addiction, pre-existing conditions, medicare for all, medicaid abuse. who has the better plan? the republicans or the democrats? >> i'm not sure who has the better plan because i don't think there's one plan but stepping back to points you raised individuals and employers are seeking the right access profile, so access to high quality physicians, support when there's clinical complexity and affordability with a personalized service experience.

that's what we are seeking to deliver. let's take a concrete example. we stepped into the opioid void three years ago with a pledge to reduce opioid consumption by our customers by 25% in three years. we achieved in the two months. we achieved it by more actively coordinating and providing more transparency for practicing physicians and dentists. we need that and a public/private partnership presents the best opportunity to do that. that's what we're focused on. >> well that would be helpful. open enrollment starts today and i got a nice primer from bertha coombs who covers this she said tex changes a s athe e stabilizing and you're expanding your footprint talk about why that is happening. >> we took a different approach on public exchanges. we took a very focused

disciplined and sustained approach, entering five states in 2014, expecting to lose money in '14, '15, and '16 and we unfortunately achieved that goal speaking to turn a small profit in '17, we achieved that we grew meaningfully in 2018, will remain in our six states going into 2019. we'll add arizona and we feel good about our product offerings that we can bring to market for 2019 because they're done with value-based health care provider relationships as the backbone. that's how we've deliver add more sustained result so disciplined expansion and adding arizona is a positive. >> i hope you won't think this is too far afield but health benefits from cannabis or cbd? people are trying to figure out how this will fit within health care what does the space think about that >> a little outside my sphere of expertise but if we step back,

medical marijuana has been used for quite some time on a targeted basis for example, in certain oncology protocols to deal with the effects of nausea. certain pain management treatment protocols dealing with that so there has been medical marijuana that has been used for some time. the possibility to expand that further. whether it's targeted pain management, oncology complications or otherwise, that's been part of the clinical protocols and i don't think the current change in societal posture around cannabis changes that because the medical profession has access to those drugs and as we know more powerful drugs to get the best possible outcomes for individuals so i don't see the policy change more recently state by state is changing the way physicians may use cannabis for targeted patient interventions. >> and finally as you said, the transaction to acquire express will close in the not too distance future. what should investors be focused on to judge whether or not

you're succeeding in the goals you set out when you did the deal. >> we announced our leadership team for the combined corporation. couldn't be more pleased with that tim stays on as the leader of the business in an expanding business portfolio dr. miller joins the executive leadership change as chief clinical officer number one, number two and number three ensures both companies remain in position to deliver to our clients, customers, partners and communities because both companies are growing therough 2018 and 2019. so sustained value delivery for our clients. we'll deliver phase one of our synergies for the benefit of our shareholders, that will be reflected in guidance and then sustained momentum into 2020 to demonstrate we're on our trajectory for $$20 to 21 eps number which will be a rate -- a

compounded rate of growth higher than our 10% to 13% commitment to shareholders on an annualized basis so we'll deliver on that core job one, deliver phase one of synergies and position ourselves for 2020 as well. >> we'll be checking in with you most likely quarter to quarter as we go along we appreciate it thank you. >> thank you for your time have a great day. >> david cordp cordonny of cign >> we have apple day plus we have people trying to figure out if this huge fang bounce is real so a few different slices of the tech market. just the main tech sector spdr, this is the highest weighting after the sector split we had. it's 21% of the s&p tech sector so obviously this is etf has a lot riding on tonight. you see the lows recently.

one of the significant things on that chart is above the april lows and certainly above the february lows so tech is still not giving up nearly all of the outperformance you've had. then look at the slices of etfs that have, for lack of a better term, essentially a huge fang bet embedded in them, including are the arc web x.0 etf. up 7% year to date so you're seeing huge run us there most of the year, big selloff as crowded fang stocks fell off but leaving them well below what their trend was before the first trust, internet fund -- dow jones industrial average internet fund, fdn, is the one that people look at as a fang bellwether, as well as invesco and nasdaq so they're tracking in line with one another but it shows you that for as strong as this rebound rally has been, it looks like a reflex on an oversold chart.

so it has to prove there's something behind it to carry things higher. >> that is sort of the technical picture. anything in particular worrisome within the earnings reports from big fang names some were good, some were scrutinized. >> i wouldn't say that was the catalyst it wasn't like people zeroing in on specific fundamental challenges, the problem is the valuation swing has been so huge so most outperformance came by people willing to pay more and more and more for the same dollar of earnings so now what is the floor where does that stop well, it's -- they're still trading at a preed yum so there is no mark of fundamental value they'll hit as a stopping point. people are making the point that apple is in a different category in terms of it's not like hot money hedge funds are crowded in there with very concentrated positions in apple as opposed to what might have been the case

for a while with facebook, netflix, et cetera. >> we always like to check breadth yesterday. worst breadth for a 1% update since '09. matters? >> i think it matters. you're evaluating what is behind the move so there have been middle internal performances in the market so that's why i think yesterday's late day pullback from the highs got people concerned. it shows you the market is in this zone where it hasn't proven it's broken the spell of this pressure because you still have to get up to 1% or 2% in the s&p before people say okay, you've reversed the down trend. >> santoli isn't impressed >> i'm open minded but you can't say monday was the low, it's a lie. >> you'll come back when that day comes? >> yes let's head it over to sue herera with a cnbc news update. >> good morning, here's what's happening this hour.

south korean president moon says north korean leader kim jong-un will visit seoul soon. he says a second north korea/u.s. summit is near at hand and that china's president is expected to visit north korea in the future. the national transportation safety board and boeing officials arriving in jakarta to examen the recovered debris from the crashed lion airplane. earlier, divers recovered a flight recorder from the plane it was on the sea floor. a colorado gun shop owner is offering free ar-15 rifles and ammunition to synagogues that are interested mel bernstein says everyone should be armed for protection he compares it to a fire extinguisher on hand to put out a fire but so far no one has taken him up on his offer. the "wall street journal" reporting that the bill gatand melinda gates foundation is suspending future work with a nonprofit charity chaired by the saudi crown prince

this is because of the death of journalist jamal khashoggi you are up to date that's the news update. >> when we come back, it's the first trading day of november. markets trying to recover from sharp october losses, going for a third day in a row of gains with the dow up 150 points a tweet from the president on trade talks with china giving the major averages a big boost here just in the last half hour. nss director of floor operatio art cashin will be joining us in just a moment. "squawk on the street" will be right back don't go away.

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including the latest movies and box sets from around the world. ( ♪ ) we even have live sports and news channels. ( ♪ ) and your free wi-fi will start shortly. enjoy your flight mr. jones. world's best inflight entertainment. fly emirates. fly better. welcome back to "squawk on the street," i'm sara eisen with carl quintinilla and david faber. thing have taken a leap here in the last half hour as the president tweeted out he's made progress on a phone call with president xi jinping of china

talking trade. nothing more specific but that was enough to give the s&p a lift to session highs, up more than half a percent. dow up 180 points right now. third day in a row for the rebou rebound. >> art, you wrote about the final 40 minutes yesterday what happens, how important was it >> very important to how things worked out they were cruising along handily near the highs of the day and the market on close indications suddenly flipped from mild to buy to well over a billion dollars per sale that caught people off guard we lost 211 points from the high and ironically at the final they

flipped slightly back to more neutral. i was going say buy but more neutral. it shows how nervous people are. the indication there might have been real selling at the close and people walked away we lost 211 points on merely the speculation there could be selling. >> so year end mutual fund over. is it a fresh start today? >> it usually is october is important for taxes and mufts, as you note and that's sometimes blamed for the famous october weakness that shows up usually late in the month. we'll see. the president's got the main stage right now. earlier in the day, showing how nervous markets are, you had two different economic points come out that were weaker and they took all the oomph out of the market we went mildly negative after one of them but as you pointed

out, the president's tweet about perhaps progress is moving up. of course, it can't hurt in the election but it seems to be helping the stock market. >> that manufacturing number was weaker and if you dive into the internals, new orders disappointing and marked a slowdown from what we saw last month. >> it wasn't devastating but it was disappointing enough that, again, everybody pulled away, but a different group of speculators hoping for some relief from the trade wars and we get going and we're back to the high of the day. >> my question on the economic data is what does the market want to see? what would be a positive reaction for the market off the jobs report? we have questions about the strength of the economy but we have questions about the fed hiking rates too fast. >> i think what they would love to see is solid job growth but not much further push up in wages.

if the wages remain at the stick or slip back a tenth the market i think would celebrate that from the standpoint of the fed. >> any worries or -- not worries but any thoughts on apple and what an either really good report or not particularly good report will do tomorrow? >> i think a really good report probably can give the market a bit of a boost but i think attention after the payroll data comes out is going to shift immediately to the election and so that will keep somebody with their wallet on their hip and others will turn more nervous and midterm elections, c be rumors everywhere so it will be a bumpy couple days. >> i saw one trading note this morning -- this week about the jobs number saying if you're worried about the fed you might be rooting for a miss on non-farm payrolls because

there's a long way to miss before you get concerned about the economy. >> i think you don't want the number to be overly strong but particularly you've got to watch wages. inflation has not been run away by any means but yellen the other day when she was speaking talked about possible wage push. there's a hypothesis going around that we've got more jobs than we have workers around that will put upward pressure not sure if that is true historically these things don't seem to hold up but that is out there. so if you get upward pressure on wages tomorrow in the numbers, i think you'll see the yield on the ten-year move up then once we it this 3.75 level, that's when the electricity moves. >> it showed the strongest increase since 2008. >> the big numbers will show

first tomorrow. >> thanks, art art cashin. when we come back, general motors ceo mary barra speaking at the deal book conference with andrew ross sorkin we'll take you there live and a ton of other interviews you won't want to mitss "squawk on the street" will be right back dow is up 174. don't go away.

one top investment strategist has three reasons stocks will rally into year end. find out what they are on tradingnation.cnbc.com more "squawk on the street" is coming up.

gm's mary barra has taken the stage at the deal book conference she's sitting down andrew ross sorkin talking china let's listen in. >> not only do we have a significant business over there. cadillac, luxury, even though there's parts of the markets

that are declining right now, luxury is growing and we're playing a significant role with cadillac not only would it hurt from a sales perspective but we have a strong joint partner that we do work with from a development perspective so that would impact as well. >> you've spent time with the president. i imagine you tell him these things what does he tell you? tell us about those conversations. >> [ laughter >> i haven't necessarily had a conversation about china most of my conversations have been around fuel standards and i shared with you what i tell him on that. also -- that's been the primary conversation on nafta, i didn't have specific conversations with the president but had many conversations with his team and we work there -- we were committed to let's make sure you understand the

complexiti complexities. >> quick business question stock question auto stocks, including your own, have been done what doyou think investors hav been thinking? >> the auto industry has been cyclical so we're approaching eight years from -- >> you think a downturn is coming >> i think -- they've been predicting for three years, all i know is we're one day close yrcloser when you look at auto stocks and there's uncertain any the marketplace, people are conservative looking at our stoc stocks we're working hard to prove we're a different company and positioned well for the future, positioned to do outpnerform in

downturn. >> we're talking about diversity and it's remarkable that there are now only 24 female ceos in the s&p 500 today. 4.8% your board is 50-50 women. you're doing better on the management side but probably want to do better. what do you think has happened i think when i saw you in 2015, there were more females running companies of size. >> to me it's about pipeline and you have to have -- and i sit here today because 20 years ago there were leaders at general motors who invested in me, gave me assignments that were reach assignments and mentored me so i had that opportunity that then prepared me to sit today if you're not developing a pipeline from when someone joins the company through their progression and not making sure you have diverse slates for every opening, a diverse

leadership team you won't have the opportunity to impact that 4.5%. >> it feels like we're at a tipping point but does that mean it doesn't come for ten years because people are now talking about it and putting in the place today. >> i think every company has to be -- you have to be growing talent and giving them the opportunity to develop, have the experiences that will make them successful that's whatwe work on. >> final question from me then we'll open it up when i saw you last when we were all together you were dealing with the ignition switch scandal or recall. >> crisis. >> we'll call it a crisis. [ laughter ] >> that's mary barra talking with andrew ross sorkin live at the deal book conference from gm and china and trade policy, conversations with the president although not a lot of granularity on that one. >> more on boring fuel standards and china. gm is one of three s&p 500

companies that has a female ceo and cfo. it's so rare out there and phil lebeau just talked to the other two, the other are hershey and american water works so andrew focused on the ceo part, less than 25 s&p 500 companies have female ceos. she talked about the need to develop talent. >> phil lebeau coming off of their monster quarter and their average selling price is impressive. >> and what's interesting when you listen with mary barra as she's talking, she rarely when she does these events rarely makes news she sticks to her standard line s. if you're looking at catalyst moments, it typically has to surround an an announcement for investment, whether it it was honda or softbank or when they make a major strategic initiative, say getting out of

europe that's usually when you so a big move in the stock. it's rarely at an event like this because you know mary ba y barra, the last thing she wants to do is make news so it's always good to hear from a ceo but for those thinking maybe we'll hear something from mary today that we haven't heard. that rarely happens. deal book conference we will hear from 20th century fox chairman, a rare conversation andrew sits down with him. let's send it to jon fortt with a look at what's coming up on the next hour, "squawk alley. >> you know who i want to hear from, james park, ceo of fit bit. that stock is up 28% after earnings check out the cnbc app you can see that, the beat on the top and bottom lines, how

long is it sustainable find out coming up on "squawk alley.

welcome back to "squawk on the street." stocks are hovering near the best levels of the day so far

with the s&p 500 on pace for the best week in nearly 8 months but one grioup struggling, communication services that particular sector one of the worst performers, among the names leading that to the down side, verizon, viacom, and social media companies like twitter and facebook twitter was the second best performing stock in the s&p 500 during the turbulent month of october, up more than 20%, but not participating in broader market rally today something to watch facebook also lower, guys. back to you downtown >> twitter second best because redhot got bought. dow is up 182. let's get the santelli exchange. good morning, rick. >> good morning, carl. welcome my guest, dr. john sylvia of dynamic economic strategy john, up 2.2 on q3 preliminary productivity if you look at four quarter average, 1.2 over the long run

average of 2%, still isn't enough where did all of the productivity go, john? >> on a long-term basis trending down, rick, but we have seen improvement, the economy picked up there's more output out there. it is hard to measure productivity in areas like health care and services but productivity is improving, and again until we understand how to apply technology as we did in the late 1990s, productivity will remain low relative to our history. >> another bit of information that will be important in lieu of tomorrow's employment report, we learned from the labor department yesterday that wages and salaries year over year were up 3.1%, best since q 2, 2008. do you think the pressures remain or is that a key issue for the fed? >> i think it is a key issue for the fed. first of all as you hinted at, those gains in wages and salaries are again real gains

after tax suggesting that the american consumer will remain very, very strong. if the fed follows the argument that wages eventually lead to inflation, which i disagree with, but if they follow that argument for the fed, it will be another rate increase too. >> you disagree with that. when you add in that we both disagree that 3.7 is probably overzealous in terms of true employment rate, considering how many are employable but not working and not counted, how should you approach tomorrow's employment data if trading treasuries and looking at interest rates >> for me, it is that wage number, rick you can understand from the fed's point of view they have a model, the phillips curve model that says lower unemployment generates wages. i sfwrdisagree with that if that's the model, they will raise rates in december. again, two or three increases

next year i think will be a problem. >> john, thank you hard wrap. we are running out of time thank you for joining me sara, back to you. >> rick, thank you. coming up later on "closing bell", apple reporting results after the bell we'll bring you numbers, instant analysis you don't want to miss it, 3:00 p.m. eastern time relative outperformer in the ugly month of october. second best performer of the year for dow. >> big night. shares of fitbit soaring 25% gain and look at the aerial shot of google offices in manhattan as the global walkout happens at offices around the globe, protesting the company's culture regarding sexual harassment and its employees. we expect to see that in the next few minutes

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