♪ it's 5:00 a.m. at cnbc, here is your top five at 5 on monday. seeing red futures pointing to a lower open after a wild ride for stocks and kick off the fourth quarter. no deal ahead. maybe not. why robert lighthizer and peter navarro may be preparing for the worst as u.s./china trade talks resume in d.c. this week speaking of no progress, trouble in detroit the gm worker strike now entering its fourth week and there's no end in sight. tension also rising in d.c. as yet another whistle blower stepping forward with new information over that now infamous ukraine phone call. and continued crisis in hong kong the city police once again descending on protesters

they push back against the newly imposed mask ban it is monday, october 7th, and "worldwide exchange" begins right now. well, good morning, good afternoon or good evening are and welcome from wherever in the world you may be watching. i'm brian sullivan happy monday thanks for joining us. here is how your money, markets and global markets are looking dow futures are indicating that the markets will drop 136 points right now at the open. remember, what we have seen at 5:00 a.m. is that this trend tends to get magnified unless w see big data points that change it around. not saying things will get worse but we have seen this tend to accelerate as the traders come into their desks in new york now in bond, no big economic

data out today later on this week, yes. and no earnings out today but of course the big earning season hard to believe already kicks off next week. right around the world you had china and hong kong closed for a national holiday the japanese market down fractionally .16 of 1% and south korean economy rose and australian as well in europe, not a major trend that we are seeing anywhere overseas yeah, there's a lot of red but the numbers there are quite small. so, there's your set up. let's get to the news and begin, where else, with trade and the likely reason why futures are pointing to a lower open chinese officials are report lid growing hesitant to pursue a broad trade deal with the united states as talks are set to resume this week the chinese vice premier who will lead negotiations for his country is telling dignitaries his offer to the united states will apparently not include commitments on reforming china's

industrial policy or government subsidies. remember, these are among the trump administrations main demands in the trade talks now, if that report is accurate, this is viewed as a big setback and the markets, as you noticed, are reflecting it. trade talks are not the only thing on this calendar this week expect new comments from fed chairman jay powell and minutes from the fed meeting joining me to talk about that direction managing director dave maza i'll join you on set in just one minute overall, what kinds of moves have you seeing your clients make right now at direction in. >> it's really interesting we know headlines you just went through trade talks. we're beginning to see a lot of interesting moves setting up for the 2020 election. in particular in area like health care and bio tech as we know is getting a lot of attention as elizabeth warren is gaining in the polls but we're seeing traders engage on both sides.

both our leverage bully tf and bearry tf. >> what are they doing in particular buying bio tech >> they're moving away from bigger health names. a lot of potential impact for -- >> getting out of big fapharma >> correct bio tech is riskier area in the health care space. it's a bit insulated from some of the areas like you see with big pharma we're seeing again activity there, moving away from the bigger space and moving into some of the smaller bio tech names. >> they're placing bets that bio tech in the near term will go up. >> 2020 election is sometime away there's a lot of room to run but what this is telling me is that even with all the headlines that we see, some of the

negative economic data last week the concerns of recession, people are starting to see through that and seeing especially if they're in the trading community, beginning to start placing some bets, placing some areas that might actually do well regardless of the outcome of what trade talks might be. >> when you look at the macro picture, the bigger etfs the more broad market etfs are people becoming more negative on the overall market or staying long and strong? >> the marketplace feels long and strong but it's more been climbing a wall of worry we've been this fat trading range from august. we expect that to continue to be the case so we have seen investors be more defensive and begin to pick their spots whether that's an industry like bio tech or in other cases more defensive type companies. >> we have been really in a trading range for the last 18 months if you obviously december skewed everything. >> yes. >> december didn't exist, wouldn't that be nice, if december didn't exist, the markets would be solidly higher. we're actually basically with the s&p and the nasdaq

effectively where we were a year, year and a half ago. >> that's exactly right. so the trend that we have been in, again f you exclude the kind of draw down we saw in q4 has been almost flat slightly positive and there's been big divergences of areas that have done well look at the year over year performances utility is the best performing sector you never think that you continue to think it's tech and the areas get a lot of attention. that tells you something even though markets have been going up and going up pretty well, it's been led by the bond proxy, the most defensive area so investors can still have opportunities to actually. >> hey, dave, utilities would outperform netflix, you have to lay off the hooch because you have been drinking but guess, that person is right. >> exactly right. >> have a great week. >> thank you. your other big story on monday, deterioration of the contract talks in detroit.

general motors talks now entering its fourth week the two sides appear to be farther apart than ever before contessa brewer more on this story. >> day 22 of this strike uaw vice president sent a letter to members yesterday informing them the union presented a proposal to gm this weekend. gm reverted back to an offer that had already been rejected it says the offer did not address a host of items such as product commitments for u.s. factories and job security he says the uaw could not be more disappointed with gm and after making some progress on important issues the company has shown an unwillingness to pay its union workers fairly in a statement, gm says it continues to negotiate in good faith with the uaw and is committed to talking around the clock to resolve the contract dispute. the negotiated press reports the uaw has voiced concerns about gm

increasing production in mexico where it builds two suvs and pickup trucks and small cars 20% are made in mexico gm u.s. factories have been shut down since the union walked out and the company is losing more than $80 million a day and workers are getting $250 a week in strike pay a fifth of what they normally earn it really boils down to this long-term job security about where jobs are, brian. the company says it would invest $7 billion in plants in the u.s. but still wants flexibility to move plants around where they see fit. >> the workers may not be unionize ord feel the protections that they once had certainly in michigan and ohio and those places. >> yeah. you're right, brian. >> contessa, thank you very much. when we come back on this monday morning, tensions rising again over the weekend in hong

kong protesters pushing back against emergency measures against wearing masks. later, a lesson in leadership how tim cook is saving apple from the trade war and using his personal ties to the white house to do it but first, that trade war hitting america's heartland right where it hurts in the heartland is where we find our frank holland early this monday morning. frank. >> reporter: good morning, brian. we're in the quad cities area where normally farmers would have spent the last few weeks working their fields and probably buying some new equipment. instead they're talking about weather and the on going trade war. we'll explain how that's ke octing john deere and other marsf farm machinery on "worldwide exchange. so servicenow put your workflows in the cloud, huh? mm-hm.

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welcome back and good morning. we talk about stocks on cnbc, it's not just wall street feeling the pinch of the on going u.s./china trade war farmer and companies in america's heartland getting the squeeze. and by the way, some rough weather not helping things either frank holland joining us from east moline, illinois. good morning, frank. >> reporter: good morning, brian. farm machinery shipments total 22 billion, bill number, but that's an 18% decline from 2014 and major manufacturers like the iconic john deere are feeling the impact deere says it's agriculture division is down 6% and announced layoffs here at the

factory where it makes farm equipment. cat pillar saying those sales are down for the first half of the year now wet weather here in the midwest, flooding and rain a big factor also the on going trade war. we've been talking to farmers here in the quad cities like phil four, a six generation farmer whose cash crop is soy beans and he owns 20 pieces of deere equipment, he says he's holding back on buying or financing any new equipment this season >> i'm just trying to take a wait and see attitude, maintain the old equipment and then if times improve we'll roll in to some newer tractors or combines. >> we've backed off on any capital purchases of anything very high dollar we'll postpone anything in the future for probably a full year, probably two years out and just maintain the line that we now have

>> reporter: and brian, the willingness of farmers to make big capital investments like buying tractors and combines, well that's plummeted over the last three months. according to the agricultural barometer, coming up on thursday, we'll get a better reading of just how bad the situation is for these farm machine makers the numbers will come out coincidentally on thursday the same day that u.s./china trade talks resume back over to you. >> frank, are there any other factors that might make farmers feel a little more confident about buying new equipment right now? >> reporter: yeah, brian absolutely we talked to these farmers they say a more optimistic hog forecast over in china the hogs over in china the herd is down about 50% this year because of african swine fever in china, they buy a lot of soy beans and a lot of corn to use as hog feed. that situation can turn around, these farmers will buy a lot better about buying the tractors

and combines. >> it's pork that saves the day once again frank holland in east moline, illinois thanks for being there see you soon. >> thank you, brian. still on deck, another shoe dropping in the impeachment inquiry into president trump and the now infamous ukraine phone call. later, no ice, no glass, no bitters, no problem. the latest high end whiskey craze that apparently is sweeping somewhere we'll tell you about it. it's a little weird. "worldwide exchange" returns right after this whether your beauty routine is 3 steps...

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♪ welcome back 5:17 here on the east coast in the morning. 5:17 p.m. there in hong kong as you can see dusk beginning to set in it certainly looks peaceful from a distance but over the weekend, inside hong kong, there was no sign of peace. protesters defying government bans about wearing masks over the weekend. pro-democracy demonstrators turned out by the tens of thousands. many hid their faces and they were met with tear gas there were no obvious signs of violence against police, but many protesters ignored the gas, dousing them with water or tossing them right back at the police hong kong leaders had invoked colonial era emergency powers to threaten protesters with up to a year in prison if they hid their faces. police say they were participating in unlawful assemblies and warned protesters to leave immediately or face what they call dispersal

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welcome back and good morning. good morning, washington, d.c. sun not up yet. well, a second-whistle-blower is now coming forward with new details on president trump's dealings with ukraine this time with apparent first-hand knowledge of the allegations. nbc's tracie potts joining us now with more from washington. good morning, tracie. >> brian, good morning that could be the key here in fact, it could be a game changer in this impeachment inquiry if, in fact, the second person has his or her own knowledge of what was said on that phone call between president trump and ukraine's leader >> reporter: an attorney for the original whistle-blower now claims to represent a second person with first-hand knowledge of the phone call where president trump allegedly pressured ukraine to investigate joe biden. >> why should i care at all what his opinion or judgment of this transcript is. you and i can read it. >> reporter: the white house says it doesn't matter how many people decide to call themselves whistle-blowers, it doesn't change the fact that he, president trump, has done

nothing wrong. the president tweets this new whistle-blower also has second-hand information. democrats insist there's evidence to support the original complaint. >> the whistle-blower complaint has been corroborated by information in the public domain every step of the way. this is as serious as it gets. >> reporter: four current around former state department officials will tell their stories to congress including the european union ambassador implicated in text messages released last week. >> what i certainly hope to hear is how he can explain his behavior in pressing the new ukrainian president to do something of such a sort of nature. >> reporter: his deposition is set for tuesday. >> meantime, we're continuing to follow what's happening with this second whistle-blower, brian. turns out the second whistle-blower is not expected to file a separate complaint. >> wrapped into that one complaint i would imagine. tracie potts in washington, d.c.

tracie, thank you very much. so let's get a check on this morning's other top headlines outside of the world of money and business and get you set up for the news day nbc's francis rivera with those. >> good morning. we start with breaking news overnight. police arrested one of the two suspects that left four dead in the kansas city bar. they first responded to a fight at tequila kc and mass shooting just after last call sunday morning. four people were killed and five others were wounded. one suspect is in custody and police are still searching for the second. in a major policy shift, turkey is moving forward with a military operation in syria. turkish military convoys have been bringing troops and equipment inside the country's northern region. the white house says the u.s. will not be involved more than 1,000 u.s. troops are deployed in northeastern syria and work with kurdish troops against isis it's now up to turkey to figure out what to do with isis fighters that have been captured

in the area. president trump spoke to the turkish president about establishing a safe zone east of the ewe frats river. celebrities including oprah winfrey, bhoopky goldberg and many more celebrated the grand opening of tyler perry's new production studio in atlanta brian, for a monday morning, those are your headlines. >> everybody is moving south and west except for us apparently francis. thank you very much. coming up, an upgrade for uber just crossing the desk. we'll tell you who and by how much coming up. plus, how tim cook won the ear and the support of one mr. president trump. those stories and more on "worldwide exchange. make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty,

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but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. red arrows futures pointing to another big drop to begin your week. dow futures off triple digits. it's fear versus greed and battle playing out amid ipo investors right now, and the winner could have a big impact on the broader markets plus, who doesn't love breakfast for breakfast? but what about break it's for dinner mcdonald's investors have been loving it. we'll give you the answers your rbi on this monday, october 7th and you're watching "worldwide exchange" on cnbc ♪

welcome back and good morning. thanks for being with us here on cnbc i'm brian sullivan. hope you had a great weekend not looking like a great start to the week for the gloenl markets. in fact, dow futures are down 146 points right now remember we told you at the top of the 5 if you missed it, it was this, which is what we have seen the last couple months is that whatever the futures trend is during this program, it tends to accelerate in that direction absent any big change in data or market-moving headline that's exactly what we saw futures down 100 points 30 minutes ago and now down to 145 points right now of course after what was a wild week with big early drops last week but we came back and, in fact, you wouldn't know it necessarily given what was happening at the beginning of the week but the nasdaq and nasdaq 100 actually finished last week higher bad start to the week right now this week. at least indicated no big economic data or earnings out today. ramps up at the end of the week and also earning season really kicking off next week.

ten-year bonds at 1.52%. the yields have come down in the last couple days in asia, we saw the chinese and hong kong markets both closed for national holidays. japan did trade and traded down saw the south korean market rise fractionally and in europe a similar story. a lot of red on the screen but it's not big moves either way. you can see the major markets down but we're talking 1 or 2 tenths of 1% citi group upgrading uber. they're taking it to a buy from a neutral. they keep their same target $45. the analysts sayover hanging from the ipo will likely persist. they think the third quarter earnings may, quote, refocus the story particularly on ride fundamentals the analyst at citi also believes revenue growth will accelerate and the next earnings will make it more favorable on uber stock $45 price target is 50% higher than uber shares are right now uber getting a little bump on

the upgrade up 2.5% but it literally crossed just a couple minutes ago. speaking of ipos, as stock futures point to another rocky start for the overall markets, some are looking to one area of the market possibly to blame for stocks performance as of late. that is the ipo market according to data shares of technology startups and other companies that went public in the u.s. this year are trading roughly 5% above their offering price on average yes, that's positive but it is far short of the s&p 500s nearly 18% jump let's take a look now at some of the worst and most notable debuts of the year, smile direct down 34% uber we mentioned it, 33% down from its ipo lyft, peleton, slack and the real real looks pretty good being down only 1% from its ipo price. joining us now to talk more about this is corporate finance and deals editor at the financial times. and he joins us this morning

great piece. so for our viewers who couldn't read it and shame on them but they couldn't read it, what is the overall take away from the ipo market and maybe the macro market in general? >> well, i think what we're seeing is something that is quite strange, right, these companies that are ipoing are supposed to be the most interesting, hottest companies in global economy and when it comes to market is supposed to be this opportunity for investors of all shapes and sizes to get their hands on them what you're seeing are the public markets supposed to accept this product brought to them by investment banks with open arms fundamentally reject them and the stuff you showed on the screen just now doesn't capture the worst one of all which was wework, wasn't just a rejection of the ipo they had to pull, it was the concept evaluation and everything that went along with it what you're seeing is the ones you showed on the screen, uber, lyft, peleton, slack, the most exciting new companies in our economy. and at the same time, you know,

they're not performing anywhere near what their shareholders would have wanted them to do when they listed what's happened is basically the private markets have sucked out all of the use there are in these companies and the public markets evaluations that investors are fundamentally rejecting the distortion between the push and pull is really playing out in the last few weeks and how that ties into the macro economy, the s&p 500 and some of these other normal companies are performing totally fine with respect to share prices so you're seeing the kind of exciting companies having been overhyped and being rejected and some of the more sort of run of the mill companies we're all familiar with doing much better. >> is there a necessarily a reason why you guys have dug -- when you dig into this arash, is there a reason why these ipos have done so poorly, just that investors don't like the stock or the viewpoint that the private markets extracted most of the gains beforehand or the

bankers screwed up in initially pricing it >> yeah. i mean, if you want to look at the ipo market as a power struggle between buy side and sell side, the sell side had the upper hand they had the companies they kept private for very long periods of time which they had time to build private investors bid up through various rounds six months ago every piece would say the private markets are the hottest place in the investing world. now in the public markets are where companies are pawned off on to retail investors the public market saying this thing is illogical, not something we can purchase at this price and the investment banks talk about valuing this in their pitches between 50 and $100 billion and valuation of $47 billion of soft bank cut by at least a third if not more and that is something we really haven't seen in the last decade in terms of a rejection of that size that brought it down to earth. i think that's had a knock-on effect across the board.

several ipos were pulled including endeavor which has ufc, uber continue to struggle what's happened is all these companies sold on growth as the value in it are now being measured for profit. that's exactly what happens in ipo markets. this growth story stuff is all hype and i need to see profits that's the main, main thing happening here. >> basically profits are back, they matter. >> profits matter. >> and we look out at the ipo calendar going forward, does it look any better, arash >> right now i would say that -- i'm just back from new york, the sentiment is very negative around the market. everyone is talk about we work what happens is banks do to rebuild confidence in the market is they have to give up. so if you're the next batch of companies coming out, the banks will advise you to go out lower than you hoped valuations hooch they have to give something up now to the buy side.

that push and pull has to re-adjust and often takes a little bit of time the next few companies out in the coming weeks will have a much lower valuation when promised. >> by the way, ara shrks, next time you fly across the ocean, let us know, we'll have you on set. don't be a stranger. >> thanks, brian. an interesting investigation in "the wall street journal" over the weekend on a rather unlikely friendship. the headline, how tim cook won donald trump's ear now according to sources close to "the wall street journal" with the threat of tariffs looming and apple standing to lose billions of dollars, tim cook reached out to one of his most important white house contacts, jared kushner. joining us now to talk more about this and maybe the lesson it provides in leadership is yale school of management jeffrey sonnen feld and one of our favorite guests. jeff, great to see you early on this monday morning. what did mr. war eagle, tim

cook, get right about his dealings with the white house? >> thanks. thank you so much for the favorite guest or one of the favorite guest celebrations. you just made my week. something that tim cook does is he understands that president trump you don't reach him by hectoring him with email tweet storms or responding to them or certainly with a lot of public grand standing but also surprising despite the ledges of k street lobbyists he doesn't respond to that well people talk about who from industry is represented in the trump administration on issues they're concerned about independence when it comes to apple, he doesn't rely on third parties to speak to them, he goes directly. that plays really well to president trump. it's a personal diplomacy, one on one, mono e mon moe, that's what president trump responds to apple, in fact, pays far less for lobbying that many of its competitors do. >> what a lesson as opposed to hiring these k

street firms, not that there's anything wrong with the lobbying profession, tim cook doing a lot more subtly. one instance the journal points out that cook and trump had some kind of a conversation he convinced president to maybe roll back planned tariffs on the iphones and a day or two later apple just happened to put out a press release saying wow, look at the growth we're seeing didn't take more than a dinner and a press release to maybe move the markets >> no. something that people don't understand about president trump and obviously with a lot of the negative swirl we see right now of some bad choices from the white house, driving himself into a corner, that it's hard to believe that president trump actually when he doesn't feel humiliated is open to honest debate he just doesn't want to be humiliated or embarrassed. when cook very early on, tim cook, met with him soon after election, i ran into soefrl ceos the day of that meeting larry page of google was another,

several met very successfully and had a great discussion of course, steve schwarzman of blackstone, and a few others had a good rapport by just explaining issues quietly to him. the one on ones work especially well, but it's recent not just going back to 2016 or we saw a lot of business community being divided up as trump likes to play one off against each other in the spring of 2017, cook stayed out of that talked individually about issues and recently this past august with trade sanctions arising, higher tariffs he managed to carve out again about the iphone it's remarkable how he has managed to get a special relationship jared kushner helped a lot, too. he's gone directly to kushner. this is not with any money being exchanged but with forceful arguments about trade. i think china is probably the third largest market to sell into apple

and sell for apple i think the u.s. is probably around 40 some percent, 42%, europe 24, 25 and china is around 20% that's very important apple revenues. >> how has cook been able to walk that line hooch you have seen it, the journal points it out, we had a ceo come out and tweet out i think president trump is not terrible just something as innocuous as that in this environment cancel that company would be trending on twitter immediately if you associate with the white house, everybody comes out and says down with that product or service. how has tim cook been able to walk that line where people aren't saying, oh, shame on tim cook and throw away your iphone the google pixel. >> that's a really good point hooch more than 97% of political contributions coming from apple employees have been going to democrats. for that matter, most of the u.s. business community, 70% republican for major businesses were not supportive of president trump in 2016 and again now in

our surveys most are not voting for his re-election. nonetheless, and tim cook doesn't get political, but he also doesn't come off as haughty. whether or not either side of the aisle finds themselves with tim cook, he talks rationally and takes independent issues on a couple issues such as on immigration policy early on was one and climate issues climate concerns where he has put out messages to employees but would go to the white house first, often jared kushner and give them a heads up warning and wouldn't make it personal to explain why they take a different point of view. that's been very effective the advanced warning plus he has celebrated the administration sometimes as that apple benefitted from things that probably apple was already doing, like $350 million advanced manufacturing fund for investing in the u.s the mac pro has been made in texas but it's being migrated to china but he's been managing to

make commitments on how we're investing in workers here in the u.s. in a way that doesn't seem like it's anti-american or an affront. some of that helped. the tax policy said that really helped put another quarter billion dollars into the u.s. already being invested here, he gave trump credit for it. >> the bottom line is the southern gentleman, the alabama guy figured it out. >> he finds a way to thread that needle you know that old expression you don't spit in the wind, you don't step on superman's cape and don't get in a tweet storm with president trump unless you have a hard rock to throw. >> there you go. tim cook has done it very gently and maybe a lesson for other ceos and just a lesson for the internet jeff sonnen feld, thank you very much coming up, fined for wearing an apple watch what would tim cook say? we'll tell you why one nfl star

is being forced to pay up this morning. later, one little move has investors licking their chops over the past year it's rbi, it's random, it's interesting and it sounds pretty good right now it's delicious we're back rhtft ts.ig aerhi i'm 52. but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium.

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talk to your advisor or consultant but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. ♪ welcome back, good morning 5:45 now on the east coast dow futures down 144 points, go back to bed. crazy clowns, big ben and the most bizarre thing in cocktails you probably heard in a long time are topping your trending stories this morning thankfully they're not just one combined story that would be super weird. contessa brewer is here with more. >> you never know, brian. >> the joker's box office debut was no laughing matter the warner brother movie shattered records during its opening weekend. the film depicts a darker, grittier version of the classic

batman villain and raked in $93.5 million in the u.s. alone this weekend that makes "joker" the highest. >> it's ukraine. not the ukraine. it's not the joker it's "joker". >> it's one of the biggest openings for an r-rated film ever so far it made $234 million worldwide this in spite or hooch of the warnings that came out by law enforcement saying that they thought this movie would encourage mass violence. >> yeah. you had the aurora shooting. there's a thing there. >> well, and it's a very violent movie. >> clearly did not affect the opening. >> this is the story of the day if you ask me. okay, you know how the kids were doing the tide pods consuming them and had to do the warnings. >> don't do that don't eat laundry. >> imagine the beautiful tide pod instead of detergent it has

booze. that's the product scottish whiskey maker wants to make. whiskey capsules are roughly the size and shape of tide pods. and to consume them, you just pop them in your mouth and then feel the gush of booze swirling through your teeth and tongue. each capsule comes packed with roughly an ounce of whiskey cocktail and come in three flavors, citrus, wood and spice. is that one finger of whiskey. >> how many pods did you have there, clancy? can you see a situation where people just start popping a lot of pods. >> hey. >> so i'm told that these edibles, edible pot, right. >> people heat a bunch it's not doing anything. next thing they're under sucking their thumb like paranoid. can you see the same thing happening, you don't realize how much you're taking in. >> can you imagine the places

you can sneak these into. >> what's that down your leg that's whiskey just whiskey. >> apple watches can -- >> just whiskey. i swear it's whiskey. >> apple watches can either make your life easier or result in massive fines. the nfl hit steelers quarterback ben roethlisberger with a $5,000 fine hooch here he is, poor guy, recovering from an injury back in the game kind of on the sidelines, but he was wearing an apple watch. and the league has a rule that bars players from wearing any electric device that can transmit messages. roethlisberger says he didn't know he was violating a rule he wasn't given advanced notice. and also he wasn't even playing in the game. he's been sidelined since he had elbow surgery. he is currently appealing the fine my question is, don't these refs have something better to do? don't they have something on the field of play to watch >> i don't think that's the refs doing the fines.

i think it's nfl -- some nfl guy with a camera. we got an apple watch. remember they use micro soft surface tablets. they have a huge sponsorship with the nfl. >> there in lies -- >> microsoft search. >> so big ben, miami university, not university of miami, finest player to come out of the red hawks makes 22 million this year so the 5 grand -- >> it's the principle of the matter. >> the 5 grand is just a whiskey pod in his pocket basically. >> got it. >> contessa, thank you. on deck, the billionaire soft bank ceo telling a japanese magazine he is embarrassed and flustered. we'll tell you why next. later today, changing the world on commissions and investing, do not miss charles schwab on the halftime report, we mean the actual guy, charles schwab, the man, on "half-time." we're back aerhift ts.

good morning welcome back dow futures down 144 points right now. time for your executive recap. let's do this. the uaw does the union labor talks with general motors have taken a turn for the worse union's vice president calls the latest proposal inadequate and in response gm says it's committed to continuing discussions around the clock. hsbc reported cutting up to 10,000 jobs for more than 4% of its global work force. financial times says the bank's interim ceo is looking to slash costs around the countdown. >> softbank crow says he is embarrassed and flustered by his recent track record. when i look at the growth of u.s. and chinese companies, i

feel strongly it is not good enough softbank is, of course the largest outside investor in wework last week reuters reported the japanese firm is struggling to attract investment to a giant second fund. now back to the broader markets. futures are pointing to losses again at the open. all this as investors gear up for earnings season about to officially kick off and check out this number, consensus calls for a 4% drop in third quarter profits. if true, that would mark the biggest yearly decline in profits in three years analysts have recently lowered their investments for all 11 sectors but is that reason to avoid the s&p 500 and stocks in general right now? joining us, chief equity market strategist and joe, rsm u.s. chief economist. thanks for coming in. >> thanks for having us. >> if they're lowering estimates, why is there any reason to own equities

>> the consensus expectations were negative year over year earnings and we reported positive numbers ch. >> the analysts got it wrong >> well, to some degree the company management sort of lowered the barbie sort of sandbagging the analyst thats bring the numbers down and are able to manufacture a positive surprise i think we're looking at a similar situation in the third quarter. likely the fourth quarter as well. >> i can't figure out the economy, joe i tweeted out a story from roanoke, virginia. they can't find bus drivers. offering 20 bucks an hour, grocery store they just built in new jersey, 15 bucks an hour plus bonus to start. i see those signs everywhere maybe we have recency bias or geographical bias, how do you see the economy, is it really slowing? >> yes, we're slowing back to trend. the economy is absorbing two supply shocks at the same time both driven by policy, one obviously is trade we spent a lot of time talking about that the other is immigration

i don't think we spend nearly enough time about how tighter immigration led to tighter labor markets and we are seeing a little bit of bottlenecks to develop as you say around different regions in the economy. i think that's what you're seeing and what you're hearing. >> 7.5 million open jobs right now. you think we need to bring in more workers we don't have them. >> we don't. >> if we have them, they don't have the skills or in the wrong physical location. >> we don't have enough willing and available workers at this point. we have a real good business in toronto. toronto is number one startup capital in north america know why immigration policy >> go canada. >> we look at equities going back to the markets. if the economy is going back to trend to joe's point at 1.8%, we had this ten-year bull run is it harder and harder to make the longer term bull case or have companies got leaner and compressed their stocks, taken out stocks through bye backs. >> all of that has happened.

the last time i was on the show, we talked that there would be consolidation in the markets in august, september and october, to some degree that's happening. if we're not going into a recession and our call is still there's no risk of recession probably until the first half of 2021, then we'll get through this and if we can get some positive news on trade, i think that potentially would be a catalyst over the course of calendar 2021. >> would it matter anymore the markets seem to be moving less on trade headlines. apparently the two sides china said we're not going to give you what you want. >> economic news is clearly the most important and the beginning of last week the ism manufacturing and service data was very poor. that sent the market lower the pressure from negative chinese trade issues i think is what's creating the pressure on the economy. so if you can make some progress on that, potentially looking at better economic news next year. >> any indication, joe, that

tariffs, we have done stories. we get that individual businesses are get whacked any indication that tariffs have taken down the economy as a whole? >> no, but that was the approximate cause of the slow down and then also you guys did a great piece earlier on gm 2 billion hit a month, 48,000 workers. you'll see that in the initial jobless claims and next month's monthly employment report that will be the big story. >> do we ignore next month's monthly payroll number hooch the gm strike? >> we'll hang a big asterisk on that. >> not to steal anything away from our future coverage. >> we also have a big slow down in the energy markets. we tied the slow down in new oil and gas drilling with industrial production, right? it's not like it was ten years ago. you can't equate oil and gas now to ten years ago hooch it's double the size. it's massively important what's it going to take for the next leg up for equities a turn in energy stocks perhaps? >> certainly stronger economic

growth one of the pressures here separate and apart from the iran, saudi arabia issues is the perceived lack or production in global demand for oil and gas. unless and until you get that pickup in demand, that's going to drive in terms of supply/demand balance the price of crude higher. looking for negative corporate earnings in the third quarter, the expectation of growth being lower, we need to get stronger growth in order to get those prices higher. >> yeah, we do remember, just a note that energy industry is twice as big as it was now than ten years ago. lot of people talking about changing it. we'll see what happens phil and joe, great stuff. have a great week, gentleman. time for your morning rbi. today is the fourth birthday of mcdonald's offering all daybreak fast you want a mcmuffin at 3:00 p.m., you got it what gift. but this birthday has been a gift to mcdonald's' investors

more than anything else. they announced this plan, the stock trading around 103 bucks now it's at $211 that, my friends is a double the return for mcdonald's investors just about double that of the dow in the four years never underestimate the financial power of bacon random but interesting we'll see you tomorrow "squawk box"begins right now good morning, stock futures under pressure after a big day, though, on friday. we'll tell you why china trade headlines are most likely to blame. violence in hong kong has masked protesters defy an emergency order. the latest from a city in crisis. plus, trouble in detroit gm worker strike enters its fourth week with no end in sight. it's monday, october 7th, 2019, and "squawk box" begins right now. ♪ >> announcer: live from new

york, where business never sleeps, this is "squawk box. ♪ good morning welcome to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen and melissa lee becky is off today the futures this hour, things look like they will open in the red right now. concerns over china trade a big part of this dow off about 132 points right now. s&p 500 would open down 15 points the nasdaq looking to open down 40 points. let's also show you treasury yields at this hour. look at the ten-year note, what you're looking at there is 1.522. the two-year note down to 1.395. i still always like to look at the distinction. >> absolutely. one potential drag in the markets this morning, chinese officials are reportedly growing hesitant to pursue a broad trade w