box" begins right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick with joe kernen and andrew ross sorkin u.s. equities. last week a pretty wild ride for the markets but this morning things are starting out rather tepid. dow futures are down but only 8.5% s&p futures down by less than a point and nasdaq up 11 points. the wild time that we saw last weekended with the dow, s&p and nasdaq all up over 2.3% for the week the s&p had its best week since march 9th. a lot of different factors that were playing into things on friday we had a better than expected jobs report

the issue was really moving things we have mid terms coming up this week all of that will be in focus take a look what happened overnight in asia. going to see that the nikkei ended down by 1.5% hang seng was off by even more decline of 2%. the shanghai composite was down by .4% in the early trading you're seeing right now in europe across the board, all the major averages are slightly higher relatively flat for both the ftse, the cac and the dax. italy the stocks were down by .4 of a percent stocks are up by the same amount finally, take a look at treasury yields last week the u.s. treasury yields hit multi-year highs for the 2 and the 30 year. right now you're looking at ten year yielding 3.25%. the united states is reimposing oil and financial sanctions today. mike pompeo and steve mnuchin will have a news conference at 8:30 eastern time this morning the u.s. lifted sanctions under

a nuclear deal under the president. the trump administration also said it would grant wavers allowing eight countries to continue importing iranian oil oil prices this morning, wti crude is 62.85 did you see the tweet that the president put out of himself with th the game of thrones ande president wrote back, i will defy you it was very game of thronesish. >> it's real and not a made up story. the trade news despite the escalating trade dispute, they want to make it clear that they're still open for business. president xi jinping is lodging

the import they broaden market access and import more from overseas. not a trade war, a rhetoric war. >> a.mazon has held advanced talks to locate the campus in virginia, crystal city, virginia, just outside of washington discussions will happen about which buildings amazon can occupy a few other cities remain in the mix including toronto, dallas, new york city, and austin, texas. a top amazon executive is throwing cold water on the weekend report the director of economic development memo to the genius leaking info about crystal city. stop treating the nda like you signed a used napkin. >> i thought that. when the washington post reported on this i thought i bet

it's not the only city where this is happening. it's the closest one to the washington post. the people talking are making it less likely that they end up choosing them. >> yeah. >> depends whether you think they've actually chosen it already. >> i didn't get the sense. >> depends whether you think -- >> people have conversations. >> do you defy the city because they talked when about it >> do you think it's done? >> i don't know. >> as reporters were able to get a glimpse what was happening in that city and not necessarily other cities >> yeah. >> it's hard to negate what you don't know. >> amazon started this, launched this bid for a second headquarters in north america last year. created about 50,000 jobs wherever it is and it gave scott cohn another thing to do he does that best state for busine

business. >> and most likely one to be chosen. >> this is perfect right in his wheel house he's going to join us and i can tell you this isn't normally the way it works i can tell you where he is crystal city, virginia, but i can't tell you if that means that's where it is normally if you can figure out where scott is on the last week where he's doing states. >> because it's ours >> yeah. we don't know he's there maybe scott cohn knows a lot he always knows a lot. he knows what the state is now he's in crystal city that would have to win, sorkin, no no >> uh-uh. >> this is not that big -- what's the name of that big -- crystal cathedral? what was it, oral roberts? >> in other amazon news the -- >> i'm not the only one who doesn't know what you're talking about. >> crystal cathedral, the big

glass thing he's on every sunday. >> oh, televangelist guy >> $25 minimum purchase amount for free shipping. intended to give customers a free taste of prime membership just over half of all households. >> you're referring to the crystal cathedral. >> yes. >> which is in garden grove, orange county, california. >> yeah. it's beautiful >> it's a big glass structure. >> big glass structure. >> yes. >> every sunday, is he still around -- robert, what's his name >> robert schiller schilling? >> robert schiller different robert schiller. >> yes >> is what you're describing he passed away in 2015 >> okay. >> did anyone take over -- >> 1926 by the way. >> anyone take over the crystal -- that's a huge structure. >> right >> all glass. >> i don't have the full

history. >> while you're reading your next thing -- >> when brains get put on chips so everyone can operate on the -- >> crystal cathedral different place entirely all right. >> in the meantime, some stocks to watch this morning. softbank's profits surging helped by higher valuations on high tech bets made by the vision fund. the ceo says the $100 billion fund which is backed by saudi arabia will continue despite the controversial murder of jamal khashoggi at the saudi consulate in istanbul. he called it a tragedy but says softbank must continue to carry out the job. berkshire hathaway's profit doubling in the last quarter berkshire benefitted

they repurchased nearly $1 billion of stocks in the first quarter. the first time the company bought back shares since 2012. probably no surprise to viewers of cnbc. they told us back in august that they were changing the guidelines for when they would be buying back stocks signaling they would be very likely to jump back into the market. >> if warren can't -- warren is struggling to find stuff at size doesn't he say there are many opportunities? >> he told us maybe it was may, he told us this, he said they were having trouble finding full businesses because the premium to buy an entire business is -- >> what's the market >> i don't know. >> hundreds of billions. >> when we had talked about -- >> i want to say it's eight or nine but then after the losses of the last week -- >> berkshire is hundreds or

billions. >> yeah, 8 or 9 -- >> yeah. when a major company announces buy back, it's usually over time they say they have an authorization. it's de minimis. >> the broader thought of what it means. >> do the math. >> 1 divided by 500. >> with amb? >> yeah, amb shares. >> what's 1 divided by 5 minuscule. but berkshire because of the way they operate, they're always looking for deals. >> right >> it doesn't mean that he doesn't see other markets. >> the rule every week when we talk about that, it's usually two, three, four, five billion. >> even $10 billion. >> how much is the purchase agreement? 10, 20 -- >> i saw a statistic with the

declines in aprille, they lost 3 last week. for people looking for evidence that there aren't any values out there, they immediately seize on this >> the only thing i'd say with that is when we've spoken with himin the last few months what he has said is he still thinks the market wasn't over valued. he was still buying individual stocks but it was hard to buy a company outright. >> that's what berkshire is in the market for. >> the other thing i saw, mondays are hard, okay we go to bed on friday we stay up late, which we shouldn't. then on sunday we try to go to bed and we can't david stockman trumpeting his 40% market correction is finally happening. the 40% selloff that david stock man has been talking about is

finally happening. it won't get anywhere close to where he said it was going to start to happen. we can go down 40% and we're still double where it was when he was talking about it so that doesn't count, andrew. >> if you don't make money on the call, that doesn't count. >> if it crashes and it's still double you're not right you can't be right now >> do i look like him? >> well, you talked to -- if you see him? >> if i see him, i'll let him know. >> you know what i mean? >> yes >> they finally -- he's just wrong. maybe he's right maybe we do go down, i don't know, but it's not going to get to where it was when he started saying it. >> i hope it doesn't how about that do you really hope that? >> yes. >> you see what i'm pushing, a blue wave. i'm pushing the red, white, blue wave, baby everybody needs to vote, okay? because it's america

have you ever heard anyone talk about the red, white, blue wave? >> that's right, patriotism. >> i'm pushing -- everybody vote how's that, andrew >> everybody should vote. speaking of, president trump making his closing arguments to voters ahead of tomorrow's mid term elections eamon javers joins us. >> reporter: the president suggesting he would introduce a new middle class tax cut that's something they're working on around the clock. over the weekend the president walked that back suggesting, no, that's not going to happen before the elections it's not going to happen in the lame duck session. it's really going to happen next year if the republicans hold it. a lot of pundants speculating whether or not that's possible here's what the president said. >> we're going to work on the tax cut. we've already started. i've been working with kevin brady. we're working with the house we're doing a 10% tax cut.

now it could be that if we lose control of the house that's not going to happen but we're going to be doing a 10% tax cut for the middle class we're starting the process with kevin brady. we're very long on it. we'll be submitting when they come back. >> reporter: the president making the case that if republicans hold the house, new tax cuts are coming. 10% tax cut for the middle class. the president said it could be on tap as early as january now we'll wait and see what happens tomorrow a lot at stake here, not just in terms of taxes but in terms of everything else on election day tomorrow. >> eamon, thank you very much. let's get back to the markets. first thing this morning when i looked at it on some it shows the absolute data. the nasdaq was -- >> positive. >> -- positive and flat everywhere else. is it waiting for tomorrow

waiting for -- >> i think so. it's coming this time around. >> it's supposed to know what's going to happen. >> the market? >> supposed to have an idea. >> that's if you trust polls. >> if you think there's going to be an outsized number of voters. >> supposed to rain tomorrow hard crazy little things like that. it's weird that that can -- >> i think that there are a lot of people who actually vote early now. >> texas, 5 billion. >> a large number of people voted early. >> 10 million -- >> which is why the exit polls won't be all that confirmational. >> how late are we going to be up >> still haven't talked about gerrymandering >> how late are we going to be up number one on tuesday have you heard about wednesday yet? >> i have. >> you have? >> oh, you have? what's the name of the local tv. dubovitsk

do you know >> that's? yes, potentially depending on what's going on in the world. >> there is an election. you don't think we'll be here at 5:00 a.m. on -- >> maybe. >> we should be. >> we are, aren't we >> definitively? >> we are definitively can we count on you? >> i have to think about it. i have to talk to my people. >> he got here at 4:45. >> he forgot to set the clocks he was on time you had no idea. where is everyone? huh? >> always on time. >> joining us now, annastac annastacia amoroso russell price is at ameriprise i want to ask you about that number that we got on friday did you find a flaw in that number >> no, not really. it was good indication we were starting to get traction on wages. there's an inflation concern component to that. it will also likely give a second wind to consumers over

the next few years job growth is going to peter out because there's fewer people still on the sidelines available to be brought back in. as we get good wage growth that's good. so it was a very good report >> anastacia, i saw it here. the notion that -- oh, here it is profits are peaking. why are profits peeking? >> i do buy into that. in absolute terms they're not peeking. we should still continue to see this next year if you look at year over year growth term which is what the market is concerned about, we're not going to see a repeat of 24% year over year earnings growth we're going to see closer to 10. that's one thing the markets are concerned about. we can talk about a great q3 but

2019 is already starting to trend down so that's really key indicator for the market so i'm not at all surprised that even though 78% of the companies beat, 1.5% negative is what the average price reaction has been. >> we made the point that when you go up 24% one year, even if you're flat you're still up 24% from two years ago does the market always crave more, more, more, more, more gains? >> the answer is the market is always forward looking it's about the direction of travel, not about the level of something. the direction of travel with the next few years, it's not just peek profits, it's peek policy and peek positioning if you think about what worked with the marge begins, what we have today is the exact opposite of that.

>> is it margins are going to cause profits to peak? you could paint a scenario if the trade initiatives eventually bear fruit and let's say that companies feel comfortable that tax benefits they recently got are going to be sustained so that they can -- they actually start with good investment, why couldn't corporate profits continue to be good? maybe margins are bad? >> margins are phenomenal. they're 11 bo 11.6. >> are they peeking? >> i think they will and if you look at the companies that are starting to say is wages are rising input costs are rising the u.s. dollar is rising. by the way, tariffs are rising as well. so that's what we think will eventually eat into the corporate margins. >> let me get to russell

does the same go for gdp, that that's peeking and heading lower in your view you mentioned the shortage of workers. >> right i do think that gdp is going to subside over the intermediate term 3% probably was the pace that we had gotten to. it could be sustainable. there will be a stronger head wind and the tariffs if we drop down to 2.5%, that's a strong economic environment. that importantly allows companies to continue to see strong sales gorowth and the tem peak earnings is used a lot. it's about the peek in the growth rate. 2.5% for next year, 1.5 to 20 in 2020 is still a good year for corporate growth earnings prospects. >> 1.5 to 2 in 2020?

why do we have to go back -- why is everyone stuck with the new normal you're talking about population and productivity again >> no. >> the united states has never only grown at 1.5 and 2. before then we had 50 years. >> that's right. but in 2020 the big issue is the headwind from the dropoff in government spending. we're having an extra 150 billion this year, 150 billion in fiscal 2018 and 2019, when that drops off the biggest impact will be in calendar 2020. that should shave .8 of a percentage point. >> 1.5 to 2? come on, russ. intermediate term. that's a cruising speed. we can keep that up for quite a long time. >> i'll have to be satisfied with that.

>> russell price from ameriprise >> others talk about it in the morning. >> huwawe has been blocked in many countries reporting. trade a foreign network that could have implications for the sprint oh t-mobile deal here in the united states. we'll explain a little bit as we head to the break. here's a look at the biggest premarket winners and losers in the dow. what do advisors look for in an etf? don't just track an index, help me meet a client's need.

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you'll only pay $4.95. 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. welcome back to "squawk box. we are raising the red flag on a story that many investors may be missing. australia has received intelligence reports that huawei provided passwords to hack into a foreign network. a lot of investors are watching shares of sprint/t-mobile today because congress is very worried about how close softbank is to

huawei joining us is john rutledge. good morning to you, john. >> good morning. >> this little story that came out of a newspaper in australia has made waves both in washington over the weekend in part because the report says that the australian government has found be that huawei has hacked into or was trying to hack into or giving china the opportunity to hack into a foreign network. we don't know what network that is that's the washington piece of this is. the second piece is for investors thinking of sprint/t-mobile, there's been a worry that softbank which owns sprint is too close to huawei. softbank uses huawei servers in japan. because of that relationship the transaction ultimately could get scuttled what do you know about all of this >> probably i should start by saying nothing and that makes me equal to everyone else but, you

know, so far we have a rumor from the australian newspaper. what remains to be seen is whether this has any more legs like the apple phones. the fact is huawei is a huge company. they have big strategic interests not only with softbank which means sprint/t-mobile but also with intel, with bido and with many other companies in the u.s. and abroad, listed companies. very important these companies are rolling out 5g networks. for all of my sins i'm actually the chairman of the data storage company. what i know is the latency, short latency, a thousandth of a

second is what allows the 5g to be able to work in things that require quick response, like, for example, steering your car. >> john, help us with this though so in the united states huawei phones are hard to find. at&t was about to do a deal huawei that was scuttled you talked about other companies beyond the sprint/t-mobile deal. you talked about intel what's the relationship? >> huawei is the largest telecom infrastructure company in the world. that doesn't mean hand helds the two companies themselves know each other quite well the intel relationship is huawei, alibaba, tencent, baido are rolling out network in china

that uses intel chips as core to the thing. so when you start questioning the usability of the equipment of the largest in the world, that's what's been happening not only with us shutting them off from nags tall defense and other national security measures but also last weekend our congress warned the canadians, the australians that were in t south koreans, shut them out of government contracts and so forth. >> just real quick on sprint t-mobile, how close people think that softbank is to huawei, how much will that weigh on allowing that transaction to move forward or not >> it's a highly politically charged environment. and cifius is under their

control. i would expect it to be used as a weapon in the whole trade/intellectual property dispute. therefore, it could block it of course, the largest owner of that, of course, will end up being deutsch telecom which means the germans are drawn into this this is a global drama we're watching roll out. it is going to be a big story. >> john, very quickly. we realize that this open for business in china, this huge draw that we're trying to bring foreign countries in, the united states not with any of the top envoys how should we read this from the outside? is this a desperate bid or is there something else at play here >> foreign companies coming into china is a powerful buyer of the currency of rmb and when foreigners take their money out of china, it drains reserves out of the banking system so they've had trouble with out flows over

the past couple of years having foreign countries come in not only support the rnb, it supports the high tech stuff that the government is promoting. lower tech is moving out of china into places like vietnam the whole you can call it the industrial policy of moving down the value chain to high ger margin products is really endangered by these attacks and wte. >> john are you the leverage, thank you, sir. >> my pleasure. when we come back, president trump speaking to axios in the first segment of axios on hbo. he's looking into antitrust of google, facebook and amazon. axios executive will join us next take a look at last week's s&p 500 winners and losers ♪ ♪

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♪ ♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning, everybody. among the stories that are front and center, the united states is

reimposing oil and financial sanctions on iran today. the u.s. lifted sanctions under a 2015 nuclear deal negotiated by the obama administration. iran's president says that he plans to defy the u.s. sanctions and continue to sell oil china's president xi is talking up his country's commitment to free trade they're holding an international import conference this weekend and amazon is reportedly into the advanced stages of naming crystal city, virginia, as the home headquarters. dallas and new york city are said to be in the final running. scott cohn will be joining us live from crystal city in the meantime, u.s. equities are up, the nasdaq up by 14. the s&p up by just under 2 points. president trump sat down recently for a wide ranging interview with japan and jonathan swan from the new

series axios they were discussing regulating big tech giants. >> what about looking into it? >> i have so many people saying that but it's certainly something that we have looked at. >> would you ever break them up? >> they were talking about this years ago. they were actually talking about this same subject monopoly years ago long before i was in office. >> do you think you're the man to do it >> a lot of people thought it was going to happen. >> you're in charge. >> i am in charge. i am definitely in charge. >> this is antitrust >> ain't trust, yes. >> for amazon? >> for all three >> mike allen is here executive editor from axios. congratulations on the show last night. >> thank you. >> i had a couple of questions one on the show or in relation to the show. did you believe that was an offhand comment or do you think he's actually really looking at

amazon >> no, you talk to people behind the scenes, the president has been talking about this for a long time. the way that axios originally broke the story that the president had this obsession with amazon was we were asking what he was saying behind the scenes about facebook and, andrew, a lot of times officials don't realize the news they have in front of their faces. the president never talks about facebook but he talks about amazon all the time. so we started pulling on that thread and that's when we realized that that's a place he really does have an issue. >> your number two story of the day in the newsletter this morning is about top tech companies which yousay are seeing evidence of the same bad actors looking to interfere in the u.s. elections looking to spread false claims of meddling. what's going on? >> andrew, this is a story that broke esterday axios talk to a couple of tech companies about this they're very worried the next 48

hours probably state actors are going to claim to have medaled in state elections to have either infected registration base or a tally. what we know is the public's view of what's happening is rightly so fragile that just for people to claim there has been interference in election could have the same confidence shaking effect as an actual intrusion. of course tech companies are trying to get out in front of this, they know they're going to be blamed. it's also what's on the important side of where we are in the homeland security secretary just last week was warning about this possibility of a claim of encouragement by trolls who may just be trolling. >> mike, is there any way for us to know whether there has been interference or not? >> so people keep telling us the elections have already been hacked there's no sign that an actual

database has been corrupted, that actual machinery has been interfered with. we know that there continue to be these operations online to try to confuse people like inject fear and confusion but there's no sign yet of like a physical intrusion listen to the intel agencies, they say it either is coming or it's coming -- >> will we know? that's my question there's no sign yet but will we know as the public will they know first of all as the guys who are looking out and will we know as the public if there is a real reason for concern? >> no, and, therefore, no. like a real problem with a lot of the state machinery a lot of people don't pay enough attention to as you know, we don't have national elections we have county by county, city by city erections. that's a lot of soft points. a lot of machinery that can be

tampered with. we know that in 2016 foreign actors tried to get into, made efforts to break into the state databases and you talk to cyber experts, it's only a matter of time until that actually works. >> hey, mike, given that we are now just 24 hours away from what might be described as the final day of voting, the expectation is what it is but there clearly is an -- frankly, it sounds like on both sides anxiety on both sides of the aisle this time is that anxiety warranted in terms of questioning of the polls? >> sure. everything is tightening, as it does around these times. republicans don't have a clear path to saying how they would keep the house majority, and that's why this split decision, split verdict seems very likely, like something i know from

covering local politics decades ago. facebook someone can't tell you how they're going to win, it looks like republicans pick up a seat or two and democrats pick up the house no one is sure here's one sign of how that blue wave could turn out to be a category 5 instead of a category 4. what to look for doesn't look like democrats are going to take the senate but what could happen, what would be a sign of a category 5 is if there's presidential level turnout in texas and you end up having beto o'rourke getting ted cruz. that might be one side. >> last night on "60 minutes" mike bloomberg running an ad himself on behalf of the democrats. how much of that was about this particular election and how much

was this for setting up mike bloomberg for 2020 >> leaving the witness there, as you know, the bloomberg machine is gearing up. he's the biggest outside democratic spender that ad was not only on "60 minute minutes", it's going to be a roadblock on evening news. we'll see a lot of it in the next few hours it's mike bloomberg that he, now a democrat, switching from having been spending over $100 million. house, senate, governor. very interested in playing andrew, as you know, the dilemma for him, is he what democrats are looking for? >> right. >> this big blue wave -- >> how much of this is a test? i'm wondering how much polling he's going to be doing as a result of these ads themselves he has not been on the national stage in this way in quite some time. >> he's going to continue to do polling. you're right about the ads

there's been very sophisticated digital targeting he's done. something new they tried, they've been doing very local focused issues, for instance, talking about a hurricane in florida or texas talking about flood control. going to be very relevant to people and so in spending his $100 million, he now plans to turn around and look at how you would do a 21st century presidential -- >> i hear it in your voice you had no voice a couple of days ago, i guess. have you thought about skipping a couple of trump's rallies? i know you're there screaming and yelling and everything is that where it happened, yelling make america great and stuff? how did you lose your voice? >> so steroids, we've got a bunch of different things. >> you and andrew can compare

notes. >> prednisone is your move >> i'm sorry >> prednisone, is that what you're taking for the throat >> i think i probably is an endorsement deal coming up definitely for green tea and probably something a lot -- >> i don't want either of you guys it doesn't help on tv. >> i don't think prednisone helps with muscle growth. >> are you sure? >> i don't know. >> just another way to win the morning. >> okay. mike allen, glad your voice is back great to see you. >> look forward to your coverage >> he's going to be on hbo for the next three sundays right here in november that's going to be 6:30 p.m. eastern and pacific time. crude prices falling we're going to talk about the four-week slide and the impact of those iran sanctions straight ahead.

welcome back, everybody. right now time for the executive edge goldman sachs is expected to announce that fewer than 65 people will be named partners this year. "the wall street journal" says that would make it the smallest

class of new partners since 1998 back when goldman was still a private company. an official announcement is expected this week partners own less than 5% of the firm. >> by the way, you know why this is because if you turn into partners, guess what, everybody makes more money by the way, we shouldn't -- the partners at goldman sachs, just to be clear, it's a partnership but not a partnership in the classic sense of ownership simply almost at this point a designation, a title designation. >> right. >> the way they think about it exactly. all right. in other corporate news, general electric will pay former ceo john flannery 4.3 million in cash severance he was fired last month after 14 months on the job according to an sec filing, flannery will be eligible for equity awards several million dollars and receive a pension more from his more than 30 years at ge once he turns 60 it was valued at nearly 24

million at the end of last year. saw something over the weekend that kind of got me. it was from zero hedge from some guy recounting what he remembers so vividly from the financial crisis that was immelt being on cnbc on this show -- >> what are you talking about? >> it wasn't immelt. it was keith sharon. immember w immelt was not on. he was supposedly on the new york fed and knew what was happening. it wasn't immelt it was keith sharon. >> what are you saying >> when the stock was down at 5 or $6 a share. he vividly remembers immemblt as he massaged the article the entire article is based on false premises no no, it was keith sharon. i remember it well the ticker was down in his hands. >> i do remember that. >> it was keith sharon it wasn't jeff immelt. he didn't have credibility then. they sent sharon in.

if you are actually there, it's different than if you are writing about it fake news. >> narrative when we come back, we are watching crude prices. eyou have dropped 15%. th cld see a what it could mean at the pump right after this 3 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' because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react... when you retire will you or will you just be you,

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welcome back, everybody. the u.s. is reimposing severe economic sanctions on iran in a bid to cut off the country's oil revenue and try to renegotiate a nuclear deal on president trump's terms. joining us now is kevin book he is managing director at clear view energy partners trying to figure out what all this means has been a conundrum. last week oil had its worst week since february how does this add up was everything priced in well before all this? or do you think there's still more turmoil to come >> i think there's a little bit of the air coming out of the balloon. because the cuts are only so deep going to zero was the narrative in july. zero from 2.5 million barrels per day. trailing 12 months through june. that would have been a huge impact on the market the eight countries have been

given exceptions one is that some countries that negotiated essentially saying, okay, we're going to cut more in the future either give us the exception countries probably like india, that could tighten the market more some of the others could pop back up. countries like korea that could even add a little bit more to the market in way of supply >> so what would you do at this point? would you be a buyer of oil prices here? >> no, not going into first quarter. first quarter is cyclicly weak typically. if you have today's levels coming out of iron, you could be looking at levels going into '19. there's definitely some pass through to drivers on the demand side one of the realities of the crude price going up so much and the dollar strengthening at the same time is that you've also

had effectively a currency adjusted acquisition cost ahead of the percentage gains in crude. for countries like india and china, that also means weaker demand going into the year >> kevin, i want to thank you for your time today. it's good to see you >> thanks for having me. >> kevin book. when we return, a lot more on "squawk." we're going to talk about the potential market reaction to tomorrow's midterms and what it means for your money our guest host will be barry kna knapp. a lot on his mind. we'll tell you what he's thinking when we come back what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

buckle up. >> and what about seat belts to fasten take the little end and

stick it in the big end. >> investors are strapping in for what could be a wild ride thing week on wall street. trumponomics we'll be joined to talk about the new book that interview is moments away plus is the tech wreck done? is now the time to buy mark mahaney joins us with investment ideas as the second hour of "squawk box" begins right now. ♪ good morning it looks like it's night outside but it's morning welcome back to "squawk box" here on cnbc i thought with the time change, we were getting -- supposed to get more light anyway, i'm andrew ross sorkin

along with becky quick and joe kernen take a look at u.s. equity futures at this hour as we get ourselves set up for the market to open in about two and a half hours. if it does, if we stuck to this dow would open about 35 points higher nasdaq 21 points higher and the s&p 500 about 5 points higher. we're watching a couple big stories this morning here are the top three one, investors paying attention to fresh sanctions on iran and volatility could play a major factor in the first full week of trading ahead in november. we will tell you what you need to watch two, investors -- i'm sorry, china's president taking up his commitment to free trade what his latest comments could mean for the next round of talk expected to take place at the g-20 summit. and then three, midterms and yes, your money. it's the most expensive midterm election ever and control over congress is on the line. we'll tell you how much it will impact your investments. first, though, here are some other big stories.

gasoline prices are falling in the wake of crude oil's recent tumble the price of gasoline average is down 8 cents in the last two weeks. that puts the average price at $2.85. ousted general electric ceo john flannery will be getting $4.25 million paid out over the next 12 months for severance flannery was fired in october after just 14 months on the job. amazon has dropped its free shipping minimum in a holiday season promotion normally you have to spend at least $25 to get free shipping that promotion will end when amazon can't guarantee an order can be delivered in time for christmas. multiple reports say amazon is zeroing in on northern virginia as the winner of the coveted hq-2 project but those same reports say it's not a done deal and other cities are still in the running normally i'd say that's possible, but if scott cohn is

in crystal city near arlington, virginia, i mean, is this different than the state stuff, scott? because when you show up somewhere, that's where it is. this is not -- i got to recalibrate my thinking here this may not be the place but you're there >> reporter: it may not be the place. there's a lot of speculation about it i just happen to be in the neighborhood but we do look at our top states data to evaluate what's going on ultimately the decision is up to amazon if they come to northern virginia, this is one place crystal city that is getting a whole lot of buzz. it's a hop, skip, and a jump from reagan national airport and the d.c. metro there is a bunch of office space, a bunch of vacant office space in this area one of the big developers here just recently scrapped a plan to turn an office building into apartments read into that what you will now, "the washington post" reports that amazon and local officials here are in what they call advanced talks to locate

hq-2 in northern virginia. sources told cnbc that those talks included a lengthy conference call on friday and that the deal could include a generous transportation package. but the sources stress that no decision has been made "the wall street journal" wei weighing in saying in addition to virginia, they're talking at an advanced level with new york city and dallas. so why would virginia be where it is? well, we've been reporting about the outstanding workforce in this region. that's probably why the d.c. area is the home to three of the finalist sites from the hq2 sweepstakes. of those locations, probably none is closer to transportation and has all those options than here in northern virginia. and virginia has also embarked on a bipartisan push to cut red tape amazon, remember, wants a business friendly environment. how will they decide jeff bezos said you collect as

much data as you can but then you make the decision with your heart. now, we can't get into jeff bezos' heart, but we give virginia a solid b-plus with the biggest weak spot being transportation which is being addressed dallas, the other place being speculated on by "the wall street journal" does even better with an a-minus. remember texas is our top state for business this year weakest in talent. with all of the red tape and everything else associated with no -- by the math we should be a few weeks away but this decision could be imminent guys >> okay, scott finally, that's good we'll be waiting we'll see. you know, you got your bags packed still, right? just in case >> reporter: absolutely. absolutely wherever it is, we'll -- >> frequent flier number is on

the tip of your tongue okay all right. thanks, scott. few stocks on the move this morning. berkshire hathaway's operating profit doubled in this latest quarter benefitting from fewer catastrophe claims berkshire also repurchased just under $1 billion in stock during the quarter. that's the first time the company's bought back any shares since 2012 i forgot it really hasn't made a really large acquisition since 2016 >> precision cast parts was the big one. but warren buffett has talked on our air about how buying full control of the company comes at a higher premium >> we sort of said he wasn't buying anything else he did spend like $170 billion on other stuff >> apple has been the primary one he's been buying he still thinks prices are reasonable in the stock market >> but $170 billion is a lot >> yeah. he likes apple better than he

likes his own shares he spent a lot more on apple at trillion-dollar prices he also did the buyback before the october correction too >> right which makes you think if you think he thinks the stock is cheaper now. under armour was upgraded to overweig overweight piper jaffray says it is underappreciated after the quarterly results. the united states is reimposing sanctions on iran today. mike pompeo and steve mnuchin, they will be releasing details in a news conference scheduled at 8:30 eastern time this morning. u.s. lifted those sanctions that had been negotiated by the obama administration he plans to defy the new u.s. sanctions and continue to sell o oil. on friday the trump administration says it would grant waivers to allow eight countries to import iranian oil.

oil prices this morning, $62.93. we should get those tweets at some point that the sanctions are coming in "game of thrones" style and then the i will defy you tweet back that came from the president of iran over the weekend. the first full trading week for the month is upon us along with the long awaited midterm elections coming tomorrow we'll break down what investors could be expecting this week joining us now is our guest host this morning barry knapp who is former guggenheim senior managing director also stephanie link head at nuveen welcome to both of you this morning. it's been a lot of things. we've been watching on the markets. first it was the fed talked about what they might do next then we have the midterms. you think it was really trade the market was so focused on last week. >> if you look at thursday and the explosive move we had. that's all because we thought we would see some sort of a resolution or talks about a resolution -- >> with china.

>> with china. so i think that is the thing that's weighing the most on the markets. but also, its international growth is definitely slowing and you have this fed worry. on the other side, you have amazing earnings 25% growth in earnings and also it's strong top line growth too we're seeing 8%, 9% revenue growth too so it's not just manufactured earnings kind of thing and the economy is really good i mean, those numbers on friday were tremendous. the jobs numbers and the wage numbers are also starting to creep higher >> i thought the same thing. even with hourly wage gains, you didn't see the market pull back on that as if there was some concern the fed might be stepping in. >> no. because the core pce is also tame rounded up to 2% it's still under control i think at the same time, becky, all of these things are happening but you're at a multiple in the market at 14.9 times forward estimates down from almost 20 times beginning of the year. i really think we're absorbing a lot of this bad news

and a lot of this bad news is into the stock market. i'm looking at strong fundamentals and i'm pick k away at the strong fundamentals >> barry, what do you think? >> i think steph had a number of really excellent points. i would agree from a corporate fundamental perspective that the story here is not earnings growth it's revenue growth. right? so for most of this business cycle, nominal gdp, gdp plus inflation grew less than 4%. it's been above 5% now for eight quarters that's --revenue growth should be similar to that revenue growth has been averaging 7% or 8% now for two years. i think it will continue well into 2019. this idea earnings are going to decelerate to something like 7%, not at 6% or 7% revenue growth because you still have operating leverage at that level so it'll be more like 12.5% which is really what happens typically in the middle of the cycle. >> but if you do see -- let's say we do see earnings slow to

6%, 7%, 8% growth, if that's the case is that a reason for stocks to be down here at 15 times forward earnings >> i don't really get too caught up in a given level of earnings growth for a given valuation metric valuation tends to rise through the business cycle and the mean reversion mechanism is actually a recession. right? and so the only way that 14.9 times forward earnings makes sense is if the recession is within a year maximum. and i just don't believe that's the case actually, the best thing i heard about that recently was on your show one of my old colleagues who said the reason everyone keeps forecasting it 18 months out is because that's as far as they can forecast they keep saying it's at least 18 months out. there's no evidence of that. and a couple of other -- >> there's no evidence that there's -- >> that we're about to have a recession. you also touched on an important point about the wage growth. so there's two things that can drive wage growth higher

one is scarce labor resources. right? a low unemployment rate. the other is that you get a big pickup in turnover, labor market dynamism and that actually is what is working and what is driving wage growth up. we had a really tepid recovery and a turnover in the labor market until '14 then it jumped in '16. it's moving higher if people get jobs they want, productivity goes up if you just have to hire workers that are sub-optimal, productivity goes down that's actually -- the turnover models are driving wages >> we have heard stories of people saying forget it we're not doing drug tests anymore because we can't find qualified employees. >> you can find lots of anecdotes for everything just like the anecdotes that trade is pairing industrial margi margins except that industrial revenues are up. and margins are still going up same thing with that, so

there's -- we had had built two big models one based on slack and one based on turnover. and the one that's predicting wages is the one based on turnover so that's really the driver here >> stephanie, very quickly interest rates have to be the most important decision whether it makes sense to get into something else we did see both the 2-year and 30-year at highs last month. is there another alternative >> i mean, i'm focusing on strong earnings and i think that the valuations are so compelling right now, i mean, i have companies beating and raising and their stocks are down from where they were. i like that kind of setup. i think there are alternatives, certainly. but there are also strong fundamentals in terms of u.s. equities at this point >> thanks for coming in today. stephanie link and of course barry knapp is with us for the rest of the program. when we return, president trump is planning to meet with the president of china, president xi during the g20 segment to make a trade deal president xi tried to play up

china's role in the global economy saying the country has always been an advocate for free trade. we will have more on his comments, the war of words between these men, and the possibility of a deal and whether one can be struck after the break. then at 7:30 this morning, stephen moore and arthur laffer is going to be here. stay tuned you're watching "squawk box" here on cnbc really want to be there, but you can't.

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my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back, everybody. chinese president xi jingping promoting his company as an advocate for a multilateral trading system and free trade. he spoke earlier today eunice yoon joins us more on this what did you hear? >> reporter: president xi jingping wants the rest of the world to be convinced that china wants to buy more of their stuff. he said that china would make the necessary changes so chinese could become more necessary to the global economy that means promise for greater market access, a tougher stance on ipr violators, and creating what he described as a first class environment for foreign

businesses now, the problem is that he didn't get specific on even one issue. nor did he address the u.s. trade war directly so that left a lot of business executives and diplomats who i was speaking to here scratching their heads and feeling a sense of deja vu one said he felt like the speech was warmed up leftovers because he's heard all of this before. so there has just been a widespread feeling of frustration that beijing has repeatedly made promises but at the end of the day it hasn't opened up in the way international businesses would like so the u.s. administration didn't send a delegation here. also, there are a lot of global companies represented, but not really high level ceos so not at the top level. i think it really shows, becky, that the foreign businesses here are really wary and weary of what they've been hearing, all this rhetoric out of beijing.

>> so it's not just the united states that gets concerned or pulls back when you hear this trade war between these two? >> reporter: no. and, you know, it's -- the chinese, also, there were some business leaders here including alibaba's jack ma who expressed frustration at the rhetoric from the white house. he is here in shanghai and he described the trade war as the most stupid thing on the planet. but i think what we're seeing here is that there's been a lot of talk here about what's going to happen next and so all eyes are on the g20 and there were several people who were saying that perhaps president xi jingping is holding off on making any offers here, keeping things vague for that particular reason. but just based on some of the comments that we heard out of him today, i don't think it's any -- we won't see china caving in any time soon to u.s. demands. and one of the analogies he

brought up was that china, he described as an ocean. he said not a pond and he said that china's ocean has survived 5,000 years of storms and in this particular storm, he said that china is going to weather that too. so i think he was emphasizing this idea that china has staying power and that it's around for the long haul. >> great eunice, thank you very much. eunice yoon. we want to bring in a guest this morning joining us now wendy cutler. good morning to you, wendy >> good morning. >> you heard the report there out of beijing i'm curious about the disconnect between the way, frankly, the chinese seem to think about this current situation and the way washington seems to think about this situation and sort of where -- how you think about the situation in the middle of it >> yeah. i view the speech today by president xi jingping as a missed opportunity this was the world stage where

he could have said, you know, i'm going to cut tariffs i'm going to make a better business environment but just add some specifics. send some signals to the administration in an effort to kind of pave the way for both sides to get back to the table >> you don't think he was sending a signal a signal of defiance >> no. because i think if he wanted to be defiant, his comments could have been a lot more cutting and aimed at the united states i thought he kind of treaded around america's unilateralism here and, you know, once again, i think he wants to portray china as open, as the global trading champion and the anti-protectionist force which was met by skepticism, i'm sure, by many of the businesses in the room >> when you think about how this can get resolved, if it can get resolved, how are you handicapping the situation just to put a fine point on it, obviously last week at least

there was a report that sensed there was a deal in the offing there's a lot of skepticism from people like larry fink at blackrock. >> there are a lot of confusing signals being sent i think one part of the administration would like to get back to the table with china and try to work through these issues others seem to be more focused on continuing the trade war in order to build u.s. leverage and perhaps decouple the two economies. and the president's going to have to make his decision on which path he wants to follow. i think the most optimistic outcome for the upcoming meeting between the two presidents would be an agreement to go back to the negotiating table and to try and work through these issues. however, they would need some guidance from both presidents on which issues they're working on, what they're going to do with the impending tariff increases and perhaps further tariff imposition

>> speak to china specifically in terms of how much pain they can take in the short-term relative to whatever you think their long-term strategy is given they have a 2030 plan, a 2040 plan. these are long-term thinkers but they also have their own social issues to contend with and social economic issues >> we shouldn't underestimate their wherewithal. their economy is hurting, but a lot of that is their own domestic reasons i think china does want to come back to the table. but does that mean it wants to concede on all the issues the united states has put on the table? no but we'll never find out if both sides don't get back together. and i think both sides kind of owe that to their companies, workers, and consumers or else we're going to be seeing additional impacts from the tariff increases and further

tariff imposition and other measures that could be taken come january 1 and onward throughout 2019. >> we got to run, but real quick. we had a report over the weekend out of huawei being used by perhaps the chinese government to hack into another country do you think that huawei is a danger to our national security? >> i think that there are a lot of, you know, issues surrounding this whole national security cyberspace these issues also need to be addressed and addressed squarely along with the technology issues and the trade issues >> okay. wendy cutler vice president of the asia society policy institute. thank you. >> thank you all right. coming up, are you worried about your search history on google? a new tool could help you hide the searches you don't want others to know about including even google. details after the break. "squawk box" will be right back. still to come, how the trump

economy will influence voters at the polls tomorrow and what it could mean for your money. we'll talk to stephen moore from the heritage foundation and art laffer, inventor of something you might have heard of. >> anyone know what this is? class? anyone anyone anyone seen this before? the laffer curve >> we'll talk trumpnomics when we return. this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. at if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait. ♪ ♪

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welcome back to "squawk box. google is now making it easier for users to delete their search history. couple people out there, you know who you are, might want to do that. a new function called your data in search allows you to view and delete recent searches in the search page itself you can also adjust ad settings and activity controls to decide what google saves to their account. the tool follows a new scandal that was released giving access on the google plus platform. >> how long do they save these searches years? >> forever i mean, if you have a google

account, you can look at your search, i believe, for as long as you've had it >> mine's just breitbart, breitbart, breitbart, breitbart. you know what i mean >> joe, you won't need to use -- >> that's why google is like god. they know everything about you >> you don't have to be incognito anymore. you can just delete it >> i don't hide the breitbart searches does mother jones have a twitter account? >> i have no idea. all right. when we come back this morning, trumponomics stephen moore and art laffer will join us to talk about their new book and more. and a big month for big tech after an october slide, apple and google are ready for a rebound. as we head to break, take a look at u.s. equity futures what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the

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♪ good morning welcome back to "squawk box" here on cnbc

among the stories that are front and center this hour, lowe's closing 20 u.s. stores and 31 canadian locations they say those underperforming locations will be closed as part of an ongoing strategic assessment most of those impacted u.s. stores are within ten miles of another lowe's they expect the move to shave 28 to 34 cents per share off its 2018 earnings. take a look at verizon they've announced a reorganization of its business segment. january 1st, it will have a third segment called media/oath. and "bohemian rhapsody" debuting at the number one over the weekend box office it took in $50 million in north american ticket sales. that just about matches the cost of producing the movie by the way, guys i saw "a star is born" over the

weekend and i am putting it at the top of my list best film i've seen all year by a square mile. bradley cooper who directed it did an amazing job and lady gaga is extraordinary our next guest had a front row seat to the making of the trump economic agenda. let's welcome stephen moore, former member of "the wall street journal's" editorial board and arthur laffer, a member of reagan's economic team and so-called father of supply side economics both have advised then-candidate trump on economic policy they're co-authors on the new book "trumponomics." stephen, arthur, thanks for joining us so gentlemen, there are like ten points that you each -- did you come up with five, steve, and you come up with the other five, arthur it's a true collaboration. start with you, steve. >> i stole all these ideas from

art laffer the other guy involved with arthur and i in terms of helping trump devise this economic forum is larry kudlow. larry is now the most important economist in the country i think you know larry, joe. you've dealt with him a little bit. >> i have. we've had some meetings of the minds in the past. you know, he says like eight words and i finish with the last four he wrote the forward for the book, too, didn't he >> he did. >> hey, so arthur, you've watched it play out. it's kind of funny for a guy that is called the father of supply side economics. and according to so many people, supply side economics -- i heard president obama -- it's been totally refuted. but here it is again are you sure -- did it work this time in your view or is it a work in progress >> well, it's always a work in progress, joe. but it's working beautifully i mean, we couldn't have asked for a better gdp growth.

we couldn't have asked for a better jobs report all the policy metrics that are coming in are right in line with what we wanted the tax bill is great. the deregulations, monetary policy trade is a work in progress. and obviously in the future weaver going to have to get spending restraint and a lot of it things are going very, very well and i couldn't be happier. and obama, he's like yesterday's news on supply side economics. great guy, but not very good on economics. >> joe, one of the points of the book and we have a major chapter about obamanomics. look, i think that barack obama did the best he could, but it just didn't work there were so many areas in the country we went to on the campaign, especially those american state mid western stata they felt left behind. obama every year predicted he and his economists predicted they would get 4% growth they never came within a country mile of 4% growth.

and by the way, over the past six months guess where we are with the economy right now just about 4%. >> hey, stephen. we got a talk tariffs. i want to also talk to you about the never trumpers, all your colleagues or a lot of your colleagues that will never, i think, support trump they've always had the idea that deep down he's a democrat. or i don't know, from his past or from some of his statements or for whatever reason at this point, i mean, i when he said these are the 20 i pick from. he followed through on that. a lot of the policies are conservative aren't they except for tariffs? >> you better believe it arthur and i have faced a lot of opposition within the party itself, within the republican party when we first got behind trump in early 2016. you know, he just had the right economic formula

a lot of times donald trump says things that make my eyes roll. i'm like, donald, don't say that but when you look at the policies and the results, that's where you just have a home run i mean, as arthur said, who would have thought we'd be at 3.5%, 4% growth -- >> heritage and tariffs do not go together. >> no. >> say heritage and then say tariffs and that does not go hand in hand that's the last thing you'd associate with where you are now. >> yeah. but i think we're in a lot better shape today on trade than we were six or nine months ago arthur, we got that canada/mexico deal. >> he's using tariffs to get these people to the table to negotiate free trade when he left the g7 meeting in ottawa to meet with kim jong-un, he said right to the other six, i'm willing to go to zero tariffs, zero nontariff barriers if you are right now he is a free trader. obviously a free trader.

how does he get china to the table without threatening tariffs? you know, that's a strategy i'm not good at. i'm not a negotiator, but he is a good negotiator. it looks like it's working with nafta, south korea, and i think it's going to work in argentina with xi. >> arthur, is there a point you get a little more concerned about the tariffs? >> of course we hear talk of this becoming a cold war is there a point you say hold on a second, this is no longer a negotiating tactic >> there's nothing worse for the economy than a trade war if you look at smooth holley or in the nixon administration where we put those in. that was horrible largely as a result of the trade war. i don't think that's what's going to happen, but it terrifies me day and night higher taxes and trade wars are the really big killers of prosperity >> by the way, if you look at what donald trump is asking of china, i don't think there's anything unreasonable here >> true. >> we know they're stealing

about $300 billion of intellectual property. he wants china to open up their markets to us which would be a great thing, right for both of our countries. they would have more access to ours our strategy and we're working with larry kudlow at the white house. the zero tariff strategy wouldn't it be ironic if donald trump ended up being one of the most free trade presidents ever if he were able to pull this off? >> hey, stephen, i've read you for years and i remember reading for many years when you would rail on the issue of deficits and debt and so my question to you is, given the additional deficit and debt that we're going into despite the fact that we are having a nice little economic boost here, how you think about that >> well, the spending is out of control, in my opinion i wish donald trump would veto more of these spending bills i hope he vetoes the big spending bill that's coming down the pike in the next month or

so but look the first meeting that larry and i and arthur had with trump, we laid it out that there was no way we would make progress in reducing the deficit, debt, poverty in america with this growth rut we were in under obama. we had to get the growth rate up i feel much better about where we are with 3.5% to 4% growth. we're going to get a flood of revenues into the government next year with this additional growth as larry kudlow likes to say, every one percentage point in growth gives $3 trillion of revenue in the next decade >> go ahead. >> dr. laffer, i have a question for you in how you think the tax bill is impacting investment which is what it was all about so my perspective on this is if you look at every business cycle peak to peak since world war ii, we had two where investment grew better than 9% the '60s and the '90s. both followed supply side tax

cuts until 2017 we were averaging only 1.8%. it's surging 6% now in software, intellectual property, even structures where it's been more. my thought is it's having the desired effect can you elaborate on that? >> yeah. i think it's the desired effect. not only did we cut the rate from 35% to 21% with the pass throughs as well and the personal income rate down to 37%, but the capital purchases my goodness. that increases the internal rate on investments dramatically. then we have the territoriality which means that u.s.companies can now compete with foreign companies on foreign soil. that's the greatest thing since soap i mean, it's just phenomenal and you will see as the growth rates increase and what steve said, these tax cuts will pay for themselves but it won't happen tomorrow morning. it takes two, three, four years before you really get net revenues increasing. but over a decade as steve

quoted larry kudlow saying at three years, it's $10 trillion -- >> isn't this the key, though, to ultimately cutting the trade deficit? is driving investment back home? >> i don't think that trade deficit is an issue. the trade deficit is foreign investment in the u.s. i may be a little different from other people in this, but i don't think a trade deficit is bad. a trade deficit is a capital surplus and it means capital moving into the united states providing jobs, output, and employment for americans and i think a trade deficit which happened under reagan and under kennedy, i think that's phenomenal for the u.s >> you know, you mentioned that issue of investment. some economists were disappointed with the third quarter number in terms of business investment. but there's something funny about that number. if you look at the manufacturing numbers in the jobs report, if you look at the construction numbers, very positive you know, everywhere i go, i travel everywhere from portland, maine, to portland, oregon, and

every city in between. all you see is building cranes everywhere o we're in the biggest construction boom in this country. i don't see a slowdown in -- >> year on year rates are still rising that was just gdp quarter on quarter math and it's still going up >> the one thing, art, i wish you'd do more work on is the rap against supply cidsider trickle down that it's growing the -- >> hold that thought >> that's the only thing you can do you know, when you do the redistribution and the pie shrinks, you feel good that you're doing something but then the fed's got to stay at zero because your growth policies are so bad. but it doesn't seem -- i wish there was a way the free market would redistribute things itself and maybe it is with wage gains that we're seeing now, art >> joe, let me just -- i'm going to quote my old friend jack kemp you can't love jobs and hate job

creators and if you don't make it worthwhile for the upper income people to do the investing and increase output and increase employment, you're never going to get wages rising like they're rising now >> it's counterintuitive though. >> it is but i've never been employed by a poor person. >> how do you feel about the recent capex number? you would think there's not real capital expenditures taking place. >> that was what i was saying. everywhere you go is construction cranes building warehouses, factories, apartment buildings, you know, everywhere. >> stephen, the math does not suggest that the capital expenditures you would have thought there would be relative to what the tax cut demonstrated >> i'm happy with the numbers. larry just announced these numbers last week. i think the numbers were 6% or 7% that's a healthy number for business investment. >> all right thank you, stephen moore >> you guys have altogether too much fun

>> yeah. well, that's true. you know what? there's a lot of things i ain't never done but i ain't never had too much fun that's a song, actually. >> we'll do supply side tax cut on fun >> "trumponomics." i'll put this under my pillow and want it to seep into my brain. it's out now when we come back, will it be a november to remember for technology lead tech analyst at rbc capital name mk mahaney will join us after this break "squawk box" will be right back.

welcome back to "squawk box," everybody. take a look at the futures right now hanging in there in positive territory but just barely s&p futures up by three and the nasdaq close to three. remember last week with the vix hitting a high of close to 28 at one point early in the week, we did see all three ending the week up over 2.3%. the s&p had its best week since march. coming up, mark mahaney on tech plus new sanctions on iran set to take place today. we're expecting a news conference on the announcement we will bring it to you live and get market reaction when it happens. "squawk box" will be right back. really want to be there,

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get ready, because we're hi am a techie dad.n. ies 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. welcome back to "squawk box. october was a volatile month for the markets. joining us now mark mahaney from rbc capital markets. good morning to you, mark. >> morning >> we have suffered through what was a tech wreck where are we in the wreck? >> well, let's see you're right we did have a tech wreck of the major faang stocks, if you will.

the one that corrected the most was netflix. also had the cleanest beat in raised results probably the best growth out of the group. there were other issues that came up. going forward kind of the relief catalyst may well be the non-event if the elections are a non-event in terms of political hacking. then facebook actually may be the best play here because there a's a lot of feari that stock should be 20% to 30% sustainable growth the engine that is google is essentially unchanged. and all of these companies are invested if you look at those faang stocks, they're doing over $100 billion a year in capex and r&d. these are some of the biggest capex engines in the country i don't think their fundamentals have changed that much >> make the case your argument is if, in fact, we get through these midterm elections without accusations

about meddling and additional allegations in terms of facebook's involvement, that that's a positive? that's a catalyst for this stock? they still need to spend the money that they're spending to deal with this, but you think that is about to happen? >> i think there's been part of the risk on -- i think that's been part of the overhang on facebook there's been a series of issues. what we just learned from results is growth isn't desale rating as rapidly as feared and the outlook was is little bit better than the street had expected we know we're going through this format shift over to stories away from the news feed items, but i think the overhang issue really the bigger one is a public confidence, trust, safety security issue on the stock. >> what about the question about user growth and whether ultimately people are going to move from the classic

traditional facebook platform to the instagram platform and on the instagram platt form it is harder to use ads. >> it can be monetized just as well as facebook can there's a second tier shift which is the move away from the news feed items towards stories. that's where the question mark is around monetization today the big advantage with facebook is there's no real competition for it as a social media platform that's a pretty rare position. so if you have a leading asset like that without dramatic competitive risk, that's -- and the stock sells off, that's usually a great buying opportunity. it's why it's our number one pick in this >> speak to the issue of apple because a lot of people look at apple as a proxy for what's going on with china in this tariff war >> i don't cover apple i'm going to punt a little bit on that. but if you look at these names where you see the growth slowing down the most is where the

stocks are going to most underperform or at least out-perform. when you see the most consistent growth, the secular growth, that is what these names are. google, amazon, nemt fltflix. that creates great opportunities. >> we got to go, but i'm curious. we saw evan spiegel at dealbook. what's your take on snap at this point? >> you know, it's a truly speculative buy on our part. it's not a high conviction buy execution has been lousy, vision has very good. if they can do anything to improve that execution, there's real upside in the stock it's a big hope stock for us >> okay. very good. mark mahaney, thank you, sir appreciate it. coming up when we return, a lot more in the next big hour. how are some of the nation's largest pension funds handling this market volatility we'll talk to the north carolina state treasurer dale folwell after the break. we'll discuss retirement systems and how they're dealing with the market swings.

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today. secretary of state mike pompeo on treasury secretary steven mnuchin set to hold a press conference within minutes. we'll bring you comments live. midterms and your money. what tomorrow's election could mean plus hold onto your hats we could be in for another market ride. we're turning to a minute with about a hundred billion dollars on the line for advice north carolina state treasurer will be our guest as the final hour of "squawk box" begins right now. live from the most powerful city in the world, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin i'm worried about the weather tomorrow worried about the weather tomorrow >> in which state? >> everywhereverywhere

>> it's not raining everywhere >> it's going to be raining here hard we need the millennials to get out and vote if it's raining -- >> you want millennials to vote? >> i'm playing up to you, sork they're coming around. they're starting to watch "squawk box. they're starting to work they're starting to move out >> it's a big age group. it's like 37 all the way down -- >> coming around >> trying to gerrymander against the millennials. >> no. who's going to come out if it's raining? they're going to turn on "game of thrones" on netflix or something. you know that. >> we'll see >> futures right now are indicated flat are we going to do anything between now and wednesday? we'll see. this is going to be -- is it possible that something could happen in the news cycle between now and tomorrow there always is in the last. >> but then you wonder how many people have already voted anyway and it wouldn't change their vote mark grant is hopefully going to join us tomorrow to talk about what he sees happening >> he says he has no way of

knowing because of these crazy polls. >> but he does think there is the potential for some serious volatility depending on how the house falls. >> all right i saw it in -- you know, i asked andrew whether "the new york times" says that the house scales might not tip but i think that's trying to act -- i think that's trying to get the voter to get -- >> no! no >> that's trying to spur the democratic voters to go vote >> no, joseph. the front page of "the new york times" and i would argue the front page of "the financial times" are not being used to motivate one side or the other to go to the polls >> okay, all right i'm naive. i'm naive. i just figured, you know, one last chance to motivate the right voters >> you can use the chance, but i will assert they are not >> all right okay you never see that on the front page only in the op-ed pages.

treasury yields are 3.2% on the 10-year. we are watching three big stories this morning number one, investors keeping a close eye on the u.s. reimposing those sanctions on iran. that's a move that could have major implications for world oil markets. we're expecting a news conference on that story at 8:30 eastern time we will bring it to you live number two, the trading week kicks off in just 90 minutes' time after the economy added 250,000 jobs last month. wall street watching and waiting to see if last month's volatility is here to stay this fall and number three, midterms and your money after a long summer, the election is finally just a few hours away we'll get a look at what different election outcomes mean for your portfolio >> just one more just for a second. >> please. >> i was looking at "the washington post" and "the new york times" op-ed pages. >> okay. >> has "the new york times" ever endorsed a republican for president, do you know >> i would imagine probably not. >> and one of them did the last time, it was 1954 the last time

either "the post" or "the times" endorsed a republican. that never seeps into the front page >> has your favorite publications, has breitbart ever endorsed a democrat? >> plus you don't think "the wall street journal's" op-ed page influences the front page at all. >> no. i think the reporters are by and large at "the wall street journal," they would also work at "the new york times." >> that's his own version of an insult which is unfair >> i'm not insulting you i'm not sin ulting you because you have different -- >> let's talk about the markets. >> that's not insulting. we're just talking the market's recent swings have caught many investors by surprise despite a recent drop wall street's so-called fear gauge is still up more than 30% in the past month. one important but sometimes forgotten constituency that's dealing with the volatility in the markets. >> they did endorse abraham

lincoln back in 1860 i just looked it up. "the new york times. >> which the democrats are claiming now which i love. >> and ulysses s. grant who was a republican and james whitfield who was a republican this is all "the new york times. >> but that was before it was owned by the salzburg company. >> all right it's a group that manages money -- >> and dwight hooeisenhower >> that was the last one, i think. which i voted for him in '54 anyway, it's the group that manages money for the -- not really, dale i didn't dale folwell state treasurer of north carolina thanks for coming in >> good morning. >> are you -- your job, you got $100 billion to worry about. is it better for you at 3.20% on the 10-year? do you feel you've got an option at least to try to help pensioners that have been hindered for so long trying to

get a risk-free rate of return is it a little better? >> it is better. last year when i was sworn in, obviously that rate was 50 basis points now it's quite higher. and that always helps our fixed income portfolio because we have $35 billion to $40 billion sitting in fixed income. we're very positive about that on the fixed income side >> we want to talk about all those things, talk about health care but you have to run and be elected in north carolina. >> the state treasurer of north carolina is an elected position. >> you're a republican and you've never led a poll in north carolina >> correct >> you've always been down by how many points? >> who knows >> are you an imposter here? did you get elected? somehow you've gotten elected even though you're always down in the polls >> i just know when andrew calls you joseph, i don't get involved in that conversation. >> smart man >> that's the cardinal rule. >> i never do that i never call you andy or sorkin. >> you have called him andy before >> i would never anyway, you've got to show -- so

you're trying to figure out -- how long have you been trying to get information on health care in north carolina? >> health care is obviously one of the biggest expenses in the state of north carolina. and everybody who is in government, they often get accused of doing things for business i need to remind your viewers that the biggest employer in the state is the state the second is the city so when you do something, try to reform a system, not just run it but actually find it and fix it, any time you do that, everybody benefits from that not just running the place, but actually finding and fixing. and health care expense, we're going to spend over $3.4 billion on health care and pharmaceutical benefits just in north carolina just for active and retired state employees. not medicare, not medicaid just for state employees so seven years ago, the state

came out with a report saying the plan is at risk for overpaying never a good word. even though it pays out that amount of money every year, the treasurer or the alter do not have access to the vendor contracts and cannot verify that the state is receiving the proper contractual discount. excuse me. so i sent a request to the state hospital otherwise known as unc health care. and this is the report i got back >> you finally got it. >> of what health care cost is -- >> hold that up. >> all the redactions. >> there's not a single -- >> this is what health care cost is supposed to -- i pay this organization $300 million per year >> that's what they sent back to you? >> yes this is the actual response. >> because it's redacted why is it redacted >> because they say it's proprietary for me to know what i'm supposed to pay. i know what they're charging me. you have a cup of coffee here, becky. you know, when that cup of

coffee was purchased, there was a customer and a payer and they were right beside each other. well, in health care, the customer's over here, the payer is over here the customer doesn't know what the payer's paying -- >> and this is the problem with health care at large there's a lot of conversations about transparency and the customer whether it be a state or an actual person like myself being able to know what you're going to be paying not only after the fact but even before the fact so you can price shop >> that's right. then the payer doesn't know what happened to the customer in that health provider experience the editor of the wilson times said, and i paraphrase, let's get this straight. the state treasurer cannot find out from the state hospital what the state health plan is supposed to pay for state employees' health care if that bizarre sentence doesn't give you a headache, we hope that it will go away before you're in need of medical attention. because lord knows what a

neurologist will charge you to diagnose that. we're pro-health care. we like our providers. but the fact is we're a governmental payer in north carolina and we've been paying commercial rates for decades >> just to -- we don't have a lot of time left, but the stock market has been volatile lately. have you noticed that? does that change anything that you do in managing the hundred billion? >> sure. we've always had one of the most conservative -- and that's why we have one of the best funded pension plans in the united states, but the fact is this volatility is a major issue. we're in the check delivering business we're not like an endowment where we can turn the spigot on and off like the stock market does but at the end of the day, we have a serious issue because we're paying out gross over $6 billion a year in pension benefits i'm spending $740 million every 30 days just for health care, pension, and pharmaceutical

costs. >> which means what? if there's volatility, you have to hide more in the bond market or are you hiding there? >> we have always had one of the most conservative allocations in the country. but we have always done that end of the day we've had about a $4 billion draw down during this latest downturn in the market. >> you had this magazine -- you've been carrying this around you wrote andrew, fyi. thank you for bringing this. my question for you is do you think this whole esg thing is actually about creating significantly better returns or mitigating risk? because that's one of the arguments you keep hearing on the esg side it's not necessarily they think it's going to be better outturn as much there's a mitigation on the risk side. >> it's all of the above at the end of the day, as a fiduciary, i have to be loyal to the participants of the plan and figure out who brings value to our participants and if somebody who is doing any

kind of investing brings value to our plan, that's where we invest >> you love that esg stuff, right? >> i think esg stuff is just interesting within the context of where we are as a society and the role that ceos and businesses want to play or say they want to play right now in the conversation >> if someone doesn't play along with that and satisfies their customers and shareholders, is that okay? if that's all they do? >> that was the classic version of what might be described as esg. today it's much more than that that's the question. >> i wonder if that's a positive for society. >> if they're polluting or if they are doing other things, you know -- >> dale, very quickly, your question on this have you put more in bonds have you put more in other things have you pulled out of the stock market >> we have about the same asset allocation we're paying benefits every month out of some of the equity portfolio you have >> you sell winners or losers when you have to do that >> i take the advice of the people who work in the

department we attack problems and not people and i think since you started this conversation talking about politics, state treasurers across the united states, you know, we're in the fiduciary responsibility where with ef to attack problems and not people that's what we do. whether it's on health care or pharmaceutical talks >> if you have the same asset allocation, that would imply relative to fixed income even though fixed income hasn't had a great last quarter you would be more likely a buyer than a seller. keep that strategic asset allocation >> but we still have 60% to 65% of our investments that are not in fixed income. alternative investments, real estate, equities this year -- at the end of this year we will for the first time in north carolina history have all of our public index funds being managed in house we're very excited about that as well as the health care reform

>> all right great. dale, thank you. dale folwell >> thanks for having me. would love to come back. >> it's fun, isn't it? >> yes >> good to see you, sir. we've got a lot more coming up this morning. >> andy? >> thank you, joseph president trump has been making predictions on what will happen to stocks if democrats do well in the midterms. that's his threat. we'll look at what tomorrow's election could mean for the market stay tuned you're watching "squawk box" on cnbc when i was shopping fothe choice was easy. i switched to geico and saved hundreds. excuse me... winner! that's a win. but it's not the only reason i switched. hi! geico has licensed agents who i can reach 24/7.

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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. the final countdown is under way to tomorrow's midterm elections. dom chu joins us right now he's been following some of the potential market reactions we could see after voting concludes. and dom, good morning. >> good morning. we should preface this by saying after the 2016 elections, we know how much polling may be a little more suspect with regard to outcomes and whatnot. but we want to look at just some of the conventional wisdom about how things can shape up. according to predict it, right now the general consensus, it's just generally about a two-thirds probability, we'll call it, that the democratic

control goes to the house and the gop retains control of the senate and right now the gop house and gop senate keeping both controlled is about a one-third, we'll call it. obviously those markets kind of move a bit as we get closer to the election if you look at some of the scenarios that could play out, if we do get a democratic controlled house and a democratic controlled senate, the general feeling is the overall market would be somewhat bearish on that particular outcome. again, we don't know exactly how that's going to play out given the fact that many people thought president trump getting elected would be bearish for the overall economy. we've seen that play out not as they thought the gop house and gop senate is the most bullish scenario in the case of what would happen. and the democratic house and gop senate would be one that's modestly bullish overall for the overall markets. and the idea here is gridlock maybe is a good thing for the markets. now, the sectors that we're going to take a look at in focus

here, if in that most likely scenario where the democrats control the house and the senate stays with the gop, health care could be a big focus what we've seen with health care recently is at least the markets are trying to say a griz locked washington would not be as bad for health care. that's one to watch. also another sector to watch is the defense contractors. if we do have a divided congress, they could see that as modestly bullish we already have spending plans in place for washington as well. the idea here is as we take a look at the sectors in focus, it's the regulated ones that become a lot more of the focal point. that's banks with regard to regulation that's health care that's the energy sectors. so as we take a look at how the polling plays out into the elections, those are going to be some of the key sectors to watch, guys. back over to you >> thank you for that, dom continue this conversation our next guest has written about the connection between the markets and the midterms

will the stock market crash if the democrats win published in today's issue. joining us now is associate editor at barron's this has been what the president has said will happen what do you think is going to happen based on history and the data >> it's concerning the president says the market's going to fall apart if the democrats win. the pollsters say a 85% chance of the democrats taking the house. i think i got to get out of stocks but wait a second. if markets are forward looking, why hasn't this already crashed if we're certain democrats will take the house >> answer your own question. >> i look at history and what happened in the past when we had a republican president and the democrats flipped part or all of congress i look at 2006, 1986, and the answer is whole lot of nothing positive decent returns over the next year. not much motion on election day. i hate to tell people, i think we imagine a bigger connection than there is.

one thing that the right and left can both agree on is they hate me when i tell them the stock market does not care about your politics. >> is there any chance that the market actually goes up just because there's a sense of uncertainty and nobody knows what is going to happen one way or another >> on election day, you could see that i'm more concerned about this self-fulfilling prophecy if we're going around telling everyone the market is going to crash if the democrats win and the democrats gain ground, i'm afraid some people would say uh-oh. pull themselves out. over the next year, i'm not concerned about returns. >> if you just look at what's happened in midterm elections for the last 75 years or something, just -- the markets go up afterwards because of the volatility ahead of time and what happens after is this different? >> no. i think it's about -- i mean, if i have to guess what markets are going to do over the next year, i'm guessing they go up. because on average that's what they do. when i talk to my republican friends, they tell me donald trump has restored american confidence and unleashed

entrepreneurialism and bald men are regrowing hair and then democratic friends say that's obama the truth is the most powerful force in the financial universe right now is the 0% interest rates we had for years now those rates are creeping up a little bit that's what to watch not people's political passions. >> okay. different question dom talked about health care stocks holding up in part that if there is gridlock maybe that's a good thing. are there any other industries that you think gridlock is particularly helpful for >> we're almost surely going to have more gridlock when i think about the kinds of things you could get done, what is their agreement on? i think there could be an infrastructure bill. everybody seems to believe we need to invest in infrastructure and there could be some kind of control on drug prices so when you say health care, i don't know positive for transportation stocks may be negative for drug stocks going forward no matter who wins everyone seems to agree they're getting out of control that's what i think is the most likeliest thing that's going to

happen under this next congress, but mostly it will be more gridlock you won't get tax cuts 2.0 you won't get obamacare overturned >> isn't the real issue here the level of spending? the growth rate of spending? spending has grown at 6% since world war ii it slowed to 2% under the budget control act of 2011. they ramped it up again. not because of the tax bill, after the tax bill and a democratic house with this administration, we could probably still have spending at 6% so in 2020 when entitlement growth starts to accelerate again, you're just headed towards a mini -- another mini-debt crisis after the presidential election. the real issue a spending. >> you mean will democrats blow up the debt and deficit. and the answer is we're doing a good enough job of that without democrats. >> that was with democrats because of their -- >> not the obama recession but at the top of expansion.

>> but that was with democrats because of reconciliation. reconciliation had already been used for tax reform so they couldn't use it to settle the spending and so that deal was a deal that trump made with schumer. >> well, the deficit crunch is coming no matter who's in power. i mean, the numbers are already in place you're already going to see trillion dollar deficits not emergency spending but where we should pay that back. >> thank you, sir. >> thank you >> appreciate it stay tuned go're going to talk to ken roff later this morning. "squawk box" will be right back.

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coming up, the secretary of state and treasury secretary expected to detail those reimposed sanctions on iran. we'll bring you that live when "squawk box" comes right back. today, there are more sensors on our planet than people. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments. that's smart for medicine. at this bank, the world's most encrypted mainframe

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for more information on how to keep you and your neighborhood safe, visit pge.com/wildfiresafety ♪ welcome book to "squawk box. we are awaiting a press conference from washington where mike pompeo oand steve mnuchin are to address iran. eamon javers joins us now with more you did the weekend. it was late friday i think you should do an early morning, a monday just to be fair for -- >> no way. >> did you do that >> that would be a less popular tweet. >> monday.

>> monday. yeah anyway, what's up, eamon >> well, what we're waiting for here is the secretary of state and the secretary of treasury. they're going to be in the foreign press center there as you see on the screen. and they're going to be announcing these new sanctions which are officially being reimposed by the united states tod today. this is a big one for the iranian oil sector we're going to watch for a number of designations we expected about 300 designations of different entities inside iran's oil sector but also its banking sector and insurance sectors. that's going to impact the ability to export oil across the board. one of the things we're going to want to pay attention to here is what the secretaries say in terms of the exemptions that the united states is going to grant to these sanctions a lot of countries that are u.s. allies around the world depend on iranian oil to run their economies. notably south korea and india. both of those countries have said that they have secured -- they have already secured

waivers from the united states to continue importing iranian oil. we'll see whether any other countries are granted those waivers as well. the administration is going to say this is all about the failure in their view of the 2015 iranian nuclear deal. and therefore they say they're going to have to impose all of these sanctions. again, a big question mark here is what does this mean for china which would like to continue importing iranian oil. will the united states grant the chinese any kind of waiver that's something to watch for as well here too. >> hey, eamon. the big issue, though, i mean, we've been watching the oil markets this morning and oil is actually trading down last week was the worst week we've seen for oil prices since friday that's all because of this telegraphing ahead of time there's no surprises here for the market >> that's right. and some of it from the commentary i've seen is based on the idea there are so many exceptions people expect are coming here that ultimately it's not going to be as strict as maybe some in the oil market had

feared last week and so that's why you're seeing the oil move slightly to the downside today ultimately, though, it's going to depend what's in the official announcement here. >> oil just picking up by about 18 cents i correct myself but we are looking at a huge slide in wti prices in the last week >> right i think that's based on the idea of these exemptions. as you've seen countries announce they've gotten some exemptions, some people in the market have got the sense it's a little less strict than the optics might suggest therefore it's not as draconian for the markets globally especially if some of these big countries are allowed to do business with the iranians. >> what do you think of this from the market's perspective? >> i think the structural issue that the vast majority of traders don't understand is shale changed the elasticity of supply in oil maybe forever. it used to take three or four years to bring wells online. you bring them online in three weeks now. so this 11 million out of the 95

million per day can be turned on in a way that wasn't before for the markets. >> let's listen in now to this press conference >> they'll both have some opening remarks and then hopefully time for one or two questions afterwards secretary pompeo >> good morning, everyone. it's great to be here at the foreign press center it's great to see you all. in may of this year after president trump withdrew from the nuclear deal, the trump administration announced a new strategy with iran's leadership. at the center of this effort and there are multiple lines of effort, but at the center of it is an unprecedented campaign of economic pressure. our objective is to starve the iranian regime of the funds it uses to fund violent activity throughout the middle east and around the world our ultimate goal is to encourage them to abandon their revolutionary course look at what happened last week.

denmark announced it uncovered an iranian assassination plot on its own soil the iranian regime has a choice. it can do 180degree turn from its course of action and act like a normal country or it can see its economy crumble. we hope a new agreement with iran is possible, but until iran makes changes in the 12 ways i listed in may, we will be relentless in exerting pressure on the regime. as a reflection of that resolve, today we are imposing all sanctions that were previously lifted during the nuclear deal this includes sanctions on the shipbuilding industries. since the trump administration came into office, we've done 19 rounds of sanctions targeting 168 iranian entities this will accelerate the decline since our implementation in may. since that time, since back in may, over 100 companies have withdrawn from iran or canceled

plans to do business there it should be noted that if a company evades our sanctions regime and secretly continues commerce in the islamic republic, the united states will levy severe, swift penalties on it including potential sanctions. i promise you that doing business with iran in defiance of sanctions will be a much more painful business decision than pulling out of iran and it being connected to iran entirely more than 20 importing nations have zeroed out their imports of crude oil already. taking more than 1 million barrels of crude per day off the market the regime to date since may has lost over $2.5 billion in oil revenue. we have decided to issue temporary allotments to a handful of countries responding to the specific circumstances and to ensure a well supplied oil market the u.s. will be granting these exemptions to china, india, italy, greece, japan, south

korea, taiwan, and turkey. each of those countries has already demonstrated reduction of iranian crude over the past six months and indeed two of those eight have already completely ended imports of iranian crude and will not resume as long as the sanctions remain in place. we continue negotiations to get all of the nations to zero additionally today, 100% of the revenue around the sale of oil will be in foreign accounts. iran can only use this money for bilateral non-sanctioned goods speaking of iran's nuclear program, we have decided to grant narrow and temporary waivers to permit the continuation of three non-proliferation projects currently underway allowing these activities to continue for the time being will improve ongoing oversight of iran's civil nuclear program and make these facilities less susceptible to illicit illegal

nuclear uses rest assured, iran will never come close to getting a nuclear weapon on president trump's watch. i will now turn it over to secretary mnuchin. >> thank you today the united states is executing on the final actions to withdraw on the obama administration's fatally flawed iran deal. this morning we will fully impose sanctions on the regime this is part of a precedented campaign the united states is waging against the world's largest state sponsor of terror. today we sanctioned more than 700 individuals, entities, aircraft, and vessels as part of treasuries largest ever single-day action targeting iran over 300 of those are new targets. we are enlisting hundreds of

individuals and entities that were previously sanctioned, granted sanction relief under the jcpoi. these powerful sanctions directly target iran's banking, energy, and shipping sectors the iranian regime has funneled billions of dollars for the islamic revolutionary guard force through the banking sector today's designation includes 50 iranian banks and their foreign and domestic subsidiaries in connection with iran's regime support for international terrorism, proliferation of mass destruction, or their means of delivery and human rights abuses our actions include the identification of more than 400 targets including over 200 persons and vessels in iran's shipping and energy sector, iran air the national airline of iran, and more than 65 aircraft. the placement of nearly 250 persons in associate block properties on the specially

designated nationals list, the atomic energy organization of iran over the last five months treasury has implemented some of the most impactful sanctions ever seen. more than 900 iran related targets have been sanctioned in this administration in less than two years. marking the highest-ever level of u.s. economic pressure on iran we are making it abundantly clear that they will face mounting isolation until they fundamentally change their destabilizing behavior iran's leaders must cease support for terrorism and end destructional regional activities immediately they must stop ballistic missiles we are watching the iranian regime with laser focus. if they try to evade our sanctions, we will take action to disrupt their activity time and time again

the maximum pressure exerted by the united states is only going to mount from here companies around the world need to know we will be strictly enforcing our sanctions. thank you. >> that will allow time for a few questions. let's go to skye news. cordelia lynch >> hello this is a question for secretary pompeo the president invoked "game of thrones" when he was discussing the sanctions. do you think that was appropriate? >> this administrationhas been consistent from president trump's campaign to the first day he was inaugurated about our intention. we understand that islamic republic presents a threat to the united states and we're determined to stop it. much has been made about this "game of thrones." he responded and i haven't seen any of you comment on that this is a man who has american blood on his hands

he's killed american soldiers. and that's not funny and the actions that the islamic republic are taking are not about little silly things that people get wrapped up here in washington, d.c. but about very serious matters that impact all of europe, all the middle east and the world, and our young men and women in harm's way today. >> thank you, sir. next question. all right. we're going to move on to fa beatrice masias. >> hi. thank you. i was wondering what would you say to the european countries that were expecting to be in this list of countries that are not going to suffer the sanctions? and what kind of relation have you have with them what are the conversations regarding this topic thank you. >> you want to talk about it on the financial side, steven >> i don't think we've ever said that it relates to the european countries that they'll be exempt i think quite the contrary

we said we expect them to honor the sanctions. having said that, there are certain transactions they can continue to do whether they're humanitarian transactions or specific trade in the restricted accounts let me emphasize assics last we week, this is not about hurting the people of iran but we will not let money be diverted to humanitarian purposes and then put for terrorist activities >> just to follow up with respect to the relationship, we've been very candid with all the european countries there are more than three. we should note many of them are fully supportive of what it is that we are undertaking. they have taken a different approach with respect to the jcpoa. but it is also something that the whole world should know. european businesses have already made their decisions they've decided not to do business with the islamic republic of iran and so we're very confident that the sanctions regime that we're putting in place will be

effective. >> james base. >> you talk about the destabilizing behavior of iran in the region. how does that differ from the behavior of saudi arabia >> so let me just go through the list underwriting lebanese hezbollah with the threat to the united states, underwriting the houthis in yemen causing an enormous problem to take place. the underwriting of the funding shia militias. their efforts in syria the list goes on the difference in behavior between those two countries is remarkable since we've taken office, the kingdom of saudi arabia has been very supportive of our efforts on counterterrorism. they've assisted us. i know secretary mnuchin has worked with them on a couple of projects as well it is completely clear the islamic republic of iran is the

destabilizing force in the middle east today. you want to add to that? >> no, i think it's well said. >> last question >> thank you gentlemen, thanks for coming over to brief us for secretary pompeo, sir, you managed that three waivers have been issued for the civilian nuclear energy project would you clarify what those are. and the nuclear power plant, is it the one under the waiver? >> that's a great question it's a pretty complicated area it is one of the three but if i may, we will get out a full fact sheet on that here in the next hour or so that you will be able to see. what we authorized is very narrow, very time limited as well but important nonetheless that these nonproliferation projects are not things that are taking place without some ability to see what's going on. and we'll give the full details of the scope of those waivers.

>> we have time for -- this is the last one let's go right to the front right here, please >> mr. secretary, iran has very powerful hands in iraq are you not concerned that with these sanctions that iran might increase the pressure on some of your allies in iraq and in that case what can you do to reassure those allies >> so it's a very reasonable question here's the facts since the united states entered the jcpoa in 2015, iran has turned up the heat on those very entities to which you're referring. so we have history we have data set we have a historical basis on which to say that we know that the jcpoa didn't put pressure o them throughout the region we are very hopeful that the set of efforts we're undertaking, we've focused here on the financial and economic but the full range of efforts

we're taking to push back will have the intended effect on reducing iran's capacity to be destabilizing and present risk to the middle east, to europe, and the world. >> with that, that concludes this morning's briefing. thank you very much. >> we have been listening to the secretary of state mike pompeo on treasury secretary steve mnuchin detailing the reimposed sanctions on iran. couple of quick points, eamon. one, they only took questions from the foreign press that was being held in part for the foreign press. just to put a point on that. but the bigger question was around the banks we were trying to understand what they were suggesting in terms of companies and countries that deal with certain banks, how they actually won't be able to deal with our banks either. >> right i mean, that's the essence of sanctions by the united states and that's why they're so powerful around the world. and countries tend to follow american sanctions because what

the united states treasury does when it designates foreign entities is saying they and people that do business with them can't have access to the united states financial infrastructure and because all global finance goes through the united states at some point along the chain, most countries and companies decide, you know what? we're going to follow these sanctions because we can't untangle ourselves from the u.s. financial infrastructure globally and so that's the real power it's the strength of america's financial muscle around the world that gives these sanctions some real teeth. and so what you're seeing here first of all is some teeth being pulled, right? so there are some exemptions here for major countries to continue to do business in terms of oil with iran china number one on the list read by secretary pompeo but also india, italy, greece, japan, south korea, taiwan, and turkey granted those exemptions to continue to do some kind of oil business with iran a lot of those eu countries not included on that list. and they were asked about that

we saw the treasury secretary, secretary mnuchin highlight the fact there are more than 700 individual entitieentities, air and vessels along with individuals that are designated here and that means that anybody doing business with them is going to have a very tough time conducting transactions in the u.s. financial system. 300 of those designations mnuchin said are new targets and then, of course, the controversy over the president's "game of thrones" tweets was the first question asked a reporter asked if that "game of thrones" inspired image was appropriate by the president on twitter. we saw the iranian side responding to it with their own "game of thrones" image over the weekend. there you see the one tweeted out by the president of the united states on friday. then pompeo didn't address it. he said this is the kind of thing people in washington, d.c., get all wrapped up in. not mentioning it was the president of the united states who put that out on twitter in

the first place. so a lot there to chew over, guys >> eamon, thank you very much. eamon javers let's get reaction to what we just heard today barry knapp and steve liesman here mike pompeo saying i promise po saying i promise doing business in iran is a much more painful decision kind of sending a message and trying to get that across. >> what we know is the obama administration did this deal in part because it saw the coalition fallen into parapart. >> this is the whole bank sanctions thing is they are not - this is not a coalition of the willing in the sense. >> it is not going to work this time >> we'll see one way to think about how this is working is we'll take a look at the price of oil which is

generally coming down. >> you can argue it was building up for a long time in anticipation of those. it came off, i can't argue with that you know money and oil are both fundable what china may get in access of iran can be supplying some place else or the other way around it does not seem like the mark market as if there is going to be a massive deficit of iranian oil in the market. >> is it that? we are able to turn it a lot faster and saudi arabia because of the political pressure they are facing >> shell energy absolutely, the two biggest losers were iran and russia this whole and opec as well because the whole difference between shell and conventional

wells is you spend all these money and takes three years to drill a well the market is much responsive. overtime you would expect much lower volatility and oil prices and back to the 50s when we had plenty of oil. that's a big change in the whole inflation dynamic. >> yeah, i never understood that opec is under pending the u.s. that's what they are doing worth pointing out, this is a prosaudi and proisrael policy move look, is this a way to go to a peaceful middle east everyon fra nuclear standpoint i guess the answer we'll see the other administration thought it was important to concentrate on the nuclear side. this administration striving for something of a balance in terms

of trying to do the nuclear side and the terrorism side as well >> steve liesman thank you. >> let's get down to the new york stock exchange with jim cramer we have not talked about it. apple is lower again it is like 204 bid now how does that find support and when does it find support in your view? i think the buy back will start and they'll buy every share. when i spoke to the cfo last week, they're anxious to buy back a lot of stocks this narrative and they're pushing back the orders. that story seems well timed so to speak i would let apple come in and let all the sellers go i would not sell to the buy back people are going to say it is over for apple because that's what they say.

i expect a couple of downgrades. people can't believe stocks are going down and have no faith wait until the next round of people thr people >> you are pretty good on this, too. is there anything to be -- a lot of people were bullish of the report last week and i asked you is there anything to be concerned about and you said a lot. >> yes, everybody got bullish. let them sell into the buy back. they're trying to get the story to be consumer product they really did botch how they did that how they put it does not matter of how they're doing i don't care of the push back of this phone service keeps building and 97% of customers satisfaction. great consumer product company i am not a seller. people like to panic

amazon is 1400 two weeks ago >> in parting, i like the saints now, you know what i mean? >> oh my god, thomas, is the best camera and they're going to be home all the way. you could not run against gurley and stop gurley? >> people think when i start liking a team it is over >> when does giovanni, coming back >> i stay with my team, good or bad. >> penn state. >> drew brees is just -- really good >> all right drew brees, my hero. thanks jim, we'll see you in a couple of minutes. >> really showing up there anyway, tomorrow -- what

anthony scarramucci on the midterms, he jns uois live that'll be fun, we'll be right back

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you saw the scenario, split house and both houses of congress blue and both of them red. there are different outcomes maybe things have already been said in motion so it does not matter quite as much as it would of >> i think the set is favorable for the markets through the end of the year. the idea of the democrats taking back the house is definitely in the market if that's the expected outcome, that's not what this correction is all about this correction was another unconventional money policy and reflection boj changing theirs. that's all behind us just like 10 or 11 or 12 or 14 we are through that. unless you get the worse case snacenario from the market

perspective would be a democratic sweep the markets are going to rally through the end of the year. it will be out of the way and move onto god knows what in this news cycle we'll move on. >> barry, thanks >> good to see you good to have you in today. >> make sure you join us tomorrow, "squawk on the street" begins right now. good monday morning, welcome to "squawk on the street," i am carl quintanilla with david faber. futures is in a tight range. midterm elections and fed meetings and chinese president xi speaks on trade we'll get to all of that europe is mixed. invest invest sediment is down there. our road map begins with china talkin