>> it is 5:00 a.m. at cnbc headquarters netflix ex bracing the growing slate of streaming forms work to be done. treasury secretary steven mnuchin giving investors reason to worry after the president's highly touted phase one of the china trade deal on the verge of a deal reportedly closing in on a deal

but head winds remain. black and big blue ibm with another disappointing earnings report. and don't be a fool. president trump's unconventional message to turkey leader it is thursday, october 17 "worldwide exchange" begins right now. ♪ >> good morning. welcome to the show, we'll hear from brian in california this morning. netflix set to miss based on one key issue. >> shares up just about over 8% but the stats were not all

positive subscriber additions below estimates. warning that subscriber growth would all fall short citing finance changes and more competition. their ceo saying the streaming wars are noisy >> fundamentally, there is not a big change here. it is interesting that we see apple and disney launching basically in the same week after 12 years of not being in the market i was being a little playful with whole new world and the drama coming disney will be a great competitor apple is just beginning but they'll probably have some great shows too. >> netflix says it will take bold swings when it comes to

content but won't take each and every player on the table. is projected to spend about $18 billion in 2020. >> frank, as we take a look at the stock reaction here, those shares for netflix are down double digits from july. it also missed results there on some metrics what is the difference >> this time around, new international growth last quarter, they missed that by double digits nearly 40% a lot of people think netflix actually trades on international growth >> indicating now the dow will open modestly higher now it is down by about 5 points the s&p would open up by about

four points helped along by those strong netflix results the bond market with movement. you can see there 1.75%. higher in 10-year note yields. two-year at 1.6% let's go worldwide in the asia trade. a bit of a mixed session there shanghai and kospi posting marginal declines there. the german dax about flat. the ftse 100 up about one half of percent new comments this morning about

president trump's phase one trade deal with china. mnuchin telling reporters trade negotiators still have work to do on an agreement between planned signing between trump and president xi next month. adding there has been no indication from china. the white house has yet to make a decision on the tariffs ahead of chinese goods set to go in effect in december we'll hear more later this morning when larry kudlow joins "squawk box" at 8:30 eastern, the president's chief economic advisor. outside of trade, earnings have been a big advisor this morning. art, between geopolitics, between trade relations, the kick off to earnings season, you

would think there would be a little more kind of tempered optimism yet the market sits right near record highs >> there are a few things we are not talking about enough the tone around trade is so much better this month than in september and august and the month of may it feels like both sides need to get things accomplished desperately. we hadn't seen that throughout the entire 18-month process. the flexibility means we are probably not going to escalate here earnings in general had been netflix is a great example better than feared everyone else seems to have a screaming product coming out netflix was okay

not great. it is not the disaster we saw. the third thing i think we are missing is the inflection point of housing home sales and the national association of home sales index. that inflection point was in december that is an important part of the economy. that will be better. earnings are better than feared. we are okay. >> there have been certain hot spots we have been watching. watching semiconductors that have hit a record high we talk about home builders and stocks one place that hasn't really played much of a catch up is trade stocks does it bother you that smaller cap companies are not participating fully?

>> yes and no. you look at the russell 2000, that is a bit of a separation. usually not true that would actually do better. the stablization of growth let's say for the next year. if that stabilizes, they catch a bit. with acceleration, there is really two places to be. they need to be in momentum and they need to be in defensives because the yields are low that whole middle gets cut out we saw three quarter in the low. the russell too gets that bid.

makes a lot of sense >> the kick off to earnings almost always has a heavy earnings is there anything we can glean that makes you feel like the rest of the earnings season or market year will go towards the upside or is there reason to be cautious now citi bank, bank of america, jp morgan, that has been strong obviously many of these are making money in the margins. that is a difficult part of that business the part we care about the most is not that cost to capitol is so low but that we want it that is both on consumer side and industrial side. the cni loans, circular credit all of those that we hope to be robust is probably going to

happen i'm pleased with that. would love to see better than interest markets that is not going to happen right now. great to see you >> when we come back on the show the eu and the uk closing in but work remains for prime minister boris johnson back home with he go live next growing losses and weak demands not enough to stop shares of alcoa this morning and later on, the battle over rare earth elements. brian sullivan is all over it with a closer look >> if you want to drive a tesla, have an ipad or a fighter jet, you'll need what is in this rock in that mine coming up, we'll talk about how this mine in the desert of california could power the future that's next. thank you.

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>> a live shot of hong kong. the sun just going down. still unrest a big part of the story there in china. turning now to britain working to save the brexit deal ahead of the october 31st deadline boris johnson has plenty of work to do back home.

willem marx joins us now from brussels with the latest >> dom, it depends who you talk to this is the third time this year the french minister has come to brussels for what you would think would be the last summit it may not be the last one we are a few hours away from the arrival of some of these leaders. clearly, there is not yet a deal they can approve back home, the small northern irish party. the dup, they have said they are not currently happy with the deal they've been presented with that has been the challenge is to swarear a circle around the

island and fight with counterparts and the lawmakers the challenge is not only to get european leaders over the next 48 hours to sign up to a deal. this weekend, he may face a hostile parliament where he doesn't have the authority there is a chance he may not be able to get a deal through, in the same way his predecessor theresa may failed three times to get it through. >> the irish backstop, i don't want to use that term because it causes confusion for people on our side of the atlantic take us through, what does it take to get it done? what is the sticking point right now? >> what the europeans have said for years now is they want to make sure the all island economy is supported and maintained. that allowed goods to travel

across that border without being checked. what they've tried to do is maintain the northern irish territory, nation of northern ireland inside a legal customs union with the uk but a rack tick tickly -- practical customs union to remain as a whole as far as the politics around that, the assembly in northern ireland, which is currently suspended and then the people of northern ireland to agree to stay under those conditions for at least the next four to eight years. that is the sticking point >> after nearly five weeks, auto union leaders and general motors have reached a deal of their own

to end the strike that has come the company upwards of $2 million. first, today's big number. one billion. that is how many hours per week netflix users spent watching videos one billion hours. stay tuned to more on cnbc en a , perfectly good food goes to waste. now, we've got away around that. looks good. we're on target. blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. it's used by some of the biggest retailers everywhere. a nice wedge. so more food ends up on your table, is that daddy's lettuce? yeah. and less food goes to waste. ♪ ♪

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>> welcome back to "worldwide exchange." stocks to watch this morning ibm, the big blue shares lower after revenues yet to make up for declining sales in its services. shares off by nearly 5% in extended trading alcoa shares getting a boost despite a bigger than expected quarterly loss after announcing it will pursue asset sales can you see those shares up. csx sharesrising topping wall street estimates. those are up nearly 4% still to come, president trump has a message for european regulators looking to put the squeeze on u.s. tech giants. >> if anybody is going to tax those companies, it should be the usa. it shouldn't be france and the

european union who are really taking advantage of the united states >> this as yet another silicon valley sllta warth facing fire more still to come

>> while the u.s. and china work on a trade deal, perhaps the most important elements in the fight are getting the least

attention. so-called rare earth minerals. the mountain pass in california is the only operating mine in america. brian, over to you >> yesterday, we talk about rare earths and how the united states used to be the global leader in the production of these minerals all because of this mine behind us mountain pass. the size and scope is amazing. all because of basically this type of rock you are thinking what is this? inside of this, there is about 8% of the stuff we really want ultimately, it will be refined down to almost a sand. you think well why do we care about those rocks? it is not gold more important for the high tech future if you want to build a magnet for a tesla, an ipad, jet fighter plane, mri machine, b

you need the imagine gets created by this rock mined here. the company went bankrupt years ago. now reopened they are hoping to create 10% of the mineral. china leads the market they hope to change that they have the world's largest refining processing here it is not opiate they hope to be open soon. rare earth, how did china get the lead how do we get the lead back? much of it starts right here in this big hole. we'll tell the story here today. >> we look forever to that coverage all day long.

>> coming up, shares of netflix leading. our next guest says he's not sold on it >> and the future of barneys may already be written more at "worldwide exchange" rolls on after this. sometimes, the pressures of today's world can make it tough to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested.

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>> maybe some stranger things magic. shares of netflix set to surge we'll have more on that. nearly $1 billion mistake. the fall out continues for ken fisher as yet another client cut ties and done deal after nearly five weeks. auto union workers and general motors come to terms on the strike that cost the company upwards of $2 billion. all coming up on "worldwide exchange." you are watching cnbc. ♪ >> welcome back to the show. thanks for being with us i'm in this morning for brian sullivan right now, futures pointing to

what could be modest gains the dow would open up by about 25 points. you can see the s&p 500 up about seven points and netflix shares hoping to power the nasdaq up about 35 points. seeing yields up 10-year note up about 1.76%. the 2-year note up about 1.6% as well the hang seng in hong kong up. the composite down and the kospi down as well the dax about a quarter percent of the upside. ftse 100 up by about .2% and ibex in spain up by

about .3%. >> after earnings estimates for the most recent quarter. the good news may be ending there. domestic paid subscriber adds mitted the projections fourth quarter out look coming in softer. subscriber retention continues to be an issue company ceo remains cautious >> we are incredibly low priced compared to cable. this year, that is what hit us we stay focused on providing amazing value. that gives us a shot to continue to grow long term.

we feel caution on that guidance going to our guest here. you look at the performance, pre-market, yes, it has been a surge but it has been a roller coaster. over the last five, it is up huge does that reinforce the longer term or more of a bumpy road ahead? >> last quarter was a train wreck. showing some strain. in terms of competition especially between disney and apple. there will be potential speed bumps ahead in our opinion >> we've talked about how competition is inevitable and has been developing over the past several years you've been bullish on netflix

in the past. why is it now because you feel as though it is more bearish >> one, it is pricing. you look across at the pricing that will be from a share perspective. they'll gain significant share out of the box you'll get apple too on pricing. that is another one that could disrupt in our opinion about 15 to 20% of the netflix core customer base. you'll get this content arms race you'll have more streaming competitors out there that will start to get content look at what is happening in terms of that bidding process. netflix has been the only house on the block there will be more competition ahead. you'll see it is tougher moving

forward with the rise in competition in streaming >> netflix is the 800 pound gorilla. they have this position some would argue. what is it about some competitors that make them for midable? apple is going to give away their streaming for anyone who buys a device. >> you look at disney and iger, they have another big sort of content provider that can compete with netflix you look at apple, you have 900 million iphones globally they'll start to penetrate now you have apple and dig any going after netflix, which is

significant. the difference now is content. we believe you could see 30 to 40% of viewerships in netflix decline. >> that is why it is hard for us to be bullish. >> content is king for netflix, it has been a huge focus on original programming. their own studio creating content. it might be critically acclaimed and certainly driving traffic. what does netflix have to do to make sure they keep and grow that subscriber base >> they'll have to rep kalicate things from an original content perspective. right now, the pricing as you've seen with seinfeld and friends, pricing is going to the moon now with disney, apple, peacock and others in the mix, this is

going to get a lot hotter in the kitchen. stocks has been a massive performer. there will be some darker days ahead as i think they may lose domestic >> what is your out look for netflix? >> more negative here in terms of accelerating as a firm. i continue to view this in terms of faang like apple, amazon. >> thank you we have breaking news from washington, d.c. as we are learning right now that democratic congressman elijah cummings has died. saying he passed away due to complications from long-standing health challenges.

chairman of the house oversight hearing. elijah cummings, 68 years old. >> mivice president pence and mk pompeo are in turkey this morning. we'll go now to is stan bull for the latest dan, what is going on in this meeting and what can we expect >> reporter: we understand the vice president mike pence will be landing shortly for this high stakes meeting he comes at a valuable time as the u.s. and turkey relationship has been under stress. the united states has two key goals. first is to convince erdogan to an immediate cease-fire and to

agree to a conversation with president trump next month however, erdogan saying his trip to the united states is scheduled in pencil and not pen and he's upset with the white house over how they've handled the situation. >> translator: these discussions, these talks and valuations made by myself, my family, my many insistinister f very disrespectful >> reporter: as the vice president lands in turkey, the president is at home facing criticism from democrats and republicans. the president continuing to distance himself from the decision to pull the u.s. out of syria which some suggested that's resulted in an

abandonment of the ku are everyo kurds, key u.s. allies in syria. >> dan, turkey is also facing push back from other key allies like germany what can you tell us about that? >> reporter: you are right first, it was france and netherlands. we've heard from angela merkel who said she will no longer be selling weapons to turkey unless it enacts a cease-fire perhaps this is going to give the vice president some is leverage as he comes into these negotiations later today that remains to be seen. the commentary suggests he may not be ready to play ball just yet. >> thank you very much

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with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. >> welcome back. a live shot of chicago 4:42 central time there. take a look at what is happening with futures the dow jones spiking sharply. we were just about flat 10 minutes ago, now dow jones indicated to open up by almost 100 points, s&p by about 15 and the nasdaq around 42 the reason why, we have breaking

news a senior official says the uk and eu have agreed on a draft brexit agreement juncker calls it fair and balanced he says parliament should get the brexit deal done on saturday causing a sharp spike in the markets. look at the ftse 100 in the uk with sharp spikes and the british pound. i'll show you what is happening again. indicated to open higher by about 100 points on the dow jones, s&p up by about 14 and the nasdaq up about 54 earlier in the show, brian warned us that united states had

fallen behind in the production of critical rare earth minerals. he joins us again on how a newly reopened mine in california is helping america take the edge back from china. brian. >> jim, this mine used to be bankrupt you bought it out of bankruptcy. you are a chicago money manager. why get involved is. >> it is not often in life you can buy something at a discounted cost, at the same time do something great for the country. >> all of these elements we forgot, we don't talk about much they are so vital. the fact that if you want these magnets. if you want a tesla, ipad, mri

machine, you need the stuff in the ground here. >> absolutely. not a huge industry maybe only a few billion. we power over 700 million in auto downstream. you add up batteries, it will be trillions in gdp >> this mine made the u.s. at leader effectively every color tv screen for 30 years was powered by the elements here what happened? >> we used to lead for decades ultimately, the chinese recognition the importance and they utilized the cost of capital as a weapon and came into the industry and were able to run it at a very low profit to take over the industry. >> china effective whyly controls 85 to 90% of the market but they do it with government

subsidies and without any concern for the environment. a lot of ways they refine is not environmentally sound, if in fact dangerous for the humans around it. how do you compete with that >> right we have to compete effectively and be better. it is actually worse than that we lose nearly 40% of our revenue in chinese tariffs and vat by shipping into china it would be nice to have a level playing field. >> you do ship your stuff there to be finally process or refined. this building behind you is one of the largest refining facilities in the world. you hope to get that up within a year >> yes next year, we hope to get up this building running as the largest separating building in the world. we have the capacity we have 15% of the rare earth concentrate market today we'll be making separated products next year in this

building >> do you think the capital markets will see what you are doing here if we need to build out the rare earth business in america, we need money the private sector has to be involved do you think you can set some kind of model here that this might be the launching point for something bigger >> we need to be economic and outcompete we need a level playing field. we'd like to move downstream we'll ultimately make the magnets and move downstream. that is so important for american industry. 20 years ago, there were few rare earths in china and no magnets. now they have both the motors and the ev will be next we have to figure this out >> great reporting there much more on that story from brian throughout the course of

this morning stay tuned now back to the breaking news that the uk and the eu have agreed to a draft agreement. juncker calls it quote/unquote fair and unbalanced. johnson says parliament should get the brexit deal done by saturday what you you are seeing there is the british pound that is up 1.2929, a sharp turn higher. u.s. futures seeing a spike of their own. s&p opening up by about 13 points and the dow jones up by about 92 points. we did see a market move higher specifically with the dow and all of those other ones as well on the heel of those headlines >> on deck, trader wars have

sparked bigger than expected currency having an impact the names you need to know coming up. speaking of trade shall don't miss top white house economic advisor, larry kudlow this morning. live at 8:30 a.m. eastern time stay tuned we are a 97-year-old firm built for right now. edward jones. it's time for investing to feel individual. whether your beauty routine is 3or 57,... 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, because you're better off healthy.

>> welcome back. the uk and the eu say 245i6 agreed on a brexit deal. boris johnson calls it a great new deal that takes back control. johnson says parliament should get the brexit deal done by

saturday the pound is rising on the heels of that. 1.2930 is what it will take to buy a pound. u.s. equities are moving to the upside we've been relatively flat now the dow jones is opening up by about 99 points the s&p would be up by about 14 points and the nasdaq up as well showing you when those headlines happened as you can see there, a sharp move higher off of kind of these flat levels throughout the course of the morning. the futures up overall to the latest in that stand off between general motors and auto workers. reaching a deal on a new labor contract that would end the more than month-long strike by those workers. we'll go now to phil what is in this deal

when will these workers actually be back on the job >> reporter: there is a little something for both sides we'll talk about that in a little bit here is what's happening today the leadership around the country for the uaw will meet in detroit. if they agree on that, necessity will go on to the rank and file. then it will be decided will workers go back to work while they are voting. neither side at the end of the day got anything that made you say, wow, they clearly won the uaw got 9,000 jobs that will be created or retained general motors gets plant flexibility. the important point here is that gm is not bringing production back from mexico you heard about that from leadership we want models built here that are currently being built in

mexico that's not going to happen take a look at shares for ford and chrysler they will be next. when this deal is approved, they'll decide which automaker is next. >> phil, did the union get enough do you feel the membership will say, okay, we want to ratify and certify this particular deal >> i think there is a decent shot they've got a path for temporary workers to go to full employment gm is vesting upwards of $9 billion in its facilities and production here in the united states if you are a union worker, you are looking at this saying, yeah, a raise of 3% to 4%. whether a raise or lump sum bonus. you've been without work or a paycheck for 31 days, i think there is a decent chance they'll

approve this >> thank you very much back to the breaking news on brexit will will willem marx is in brussels willem, over to you first. tell us what exactly just happened >> both the uk and the european commission say they have agreed to terms of a deal this will be hundreds of legal text much of it similar to the deal theresa may agreed some years ago with some changes when it comes to the detail around the irish border that we talked about earlier. leaders will arrive here in about an hour's time they'll have a chance to hear from boris johnson and then he'll leave the room and they'll discuss it they'll see whether boris

johnson will be able to find a majority that small irish party is not happy with this deal he has relied on them. it will now mean if they are not happy with this deal, they'll have to rely on their own parties. many of them saying to me and others they'd like to see a second referendum attached to this deal. >> willem marx with the latest taking it over to you. we've been dealing with brexit headlines for three years now. give us your first take. you saw the headlines. is this something you can feel like brexit is done. >> it sure feels like it what we are seeing here, if we finally get to a result. this is going to be good because at the end of the day, the

uncertainty is never very good in reality, you think about the u.s. corporate point of view you have the sterling go up. there for, the u.s. dollar based company will get revenue out of the uk when you think about the s&p 500, 50% of those companies have coming from abroad the issue still remains is how are corporations dealing with the day-to-day volatility of currencies we are here talking about it hours ago, we were talking about china. companies still need to manage this properly. some will, some won't. >> if you take a look at the move in markets. no doubt the u.s. markets have been moving higher and factored

in optimism. how much of this is priced -- it is nothing to take away from the markets but we are talking about less than half a percent move higher the pound is up less than 1% on this how much is priced in at this point for this brexit optimism >> at the low, with he were roughly 1.22 we have a move now to 1.29 or 1.30 one of the key issues here is the border with ireland. >> if that is still a contentious point. is this something we can hang our hats on? >> i think we can probably hang

our hats on it sounds positive. let's see what they come out with sounds like what was said. was denounced and may be happening but it is all hanging on that. >> thank you we appreciate it that does it for "worldwide exchange" this morning a lot of breaking news "squawk box" will pick up that coverage starting now. >> bring on the competition, netflix says it welcomes disney, apple, at&t and comcast. and ibm shares slammed plus treasury secretary mnuchin says there is still plenty of work to do thursday, october 17, 2019 "squawk box" begins right now. ♪

>> announcer: live from new york where business never sleeps. this is "squawk box. >> good morning, everybody welcome welco welcome to "squawk box" here on sn i'm becky quick. u.s. futures are popping you are looking at the dow up about triple digits. the nasdaq up around 55. after hearing the uk and eu have agreed on a draft deal looking at european markets, the dax is the biggest gainer right now. stocks are higher in italy and spain. the eu and the uk saying they have reached a draft brexit deal more to come on this willem marx has more on th