october 21st, already, 2019. "squawk box" begins right now. >> announcer: live from new york, where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew ross sorkin. look at the u.s. equity futures this hour. the nasdaq up by close to 25 and then the dow futures up by 63 on friday, you saw a big decline for the dow. that was almost entirely because of what happened with boeing's shares those losses that we saw on friday made the dow lose its gains for the month of october we'll talk about what happened on friday and what you can anticipate happening this week as well. overnight in asia, let's take a look and you'll see that the

nikkei was up by a quarter percentage point the shanghai composites both closed relatively flat what's happening in europe today, you'll see at least this at this hour there are green arrows across the board. people are watching the ftse particularly closely because of the brexit vote that did not pass in parliament on saturday questions as to what this will mean will there be an extension or look at another general election is there going to be another referendum that takes sflas the ftse is up by .2%. you see a similar gain for the cac. back here in the united states, if you're watching the treasury market, you'll see that the yield for the ten-year right now at 1.771%. shares of boeing as becky just mentioned under pressure again this morning that stock as you know fell at nearly 7% on friday, that's the worst drop since february of 2016 after it was revealed that officials in washington are intensifying their probe into the company's troubled 737 max jet.

boeing said yesterday it's still investigating leaked messages from a former test pilot from 2016 about erratic software behavior on the 737 max jet. later in the show, we'll talk to ralph nader about the investigation. one of the nuances -- look, you don't know who to believe in this if you really read through what boeing is trying to say about the messages we saw on friday and what this test pilot was saying, if they're to be believed, is they're saying that the messages they lied about this and the plane was working erratically were really about a simulator they were claiming was malfunctions, not the plane itself. >> i didn't realize. >> having said that -- >> i'm not sure what the actual answer is. >> they turned this over to the criminal investigation the faa wants to know why they were so slow bringing these to the faa's attention. >> the piece today in the journal is that a lot of the engineers at boeing are contracted out to help the faa

so they have this duel role. >> duel role is a big problem. >> you see the stock today that's today the 64 so my point just separate from boeing is that the dow is up 65. >> even with this pressure from booing. >> would be triple digits if it wasn't in gains. i don't know why. >> i got to look through the other components. >> first we have to decide what the other components are >> that squirmy constant changing down component list >> apparently goldman sachs -- >> yes and nike. >> walgreen's. >> i'm going to look this morning and see how these other ones are doing. >> what the dow consists of and then we can look at which ones are up or down. new this morning, i don't know if this is positive news or negative news coming out of the china. something about tariffs. let's get to eunice yoon in bay jinx i saw something quickly eunice,

reit wi retaliatory tariffs. it's not like we love each other, great new deal. what's the latest? >> reporter: well, you know, actually the vice premier did send some positive signals over the weekend. he made a rare public speech about the trade talks. aint seems like he was trying to say there has been some progress made china and the u.s. have made substantial progress in many aspects and laid important foundation for a phase one agreement. china is willing to work in concert with the u.s. to address each other's core concerns now, i know that those comments sound like the standard boilerplate lines that you hear out of the government because that's what i thought when i first woke up and saw them but what was interesting is how the state media has been portraying them. the global times has described

his remarks as the most clear and author taltive on progress by beijing separate to that, closely watched by trade experts because they believe that it's somebody on the chinese negotiating team who is blogging anonymously, that blogger said that these communities indicate they are approaching a phase one agreement. the official press by around large is trying to manage the expectations of trade talks but now it looks like they're turning more optimistic about the outcome for the phase one agreech agreeme agreement. that optimism helped to inject some positivity in the stock markets today which largely shrugged off -- something that turned out to be a big surprise in the stock markets and that is that the central bank had decided to leave the new benchmark lending rate, the lpr unchanged in october most people were expecting the

policymakers to want to continue to loosen because of the conditions of the economy. however, it's unchanged so some analysts were saying this might mean the policymakers are feeling nervous about loosening policy too quick and by too much for the most part there seems to be an agreement there's only so much the policymakers can stop the trend of easing policy they expect the one year lpr to drop to 4% by the end of this year that's a 20-bases point lower. >> all right, eunice, just stay where you are. keep your ears open. let us know. it could be anything any time. >> that's true. >> gives us something to talk about everyday i would maybe rather not talk ability everyday thank you. wish we were all getting along

>> i just wish we were trading and selling our stuff there freely. >> why can't we all just get along? >> why can't we all just get along. >> yeah. i'm not so -- i'm not so sure. >> no. i'm not so sure either. >> i would love that, too. i would love that, too, but especially with what we're seeing the mba isn't a very good indicator. i'm not sure adam silver should be coming to china any time soon any way just because i don't know if you saw but state media has been -- or maybe worse than that the state media cc-tv the broadcaster actually said he could face retribution for his comment late last week when he suggested that beijing had demanded that mori be fired for his hong kong tweet. so the chinese government -- just in state media, state media, is saying that he crossed

the bottom line for the lack of respect that he showed the chinese. also they said his commends was a dirty lie. there's a lot of animosity growing towards him specifically but the nba. we have been watching the broadcasting for ten cent, and it's still all going everybody is going to be able to watch the games. except for the houston rockets the houston rockets still is still on the blacklist >> that's interesting, though. you suggest he might actually want to reconsider traveling to china at this point, maybe just lay low and stay away? >> well, i'm not -- i mean, just because there's the state -- you have the state tv, cc-tv, broadcasting that he himself could face retribution they said

sooner or later. so in that kind of environment, you know, i'm not sure about his schedule plans for china, but in that kind of environment, it might not be the best time to be coming. >> i'm not coming over there i mentioned winny the pooh one time. >> you should come you should come. we could go to disneyland. we could go buy lots of different characters together. >> let's meet halfway. let me think, where could we do it -- paris halfway? >> hawaii? >> paris is not halfway. >> there is no wrong way do you remember a guy named columbus i'm sorry. >> meet her in moscow. >> am i allowed to go there? i'm not sure probably trump friends with him, maybe probably be welcomed into moscow, right? according to you, right? >> wasn't even thinking about that. >> i know.

i know you weren't one step ahead of you. >> it was another weekend of violence in hong kong. protesters hurled fire bombs janis mackey frayer has more on what happened over the weekend and what we can expect next. janis? >> becky we have seen es indicate escalating this mosque was sprayed by a police water cannon covered in that blue dye. and hong kong officials were very swift to react. they wanted to apologize to the chief emom, minimize the damage, say they have no issue with the muslim community the concern, of course, is that after nearly five months of unrest here, religious friction is just an added danger. protesters say it's just the latest example of how police are using harsh tactics. we saw them in play over the weekend. but we also saw escalating

tactics on the part of protesters setting barricades and increasingly targeting businesses and banks that they see as having links to mainland china. most of the branchs communications bank, bank of china and other outlets are boarded up now with padlocks covered in metal, covered in ply wod to avoid being sand vised. we saw shops and restaurants targeted by protesters as well there is a sense of concern for apple still. following that decision by apple to pull an app from its app store that was a map of hong kong showing the protest hot spots. applctually helps keep them safe and helps them get around. there's actually a push within the u.s. congress to have the app reinstated, but at this point, apple doesn't seem to be budging and protesters here are

criticizing apple for kowtowing to beijing and falling to their censorship so there is this sense that that remains a very sensitive point for protesters with apple here now 20 weeks in and doesn't appear to be any end in sight. becky? >> janis you mentioned apple, apple shares are indicated higher it's a good example of the tight wire they're walking with everything that's happening there. we appreciate the update and hope to see you again soon when we return a lot more on "squawk" this morning. we'll get you ready for the trading day ahead including a packed earnings calendar you'll hear from 40% of the dow companies nearly a quarter of the s&p 500. here is a look at the futures right now as we speak. the dow open 50 points higher, s&p 500 up about nine points as we head to break, the biggest

premarket winners and luosers in the dow. ♪

hey. hey. you must be steven's phone.

now you can take control of your home wifi and get a notification the instant someone new joins your network... only with xfinity xfi. download the xfi app today. welcome back to "squawk box. earnings season picks up this week we get reports from mcdonald's we'll be hearing from boeing,

caterpillar, ford, microsoft son the docket then we hear from amazon and so much more. you can just see right there on the screen, hear from verizon, barclays intel, 3m visa and so many more. j.j., great to see you. >> good morning, andrew. >> your sense of how these earnings are going to come in? i imagine they'll actually be pretty good but that's in part because so many on the list already told us they were going to be bad. >> yeah, exactly the expectations are low we're off to a very good start i do think, though, some of the technology stocks may be a little more at risk overall. the one thing that we kind of already knew as earnings season started was that the consumer was incredibly healthy early innings in terms of the earnings that come out but even mr. diamond when he made his talk after the chase earnings talked how healthy the consumer is but as he said there and i think this is a theme that's going

across the industry is what are technology stocks doing and is the demand going to continue to be as we continue with this uncertainty in china overall the primary concern i had going into this earning season and i don't think it's going to change is that infrastructure is something that's not being spent on right now from companies because, let's face it, why take that risk right now when you don't know what's going to come out of it. it not only hurts outin short-term but two years down the line it can come back to bite you also. that's the primary thing i'm going to listen for. >> when you say tech is the issue, are you thinking that the numbers aren't going to come in where you want them to be or are you thinking when we get on the phone call, meaning when the ceos start talking, that you're going to see projections ugly going forward? >> it's more the ladder, andrew, to be honest with you. i think this quarter will be fine but you may see some muted expectations going forward

as, again, the demand we have seen some signs that demand might be fading a little bit i'm not saying it's a complete disaster. >> i'm assuming you're talking micro chips. you're not thinking consumer tech >> absolutely. intel is really the one coming up this week that leaps to mind right away >> if you were trying to position yourself on a monday morning as in today ahead of all this, you would do what? >> first of all, i think one of the things that people do they take particularly from retail investors from your show is take fliers from stocks this stock is coming up. i should trade it because i hear they're having earnings tomorrow number one do a little research and limit the amount of stocks you're going to expose yourself to and the second thing, in the overall market, we had a lot of trouble getting through 3,000 on the s&p 500. we're not far from away from that right now i would be concerned as we head

up there, considering we still have a brexit vote which nobody really truly knows what's going to happen there. again the news from china one day positive, the next day negative i would be very careful about getting too long here until you see we can breakthrough the 3,000 level convincingly. >> okay. j.j., always good to see you thanks for helpingous on this monday morning. coming up, jp morgan launching a new policy center. we'll talk to the new head about the role of corporations in society. that's next.

as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer. p-tech students around the world. sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances.

♪ fidelity has zero commissions for online u.s. equity trades and etfs, plus zero minimums to open a brokerage account. with value like this, there are zero reasons to invest anywhere else. fidelity.

right now it's time for the executive edge jp morgan chase launching the first policy center at the bank aiming to try to advance policy solutions for an inclusive economy. heather higenbottom is the head of the new policy center thanks for coming in. >> thanks for having me. >> people who don't know your background it's an odd way you u.s.ed to the deputy secretary at the secretary of state. how did you wind up at jp morgan chase? >> i spent 20 years working in goth on a range of policies and i was excited what jp morgan was proposing to create this new policy center focussed on advancing inclusive economic growth and really leveraging all

the work the firm does now in communities through data research, through our philanthropy and develop and advance an agenda to promote a more inclusive economy. >> when we say promote more inclusive economy, what does that mean? >> right now it works well for some people and not working well for others we think business has a role to play in advancing some of the solutions to those problems. we're advancing in chicago and detroit, community wes work in and see what's working we know there are opportunities to scale some of those things through policy and advocacy. so that's the approach we're taking and looking at a range of issues where we have some unique expertise and insights. >> this is a way of looking at people who have criminal backgrounds and records and have a tough time finding their way back into the work force what's your problem? >> one in three americans has a criminal record. that record is a barrier to employment when you see the unemployment rate for people who are

incarcerated five times that of the national unemployment rate at a time when businesses need jobs, communities need people to be earning an income and giving back, we think it's a really important priority so we're taking steps as a firm to be more inclusive in our hiring and promoting an agenda to reduce some of barriers >> how do you look at that, one in three americans have a criminal record a lot of people have done minor things that shouldn't be picked up how do you separate between? >> the fact that they have a criminal record is still a barrier. what we're saying is companies should have a broader applicant pool and need policy changes. >> what would be needed to changes? >> there are several things we could do first of all, we band to the box as a firm we removed the check box asking about criminal background on an application we saw last year that 10% of our new hires in the people in the

u.s. were people with criminal background, 2100 people. we promote restoring pell grant. inside prison will make a huge impact when people come out. >> when you talked about advocacy, how much is about lobbying in washington, lobbying at the state level, going to different governor's offices what's the strategy? >> that's right. we are looking at the poll makers in woug or partnering with other organizations or businesses and saying we think these rules need be changed. >> are you already doing that at jp morgan chase. you have gotten rid of that box where you ask people if they have a criminal background. >> that's right. we're building on that effort. we just launched a new collaboration with community organizations to work a broader population both in training and mentoring, helping them go through the process. we started this work in chicago. it's new but just in 30 days we had nine people come through this process and have job offers

at jp morgan we're excite what had we'll learn and take that approach to other cities as well. >> how do you differentiate what the criminal backgrounds are most places white collar crime wouldn't be such a big deal but if you're a bank maybe you have additional concerns. >> we have federal regulations we abide by and always want to find the best person for the job. we're not lowering our standards. we're going out in a broader way. some of the crimes that people have committed in the last year that we hired them for might have been for a dui -- >> marijuana i was thinking. >> drug possession. >> did you still want to know what the crime was >> there's always a background check done at some point in the process. we don't have a criminal record to be a precondition -- >> kick them out before they get sta started. >> we're excited to launch this for jp morgan and excited to work with other businesses there's terrific bisz out there like target, mcdonald's, delta airlines that have taken

leadership role. there are many more who want to. we want to learn from one another and make commitments to advance this hiring strategy. >> i bring up brt and what they recently said. it's created some pushback in some case but is this a big part of what they were talking about and trying to say you were looking for other stake holders? seemed to me that jp morgan was doing this >> i think that's right. we have been doing that. this is a demonstration of what we mean by the statement of -- that was issued by the drt we're eager to work with other businesses, other stake holders, community leaders, policymakers to try to carry that forward. >> heather, thank you for coming in. >> thank you coming up after a series of setbacks, facebook is considering an alternate approach on its libra project. details coming up. we head to break, here is a look at friday's s&p 500 winners and losers

♪ through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. we're changing what's possible every single day.

with technology that helps you offer shoppers a better experience. take your company's app. we can add in all sorts of capabilities, which help your customers manage rewards, offers, and payments on the fly. and now, applying for credit can happen in a flash. that way, more people can start shopping with you on the spot, wherever they are. how's that for changing what's possible? 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 wthat's why xfinity hasu made taking your internetself. and tv with you a breeze. really? yup. you can transfer your service online in about a minute. you can do that? yeah. and with two-hour service appointment windows, it's all on your schedule. awesome.

so while moving may still come with its share of headaches... no kidding. we're doing all we can to make moving simple, easy, awesome. go to xfinity.com/moving to get started. ♪ welcome back you're watching "squawk box," live from the nasdaq market site in times square. good morning, u.s. equity futures continue to trade positively premarket, even with boeing down another 2% for so. the dow component. but you can see the dow jones managing a 61-point gain s&p up about 10 and nasdaq up about 25 s&p had gotten above 3,000 again but with that friday tough action on friday, which was

really mostly boeing, but s&p went back below 3,000, so we're trading range, i don't know which way that finally works itself out today facebook is taking new steps to combat growing concerns about it says here about its digital currency libra, which is, i guess, not really facebook's digital currency libra. it's a plan at some point to have something called loeb rarks but they don't have one yet. according to reuters, the executive leading the crypto initiative told a banking seminar it could use crypto currency based on national currency such as the dollar instead of a synthetic one -- i don't know what they mean, specifically the dollar instead of a basket of currencies. we had david marcus on and said you should base it on bitcoin. that would be too humiliating. >> by the way, they're trying to say it's no longer a facebook project. it's out there and separate. i don't know how they're going

to shake that they created theos receiving from regulators because of privacy and other election concerns. >> i don't think that the government would be okay with this one that's the one thing i've been shocked about because it's fully controllable there's a central group. you could control the group. unlike these other currencies -- >> that sounds great >> well, you may dislike it -- >> great for the government. >> why should by happy it's for the government and not for the consumer i'm a consumer. >> my point is i could funs the government is going after bitcoin, that i could understand it's an uncontrollable situation. this is like i know who to call. i could pick up a phone. >> it's more like a debit card than digital currency. there may be confusion about what it is. >> they're all trying to do this they're all trying to do this.

>> referencing jp morgan, facebook the project itself suffered setbacks including the exodus of early backers. just mastercard, visa, ebay, paypal and bookings holdings. >> because regulators told them, couple senators said if you don't disassociate we're going to investigate you, too. >> that looked good. they leave, it's like. >> okay. when we come back, boeing backlash the latest on a report that says the faa was misled by boeing employeeings on the safety of the 737 max. we'll get you up to speed on the company's response next. later, senator mike braun will join us to talk trade, taxes and much more. stay tuned you're watching "squawk box" on cnbc

some farms grow food. this one grows fuel. ♪ exxonmobil is growing algae for biofuels. that could one day power planes, propel ships, and fuel trucks... and cut their greenhouse gas emissions in half. algae. its potential just keeps growing. ♪

♪ welcome back to "squawk box. boeing shares down again this morning as questions continue to swirl around ceo dennis

mullenberg the 737 max stock had its worst day in almost two and a half years. it's down again this morning in the premarket. joining us for more on all this is ryan epstein. seth caplan is also joining us good morning to both of you. you're here, so i'll start with you. >> sure. >> there's a bit of a debate, a, what was even said on friday about the 737 max and what this test pilot was saying, whether they were referring to the plane itself being a problem or referring to the simulator being a problem. that's some of what we're hearing in terms of nuance does it even matter in this case >> not so much because it raises uncertainty, right there's been a ton of uncertainty around the certification of the airplane, what went on in the background and raises that uncertainty. >> you have an issue where this information was provided to the government but not the faa in

terms of department of justice and others but not to the faa. what does the faa do as a result of this? do you think they slow down materially >> i think they could. ultimately i think you pointed out, we don't know the exact context of it. >> right. >> but it could slow down the investigation. if it does, it could slow down the certification. >> right now your projection on when this is back in the air is when >> friday morning before all this news came out, we pushed our projection out to march of 2020. >> and prior to that it has been -- >> the end of the year so we pushed it out a quarter essentially. >> and a quarter to you is worth what >> yeah. the total we've got about $17 billion of combined penalties and charges, right each month is about a million and a half >> seth, how do you see it in terms of the shift >> yeah. so the news friday per se doesn't have to delay the recertification of the aircraft, these are questions about what

boeing knew and when going back years. not anything new in terms of the safety of the aircraft as we know it today but to the extent that this puts more pressure on the faa to demonstrate its independence, more power from the counterparts around the world, show more scrutiny than they already would have shown, than yeah. this could indeed delay things that obviously impact not just on boeing and it's short term liability but on its airline partners. >> what about the management and leadership of this company dennis mullenberg, can he survive the situation. >> you have to look at it from an esg perspective i think that's a question that folks in the street are asking themselves today, what happens to this in general >> the question i would ask and i would ask it of the board of boeing and dennis mullenburg, is

therein argument for him to effectively take himself out of this does this dynamic change if there was different leadership at the top and if there was different leadership at the top do you care about continuity, does it make it easier -- may make it easier with the regulators but harder with the management how do you see it? >> that's the question at what point does that balance tip, right there was a "wall street journal" report out late last night talked about how nobody in senior leadership at the company, at the commercial aircraft division, senior engineers, nobody lost their job. one hand you can imagine how from a standpoint of getting this all right you would want the people with the constitutional knowledge there, but yeah at what point are they more a part of the problem than the solution with each new revolution in at least pushes them closer to that tipping point. >> do you by -- the faa doesn't

know it. the company says, well, we actually did provide to the government but our lawyers and ores say we kpront vied to the faa. do you buy that? is that a fair and reasonable argument >> i think right now what you have to look at is joint authority technical -- what they came up with doesn't necessarily agree with what boeing said over the weekend. >> explain that. >> so over the weekend, joint technical review there's a group of yasa, the u.s., the canadians, everyone who has a major aviation authority and they reviewed the whole process and came out with a report a couple weeks ago that said this whole system at the root of the problem grew into this monster over the weekend boeing said actually that's not the case there's disagreement now between the boeing company and the joint technical review, how it reflects back on this is where does all this fit into it? >> just reading the faa's response, the head of the faa's response to this over the

weekend, he sounded ticked off he sounded very unhappy they did not make these available if that's the case, you already had all the other international regulatory bodies against you, if the faa turns on you you have serious issues getting it up in the air. >> you have to pay attention to the pilots the union came out very, very strongly against this. >> they have a lawsuit we should put in mind, they have a lawsuit because they're mad about the lost potential pay that they have going with this. >> but they are your largest customer they're the largest operator of the airplane and they came out on friday saying that boeing was fraudulent and putting the flying public at risk. granted, you have to put it in context like you said. the american pie lots union who doesn't have a lawsuit came out almost as strongly. >> right. >> seth; you have been relatively bullish on this company despite all this

do you have any different view today? >> the question for the long-term, when are we going to hear about any new pilot training requirements? right. all of this that we're talking about today is somehow going to get resolved it's going to cost a lot of money, but they'll move from these questions of when they should have come guard with the information. boeing until now has continued to say that it doesn't think that they'll need more simulator time boeing, of course, has turned out to be overly optimistic about other things if that changes and turns out you do need simulator time and if it turns out that each 737 max basically comes with who knows millions of dollars perhaps of additional pilot training expenses over the life of the aircraft, then that puts downward pressure on pricing for this aircraft for the long-term, the thousands of yuns boeing has sold and hopes to continue selling. right now it's a volume

questions. airbus is taking orders for the competing product. if it's a question for the long term, not just the volume, also of yield, then that's a long-term issue for boeing >> okay. ron, seth, thank you guys. appreciate it. >> thank you. >> it's a story that we will continue to have a lot more on throughout the program. coming up, a number of firms initiated coverage of peleton. made its debut public last month. wasn't the greatest debut. said the stock could go 30% higher, 33 as we head to break, here is a quick check in what's happening in european markets right now.un ? everyone, look at your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market!

yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ said the stock could go 30%

i am totally blind. and non-24 can make me show up too early... or too late. or make me feel like i'm not really "there." talk to your doctor, and call 844-234-2424.

initiating coverage of peloton. canaccord. that's among others that initiated on the recent ipo. some around 29 michael graham from canaccor canaccord genuity. this is a subscription service you don't pay a subscription service. that's the main reason for positive view here >> it's one of the reasons the subscription part of it definitely makes the model more predictable. the big thing that the stock is going to have to overcome similar to other ipos is the

lack of profitability in the near term. it did he ha it. >> that's a big issue. >> to have a subscription model and then that's a very high subscription model they can pay for their customer with the gross profit that they make when they sell the bike negative sort of net present value. it requires a subscriber form. gross profit on that the term right now is quite low. it's half a percent per month. you compare that to cable or wireless telecom or anything else, that's a very low number we have churn projected to

increase over the course of this year because peloton's introducing a home trial offering where you can basically try the bike or the tread risk free and if you don't like it, you can return it and get your money back we think that that's going to help with growth in customer additions but it's also going to come with elevated churn. >> how long for profits? some of your peers talk about five years at least. is that where you are? >> we have ebitda profitability in 2023. i think that the, you know, important thing is it won't take long for peloton to show us the economics on each subscriber are positive and i think investors will be able to see that developing and, you know, we also think it's important to note that we really have a small number of subscribers sort of projected in order for the company to hit our targets they have about half a million subscribers now and we have that

going to 3.5 million over those five years so pretty low numbers relative to the market opportunity. >> go ahead. >> i was going to ask you how do you feel about them financing? and currently you can have us get a bike on a financing program. there's a view within the community or within the analyst community, investor community that they may move towards a subscription kind of model is that something you would be in favor of? you can see how that would move growth faster but at the same time create its own risks. >> a little bit of credit risk they do have a program now where they offer the bike or the treadmill for zero money down. >> correct >> then they layer that into the subscription you know, they offload that risk and just sort of recognize a lower amount of revenue for the product when they do that. so they don't take onion going credit risk. we think that it's important that it helps expand the market

and you have families who are looking at the peloton offering saying, well, i can sort of do this for $40 a month and it's a lot more if you do the financing plan but you look at that -- >> using outside firms to do the financing? >> they do they have it with a financial partner experienced in that. we see the households doing a comparison between the cost of the monthly membership versus going to, you know, two or three soul cycle classes a month >> one thing is what happens if there's an economic downturn i think about gym memberships and those can get trimmed pretty quickly. >> there's a real argument to be made this product appeals to wealthy households, not a big expenditures to those households we think it appeals to more middle income households because it does represent a savings. >> that's your growth prospects.

they would be the ones who would say no on a downturn. >> the company said during its ipo that the under 75,000 in income is the fastest growing part of their customer base. >> under 75,000? >> yeah. >> you think they're going to keep a $40 a month subscription fee? >> it's a value -- remains to be seen, but it's a value tradeoff for households to compare that to the cost of maintaining a gym membership or going to a lot of boutique fitness classes. >> it's a technology media software product, experience, fitness, design, retail and apparel and low guess sticks firm, it's ten things? it's not an exercise bike retailer >> well, you know, we really see that they have the potential to help households engage with fitness in a different way do it at home. do it with some, you know, innovative concept. >> vertically integrated digital platform you know the new name for these,

notcoms. >> yeah. we think that they have a good opportunity. >> really? >> to help >> okay. all right. so, i mean, i remember i got one of the 7-minute abs and i realized you can't get abs in 7 minutes, you need 8. remember that, suzanne somers. >> it doesn't come without work. >> i think that was the -- >> we need to go. >> that was the thigh master. >> thank you when we return, opening statements will take place today in the country's first federal trial over the opioid crisis we will have a live report from ohio when we return.

♪ the amount of student loan debt i have i'm embarrassed to even say i felt like i was going to spend my whole adult life paying this off thanks to sofi, i can see the light at the end of the tunnel as of 12pm today, i am debt free ♪ we have no debt, we don't owe anybody anything, and it's fantastic ♪ ♪ ♪ "um houston, we've had a problem"

problems. it's human nature to hate problems. but why is that? after all, problems inspire us to mend things, bend things, make things better. to rewrite the rule books, the history books, and future books. that's why so many people work with ibm, on everything from city traffic to ocean plastic. from new schools, to new energy. from flight delays to food safety. the problems even got us to the moon and back on one tank of gas. and who knows where they'll take us next. ♪ ♪

a big week for earnings. the names you need to watch. boeing under pressure. officials are intensifying the probe into the troubled 737 max. a federal court takes up the nation's first legal battle over the opioid epidemic. details ahead as the second hour of "squawk box" continues right now.

live from the beating heart of business, new york. 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 becky quick. dow looks like it would open up about 54 points higher s&p 500 looking to open up 10 points higher. nasdaq looking to open about 25 points higher. in the headlines this hour, president trump reversed his decision to hold next year's g-7 meeting at his doral resort in florida. the president said a search for another location would begin immediately and that camp david was under consideration as a possible site. acting chief of staff mick mulvaney said the president was honestly surprised at the level of push back you were out and we had sternlicht sitting here. >> i watched some of that. >> between us.

>> we immediately had the answer and this was before they decided to pull it i said, you've got to change your mind on this and do it at sea island, which is -- >> barry. >> barry is not an owner anymore. it's my favorite place and there was precedent there. they have the beautiful rooms and beautiful guests and g-7 was already there. and we were saying that. the next day "the wall street journal" in a piece said, do it at sea island. i don't know if they were watching us or great minds or whatever it was but it was -- maybe it's still in the running. so i don't -- i don't know where -- i'm thinking camp david, aren't you? >> that's what they're saying. >> reallynice, secluded. it's been done there i don't know it was just funny. the way the whole thing played out. and it was also funny, i guess, that, you know, mulvaney talking to chris wallace saying trump still considers himself a host a lodging guy.

come to my place you know, i've got -- you can eat-- >> and chris wallace immediately said, you're the president of the united states. >> right. >> you have a different job. and i think mulvaney said, didn't you have any other jobs and shockingly, no, chris wallace never has had any other job other than journalist but he's pretty good at that. >> it was a good -- >> anyway. a streaming deal involving a long-running show "south park" could be imminent. a deal could be announced this week could be worth $500 million as competition for streaming content gives up. >> i'm guessing that's not one of the chinese companies. >> probably won't be real popular over there turkish president erdogan is vowing never to allow ecigarettes to be sold in turkey disturbed his very sensitive nature accused tobacco companies of getting rich by poisoning people this is such a loaded story,

isn't it something other than phosphorous. >> little. >> exactly currently vaping is not illegal -- god it's not illegal in turkey i'm glad they're getting this squared away in turkey i'm glad he's focusing on vaping anyway, purchasing or distributing ecigarettes is -- i can't believe i'm reading this has often urged turks to quit smoking and drinking i can't even believe i just read that i didn't read it with a straight face we have a big week of earnings ahead for wall street dom chu joins us right now he's got more on that front. good morning. >> good morning, becky, joe, andrew what we have is the kickoff unofficially to the second week of earnings season and it will be by most measures the second busiest week of earnings season next to next week which is going to be the busiest one. take a look at the wall behind me as we take a look at some of these stocks, first of all, the earnings and what to expect. you have the second busiest week

of q3. the second busiest day will be thursday when 1/4 of the s&p 500 will report. you have 125 s&p 500 companies, we'll call it 125 reports from s&p 500 companies and a dozen dow components or 30% of them so far this week. it changes one or two here and there each way take a look at the wall behind me it gives you an idea of what to expect monday, halliburton and t.d. ameritrade tuesday, chipotle, one of the biggest performers reports dow components, proctor and gallmble gamble, mcdonald's, wednesday, catheter pit ler thursday, amazon, visa, twitter. 3m on friday phillips 66, ab inbev,

verizon. a dozen dow components it's going to be a fun one we'll have some real company specific catalysts, joe, to drive some of the trading this week it will be a big one for people to watch back over to you. >> you really went out of your way. you collected all of those little logos of all of those companies and drak ag and dropp them. >> i didn't. i conceptualized it. i said, hey, these are the companies we want to do. can we put logos in there. >> someone did. >> we have an amazing graphics department is what i can tell you. i say, hey, i have an idea or a vision of what we should do. then our producers and artists put it together and put all the little logos together. i can take 10% of the credit the work on this is artists. >> twitter's a good -- they don't have to put a t or a name. you know immediately from the -- >> little bird. >> it is cute. >> but what's the eagle on friday >> ab inbev.

>> snap chat ghost it's not an s&p 500 company but you know what the snap little ghost thing is, right, or the f for facebook. >> i wouldn't change any of those like amazon. someone said you need to change that, you shouldn't change that, right? >> no, that little smiley thing is kind of iconic at this point. >> it is so we cover it all here. >> change your name to verizon or something >> allegis why keep united airlines who's heard of that. let's go to allegiant. >> joining us is mike santoli, jim lewenthal. i want to whisper something to santoli. nothing is -- >> october 21st. >> nothing has hit the fan and

it's october. >> right. >> i always worry about the teens. the ides of october. >> yes a little bit of chatter that we have -- after the options expiration last friday, maybe there's going to be a little bit of rumbling. the market has been very, very calm at the index level. we kind of got a lot of that choppiness front loaded in august and i think what we're doing right now is kind of figuring out if august was, you know, just a little bit of an over reaction to these signals that were having too much of a slowdown or if that was a little bit of a primer. >> did you read paulsen's stuff? >> sure. >> i was thinking, wow, you're a genius paulsen, that's what you're going to say the recession fears peeked in august and since then things have been -- >> yeah. >> i think that case is not nearly as compelling anymore based on the data we've seen and that's why things are acting a little bit better. with you i was going to say you've been waiting for good things to happen and the jury's still out.

we're back right around 3,000 on the s&p and i honestly don't know, do we head back to 2700 or finally break out and go up? do you know? >> i wish i knew, joe, for certain. you're right i would wait a while this recent high this year has been tough to break. and we'll have to wait and see if we do it here now amidst the earnings season. and the prices >> a lot of the trends in the market could change. german is up here itself.

i think that's a big sea change. it's completely eliminated overall even commodity prices. all spot price index one of the biggest moves you're seeing a big outperformance over the last two months which is something that hasn't happened this year and you're also seeing a little better action from small caps and from cyclicals overall so i do think there was something that switched around that august fear crescendo that might continue to play forward i think right now in addition we've had better economic reports over the last two months coming out a little better than expected we probably just finished up another 2% quarter here in the third quarter we

started -- i think if earnings -- or economic reports have been coming in better than expected then i think earnings reports might prove to be better than expected as well. i think it does keion earnings if earnings continue to do a little better, then i think we're going to finally break the glass ceiling here of 3025 in the s&p and maybe challenge 3100. >> did you know all of that, santoli? you have looked at a lot of stuff. there's not much to do up there in minnesota, i guess. you've got the vikings wait until it's 40 below. >> wait until winter, i'll have a lot more time. >> did you realize that? >> i'm pretty much tracking all those trends in terms of how -- >> you're in new york. you have things -- you have a life. >> that's true 10,000 lakes. >> they have 10,000 lakes. they're all frozen over. >> what i would say is in terms of the overall index being a little bit -- either it's resilient and it was or it's kind of sputtering right here. look at the high growth stocks

that people were loaded into going into this phase. software down a couple percent last week. that's why the overall index is stuck even though all of the cyclical stuff the foreign stocks are doing better that's why you want to look to microsoft, visa, amazon this week and chipotle. >> maybe because of what the fed futures are saying it's being talked about, jim you don't think they should go down, do you >> i think personally, joe. >> it will be okay if the fed wants to cut the rate and

eliminate the ten year funds version but the better result would be let's say we get a manufacturing ism which turns up unexpectedly and the ten year yield goes up all by itself. >> there's more to do when you go west. >> out of there. >> gophers >> wait a minute

who did the gophers play >> rutgers one of those new york teams. >> wow, you beat rutgers whew >> one of those big city new york teams >> new york -- it's new jersey, new brunswick. >> close. >> no one wants to clean that football -- >> i'll claim them i just won't defend it. >> a lot more. >> they wanted to be in that conference, too. why? >> money >> it's the worst public house crisis in decades. guess what today state and local governments head to court against opioid makers after attempts at a settlement broke down last week we have that story next. congress ramping up scrutiny of boeing executives as new details point to pressure on engineers and pilots what it means to company investors. ay will talk about it. st tuned watching "squawk" on cnbc. ♪

♪

♪ what are you doing back there, junior? since we're obviously lost, i'm rescheduling my xfinity customer service appointment. ah, relax. i got this. which gps are you using anyway? a little something called instinct. been using it for years. yeah, that's what i'm afraid of. he knows exactly where we're going. my whole body is a compass. oh boy... the my account app makes today's xfinity customer service simple, easy, awesome. not my thing. opening statements in the opioid trial that's where i'm from, in the middle of the country. salt of the earth, meg salt of the earth.

>> reporter: that's right, joe there is a jury full of those folks here from cleveland. they're assembling in the courthouse behind me for opening arguments at 9 a.m it wasn't clear we were going to get here the parties were working on a settlement until the last minute that was valued at $50 billion $22 billion in cash from some of the parties and $29 billion in drugs and services, although some i spoke to disputed that valuation. you are seeing the shares of some of the companies involved in this trial giving back some of the gains this morning that they had clocked last week as it seemed like a settlement was getting closer now those numbers aren't just for this one trial here in ohio. this is considered a bellwether trial for more than 2,000 cases that have been consolidated in federal court here in cleveland. the parties involved include two ohio counties, summit and here where we are in cuyahoga

six other drug distributors. tevapharmaceuticals as well as walgreens. four others have been involved in this trial here but they reached settlements with just these counties up to $30 million to avoid going to trial here otherdrug makers like purdue pharma have been severed from this trial because they declared bankruptcy the claims here are a couple things for the manufacturers, it's only teva now, the claim is that they engaged in a massive false marketing campaign to drastically slow the market. they claim they reaped enormous financial rewards by refusing to restrict the improper distribution of the drugs. this kicks off at 9 a.m. implications if they don't reach a settlement after this. back to you. >> meg, thanks very much >> meg, real quick we're looking at a statement from henry schein that they're to be dismissed.

the company will make a donation it's just crossing the wire. i don't know if you've heard anything about this. >> reporter: not yet, andrew, although we've seen henry schein's name included in the defendant's list not entirely surprising that we're seeing this this morning to get out of this trial we'll see whether they're part of any bigger, broader settlement talks i guess it will just be five. >> thank you, meg. joining us right now to talk more about this is bethany mcclain. she is "vanity fair's" contributing editor. this is just two counties where at least some companies have decided they're going to go ahead and face the trial with this what do you think about the calculus trying to figure out whether to settle in some of these situations or go ahead and go to trial? >> it's a really interesting calculus the companies, j&j in particular, that the laws on which a lot of this is being based are not being used appropriately and if they could fight this all the way to the

supreme court they could win but the issue, of course, is that will take a lot of time it will be an enormous drain on resources and shareholders don't want to see that happen so they have a decision to make. >> that decision when you were talking about settling on a kwoun county by county or municipality by municipality basis, what would that add up to >> it would be enormous. if they can't strike a global settlement, there are well over 2,000 of them. there's no way to fight through that unless you can get some kind of global settlement. that's where we are. i think the states and everybody who's suing, the plaintiffs in this case, there are so many issues one is the payment to the plaintiff's lawyers. another is that the states don't want to see happen what happened in tobacco litigation where there was this massive settlement but the money ended up being used to plug budget holes and very little of it went to the people who needed it. then there's this feeling we all

have, right, which may be emotional rather than practical. what about retribution don't the people who played such a big role in this have to pay more than -- do they just get to wave their hands and pay their shareholders money and make this go away? >> what do you think of the states and the counties that have gone first? you look at oklahoma you look at the two counties in ohio are they right to go first there is going to be a big pot of money the question is how it gets divvied up and how much gets splintered and sent in different directions. >> there's a long appeals process. in oklahoma johnson & johnson is appealing the $570 million verdict which turned out to be overstated by 100 milli$100 milj is appealing that. it's a tank and there won't be a decision

lost money at the end of it. when i talked to david sandler he said to me, look, let's find a solution let's figure out how to pay now. this opioid epidemic is an urgent public health crisis and you want to get the money to people who need it now on the other hand, to see companies sort of short circuit the process in a way and be able to just pay and walk away feels wrong, too i think it's a really fraught moment. >> obviously sachler with purdue, that company is going into bankruptcy. what do you think the fate of other companies will be, whether that be mallenkrodt, johnson & johnson, any of the big names involved >> if they can't strike a settlement on this i think teva is the one most at risk because they're the smallest company with the least cash flow

the distributors who are being sued are some of the biggest companies, at least by revenue in the u.s., although their profit margins are thin. they've got some exposure too. j&j is just facing litigation on so many fronts and thus far their approach has been we're fighting this. at some point i think that becomes unsustainable both in litigation costs, j&j has the money to pay for it but just in terms of management time being spent, i don't think shareholders will stand for it. >> bethany, thank you for your time it's good to see you. >> thanks. you too. coming up, maybe the best known proponent of liberal or progressive economic policies. former treasury secretary, i'm not going to tell you who this is he's well known and doing some time at harvard and elsewhere. anyone got it yet? >> yes i snow, i know, i know >> chief economist of the world bank

not a person that you think wouldn't like a wealth tax but he is standing up to the warren wealth tax doesn't like it. he or she doesn't like it. we'll tell you who it is in a bit. quk x"etnsft a quick break. ♪ when you look at the world, what do you see? ♪

where others see chaos, we see patterns. ♪ connections. relationships. ♪ when you use location technology, you can see where things happen, before they happen. ♪ with esri location technology, you can see what others can't. ♪

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. woman: what gives me confidence about investment decisions? rigorous fundamental research. with portfolio managers focused on the long term. who look beyond the spreadsheets to understand companies, from breakroom to boardroom. who know the only way to get a 360 view is to go around the world to get it. can i rely on deep research to help make quality investment decisions? with capital group, i can. talk to your advisor or consultant for investment risks and information.

still to come on "squawk box" this morning, it is an important week for boeing after the company saw its stocks sink 9% just last week. we've got details on what is pushing the dow component lower. it's down this morning we'll talk about that next. later, mark zuckerberg expected to testify on facebook's impact on the financial services sector. congress seeking answers about the crypto project and much more plus the latest on the trade war, business in china and taxes with senator mike brown. 'slltrght ahead. "squawk box" will be right back.

u.k. prime minister boris johnson convening a special session of parliament over the weekend and failing to sell his brexit deal. he's been forced to now ask the e.u. for an extension to the october 31st deadline. he will try again today to get lawmakers to agree in principle

to his withdrawal agreement while the government will attempt to fast track to deliver that deal. still a lot of questions about what comes next. despite that you do see that the pound has moved up initially it moved down after concern that that deal was not going to get done. right now trading up slightly against the dollar. >> he had lost by nine votes on the delay and he's got a half dozen on his side. close to october 31st. so the thought he might have gotten him online. coming up, interesting to watch, isn't it >> yeah. >> crazy no way to run a country. coming up, one of the democratic party's strongest coming out against the warren tax plan. strongest at least thought of as autonomous, economic thinking and the like we'll have the details after the break. a monster week for earnings. the names you need to watch and what it means for your ptfioorol straight ahead "squawk box" coming right back

driving specific sectors of outperformance. where a rising middle class powers a booming auto industry... a leap into the digital era draws youthful populations to mobile banking and e-commerce... trade and travel surge between emerging markets. every day, our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

as a principal i can tell you this.

when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer. welcome back to "squawk box. larry summers, long-time progressive and pillar of economic thought has emerged as

the strongest voice against a wealth tax robert frank has more on that. >> good morning, andrew. larry summers taking the stage at a pearson institute and he leveled the most fierce criticism. it wouldn't reduce political power of the rich. it wouldn't raise half the revenue projected and probably wouldn't make it past the supreme court. the idea was leading the democratic party down the wrong path. >> for progressives to invest their energy in a proposal that the supreme court has better than a 50% chance of declaring unconstitutional, that has very little chance of passing through the congress, whose revenue potential is extraordinarily in doubt, for that to be the defining element in the progressive agenda in the united states it seems to me is to potentially sacrifice an immense

opportunity. >> summers took aim at the two economists who created the wealth tax their widely publicized plans that the rich pay lower tax rates were highly misleading, highly inaccurate and irresponsible. zucman telling cnbc we produced the best estimates that we could and policy is changing in america and the wealth tax is extremely popular, at least among those who wouldn't pay it. >> it should have been displayed across the opinion pages of "the new york times." >> it got a lot of attention summers said if he applied the same formula that they used in their paper to his own wealth it was off by, quote, a country mile. >> why do you think he takes this so personally it's not going to affect him, this wealth tax. >> i don't know. maybe it's the civil war brewing in the democratic party between the extreme left and the more moderate

this is a veteran of the clinton administration, the obama administration lots of people wouldn't say that larry summers is moderate. maybe there's some of that i think intellectually there are a lot of economists who maybe believe in a progressive agenda but think these numbers are just wrong. >> wouldn't be basing anything on that. >> correct. >> runs down the potential. >> that's right. >> we're going to continue this conversation for more on the ongoing wealth tax debate joining us is pat garafolo managing director at talk poverty and the author of "the billionaire boondoggle." and also with us is aparana, american enterprise institute phase scholar. good morning to both of you. do either of you come down where larry summers is are you so bothered by the research itself?

>> no. i actually have -- >> go ahead. >> i actually have a lot of sympathy even if you believe there is that immense wealth concentration that they produce, the implementation challenge is huge as larry summers points out. as a result of that, due to the fact that you would be getting revenues that are probably 1/8 or less of what the estimate brings into question the idea that you're trying to tie in all of these other social programs to the revenue gains from a wealth tax but what happens if those revenue gains don't actually materialize what happens then? are you just getting more tax avoidance by trying to implement a tax that many other countries around the world have actually let go of because of those challenges. >> what would you do >> sorry, what was the question?

>> i was saying, if not a wealth tax, what would you do >> i think there are lots of ways to go about it. i'm a big fan of the wealth tax. you could go after capital gains. you could go after the estate tax. i think this is a healthy, serious debate to have in the democratic party i don't think it's a civil war, i think it's a good policy debate. >> these are two very different proposals. larry summers says, look, there's an easy fix here he's talking about the step up in capital gains where he mentioned bill gates created a great company, made $100 billion but none of that likely will ever face a tax because it will not get taxed upon his death that's a very different proposal from many say confiscating the wealth of the wealthy every single year. yes, it's a healthy debate why does wealth tax to you make sense versus these other proposals? >> because it gets to that exact point. we have extreme wealth inequality and that helps you

build political power. >> this is where summers was really strong. he said number one situation where let's say just because you took mark zuckerberg down from 70 billion to 50 or even 20 billion that suddenly he would not have political power he said, that argument that wealth is translating into political power just doesn't make sense so can you name one example where it would >> yes, absolutely taking mark zuckerberg's money and using it to, say, invest in child care for everybody say invest in -- >> it doesn't decrease his power. >> sure it does. by empowering the bottom of the population you definitely distribute power away from the top. mark zuckerberg can still call a member of congress and get him on the phone, but by helping people at the bottom of the income scale build up wealth, build up resources you will naturally rebalance some of that power. this isn't a panacea i don't buy summers argument it's part of a wide suite of

reforms the democrats are talking about. >> aporna, i'm curious what you think the fair number is we talked about this with lee cooperman. what do you think the fair percentage of your annual either income or wealth should be in terms of what could be fairly taxed? >> i mean, i think we have a pretty progressive tax system. unlike what they are estimating as the basically saying, look, it's a flat tax system and at the top is regressive. look at the data on federal, state, local taxes we already do have a very progressive tax system i have a lot of problems with their analysis of how they come up with the numbers looking aggressive and a lot of economists will tell you you look at the tax and transfer system at the bottom they're completely excluding that when looking at all of the progress that's made and trying to address -- >> let me ask you another

question do you believe we need more revenue? >> we do need more revenue i think we could -- but it's also a question of how you use that revenue >> 100%. >> yeah, you can have a fair tax system but then use that to mobilize -- to encourage mobility at the bottom i absolutely believe that. but i think you need to figure out -- i don't think the wealth tax is the way to do it. i think as zach mentioned, you can address the capital gains realization, decide the capital gains are not realized and not taxed. those are the kinds of things we can try to fix in the short term you can get more revenues and you can do more for people at the bottom by addressing those challenges >> pat, do you think any of this is going to actually really happen unless you get a democratic president and a democratic senate, do you think this is even plausible >> well, i mean, it depends on the fate of the filibuster and the fate of the senate i think it's still worth talking about. we're missing a little bit of

forest for the trees we're talking about when th the .01% has as much as the 90%. it's important we want to know how much this raises but i think it's inescapable there's a wealth inequality. >> everyone agrees on that, but it's always about what the solution is not the problem. larry summers and other people, including joe biden and some of the more moderate candidates are saying, look, let's focus on the estate tax, let's focus on capital gains, let's focus on taking out all of the loopholes that the real estate guys and others get that is a very different fundamental idea than doing something that 20 countries used to do a wealth tax and now it's only 4. >> warren's plan is designed explicitly with those experiments in mind. she looked at those and her people looked at those countries and learned from that experience which is what we should be doing. >> what did they learn

>> that in the e.u. it's really easy to hop countries. you can't do that here and it has a huge exit fee if people try to do it. >> look, they're going to be implementation challenges. nobody disputes that if one of the results of this plan is we have to give a bunch of money to the irs in order to learn again how to audit rich people, that's great right now we're auditing poor folks at the same rate we're auditing rich folks. the irs admits that's what they have the resource toss do. it will have to include reinvigorating the irs that's a feature, not a bug. >> thank you appreciate the conversation. >> thank you >> it's a debate i imagine we'll be doing a lot more. coming up next when we return, we'll talk about boeing trying to bounce back after that stock saw its worst day of trading in three years it's down below 1% right now

at the top of the hour senator mike braun is going to talk trade, taxes. "squawk" returns right after this devices are like doorways

that could allow hackers into your home. and like all doors, they're safer when locked. that's why you need xfinity xfi. with the xfi gateway, devices connected to your homes wifi are protected. which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today. boeing responded after they talked about the test pilot for

the 737. when he said test pilot, i think of chuck jagr when i say test pilot. >> this was in the simulator, joe. >> in the simulator. >> there are still more questions than answers in terms of what exactly did the chief technical pilot back in late 2016, early 2017 mean when he was exchanging instant messages and emails regarding his thoughts on mcas, talking with regulators, et cetera? started coming outlate thursda into friday. it surrounds the mcas flight control software, the performance of it, within the simulator and his conversations or alleged conversations with regulators did he mislead the regulators? boeing on friday put out an initial statement saying we are committed to the safety of the 737 max. yesterday they came out with another statement saying we understand entirely the scrutiny of this matter, it's proceeding. and are committed to working

with investigative authorities and u.s. congress as they continue their investigations. well, those investigations are heating up but it's not stopping the analysts from saying, you know what, too many questions and not enough answers ubs out this morning downgrading boeing saying we see increasing risks that the faa won't allow follow through with the certification flight in november and lift the emergency grounding order in december. we think a push out of the return to service could increase the likelihood of a pause on the 737 max production system. credit swuisse downgrading boeig in light of the latest discoveries, discoveries which significantly affect the investors. keep in mind the board meeting today, yesterday in san antonio >> phil, thank you very much let's bring in eric desenhal also mark donbrof who is

aviation attorney and a partner at fox rothschild. boeing shares are down what would you be telling people right now? >> i think it's premature to put too much weight in terms of the text messages that we're looking at i think clearly a lot of questions have to be asked context has to be arrived at i think we have to know what the follow through was with respect to boeing and the test pilots involved it was in the simulator. it was back in 2016. i think phil's comment about there's a lot more questions than perhaps there are answers is accurate. and i think for anybody to take any sort of action at this stage and make conclusions is premature. >> you're speaking as a lawyer, not as an analyst and telling people what to do with the stock? >> right. >> with the law you have time on your side, you can wait and

follow things through. if you're somebody watching what this means to the company, it's a billion dollars a month for every month they don't get that plane back up and running. i would say based on the faa chief's reaction which seems pretty harsh, stern, questioning why other agencies had access to those texts and messages months ago and they are just getting it, i would say that does not bode well for that plane being approved any time soon. >> i think it's -- that's correct. there's different constituencies or stakeholders out there. certainly the financial markets are one of them. looking at it from a safety perspective, this all has to be run to the end game in terms of understanding the context of these text messages just like the whole issue regarding the investigation. so i think, again, various stakeholders move at different speeds and draw various conclusions based upon available information. >> eric, dennis muilenburg goes before congress and has this a

the backdrop not what they were hoping for. they took the chairmanship away from him and maybe were hoping that that would quell some of the anger from congress. now you have this kind of kicking everything back up what would you advise as somebody who is looking at public relations in this front >> you have two issues here. you have the real solution and then you have the theater of crisis management. the real solution has to do with what the real problem is, which is either an engineering problem or the perception of an engineering problem. until the airlines are comfortable that these problems are caused by x specific thing and this is the solution, nothing changes. then you have the theater of crisis management which is like an episode of succession where everybody is sitting around figuring who goes on tv and does the interview and who goes before congress because whoever goes -- whoever goes public loses their job. that's what's being debated.

with the revelations over the weekend, what you have is a lot of red meat for the media. >> wait a second, did you say whoever goes before congress loses their job? are you suggesting mule lilenbeg loses his job? >> what i'm suggesting, whoever becomes the public face of something like this loses their job because in the theater of crisis management that we're dealing with, people think that is the answer whether or not it really is because this is the time that we're living in. when people don't understand that most of these crises are not resolved through a pr ploy, they are resolved by solving whatever the engineering, mechanical, operational problem is. >> mark, i would take that a step further i would say what eric laid out about -- was there an engineering problem, is there a fix, i would say on top of that boeing now has the issue of

having been forthright has there been pressure on their employees as "the journal" says pushing on safety standards before they were ready i think that is the biggest problem facing boeing particularly taking this on in the courts what do you think? >> well, i think it's kind of premature to talk about pressure on boeing employees. i saw the story in the journal i saw it was a survey involving something in the order of 500 employees and it had to do with former employees i think it was a reference to potential stress the fact of the matter is in virtually every business, including in the aviation industry, there's stress, there's pressure to maintain schedules and so forth. >> right but you've got over 350 people looking at it. >> i think in the context that we're talking about against the backdrop of two accidents and the controversies that surround it and the investigation, something that is common in most industries in terms of pressure

to move things forward takes on a special significance i'm not prepared at this point to say there's really anything significant about that story. >> think there's nothing to see here >> i think it's premature too say there is anything to see here. >> something to see here whether it was intentional or not intentional, you're talking, again, about more than 350 people who died in two separate accidents. the airline waited after both accidents, the company waited to actually ground those. now you're talking about international flight administrators who are going to be questioning this very front. >> i think what we're talking about right now is the investigation and what that investigation yields i think it's premature we don't have either investigation out from either the indonesians or the ethiopians. >> agree agree. >> to jump to conclusions is premature. >> it looks like you'll be dealing with longer delays >> agreed. agreed. >> does mean it will be a lot longer before you see anything this is not something that will be covered up.

>> agreed. >> mark, eric, thank you both for your time. >> thank you coming up when we return, a big week of earnings we're going to run you through what you need to watch plus senator mike braun of indiana discussing taxes, the trade war and so much more take a look at futures dow up 66 points, s&p up 11 points higher. we'll be back in a moment. servicenow put our workflows in the cloud. this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir.

always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.

under pressure boeing shares down this morning amid questions of the company's 737 max jet. tech under fire. facebook ceo mark zuckerberg prepares to head to capitol hill this week. plus, follow the money what fundraising totals can tell us about the race for the white house as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures are right where they are all morning long indicating a 65 point or so move

higher at the opening bell on the dow. the nasdaq indicated up about 30 and the s&p up 11. a lot of things swirling about today. mostly a lot of boeing double but but also something here with the opioid crisis. breaking news on the opioid trial. it is set to begin today we are seeing headlines that four drug companies have reached a last-minute city settlement. we want to get over to meg tirrell who joins us meg? >> reporter: hi, andrew. literally in the minutes leading up to opening arguments, reports that four of the defendants involved in the trial here have reached a settlement with just these two ohio counties to avoid going to trial here. those defendants are mckesson, cardinal, teva and amerisource this is not a broader settlement that would take care of the thousands of cases against these companies. it is just to avoid going to trial here today

there is a fifth defendant, walgreens, that the wall street journal reports hasn't yet reached a settlement it's unclear whether the trial would continue with just that one defendant. we are trying to dig more into this the journal is reporting that the settlement details should be out before opening arguments at 9 a.m. we'll keep an eye on this space. this would take care of the trial set to begin here today, not the thousands of cases still pending in the opioid crisis back over to you guys. >> meg, thank you for that this was the bellwether to take it out of the mix. it's interesting in terms of what happens next. let's bring in a couple of other big headlines. halliburton posting quarterly earnings revenue did fall short as it was hurt by the slowdown in north american shale drilling. take a look at the sales off marginally we should tell you this morning bridgewater's flagship fund lost 2.3% in the first nine months of the year this according to the financial times. ray dalio's firm wasn't able to

recover the losses it suffered back in august from low government bond yields. right now let's get to some political news reversing -- president trump reversing his decision to hold next year's g-7 summit at his resort in doral. >> talk about spending the weekend reversing himself on a couple of fronts that decision by the president propos proposed the g-7 be held at doral. republicans on the hill said they couldn't defend this decision here's the tweet in which the president ultimately revealed he was backing off. he said, therefore, based on both media and democrat crazed and irrational hostility, we will no longer consider trump national doral miami as the host side for the g-7 in 2020 we will begin the search for

another site including the possibility of camp david. thank you. i can tell you there were people inside the white house who i spoke to friday and friday night who were extremely frustrated that in the teeth of this impeachment inquiry moving forward the president would make this decision which makes life very difficult for senate republicans that the president is going to need in any impeachment trial if that's upcoming there was some frustration inside and outside the white house overthe weekend. mick mulvaney, the acting chief of staff, seeking to explain himself after having suggested that there was a quid pro quo in terms of the ukraine money that was held back over the summer by the administration mulvaney had said at a press conference last week that there were, in fact, three reasons for holding back that money. one of them was the white house wanted the ukrainians to look back at 2016 that would be the quid pro quo piece of this. mulvaney over the weekend on fox news suggesting, no, when he said three reasons he only meant

that there were two reasons and therefore no more quid pro quo here's that exchange. >> if you held up the money for three reasons, that's a quid pro quo. you've got to satisfy us -- now maybe the president backed off that, but that was the proposition here >> i'm not saying three reasons. >> you said three reasons. >> i recognize that. >> reporter: so mulvaney admitting he said there were three reasons for holding back the money. now saying he's not acknowledging there are three reasons for holding back the money. ultimately it's a reversal there from the administration suggesting that, no, in fact, there was no demand to the ukrainians to investigate the 2016 election and the money was not tied to that demand. that's why they're saying now it was not a quid pro quo despite mulvaney saying that a couple of reversals from the white house. we'll watch this later this week. now indiana's freshman senator mike braun i don't know eamon ended there.

i was going to go talk about china. you're from indiana. you used to run one of the big turkey farms out there in the midwest. you know how farmers are feeling at this point and whether there's any -- whether there's wavering support it has gone on longer than i think most people would want now talking about china. >> of course, the chinese were smart when they hit back at farmers. the strongest political group. i can tell you in the farm economy. you can see now i think the strategy's working i knew all along they were a lot more dependent on us than we on them and i think that's playing out with what we see in their economy. i think you've seeing now they're talking about importing pork, soybeans that dynamic is going to go on for a long time. they're in it for the long game and i sense they have more patience and maybe attention to whatever that long-term strategy is i think we're coming out of those effects and the farm

economy with chronically low prices, high input prices. 20 years ago i got involved a lot earlier than that you didn't have huge corporations controlling the dynamic of where you buy your stuff things need to change. i think it's healthy >> auto parts is in your background throw the gm strike along with what's happening with trade and that's tough, too. if you are still selling auto parts would you be 100% behind this >> my business, three of my four kids run it with a great young executive team gives me the peace of mind to do this we're having the best stretch business we've ever had as a company. we decided many years ago not to move the supply chain to china through the manufacturers we do business with. never did have a warm and fuzzy feeling for them anybody who was lured by the

huge market, i think this is a great wake-up call to hedge your bets, get some eggs out of that basket. >> senator, looking back to what the chinese said at this point or what we thought they said, they will buy additional agricultural purchases we haven't seen that yet do you think that's coming from them >> it doesn't surprise me. they're roper doping the situation all the way into the election in november of 2020 they're in it for the long game. they've learned capitalism well. >> you think they're trying to wait out the election? >> why wouldn't they >> it could be ee liz wet warren. >> they're a culture and country and a political system that enables them to do it than to do it in the short term in the mid

term in the long run you'll have to take a different posture to weave into the world economy by liberalizing their political system then they become a reserve currency then all of a sudden the chickens come home to roost for us there's a lot involved there. >> what do we use for rope a dope that is a great expression and it's very -- it's exactly what people do. i'm going to buy time and not really do anything i wonder what we used before i'm glad they had that fight. >> that created a new vernacular. >> it did. we had nothing before that do you think the phase one, was that the real deal is it -- i mean, i saw anecdotal evidence that some republicans met with the president and said, look, there is -- the economy is

what you're running for re-election on let's not forget that. we need to get something done here you don't want to cut off your nose despite your face do you think phase one is a real agreement that leads to something? or was it watch work to show something for it. >> first of all, let's go to the context. the economy has never been hotter from a main street point of view. i know when all of that stuff happened, spoke up for llcs and all of that. that's where all of the action is c corps house a ton of jobs. most of us don't have that legion of attorneys that will get you that kind of benefit in the tax code when that rate for llcs went from thirty-nine six to twenty-nine six, that unleashed something and it's not a sugar

high it's out there working i'm a finance guy. it was the biggest finance thing that happened in main street u.s.a. when that tax code adjustment was made. sadly, that has to be reset in 2025 when you take a rate down to 2021, what's the effective rate now, they didn't need much help there because it's 16. that is driving this economy when it comes to trade, we're a lot less dependent on it than any other players. we need to use that position of strength because most people depend on us that's why the usmca trade agreements we're doing bilaterally. trump was right there. the requests that trump made of having others pay for world defense, that made sense that resonated with all of us in the real world and i think it's right on. >> romney's threatening to --

there are some people saying a 20% chance that there could be some republicans that waiver >> i'll be honest, a lot of this stuff, the agenda has been so good but needles to say, it hasn't been dull since i've been here >> no. >> but i've got to pay that close attention to media, that means maybe some other stuff needs to quiet down. >> has french licht been updated? have you tried to get the president to bring the g-7, any other ideas? >> no, because if i did they'd blast me. >> i don't think france has been updated. >> frenchlicht is the jam of the midwest. >> i said it there's a family -- >> so you're selling it. >> mildly. mildly >> i put in my two cents as

well probably be camp david i think. >> probably will be, but that's an example of where we didn't need it. i talked to the president about a week ago on friday because a lot of stuff was starting to rise to the surface and said, hey, i just completed all 92 counties in a little under ten months which is a pledge i do. most senators aren't moving that quickly, i can tell you. that's how i keep grounded they are with him. they also want to make sure that the good things thcan be talked about because the other side could not have dealt us a crazier pattern to talk about. none of which will work. one quick statement on wealth tax and all of that. >> yes >> i've been one of the few senators to see that there's room to raise revenue. the only place you could look is on high liquid incomes and if you tax 100% on ordinary income, it raises 600 billion.

our deficit is a trillion, soon to go to 1.5 trillion. i'm trying to get the cbo to admit that it's revenue neutral. we're generating more revenues than ever but our spending due to medicare, social security, medicaid is going up 4 to 5% a year so it's unsustainable. >> great to have you on set. >> thanks for having me. when we come back, technology under fire. facebook ceo mark zuckerberg prepares to head to capitol hill this week. we will tell you what investors need to watch next. stay tuned, you're watching "squawk box" on cnbc and we'll be right back. ♪ ♪ ♪ ♪ ♪ ♪ ♪

man: how can i deliver superior long-term results? it begins with a distinctive approach to managing money. that for over 85 years has focused on keeping confidence up when markets are down. an approach where portfolio managers work well independently. and even better together. who don't just invest, but are personally invested. can i find a proven approach designed to deliver results? with capital group, i can. talk to your advisor or consultant

for investment risks and information. a /*

it's a big week for mark zuckerberg he is expected to testify wednesday on capitol hill for the first time since answering questions about came bridge analytic ka. julia boorstin is here. >> well, becky, ahead of his testimony before the financial services committee mark zuckerberg is a regular in washington, d.c. he met with maxine waters, chair of the house financial services committee as well as the republican on that committee, patrick mchenry. on thursday he spoke at georgetown university about the

importance of freedom of speech and he attacked china-owned rival tiktok >> while our services like what's app are used by protesters and activists everywhere due to strong encryption and privacy protections, on tiktok, the chinese app growing quickly around the world, mentions of these same protests are censored even here in the u.s is that the internet that we want >> reporter: he capped off the week on fox news in an interview on friday news tonight he'll be on "nbc nightly news" with lester holt all of this comes ahead of his testimony on wednesday when he'll be pressed to create cryptocurrency libra high profile backers have recently backed out. the treasury warning that it could be a tool for money launderers and terrorists and there are privacy and antitrust concerns zuckerberg is trying to get his word out before that testimony andrew >> julia, thank you. joining us right now to continue

this conversation is michael ferdick, managing partner of world ventures and we have the editor in chief of the verge you were live tweeting a lot of what was going on last week with zuckerberg >> yeah. >> you were not happy. >> >> facebook exists. it happens to you. it's like the rain i think zuckerberg has two problems he has to continue working facebook he has to convince smart students to get on facebook. he has to construct a world view for that company that stands up against google, organize the world information, apple protect your privacy two, i think he is gunning to become a regulated monopoly. i think he is telling capitol hill, we're big, we're going to stay big, we're up against china. yeah, come on, regulate us give us some content moderation guidelines change section 230 we're it we're the big ones it's either that or you inject some competition in the system

which for facebook -- >> it's nice to see you, michael. what do you think about changing section 230? do you think that's the right thing to do? >> i've written for a long time about section 230. that was written in 1996 that's a millennium ago. it was intended to protect those sites from lawsuits arising from content that was posted by malicious people but back then you knew who the malicious people were because you had the credit card information, address, real name now you can post things very anonymously. section 230 was intended to protect the cradle of the internet now it needs revision. i've said that for ten years google and facebook used to say any change would result in

stalinism. i think mr. patel is on to something. he has a good point. i don't think that the private company has to set policy about free speech. you might say, hey, mensch up, zuck, do the right thing i don't think a private company has to set policy for free speech the thing that does not sit well is when they wrap themselves in the flag and claim it's for free speech that's not true. they charge money for the ads they're posting. the most click baby stuff you can imagine is the most c controversial stuff. >> michael, he has a point >> yeah. >> there's so many other places out there like tiktok, you're not seeing about these hong kong protests, you've seen companies

cave to the kren krcensorship t china wants them to censor maybe we should celebrate it. >> isn't he doing just a good job of changing the topic and getting your attention focused on tiktok. >> it's true >> we should be talking about what the topic really is, no, that's not what we're talking about. we should be talking about the russians who are hijacking and spreading false information. the iranians who are spreading false information and spreading false information from the cities to the countryside in america and pretending to be real we now know that facebook does as little as it can until it's forced to. facebook makes a lot of noise about protecting privacy and burries the privacy controls deep in the bowels. >> should we not also be concerned about what's happening

in terms of censorship with the chinese? you watch what happened with the nba. >> i'm always concerned with the chinese. >> there's room to be concerned about a lot of different fronts. >> it's a decision about the chinese. i'm sorry, i think you're letting his lawyers set the conversation instead of allowing us, including yourself, to focus on the things he's worried wi . about. he doesn't want to take on the paid for ads that are going to be misleading americans and misleading americans during the election cycle that's what he doesn't want us to be talking about. he wants to compare himself to tiktok facebook also complies with rules around in different jurisdictions. he's trying from the podium at georgetown to sound like a great american on this topic of course his lawyers are writing this for him, his pr people are writing this for him.

let's stay focused on the invasive russian trolls and the invasive iranian trolls. that's the problem that's facing america and invading facebook. >> do you agree with him my other question is is there an argument to be made for a complete and open version of social media >> so two things one, it's true the chinese platform companies are really big the american platform companies are not allowed in china google didn't go there they've been trying to build a censored search engine. >> they got slayed >> facebook, mark zuckerberg learned mandarin asked chairman zi to name his child. he walked away from that deal. but if you don't have access to the market, it's hard to say i think tiktok is the one chinese social network here in america that is popular compared to youtube, twitter, facebook. the other argument is i think telecoms naturally tend to monopoly

they want to own the entire distribution space and charge taxes. facebook is getting to that size >> do you think that's a fair solution do you think they should be regulated like a monopolmonopoly >> joe, in your economic sense do you think we should have one tightly regulated monopoly or less slightly regulated set? >> as you can imagine, i'm torn on this. i like successful companies and as peter teal says, you can have a monopoly sort of arrangement that's not a monopoly that's the greatest thing. >> if you're the business, that's great for society, what's the right answer >> i don't know. are you worried about consumers or competition and if -- >> ultimately i'm worried about consumers and competition can be -- >> i don't think consumers at this point are adversely affected maybe down the road they are going to be. >> i think the argument is

consumers are definitely adversely -- >> in what way >> if you are frustrated with facebook and the privacy controls and -- >> we're big boys. i can look and decide. i just -- >> where do you go let's say you want to share photos with a wide network of friends? >> that's a good point that is a good point where do you go? zuckerberg's very deft they buy the audience attention. they buy snap chat, instagram, what's app when their core platform attention starts to dwindle and it starts to wane, the growth starts to wane they buy the competition. very wise on their part. >> breaking up at&t was a good idea. >> he's actually describing it. >> they have reconstituted michael in paris, thank you for joining us we're going to continue this debate >> we love technology. we love silicon valley. >> that's a trick question

>> we'll continue this. >> i think the conservatives and liberals have flipped positions here you have conservatives saying let's regulate this company. zuckerberg saying okay >> that looks like the least of two bad alternatives. >> liberals saying -- >> let's let the market figure it out >> some at home. where i should be. >>. >> al:'s we all's well in your ? >> yeah. >> for me it's about google maps can i keep google maps >> yeah. >> do what you want to do. don't forget to subscribe to our new podcast. you'll get interviews and behind ste en aes ay tuned

but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you. tell him we're flexible. don't worry. my dutch is ok. just ok? tell him we need this merger. it's happening..! just ok is not ok. especially when it comes to your network.

at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing.

coming up when we return, ralph nader lost a family member in a march crash with a boeing 737 max and says the jet should never fly again. consumer advocate's going to join us live to talk about the latest headlines on the company tethrnrit wk box" retus gh afr is i can't believe it.

what? that our new house is haunted by casper the friendly ghost? hey jill! hey kurt! movies? i'll get snacks! no, i can't believe how easy it was to save hundreds of dollars on our car insurance with geico. i got snacks! ohhh, i got popcorn, i got caramel corn, i got kettle corn. am i chewing too loud? believe it! geico could save you fifteen percent or more on car insurance. ♪

♪ ♪ welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. mattress retailer casper sleep is reportedly working on an initial public offering. it's hiring morgan stanley and goldman sachs to work on the ipo which could occur in the first half of this year or 2020.

saudi aramco is going to launch the delayed ipo in early november the oil giant is hoping that those numbers will boost its valuation by showing that the september attack on saudi oil facilities had little impact this delay is just the latest for saudi aramco plans for an offering had first been announced three years ago. verizon is said to be psy seeking a buyer for the huffpost sale bank of america is the latest company to offer zero commission trades. they say the merrill edge customers will get unlimited free trades. those who aren't in the loyalty program, the disloyal ones, will pay $2.95 a trade. compared to the prior $6.95. charles schwab, as you know, cut commissions to zero earlier this month quickly followed by rival.

>> boeing shares are lower again this morning following a number of negative headlines on the plane maker. phil lebeau joins us with the latest phil. >> reporter: andrew, it's one of those mornings where the in box sees a lot of notes from analysts already we're seeing two firms credit suisse and another are downgrading the stock. the main question with all of these notes, will the return of the max be delayed by extension does that mean they're going to potentially have to alter the production level which is at 42 per month when you look at where the max is in terms of expectations, boeing is sticking with its guidance there you see it on the far right. it expects to have the plane return to service or at least designated that it's safe to fly by one major regulator by the end of the fourth quarter. the u.s. air lines have moved back their expectations. in fact, when you look at southwest, that should be february 6th you're going to see this with

more airlines around the world questioning whether or not they bring this back in the first quarter. dennis muilenburg attending a meeting yesterday and it continues today in san antonio we do not expect to see any statements from the company regarding what happened on friday and the release of documents. they issued a statement yesterday and as you take a look at shares of boeing, remember, this is a company that reports earnings on wednesday. yes, the numbers will be in focus but really, guys, the main focus will be the commentary from dennis muilenburg regarding the 737 max, not only the latest revelations but also what we can expect in terms of the company's guidance for a return to service certification. >> phil, in the past you've looked at all of the different support levels we're under those for the stock itself >> i don't know where the

technical analysts are i do believe we're down below the most -- there you can see. that was december. >> december, august, september it got down in the 325 range what's interesting, joe, if you look at some of the analyst notes, they're saying, this is overdone if you really believe in this country, believe they're going to get past this, you will be buying this stock at this level. it's one of those rare days despite all of the headlines there are analysts out saying this is a good opportunity. >> phil, phil just mentioned newly disclosed emails we've been reviewing have renewed fears over the safety of the 737 max. joining us on the phone is ralph nader. it's good to have you, mr. nader. you've been fairly outspoken on this on previous appearances on the show i have a feeling that you would

point to some of the latest anecdotal developments and say there was a reason for you to be expressing some of your very vociferous points earlier with us i guess you don't -- you're not looking at boeing in a better light now than you were before >> well, i think because of the internal emails that have now been belatedly released by top boeing pilots, test pilots saying that the simulator that tested that software, the mcas that was put in the planes by boeing to deal with the increased risk of stalling by the boeing 737 max, that's creating a lot of trouble inside boeing it is sparking further the justice department criminal probe and it's angered the chair of the senate house transportation committee and who

will hear dennis muilenburg, the defrocked chair of the board, the ceo of boeing who will testify before the committee there are a lot of shoes yet to fall the analysts should point to that congress has not been a factor up until now but it will become a factor, even the senate committee under senator wicker is going to hear on october 2 h 29th, dennis muellerberg the faa is on the heels reeling backwards because it didn't demand production of documents sufficiently from boeing and it didn't act in time from boeing as the aerospace safety expert, dr. alan diehl told me recently, the boeing marketeers overruled the boeing engineers that's how he summarized it.

focus on full certification of the plane demanded in a letter by the faa of the ethiopian airline crash families because it is a new plane, that's going to be cranked in in the new fashion as well as captain sullenberger who demanded there be simulator training. the focus has to go back to the source of the problem, which is the engine overloads of an old fuselage in order to get more fuel efficiency to compete with the airbus 320 neo that is what shifted the center of gravity pointed out in captain sullenberger's testimony before the committee in june. >> let me ask you though in terms of steps forward for boeing, it sounds to me there are two issues for you one is the accountability issue. i'd love to understand what you think being accountable means at

this point for boeing, what would have to happen, and then separately, to the extent you don't believe this plane should be in the sky, is there any way you can imagine that this plane could be put-back into service in its current construction. >> accountability means replacing dennis muilenburg and the current board of directors. >> all of them >> yeah. they're so dug in, joe, that they have a career conflict of interest with the well-being of boeing in the future and that often happens when the guys at the top can't say they were wrong, can't admit things, can't change things fundamentally, they are jeopardizing the future of the boeing corporation in terms of civilian aircraft production that's why in japan and elsewhere the executives quit

and quit quickly that's why in our country the corporations get a change of leadership it's not happening at boeing because the people at the top are in the same pit together they don't want to admit that they really, really performed in a very seriously adverse way to the safety of airline passengers. >> ralph, they did strip the chairman job away from dennis muilenburg it's david calhoun >> that's right. that's the first crack they have to legalirealize that not good corporate governance to realize that the ceo has to be chairman of the board. the board has not changed either the board, either they didn't care to know over the last two, three years when all of this trouble was being exposed with

the mcas or they were complicit, either way i hope there will be more light on it. >> the faa, you didn't touch on that we're finding out that there was a lot of -- i mean, they work closely with boeing obviously. the paths seem like what you would want but not if it's too incestuous >> that's right. >> i'm sure you're not too pleased with that. >> the new head of the faa is steven dixon he's been there about two, three months i think he's going to have to get his own team i think to have mr. atwell, the acting administrator, and mr. elbaharimi the acting safety chief there is baggage he does not want would seem to me. he would want his own team look forward to some personnel changes at the faa

it's about time congress funds the faa. it's not entirely the faa's fault, the curby relationship. all of that was pushedly congress and the white house since 2005 to delegate more and more of the safety inspection to boeing and away from the faa instead of being a regulator the faa was a dell will l delegatord elbaharimi was going to be an abdicator. that only happens if they provide the faa with enough budget to have enough technical staff and specialists to do the job for people and global air safety. >> all right ralph nader, thank you consumer advocate, ralph nader joining us on the phone. we'll be talking to you again, i'm sure thanks. a lot more on "squawk box" this morning the top movers names you need to know don't forget to subscribe to the podcast. you can get the interviews that takes place every morning.

look for us on apple podcast or the favorite app stay tuned you're watching "squawk" right here on cnbc so ...how are you feeling? on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities. thanks drone. customers into fanatics change the whole experience. alright who wants to go again? i do! i do!

i have a really good feeling about this. i'm off to college. i'm worried about my parents' retirement. don't worry. voya helps them to and through retirement... dealing with today's expenses ...while helping plan, invest and protect for the future. so they'll be okay? i think they'll be fine. voya. helping you to and through retirement. i am royalty of racing, i am alfa romeo.

a number of analyst calls this morning dom chu joins us. >> good morning, joe we're going to talk about shares of apple which are up half a percent pre-market roughly 170,000 shares the iphone maker gets a target boost by analysts at raymond

james. it goes to 280 it was 250 before. they keep the overweight or outperform they are seeing more favorable data on the earlier iphone 11 channel checks next up pinterest up 3.5%. roughly 70,000 shares. the photo and content sharing social media platform gets upgraded from outperform analysts over at rbc capital management it goes from 35 bucks to 30. they cited stronger use trends and innovation future monitor ryization current stock levels, that's helping the shares go green. it will end on shares of peloton which are up around 3% or so the company getting a slate of new analyst coverage across wall street generally all buy or outperform ratings like jpmorgan which is overweight with a 32 price

target given peloton owns its entire platform all the way to the content for users. a slew of these analyst upgrades becky, back over to you. >> dom, thank you. >> joining us to talk about what's happening in the markets is axana aranoff also peter bookvar is chief investment officer and a cnbc contributor. looking at the markets, going back a year. kind of in the same position that we've been through this whole time. >> chalking around, digesting the rate heights from the legacy ones in addition to the balance sheet shrinkage on top of the tariffs. being in the tenth or 11th year of expansion, a slow down of hiring in part due to the supply of labor all leading to the slow down in china also it's digesting a multiple that was inflated and needed to grow

into. >> that's what i wondered. have we grown into it? we've gone nowhere and they're beating granted lowered expectations coming in is this a point where think the market could push back up and push through 3,000 or not? >> you need the earnings acceleration that doesn't leave you much room for error. margins are contracting. revenue is still okay. n nominal gdp growth, marriage reasons contracting. a lot of that is contracting it is did for employees, impacting employer profit margins. >> i guess the other side of that is, okay, look at what you're getting in treasuries now. yield is next to nothing and corporates are kind of mimicking that too. >> absolutely. fixed income across the board, the story is the markets are extraordinarily rich, extraordinarily highly correlated and liquidity is w tenuous at best. when you look at lower rated credit, koorncurrently high yied

spreads, the consensus is 25 to 30%. last time the gap existed was in 2008 and across the board spreads are pushing to the tightest end of the historical range and that means everything is acting like treasuries because everything is sitting right on top of treasuries, hence the high correlation finally on the liquidity side, you have no liquidity, we're seeing signs of this in the repo market, why banks are really limited in terms of how much balance sheet they can lend. and the ownership of the market changed dramatically, shifted a lot to the mutual funds and the etfs, not really a great liquidity -- >> that sounds crazy you think of where we are with central banks, we should be awash in liquidity we probably are, look at places like the private -- the prepublic equity markets, all these big valuations that have pushed things up there is money everywhere. >> liquidity shifted to the buy side, from the sell side the buy side decision-making

process is so different. it involves investment communities. and on the fed, and the fact that the fed has done this about face last year and is now in easing mode, and this should tell you how close to that zero balance we are, you would think in this environment of the fed easing again, you would see, you know, the ag outperforming it has locked in really great gains so far this year in september, the aggregate was down, you know, generating negative returns and in october it is as well who would have thought that in an environment where the fed continues to ease. that tells you there is really extremely limited opportunities set in these sort of traditional fixed income pockets >> pete, you don't think the fed will ease in this meeting. >> i think that they'll end up following what the market is saying market is pricing in that. but if you get some detente with china and brexit deal resolved, i don't see why they feel any pressure to cut, not much has

changed in terms of the data from the last meeting to this meeting. in fact, you had some global developments sort of clearing up i don't see the need in addition to i don't see the benefit. you talk about cutting rates from an already low rate you look at the housing market, the bond -- the long end cut 100 basis points for anybody looking to buy a house the auto market is not going to be stimulated by 25 basis point cut, the average price of a car is now 60% of the median income in this country. you don't stimulate auto sales corporate leverage is extraordinarily high, so companies are not going to necessarily going to use that 25 basis point cut and go out and borrow more. so there is not enough analysis in my opinion on the part of the fed to see what are they stimulating when rates are already so low. >> peter, thank you, both, for being here today good to see you. >> okay. want to get down to the new york stock exchange jim cramer joins us now. we have been talking about boeing all morning long now. in addition to the opioid settlements which are also making news.

and we got earnings coming up all week boeing, what do you do >> i think it is pretty devastating. i think that the -- the stories out here are just so horrible that -- they reflected in the stock? people are giving up on the stock. so i'm hesitant to just give it up here because i do think that there is pathway out here, but this is about as bad a corporate crisis as i come across. i'm trying to remember where else we had one where there has been no change, no admission, the story out of boeing has been that it was really the government that kept them from telling what they really need to say in their own defense well, here we are, if this is their own defense, what -- why did they tell us they couldn't -- their hands were tied because of the government that turned out to be not true they had -- turns out they didn't have anything good to say. >> so here's the question.

i think there is going to be an accountability question in terms of whether you think management changes or board changes, ralph nader, he's throwing everybody out, the second -- how quickly you think this plane can get back in the air. there was intention to get it back in the air by the end of this year. now analysts are putting that out into march some are saying it could be longer >> yeah, i just think that you don't necessarily have to hold them guilty and therefore delay the plane over emails because if they fix the thing, boeing -- let's say you're in charge of boeing now, the narrative is pretty terrible. you come out and say, okay, listen, we screwed up, that was the previous regime, we have a new regime, what is going forward, not what happened in the past, what is going forward is we have triple redundancy that's what people want. we'll take care of the past. if we don't want to -- if we can't do it to your satisfaction, you can take care of it. we're thinking about what's going forward, clean break with the regime that's what they have to say

they obviously don't want to do that that's what any crisis manager would tell them to do. it is awkward. that's what they have to do. they screwed up so badly it is time they just said, hey, we're throwing the regime over the -- under the bus now we have to think about what's going forward now they're trapped in a narrative, their fault, they're not doing anything everybody knows that's the case. it is interesting to have a situation where everybody knows what they have to do but they just won't do it. they're really amazing they're their own worst enemy. >> jim cramer, we will see you in just a minute on "squawk on the street." >> thank you. >> later, you don't want to miss secretary of state mike pompeo he'll be live on cnbc later today as well. you can catch him on "closing ay te.at 4:00 p.m. easternim st tuned you're watching "squawk" on cnbc ♪ i got that vibe, got that vibe ♪ ♪ got that vibe, yeah, i ain't petty, ♪ ♪ looking fly, looking fly, ♪ ♪ looking fly, yeah, they ain't ready. ♪ ♪ i can shine, i can shine, ♪

♪ i can shine. ♪ i'mma do what i'm made to do. ♪ ♪ i'mma do what i'm made to do. ♪ built for excellence. you start from the foundation up. the excellence is reaching dreams and chasing them at the same time. ♪ woman: what does the word "partner" really mean? someone i can trust. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods.

that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information.

final look at the markets before we hand things off to "squawk on the street. dow is indicated upby 70 points s&p futures up by 14 the nasdaq up by 39. the dow up by 70 amazing when you consider the impact of boeing once again. look at shares of boeing that stock was down by 9% last week big chunk of the losses coming on friday. right now, it is down another

2.5% and that is putting a drag of 65 points on the dow. so boeing wasn't there, being down by this, you would look at the dow up by over 120 points. that does it for us today. join us tomorrow right now time for "squawk on the street." ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber buckle up for a busy earnings week a quarter of the s&p reporting in the coming days what a week weend in the uk. the ten year 178 is about a one month high road map begins with new