>> good morning. welcome to "squawk box" here on cnbc we are live from the nasdaq marketsite on times square joe is out today but joe taranoa is in with us. >> good to see you boy, this set is beautiful you get to see each other and you have to make sure you are in shape. >> joe is cnbc contributor and senior managing director of investment partners. you'll see we are looking at some green arrows. yesterday, you did see a decline. yesterday, the dow down looking at the weakest performance since

october 18 futures indicated up about 50 points for the dow s&p indicating to be up about six points all of this riding on the big number >> it is jobs friday expecting an increase of 75,000 none farm jobs and increase of unemployment rate of 3.6%. the numbers are weighed down by the strike at general motors those striking are treated as unemployed that's important to remember >> overnight in china, new data showed factory activity slank. analysts expected it to pick up from last month. all of this raises the stakes for the trade war.

eunice yoon has more for us now. >> thank you, becky. that official number was different from the private survey that came out showing factory activity expanded at the fastest pace in two years. it could be because the private survey tracks small and private companies as open toesed to large ones. china this morning proved to be a tech power house the goal here for 50,000

they keep on serving now with the 5g enabled phone apple is on 4g and the huawei phone is 10 times as fast. that could bode poorly for apple prospects here the fact that government is being very aggressive for its roll out the operators are also very aggressively marketing the 5g services not everyone is convinced it will be a huge advantage. when we were testing out those services, it was interesting, you could still download services and aprils pretty fast

the big question is how will all of this play out if you have a driverless car in that kind of world still big questions as to exactly how this is all going to play out >> eunice, let's start with the numbers in terms of decline and production and official numbers that come through on all of this what is the appetite for trade talk or trade deal at this point? >> we are seeing the main. what appears to be clearer and clearer are the chinese authorities are willing to take over that cold day for a while and make sure it doesn't get a deal the chinese will make some

compromises. some of state subsidies and important ways in which they run their economy, they are not so willing to move. today happened to be a day when the authorities were talking about a major four-day meeting that took place this week in china. all about strengthening the party leadership making sure president xi jinping will be core of that leadership. the communica that came out said the state is going to have a very, very important role saying the state has a visible hand in the economic priorities. it was all about how the party needed to improve and control government at all the levels

the message sent is that the government will not want to give in on subsidies or any matters that would make it look weak >> state subsidies has not been something i've heard talked about. but state subsidies is other issue for the world. it is still important for the government here. especially now, one of the things i heard more recently from china experts who are chinese. they are saying the message they got now from trump and the administration is that it is important for china to be self-reliant the government here needs to be sure china is self-reliant they need even more state

subsidies. it is a confusing message. specifically on the economy, they wanted to be sure they had a visible and invisible hand you want to encourage the private sector >> eunice, real quick. we talk about it so much i've been worried that we the u.s. may well be behind. how much of the roll out is being juxtapos to what we are doing in the u.s. and this iphone issue you just discussed. >> quite a bit today again, the communist party had a global piece about how the

u.s. is lagging behind and that they are the ones that will lose out. in china, we are raising ahead there is an emphasis on how because the u.s. from china's perspective being narrow minded on this issue on 5g, that consumers there are going to suffer >> thank you the complicated part is that we will have faster 5g in this country. it will just cost more >> from consumer's perspective >> from the build out of the infrastructure in the u.s. is so much more expensive there. what is happening is they are using low band and midband spectrum that can go through walls and stuff. it isn't as fast is it requires

less infrastructure. they have to be relatively close to you because it is running at a high level of frequent one si. >> they are doing it in some big nfl stadiums now there are parts of the stadium that can't get 5g. you need that many cells to get the coverage >> especially in new york city it is a huge issue it is a big fight about who will win this and how much it is going to cost. let's talk about wework. ad ad adam neumann facing troubles

being accused of sustaining a gender pay gap a new male that was hired for the same position when she was out was offered an an sul al vi of $400,000. she was just paid $150,000 he asked her her plans to get married and have a baby in her job interview. and said mat earnity leave was a vacation and smoked marijuana in front of her on transport planes she had to tell him she couldn't travel with him anymore. i read the suit.

it doesn't make sense. you say, it actually does make sense. >> especially smoking pot on the plane and having to tell him that. >> it is a young culture i don't know if anybody knows the rules. >> led by a guy who thinks he's jesus. >> the behavior is repulsive there has been an impact on the market the money has come out of the ipo market it is a positive impact because the money is now flowing back to megacap technology, large cap technology kwiendi kwie finding where there are quality cash companies where you have sustainable earnings over time that is good for the markets so this money coming out of the

ipo is actually helping to lift the market >> the bad news is is that you'll get your tires kicked that's a good thing. you wash out the garbage this is the emperor has new clothes thing. we talked about the ipos here with expectations for next year. not what we've seen. it is slowing down but long term, you are right it's a good thing. >> president trump has filed paperwork to change his residence den si from new york to florida he says his primary residence is palm beach the first lady filed identical paperwork. he tweeted, i cherish new york and the people of new york

unfortunately despite the fact that i paid millions in taxes, i have been treated very badly by leaders of the state the governor there tweeting, good riddance. not like he paid taxes here anyway florida, he's all yours. >> he paid no taxesin new york >> i don't know the full history because he won't tell us about all of that. two issues here. one, lots of very wealthy people in new york who are leaving. >> because of the new tax law. >> by the way, he did that let's call a spade a spade second question of course, does he ever come back to new york? >> i thinkthere is a third question, is this political. >> the election is coming up, florida is a swing state >> you think by becoming a

florian will help him? >> i thought about that too. >> being a new yorker didn't help him >> forget it you are never going to win new york he's a victim of the tax law he set up here. how many of our guests have we seen move to florida >> a lot of guests lee cooperman. we'll talk about that. does this mean fifth avenue will get opened up a little bit >> because he's here less frequently >> commuting, traffic. the economic harm those barriers created for stores including tiffany is real. >> compared to lvmh. >> maybe they knew this was coming >> when we come back, it is launch day for apple's new

streaming service. we'll take a quick look at what it to mean, that's next. we'll talk more about streaming, twitter's ad policy and her interview with edward snoden "squawk box" will be right back. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs.

all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today.

>> welcome back. apple will roll out its streaming service making it free for every customer who bought a new apple product. priced below $5 a month. joining us to talk about the high expectations for apple is our guest. and cofounder and managing

partner at loop ventures we'll start out talking about what this means, what the expectations are it is different than the other streaming services $5 and free to many people. >> not only is it cheaper and free, that's the right price for it it only has nine titles. people are trained on netflix in addition to a giant license catalog. on apple, you are not getting that it's nine titles and you are not even getting entire seasons at its launch it makes sense for them to give it away. next year, when a bigger majority of people will choosing to pay for it, they'll know what they are buying. >> it sounds more like the amazon strategy where you are

getting it free if you are signed up for prime anyway >> i think that analogy is important. we zero in on the content line up the more important strategy, similar to amazon is to bring together a lot of different products for consumers it is the only company that can go end to end. they are just filling in that element similar to what amazon has done with prime video. >> gene, the fact that tv plus is being accounted for as services revenue, does that indicate that going forward, eventually this is going to be free throughout and no one will be paying or it will be higher content costs related to it? is. >> content costs will go up.

it is at about $1 to $2 billion. netflix is about $15 billion signing up 200 million people, undoubtedly, people will forget to cancel and be shepparded in there. when we put all of this together at $5 a month, this probably adds somewhere around 3% to revenue. it is measurable most important is this theme of bringing all these products together in the text staples company. >> gene, two questions one, do you think they'll ultimately need to buy a library? >> no. >> you think they won't

materially need more content to get the price higher the way you are talking about? >> let me take a step back i believe they could when you say a library, i think of the long-tale netflix >> when you think of iconic. like lion's gate or a studio that had a library of 1,000 films or tv shows to build this out because of the issue you are talking about. even if you are able to produce another 10 to 15 shows, is that enough to sustain it >> i can tell you what apple is saying, they are having fewer titles >> i know what they are saying just asking what is apple's

strategy with a lot of fanfare, apple announces the news plus. does anybody have experience in the take up of news plus you know i'm an apple crazy person i don't think it has been that high >> i don't think they've said. the piece we are not talking about whether people will be willing to pay, is are those titles any good? you only have one title and that is "game of thrones" and it is that good. people will pay $5 for that. even if there is only a few people have to see, they'll still pay. the problem is, you have to find fire in a bottle every couple of months finding the fire in a bottle for the masses is one thing but

hitting all the nieces >> this is value ad and locking you into the eco system. >> i wonder wherewith this all leads to is this an overall subscription model. i think that's the place apple will end up. >> it feels more like amazon strategy it works for what apple is already doing. the photos and the music >> the hardware is the key element. every two years, the upgrade you don't have to be worried about it >> the one bundle to rule them all. they are building it they are tired of being reliant

on the iphone being the only thing. >> thank you for coming in gene, it is good to see you. >> coming up when we return. the jobs report isn't the only data point we'll tell you where pintrest shares are plummeting in early trading. take a look at that stock. off by 21% we'll explain why when we return ♪

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ ladies and gentlemen mini is a different kind of car. for a different kind of drive. ♪ ladies and gentlemen for the drive to create a new kind of family car,

that became a new kind of race car. for the drive to rebel, zag. for the drive that's inside you. and inside us. that's the drive under the hood of every mini. because every mini is... for the drive. ♪

>> time for the executive edge this morning pintrest is plummeting today adjusted earnings beat forecast but revenues fell. they spent more on advertising to attract more small and midsized businesses. looking like off by 21.5 points right now. >> the problem is everyone wants growth beyond the u.s. pintrest had the growth. that's the problem the revenue is with domestic users. they added 22 million users. 2 million only in the oous the problem is international growth there is less spend internationally in terms of advertising. they are getting paid more in the u.s. the u.s. is bringing in more i think it is $2.93. the focus needs to be here d

domestically growing >> do you think that is strategic with have they run out of runway in the u.s. >> there is a theory there is saturation in the u.s. it opened in april it has fallen back below the ipo price. you'll find some support but the messaging is important how are you going to grow the domestic user base >> take a look at this one too u.s. steel reported a loss in third quarter. revenue slightly higher than estimates. sales dropped 18% from a year ago amid fallen prices and fallen demand for steel. >> when we return, we'll talk about job reports and other data you need to be prepared for.

>> s&p futures up by six nasdaq up by 21. a lot riding on that number that hits in just two hours time. >> that was wonderful. >> i loved it. >> that was great. not bad. al gd.re was parts that weren't relyoo>> it was pretty bad >> awful hey. boo. 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.

rowithout the commission fees and account minimums. so, you can start investing today, wherever you are even hanging with your dog. ooh, like her. she's probably investing right now... taking charge of her money, making it happen. she's - not going to be happy about that pillow. it's time to do money, so what are you waiting for. download now and get your first stock on us. robinhood. is that pgim, we see alpha emerging in the trendsete? 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.

>> the jobs report is out today. it is not the only important piece of data we'll be getting manufacturing data hits at 10:00 a.m. eastern time today showing contraction for the third month in a row the gm strike is expected to weigh in on that number. we wonder what we'll think of these numbers when they come out if people try to discount them and say it doesn't matter. investors say goodbye to october and now the rate cut by the fed. the jobs report is due out in less than two hours from now joining us this morning our guest and our guest host this morning. scott, since you are new to the

table, we'll start with you. what do you expect from the jobs number, what is the market expecting? do we get concerned or does it get written off? >> you've lined it up perfectly. through that data, well look at manufacturing. we expect to lose 50,000 jobs in manufacturing and people will pay attention. if we lose fewer manufacturing jobs, that means the gm strike will have less of an impact. i think people will discount it because of the strike. as you pointed out, we'll start looking at ism data and look at the pmi data which is better than expected. we'll look at the china data and say, you know what, maybe things are not as bad as we feared.

>> when i think back in april back to the third year of the presidential cycle last year, he had 6% down. i don't think there was much credence given to the fact that a third year of a presidential cycle is a strong one. >> so these people are going to get big gains? >> the question becomes do we have a chase for performance sentiment has been depressed in defensive. you look at all the asset classes. total return s&p is up 20% investment grade up 12%. i could go through all of the assets, everything is higher and that comes in an environment where eps is flat. >> you think the chase to go higher continues it has to. it has to because there are

other people who think the emperor is wearing no clothes. >> who is the emperor? what is the difference in 2019 versus 2018? the difference is you have a friendly fed versus a hostile fed. >> we've been treading water if we go back a year, you see the huge dip at christmas eve. we have a huge dip up. >> important level is interest rates. snow, you may be right about the president being in his third year but he's had very little to do with that. that's the reason the stock market is higher in a situation like that with the 10-year yield dropping by 40%.

about 150 basis points and earnings being pretty good not great but good of course, the stock market will do better. i don't think that would do great for us to do well. the fact is likely that the president has caused more problems for this market with the tariff battle than anything else >> the conversation is not about the president. the conversation is about the market and liquidity i think we are saying the same thing. it's about the liquidity in 2018, the average 10-year yield was 2.91 the average for 2019 is 2.19 profit margins are actually going to be lower for s&p 500 companies. >> joe, i would add to that. if you are looking at next year, then you are in the fourth year of presidential cycle with a president who wants to be

reelected and wants to make sure he's a little more caution about doing things having an effect on the economy like trade war and things >> going back historically, in an election year, the first three to six months are challenging. i would expect that for assets to run into the natural head wins of uncertainty surrounding an election. where we are positioned right now, it is just focusing i think it is one of the reasons why apple is rising so dramatically >> it's been a good year i can't see much disrupting it >> becky, to your thesis, he got elected by speaking to people who generally seem disaffected by being brash and outrageous. doesn't he have to cement that

base by continuing to be brash and outrageous rather than throttle it back and being presidential isn't he going to go out there and in other words, ramp it up >> i don't know. i don't know i would assume he wouldn't want to be too brash with the chinese i'm guessing because that is the type of thing that could hurt the economy and i would imagine he doesn't want to do. >> a lot more on squawk this morning. a new show down between wall street and washington. robert frank, what do you have >> cooperman accusing warren of vilifying the rich and treating him like an ungrateful child more on that including warren's response coming up after the break. (vo) the flock blindly falls into formation.

flying south for the winter. they never stray from their predetermined path. but this season, a more thrilling journey is calling. defy the laws of human nature. at the season of audi sales event.

dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere.

welcome back the war of words is heating up between cooperman and senator warren the latest a critical letter

from cooperman to warren and the senator tweeting back a response robert frank joins us with all of the gossip and detail >> this is getting juicy >> billionaire investor sending an open letter to senator warren yesterday saying her soak the rich policies are miss guided. >> if elizabeth warren is elected, in my opinion, the market will drop back 25%. all the billionaires i know are self-made and give back more than to themselves >> warren tweeting back saying, you succeeded because and for you to suggest capitalism is a dirty word and to give to

ingrates that don't earn their worth are warping the facts for narrow political gain. five-page letter goes on saying he'd be willing to pay more not through wealth tax more so with doing awayed with carried interest and a version of the buffett rule on surtax on those making more than a million a year >> warren tweeting back. saying he is wrong i'm fighting for universal health care and free university. pitching in so every kid has the same opportunities he did to succeed. >> so interesting to me that leon sends the letter. who leaks the letter elizabeth warren because she thinks this is good for her. she uses it as a way to attack him. i think she's going after the

wrong guy. i understand her views and what she's trying to do i think leon cooperman is not the target of her wrath. if you understand his charitable side but his views on progressive taxes are actually pretty liberal >> agreed. >> he's talking about carried interest and getting rid of 1031 exchanges and getting rid of the step up, a lot of those things are the low hanging fruit we've talked about given his background -- >> i agree with leon 100%. i think he's in a losing position when he he hands this red meat to warren her followers are going to jump all over it. she doesn't care about fixing it >> she had an opportunity to mod rate her persona by responding

favorably. he offered to engage in a conversation she dismissed that on twitter. >> the problem with her is that twitter. it is hard for her to say, i'll engage with you now. do you thinkthey'll meet >> i get an email last night from i think one of our viewers on her base side saying, he grew up on third base, he went to hunter college for free. this is the point. this is the equivalent of third base you can't go to hunter college for free anymore >> you are missing the point he actually gave them the largest donation in history. he gave them $25 million i think leon cooperman is the wrong target for this. i respect what she's trying to do but politically it is complicated. the question is to what effect

by evidence of the email i was getting from people on her base on her side in this instance >> it is easy to character a guy like him who says i am willing to pay more. i believe we do have a progressive system and it should be more and here is how we should do it and no one wants to talk about it. >> i think he wants the system to pay more. he believes he's paying about 50% right now. i don't think he wants to personally pay more. >> his point was can we do it without the government bloating itself and controlling it. character how you say it that's how you say it. >> one of the greatest ch characters our guest host at the top of the

hour, kara swisher we'll talk about twitter's new ad rules and her big interview with eric snowden when we return >> announcer: we have final predictions coming up. "squawk box" will be right back. ♪

there are things we would change about work. and there are things we wouldn't. ♪ when work is worth it. work is worth it. work can be closer to home... pay more... make us proud. careerbuilder. work can work. find your work at careerbuilder.com you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated.

their app makes trading quick and simple so you can strike when the time is right. don't get mad, get e*trade and start trading today.

welcome bhak to "squawk box. we're two hours away from the october jobs report. joining us to talk about what to expect ahead of the numbers, michelle gerard. our best host joe taranova is here, cnbc contributor how much should we take away, care about these numbers

i'm a little bit worried that this whole gm strike issue depending whether the numbers are good or bad, we're going to be discounting it. >> right it's a very asymmetric analysis where it will be more weak, it's strike related if it's stronger, i have a 105 number people have to add 50,000. that will be seen as a strong number but we won't necessarily -- it feels to me very asymmetric. >> if it's a bad number. >> it's gm. >> if it's a good number, wow we're going to say -- >> wow, despite gm the number was good there isn't a high degree chance we're going to come out of this more worried about the economy. >> michelle gerard number to beat is 105? >> 105. >> what about your unemployment number >> 3.5 we've had a lot of strength in the household survey of

employment where their number's far outpacing payrolls if that ends up reversing to move back in line, maybe the unemployment number could tick up. >> where do you go, jim? >> lower at 60,000. >> 60,000. >> you have gm there? >> i have gm but less secondary effects. >> the official strike number, the actual number of people on strike was 46,000. the question was how many other effects there were parts suppliers. >> we should be able to largely isolate it in the details. within manufacturing if you look at manufacturing of motor vehicles and parts if you x that out you'll have a reasonably clean x strike number the information from this report is always these numbers jump around from month to month, we should be able to isolate the strike effect. >> don't immediately fear if we see a negative manufacturing component of this report -- >> yes. >> -- that it's manufacturing weakness expanding >> if the strike takes out

75,000 in total, then you're probably going to get minus 80 to 90,000 on manufacturing or something like that. again, that's the thing to isolate. motor vehicles and parts part of that. >> what's more important, the services component of this report, which has been incredibly strong, business, health care, social? >> in general, even manufacturing x the motor vehicles part will have some information there. we get the ism number for manufacturing this morning as well there's no question that the manufacturing part of the economy has weakened significantly with global trade flows. the question is degree obviously we get another drop in the ism number that would be concerning yes, it's really outside of that that the economy is still chugging along pretty well. >> go ahead. >> i was going to say, i think you make a good point that it's outside of manufacturing that we're most watchful of. >> right. >> it's the spillover from the weakness of manufacturing more broadly that everybody is focused on arguably, that's why as important as it is this morning's ism, the

non-manufacturing data are being so closely watched out next week because it is that degree of broadening out that is i think critical to deciding how concerned we are about the economy. >> how much are either of you worried or thinking, all three of you, thinking about hourly wages? how big an issue is that going to be this time around >> last time was unusually slow. there were quirky details there. the year over year detail came to 2.9 all of last year averaged to 3%. i think that number should be a bit better today. >> is better worse is better better better better for society in some ways? better worse for the companies paying it and therefore investors? >> it depends on your perspective. for the equity market in many ways a low wage number is good but for the economy broadly in terms of the labor market bringing benefits to people, i guess it's better to see a

somewhat stronger number without being worried about inflation. >> the numbers are very benign. >> michelle, thank you. >> thanks. still to come this morning, our guest host for the next hour is kara swisher. we'll have the latest on the streaming wards. her interview with edward snowden, all coming up next. we're carvana, the company who invented

car vending machines and buying a car 100% online. now we've created a brand new way for you to sell your car. whether it's a year old or a few years old, we want to buy your car. so go to carvana and enter your license plate, answer a few questions, and our techno-wizardry calculates your car's value and gives you a real offer in seconds. when you're ready, we'll come to you, pay you on the spot, and pick up your car. that's it. so ditch the old way of selling your car, and say hello to the new way-- at carvana.

jobs in america, the october employment report just 90 minutes away. wework's ousted ceo under fire again this time accused of pregnancy discrimination. plus mark lasry and carlos watson teaming up. the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" here on cnbc i'm andrew ross sorkin with becky quick. joe is off today we have you here for the rest of the two hours. >> sure, if you'll have me. >> we're pleased to welcome cnbc

contributor kara switcher is here in the house for the whole hour. >> thank you. >> recode, silicon valley, whisper. >> whisper all day. >> really loud whispering. u.s. equity futures, take a look at what's going on ahead of the jobs number. of course these numbers often and probably will change at about 8:30 this morning. dow up about 52 points up. nasdaq up about 23 points we'll call t. s&p 500 up about 6.5 points. here's what's making headlines at this hour we are less than 90 minutes away from the october jobs report economists are thinking that maybe 75,000 nonfarm jobs were added for the month with the unemployment rate edging to 3.6% the gm strike could have an impact on the numbers. we'll figure out what the impact was and what the numbers would have been without the strike later on this morning we'll get

more economic data that could provide significant ammunition we have the monthly numbers out at 10 a.m. eastern time. it is expected to rise from a month ago. it has come in below the 50 mark that separates expansion from contraction with the last two reports have been weaker and again the gm strike could play a role in those numbers as well. also, if you've been looking at what's been going on with exxon moeblg a mobile and chevron, they'll both be out with the numbers. they are expecting to see revenues drop by double digit percentages. and media and technology news, apple tv plus is now available. starting with a slate of original programming so how does apple's offering fit into the streaming landscape joining us right now with their take is kara switcher. executive ed tore and co-founder ed lee who is the corporate media and joe teranova is our other guest host all three are cnbc contributors.

kara, good to see you. >> good to see you. >> thanks for coming in. >> i have a million things to talk to you about. >> go for it. >> we'll start with streaming. this is the day for the apple launch this is a different product. this is more akin to kind of amazon it's including that in prime. >> as you know, you're using the distribution network of apple and the phones and the halo of apple to put these sort of high class shows available to people. so we'll see if it works it seems like a lot of the reviews are traditional television some of the reviews are this looks like anything that would come from nbc, cbs, abc. we'll see how it does. services are critically important to apple i use that stervices, music. >> money. >> they're trying to daisy chain them music, entertainment, health care, wellness. >> i feel like it's a different measuring stick. success in this one doesn't necessarily mean that you're

making a ton of money off of it. >> no, it's demini miss. >> locking people in. >> google and search and amazon doesn't make money but it's part of the halo effect of everything that they're trying to do. >> i have a subscription question for both of you ed, you can weigh in on this, too. i don't know the answer to this. it has to do with subscriptions which is last year apple announced with great fanfare the news plus service. remember they got all the big news organizations to join. >> yes. >> with the -- >> you get this. >> and i don't think i've heard about what kind of takeup there has been on that news service and i don't remember a ton of promotion for it and i'm just not sure where it hands and if that's an example of subscription to any -- i mean, maybe that should not be considered the model what does it mean? >> so great question when it first launched we reported that i think within the first week or so they had about 200,000 subscriptions to that news plus service. so nearly off of that that was an interesting number relative

to sort of zero. it's a nice number to get to you're right, they haven't really released any new numbers since. >> maybe it's killing it and we have no idea i don't know >> i don't think they're going to lease numbers until they feel what are good milestones released or they may never release them. >> they'll release them if it's good it's demini miss to their business. >> it's interesting. >> you think that's the better model? >> absolutely. >> number two now. >> number two. i have kids. they moved to apple music. >> all from spotify? >> they did. they love spotify. it's a tremendous product. the same with netflix. netflix and spotify are the better ones, the ones that did break through with consumers the question is can they take that up. >> they gave up or added it in >> they gave up spotify. i'm not sure why they like the product. that's pretty much it. >> better interface. a lot of people like it better what's interesting that's different about music versus television or news, the music stuff, it's a commodity, right

you're getting more or less the same things on spotify as you would apple music. there are some differences but it's essentially the same stuff. with the tv content, it's different, right you're supposed to be getting different shows. you're supposed to be getting things exclusive to apple tv plus or to netflix in the case also of tv plus, i know it's at what $5 a month that's free if you have a new device $5 is pretty expensive it's a lot of money for, what, a dozen shows at the start it will build up. >> depends how good those shows are, too. >> yeah. the flagship is the morning show and that looks so expensive. it sort of looked -- >> it is expensive $200 million expensive >> i think what's interesting, a lot of the ones getting better reviews are things that are smaller. there was one about emily dickinson that got good reviews. the issue is whether they can do well hbo launched hbo max

there are tons of things they bought shows. "friends" they have. they have "south park". >> and others. >> it's all about the content and the question is if you are going to move from netflix to those. i love netflix the question is if they have better shows on apple. >> is it an either/or? >> for most people for rich people. it's expensive. >> to your point on content, disney launches on november 12th. >> that's another one. >> they have the legacy content. >> they have a lot of good content. we love hbo's content. everybody loves "succession. >> they have a lot more stuff than i thought they would. >> hbo has taken forever to get here it's been years. >> it's expensive. hbo max is going to be the most expensive. it will cost the same as hbo 15 bucks. >> netflix the standard price is 13. >> are you telling me, are there people who have historically have not subscribed to hbo but will >> it's the same amount if you

have cable. >> same cost. >> to me, that's an interesting theoretical question if you didn't subscribe to hbo before, do you >> if your' an at&t customer i think you have a new interest in that because they're trying to bundle into the things that already serve you. the fundamental question is if you didn't already pay $15 for what you had on hbo, why would you pay it now because of all of this other stuff that's a marketing question. they have 170 million customer relationships. they're going to start putting them into the monthly bills when you get them, hey, sign up for hbo max, the first month is free, the first year is free, whatever it might be i think that will be -- that could make the difference. whether fundamentally as a consumer you want -- >> then there's a separate brand issue which is hbo, i think, always had a very sort of upscale -- >> which apple is going for. >> -- sensibility as well. hbo max is trying to do something very different. >> right >> does that shift it in a good

way? does it take away on the other end? >> peter kofko has talked about it netflix has been around the track 20 times does netflix get sold to someone? or should it sell to someone to have better distribution and link it with distribution? that's going to be the key where you get these things and how they market them. >> netflix at 60 million in the u.s. already it's already expensive the thing is their addressable market that they've said to the u.s. is somewhere between 60 to 90 million they're already hitting that mark they're going to get to 70, 80 at some point. it will take them longer because of the new competition i think getting sold to someone for better distribution could help if it were more for international or they could dominate. >> so can we expect to see netflix at a lower price point >> i don't think so. >> i don't think so. they're moving prices up, not down. >> they raise prices every 18 months also, they're going to stop borrowing money, right

they need to do more self-funding. >> pay for all the content that they're spending, 8 to $10 billion. >> how do you figure out how to play this? >> disney has been the way to play it. i will say that disney has performed a little underwhelming since the announcement we'll see what happens on november 12th. the stock is in the same place it was when they made the announcement to me that would be the right play for the investment community. >> bob iger's been smart about telling the investor community, look, don't look for profits in the next few years because it's a completely different benchmark now. >> right. >> with the economics of streaming television are frankly not great. >> same way you treat netflix. >> you remember netflix, think of the same for us >>. >> reporter: are you going to be in 2024? that's the way you have to think about streaming. >> it's content. who has the best content. >> can they continue to churn it out? >> and the best interface. they're all similar interfaces the question is, young people, how much do they want to have each of these individual

subscriptions? i don't see it i don't see that that's how people play this game but we'll see. there can be packages, bundles, different things like that. >> ed, thank you for joining us. >> sure. >> kara and joe are going to stay with us. coming up in a moment, this morning's stocks to watch plus don't forget to subscribe to our podcast. get interviews, behind the scenes access and you can even hear the podcast -- she's the podcaster in chief kara switcher. maybe you'll hear this conversation on today's podcast. if you miss any of this show, get it on your favorite podcast app. subscribe to "squawk pod." stay right here. the game doesn't end after that insane buzzer beater.

because with nba league pass on xfinity you can watch the out of market games you want- all season long. and with the all-new xfinity sports zone, you get everything nba all in one place- even notifications about your favorite teams. watch the dropped dimes, monster blocks, and showstopping dunks. plus get instant access to your teams with the power of your voice. that's simple, easy, awesome. say nba league pass into your voice remote to upgrade for a great low price - or go online today.

among the stocks to watch this morning, newell brands reporting 76 cents a share paider mate, sharpy, sun beam and they said they were ending their divestiture programs alibaba just out with quarterly results. beating estimates on both the top and the bottom lines a jump in mobile users among other factors.

we'll bring you those numbers in a bit. when we come back, kara swisher spoke to edward snowden. why he says facebook isn't much different when squawk returns. time now for today's aflac trivia question. where did honda roll out its first u.s.-built car the answer when cnbc "squawk box" continues we're honored to have you on campus for the official visit. aflac! coach saban, how is aflac's program different from health insurance? well aflac gives you money directly, for things health insurance doesn't cover. aflac! we put together a little highlight reel for you. here's aflac helping you with your deductible... copays...out of pocket costs. you look good paying bills. get to know us at aflac.com you still have service? call the insurance company sfx: [phone ringing] it's them, calling us.

it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

a new kind of credit card. created by apple, not a bank. with a better way to track where you spend. a new level of privacy and security. daily cash you get back every day. and no fees. not even hidden ones. oh, and if you happen to be somewhere that doesn't accept apple pay yet, there's this. nice.

now the answer to today's aflac trivia question. where did honda roll out its first u.s.-built car the answer, marrysville, ohio. welcome back to "squawk box. kara swisher interviewed edward snowden this week. they had interesting things to say between the nsa and big tech

companies. >> facebook'sinternal purpose is to compile perfect records of private lives to the extent that they are and then exploit that for their own corporate enrichment and damn the consequences this is actually precisely the same as what the nsa does. >> recode's kara swisher is our guest host were you surprised that he was taking on facebook with the same gust owe as the nsa? >> no. i think he's sort of i'd say religious about what happens to information. i think it's the same things that prompted him to do what he's done, which is that he was in love with the internet at an early age when it was all about community, it was all about people finding each other and when it changed into this masur vail lance vehicle i think he got personally offended almost it was a fascinating interview because he's so controversial. is he a traitor, activist, leaker, whistle-blower >> where does he land on encryption

>> he's for it >> he's for it all the way >> 100%. >> despite the other side of encryption -- >> yes. >> -- which is potential for terrorists to be able to communicate with each other? >> 100%. absolutely. >> doesn't surprise me. >> no? >> no. he thinks the incursions into the privacy of individuals has gotten to -- it started with the government and these programs that they had that he revealed and it moved to facebook and google and the whole internet and so he feels that a lot of people aren't getting the transparency they deserve of what's being done with their data and that as we add on more and more things like the nest or whatever, it becomes worse and worse and we became a full surveillance state. >> where do you come down on that question you raised is he a traitor? activist >> in 20 years >> based on your own views you've watched the internet and the dark tones that it's taken on. >> sure. >> you've lost some of your own love. >> absolutely. you know, i didn't like turnover

of classified documents. >> no. no no >> he did things because he thought one way but then he took it to a whole new level. >> he absolutely did >> he makes a very good argument of why he did it in his book, which is quite good. it's quite a beautifully written book, actually i think that most of the intelligence is that he is not a russian asset. is he a russian asset? is he a chinese asset? is he being used you have to game it out. why would he be that why would he go there? why did he give it to journalists versus releasing it like wikileaks there's all kinds of interesting twists and turns here. if he isn't a russian asset and he wasn't able to release this information with the government violating laws, what do you do you know, today given the whistle-blower incident, what do you do there are no channels for him. >> do you think he got played though >> played by >> by the chinese, by the russians after it all came out whether he was an asset for him? >> played how? how played

>> he lives right now, makes most of his money off of speaking, doing these things. >> that's right. >> lives in russia. >> he doesn't want to live in russia he wants to come back here and he wants to have a trial, the problem is he's instantly convicted so he can't explain why he did it, he goes to jail and that's it under the current espionage act. he wants to come back here he'd like to live in europe. he's been trying to live in other places he can't go anywhere he doesn't have a passport his argument is he was on his way to ecuador he got stuck in russia because the u.s. pulled his passport he doesn't want to be there. that's not where he wants to be. in fact, i think he's on a very short-term visa there even six years later. >> i want to ask you a couple of facebook questions since we're in that universe on the political ad front and what you think are going to happen there. there are all sorts of new reports, i don't know if they're right or wrong saying mark zuckerberg might change his mind. >> he's going to change his mind. >> you think he will >> 100%.

>> soon? >> premonition. >> this is a premonition >> no, we did an interview we are not going to kick them off. stick to our first amendment guns and then totally kicked them off later >> he left the door open he left the door open on the earnings call. >> i'm thinking about it that speech he gave at georgetown was -- i was there. >> your take on that i thought was brilliant. >> thank you it was disastrous. it was like this, china or free speech i'm like, there's so much in between. i happen to have gone to georgetown i think in college i studied there was a very big delta between full free speech and china. jack had a very nuanced -- >> jack dorsey. >> had a very different opinion of how to approach paid advertising which is not to do it. >> not to do it. they throw in the towel -- they can't fix the situation. >> right. >> mark is sticking to this let's let politicians lie and i think most americans get that one. it's very simple.

>> he didn't let students ask questions. >> that was astonishing. >> this is mark now, do you think he -- is motivated by a philosophical view on this topic? is it -- is it a business view it's not a dollars view, we know that >> yeah. >> i think that's true. >> it's a lot of money. >> it's ad dollars. >> $600 million. >> to me the financial issue is much more around actually if you think that there's a contingent -- political contingent that would be upset if you couldn't advertise on the platform, what it does for you from a policy perspective in which case could cost you a lot of money if you think he's motivated by that. what do you think? >> i think he's way over his skis intellectually here he doesn't have a good argument. if you sat at that speech you would be like this is so nuanced and hard and you would see that people don't like politicians to lie. sharyl sandberg did a video. if you go out on the street,

would you like to be able to have politicians lie in ads. >> joe kernen is not here. he says you're allowed to. >> joe's take is he is a big boy. >> everyone isn't a big boy. >> i disagree with his particular view. >> not in the context of the internet because the internet is amplified, weaponized, it goes everywhere compared to television, newspapers or anywhere else. it's a very different medium what mark was doing even in the earnings speech he was conflating paid speech with free speech it's not the same thing. it's -- what jack said -- >> i appreciate what he's saying what am' curious about since i think you know him and you know the valley so well, what do you think the thought process is that gets him there. >> the pressure of how bad this looks. it's a bad look for the company. it doesn't affect earnings you can talk about this. it killed it. >> where do the advertisers have to go? nowhere. >> that's right. then hop, skip and a jump to the

justice department where do advertisers have to go? google or facebook that's not a good look either. >> because they are selling you more privacy because they're able to drill down and get more -- for twitter, jack gave a good reason for this for them it wasn't such a big deal because they were not as good at aggregating and saying -- >> it's a bigger question twitter is where the media class is they love this he's taking the high ground the way tim cook did around privacy in an interview i did with tim, he took the high ground and now mark is on the low ground. that's not a good place to be. >> kara, thank you you can hear more of kara's interview on her podcast, recode decode get it on apple and everywhere else. when we return, cue the countdown clock. we had hit that number live at 8:30 eastern time. we have a panel of all-stars standing by with analysis for

that first, our economic newsmaker of the hour, former cea chair glenn hubbard will join us on set. "squawk box" will be right back. (vo) the moth without hope, struggles in the spider's web.

with every attempt to free itself, it only becomes more entangled. unaware that an exhilarating escape is just within reach. defy the laws of human nature. at the season of audi sales event.

welcome back to "squawk. it is jobs friday. forecasters expecting an increase of 75,000 nonfarm jobs. increase in the unemployment rate of 3.6. joining us is the professor. steve liesman. mr. liesman, sir. >> andrew, good morning. we're expecting a slowdown everybody knows that the bigger question is why i want to get beyond the specific system after. we have the gm strike, that will take off 40 to 50. we'll add back some workers through the census hiring that will go away in months to come the broader question, can we have weaker demand going on in the economy or is it a lack of workers? let's take a look at what's happening.

first of all, this is the three-month average of payroll growth it's the better way to look at it you can see, we were north of 240,000 when you go back to january. the beginning of this year and now you come all the way down to 157,000 now and it's probably trending lower, more towards what economists think is a sustainable rate of employment growth let's look at some of the reasons. there are a couple of reasons why this could be good and why it could be bad. if it's a lack of workers, i would call it a good reason. you have more capital spending higher wages and productivity. if it's weaker demand, you wouldn't have the capex boom you would have stagnant wages and layoffs. fact is, i don't think it's one or the other in different industries you have a combination. 10:00 today we'll get the ism manufacturing index. it's supposed to tick up to 49 though i'm a little bit concerned about it because of the gm strike.

that's the key thing triggering the market as to how much economic weakness there is out there in the economy. >> very quickly, steve, let's break out the exxon mobil numbers. >> okay. >> right now it looks like they came in with earnings of 75 cents a share versus the 67 cents we had been anticipating revenue higher at 65 billion versus 64 billion. darren woods making some comments on this they're making what he calls excellent progress on the long-term growth strategy. joe, capex is one number $7.72 billion. what jumps out at you? >> what jumps out is that we have had negative revisions throughout 2019. we have priced in horrible earnings forex on. >> because of lower oil prices >> because of lower oil prices and for chevron as well. exxon mobil is getting ahead of that what they're doing is at the end of the quarter they're filing an 8k with the sec for the

transparency they've already guided and said there would be a 400 million to $700 million hit to earnings because of lower oil pricing they're providing the transparency they're getting ahead of it. i like the free cash flow numbers. these numbers are not as bad as feared you'll have to wait on exxon mobil. >> right now it looks like that stock has not changed. the stock closed at 67.57. glenn hubbard is joining us. our guest host joe taranova, kara swisher is here, steve liesman. we have a packed table this morning. glenn, what do you think, what steve was talking about, this idea that we're not entirely sure how we're going to read the numbers. >> that's entirely correct i would expect 70,000, 80,000

jobs the real issue is investment the economy is growing roughly at its potential it's being carried by the consumer investment numbers are disappointing. to steve's story, if you expected the good news story, you would expect to see investment i expect the reason we're not has to do with the policy uncertainty in washington surrounding trade. very harmful. >> very harmful in terms of business confidence. >> business confidence, what ceos are willing to take risks on there isn't a business leader that doesn't articulate that as one, two, three. >> you can't make long-term business plans when we talk about day by day or hour by hour. >> exactly if you want businesses to recover, we need more policies. >> what do you think we'll get next year? part of my hypothesis, the president is heading into a new year he may be a little more loathe to damage the economy when he's heading into michigan, indiana, pennsylvania, there are very high concerns around jobs as you just saw with the strike, too.

>> well, i do think we will see some kind of mini china deal i think it's a stretch to imagine we will solve all of our problems with china next year. i think that's farfetched, whoever is president i think the economy is in pretty good shape manufacturing obviously not. we're both a service economy i think there's a good chance for a decent 2020. obviously the wild cards remain geopolitical and political. >> steve, i was trying to look at exxon numbers at the same time did you put capex on your list of good things >> what happens is if you have a worker's shortage, i've been puzzling this through. not a lot of people have been doing a big think on this. i don't have a lot of material on this idea if it's a good reason for the slowdown in jobs, okay, i still have demand out there as a business i need to meet that demand so one thing i might do is i might buy more machines. i might buy -- for example, the order things at mcdonald's,

that's a way to get around a worker shortage. and i think what we see is, you know, one of the great things about the u.s. economy is how dynamic it is. you can have industries slumping, for example, oil and gas. at the same time you have other industries that are pushing ahead. i think the story of the good and bad reasons is alternate tingly true. >> we had dan roth from linked-in. the most amazing thing he talked about was transportation hiring is up there but a lot of the jobs are white collar jobs, software pro tuesdayers, software engineers not necessarily drivers. >> kara swisher has done more than anybody on this economic report, how the economy is changing we don't know how to classify retail jobs. you were a retail clerk, now you work in transportation that's where your job might show up. >> the bigger trends that are coming, computer vision for example within retail. that's going to be an enormous thing.

i just did a podcast with alexis owe hainian. retail businesses utterly changing it clicks what you bought is changing things. the idea of automation everywhere ai quantum computing. what google just announced is a massively important moment in computing. >> about quantum >> i read that 100 times and tried to understand it. >> i will try to explain it. i'm going to have an interview what could you say what could the internet do it's going to change the way we do jobs. >> the bigger story though is that we're headed to a world of morrow boots, not fewer robots. >> yes, absolutely. >> on a per capita basis we trailed japan on an order of magnitude. >> quantum computing, a lot of it is the speed with which businesses can use ai. that will be a sea change.

for most business students and what are they going to be doing? a lot of them have to up scale in their jobs. >> let me say one thing, anything that can be digitized will be digitized. >> how about that economics report you just heard? is that digitizable? >> all of it is. >> intuition what ai can do is empower -- >> you can't be digitized. >> i'll say that. >> baseball umpires. >> yeah. >> i think you want them, right? i'm not a sports ball person. >> let me throw it back to you what did exxon mobil say about capex? >> hang on let me go back to the wires. it said 7.7 -- >> is that up or down? >> i don't know. >> because one of the new things out there along with this high tech stuff we're talking about is the seriously low tech stuff, which is the oil and gas business has a profoundly different effect on the u.s.

economy than it ever did you do not create oil production the size of saudi arabia, put it inside the u.s. and say it doesn't have an effect it is unclear to many economists now are higher oil prices bad or are they good for the u.s. economy? you can look at the slump in 2015 and '16 in the u.s. economy and that was directly tied to the oil prices and a lot with the capex boom we had coming out of 1018, 2017 is because of higher oil prices. >> that's a tax on every single -- >> yes >> in the near term. >> it's a regressive tax >> it is true. >> becky, you've been on a plane. you've been to these places where there's huge, huge income as a result of higher oil. >> it's a regressive tax. >> it's true. >> thank you by the way, quantum computing is going to end the encryption debate. >> won't be any encryption.

>> may be higher water mathematics. did they know about a luxury deal before it went public a little blue box, we'll tell you where this is all going. plus, don't forget to subscribe to the pod kats. interviews and behind the scenes access look at it on apple podcast or your favorite app. that's back in a minute. mpany. 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.

by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.

welcome back, everybody. lvma wanted to buy tiffanys. did they know about it before they became public robert frank has been investigating. >> top executive from lvmh bet with the top ceo on october 15th that was 11 days before the talks became public. sources say the meeting over lunch was friendly they presented its offer they said the board would begin the process of evaluating the bid. the stock that day closed at 91 bucks. so the offer of 120 a share represented a 31% premium but news of the talks didn't break for another 11 days on october 26th but in the intervening time period the stock jumped nearly 10% which of course reduced the perceived premium to investors tiffany shareholders still expecting them to raise that bid. tiffany said the companies, quote, are not in discussions but the board is carefully reviewing the proposal and is successfully executing the

business plan. no comment on lvmh sources saying tiffany needs substantial capital and time to turn around its business which lvmh is better equipped to fund. investors dialing down their hopes for a competing bid or higher offer tiffany closing at 125 after hitting that top of 130 on monday it's a question of who needs it more lvmh stock up 40% over the past year tiffany's stock basically flat over four or five years. >> the idea that it was up $10 over that course of time. >> meaning it had that spike and it got into the market and there was heavy volume in options trading so it kind of implies that some people had a sense that something was happening. >> enforcement action? >> it means the premium was higher. >> the price in july of last year -- >> they had one great quarter.

a great quarter and now it's declining. >> good to see you. coming up when we return, mark lazrus is joining us with car loss watson. they're teaming up with a big media announcement a lot more to talk with them about the media landscape and so much more. "squawk" returns with that in just a moment. 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.

so why isn't it all about you when it comes to your money? so. what's on your mind? we are a 97-year-old firm built for right now. edward jones. it's time for investing to feel individual. ♪

thbecause with nband after thleague pass on xfinityr. you can watch the out of market games you want- all season long. and with the all-new xfinity sports zone, you get everything nba all in one place- even notifications about your favorite teams. watch the dropped dimes, monster blocks, and showstopping dunks. plus get instant access to your teams with the power of your voice. that's simple, easy, awesome. say nba league pass into your voice remote to upgrade for a great low price - or go online today. >> i'm not your charity case. >> i am not your excuse to buy a new dress for the annual fundraiser. >> i am not the poster child for your big donation. >> i am out of debts and in my own home. >> i am off opioids. >> i'm graduating on time and on my way to a great job. >> i am. >> we are. >> what it means to live united.

welcome back to "squawk box" this morning it's been a big week in media and today is no exception. our next guests are here with an announcement in the sector ozy co-founder is here and lasrey co-founder is here. we can go through all of your -- what's happening here? you are doing a big deal today. >> we are. >> do you want to tell us about it >> a lot of excitement

we're announcing a fairly big fund raise so much excitement in media. talking about apple tv getting going, hbo max, spotify talking about podcasts this week along comes young ozy media. we're raising $35 million as part of our series to let us bring our own tv shows. >> from some big-deal people. >> big-deal people starting with lasrey. >> and who else? >> lots of good folks. folks at interlock, lion tree and good support from our existing investors axle springer, active in the sector and gsv capital. >> here's my big question. kara, i want you to weigh in on this digital media's been a tough business, like a really tough business, especially when it comes to valuation because you've seen what happened with buzz feed go up and then it's come down. we can talk about vox, gone up and come down.

you're the big investor investing in this guy right now. what are you thinking -- how are you feeling about valuations in the digital media space, also doing events and so many other things >> i think at the end of the day to do well in this space you need to have a ceo who's got a vision, who's going to be able to do it i think you also need a forced personality. more time people spend with carlos, the more impressed you're going to be. able to nave through that, you should be able to do really well. i think carlos is that person. that's the reason i invested i just think carlos is pretty unique and will be able to do the things that he's talking about. but is it hard yeah, it's 100% hard that's why if it works, we should all make a fortune. >> when you say that you want to capture the millenial audience, how is that different, for example, than another company that was in a high-flying space for a while which was vice

their whole mission in life is to capture that millenial audience >> i think vice opened up a lot of opportunities for lots of young media companies that obviously had some culture issues, to use a euphemism and more that i think created issues i think they pointed the way to saying digital is not enough and they began with digital and television one of the things marc and i are proud that we're doing at ozy and one of the things kara has done is diversify more broadly the fact that we're not only selling tv shows to hulu and amazon and pbs, i think it gives us a bigger, richer opportunity than if we're a one-trick pony i think if you're digital only, you're captive to mark zuckerberg and that's not always fun. >> absolutely. i think it's fun to have a basket of offerings. we started doing events 17 years ago and then moved into podcasts five years ago i think the problem is you've got a very good content that

people will hold on to the next stage is about marketing it, getting it out there in the distribution so you have to jump into hyper a er sp, you don't want to be mike.com. you want to make content that young people want to watch and listen to. that said, they're not different from other people. like the idea that they consume -- that they don't like good news, they don't like good content, they don't like good events is sort of a weird idea. >> how much of the business model is now dependent on what seems like a gold rush going on in the tv space, which is to say if you can sell a show to amazon or hulu, there's so much money rushing into this space, when you look at the business and start to think about the breakdown of these different segments, how much is around tv production >> so there's -- the majority of our revenue will come from tv and live events, and that's exciting for us. as you guys were talking about this morning, we're going to go from three key streamers to a

year from now probably eight key streamers in the market, counting sony and apple and hbo max. >> and how long does this gold rush last? >> i think two or three years at least before there's a meaningful shake-out that means -- as kara was saying if you're creating premium content and your shows are what people want to watch and stream, there's a lot more money for you and we're excited about that as an opportunity for growth. >> marc, i know we've got you guest hosting this week but we did hear from the fed this week lowering interest rates. is that good news or bad news as far as you're concerned? >> look, it's good news if you want to borrow money the only reason the fed is lowering rates is because the fed is nervous about the economy, and that's not good news you don't lower rates unless you believe there'sissues out there. and i think -- if you think back a year ago, everybody thought rates were moving up in the span of a year they have been lowered three times so the fed is being pretty

aggressive in trying to keep this economy going i think that's fine. but i don't think that's good for us going forward i think we'll have -- we'll start seeing gdp drop down over the course of next year. i don't think we get in a recession because i think the fed is doing a pretty good job of that. but if you have 1% gdp growth, i think it was 1.9, the year before it was 3, i mean that means we've got a 33% decline in the span of a year that's not that great. >> unless you're somebody who's looking for distressed properties >> right so for me, the more issues, the better it is, but i'd like everybody else to be happy also. >> can i pivot to the nba for a second i sort of introduced it at the beginning but not really your take on china and the nba and how this whole situation has played itself out. has the nba covered itself in glory here or the opposite >> i think it's been fine.

you know, you can make an argument both ways look, i think for everybody, you're happy to start playing basketball again >> how much is it about -- we've long talked about trying to export our values, right, around the world through sport, through culture, through all these other things here we are now in a situation where everybody is zipping their mouth and they're not exporting the value at all for money, by the way. that's what this is really all about. is that the appropriate way to do it, especially when you have players like lebron and steve kerr out on the other side of the con country where you are w are very vocal about the president and the united states and so many different political issues here. all of a sudden we're in another place where money is on the line and they're unwilling to speak. >> look, i think people have rights to say what they want i think what everybody has sort of realized is there's issues out there.

until they understand them more or they're going to try to understand them more, i think that's part of the reason why people haven't really talked a lot. i think for me, you know, as an owner, i think -- i think there's -- i'd love to be able to do a little bit more. >> when you say do a little more -- >> no, i think you want to try to see and try to understand all the issues i don't know everything that's been going on out there, and i should but at least for me right now i think the nba has actually handled it pretty well we'll see what ends up happening with them going forward with china. >> you're going to be joining us in a week. >> yes. >> so we can continue this part of the conversation. >> i look forward to it. >> i know this is the part you're really not looking forward to. >> i live for this. >> marc, thank you carlos, thank you. >> always good to be here. >> and our thanks to kara. >> thanks for being with us this hour, it's been great seeing you. coming up, we are approaching 8:00 a.m. on the east coast "squawk box" will be right back.

don't forget, jobs report coming up next hour >> announcer: the countdown is on the october jobs report hits the tape at 8:30 a.m. eastern. we've got final predictions coming up, and we'll bring you instant reaction from wall street as soon as the data breaks "squawk box" will be right back. 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.

there are things we would change about work. and there are things we wouldn't. ♪ when work is worth it. work is worth it. work can be closer to home... pay more... make us proud. careerbuilder. work can work. find your work at careerbuilder.com

good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today but we have a guest host, joe terranova. senior managing director and a cnbc contributor and he is ready to go. >> i am? >> right, right, right check out the u.s. equity futures. you can see the futures are indicated up but not as much as they had been earlier today.

the dow futures up by 23 points. they have pared their gains. yesterday was a down day the dow was down 140 points. that's a decline of just half a percent, but it is the worst market that we've seen since december 18th so that tells you how strong the last couple of weeks of october have been s&p 500 this morning indicated up about 3 points and the nasdaq up by 8 points. also take a look at where treasury yields are right now, the 10-year sitting at 1.688% so we've seen the yield come down since the fed's decision earlier this week. 30-year at 2.182, the 2-year at 1.528. what do you think, joe >> i think the fed did exactly what they needed to do which is basically tell the street, okay, we're going to pause but raise the bar for any lowering of rates in the future. we're also going to raise the bar for a return to a cycle of raising rates. i think that messaging is being lost in the investment community. i think it's a very powerful

one. i think the fed now sits on the sidelines throughout 2020 and 2021 potentially of the conversation if things look good about raising rates. i thought that messaging was a good one i think the federal reserve did their job. >> wednesday morning the 10-year was 1.83% so you're talking about a big move down. >> but you've seen a steepening of the yield curve which has been very significant to getting a lift to multi assets that's been important. you want to make sure that you don't return to the inversion that we were witnessing, the significant inversion in august, the negative yields that were permeating in europe for the german 10-year at negative 75 basis points i think it's important to emphasize the steepening of the yield curve. the messaging of the fed is right. we've got the liquidity in the markets and now we need to build upon that. let's get you caught up on the other big stories investors are talking about. alibaba out with quarterly results. the chinese e-commerce giant beating analysts' forecasts on

the top and bottom lines, among other factors results driven by an increase in mobile users. take a look at shares this morning. they're off just marginally, about 1.5% right now on what i thought was actually a pretty strong report. i want to dig into some of those numbers a little later to try to understand why it might be moving the opposite direction there. exxonmobil reporting earnings beating for the quarter. the energy giant is making excellent progress on its long-term growth strategy. take a look at shares of exxonmobil right now that stock up about 1% we're also expecting to get quarterly results from chevron at the bottom of the hour so we'll keep our eyes open for that of course we are set to get the october employment data this hour at 8:30 a.m. eastern time we'll talk a lot more about that in just a minute but there's another economic report a little later this morning that could also prove to be just as significant perhaps for the markets. that's the monthly ism manufacturing index. it comes out at 10:00 a.m. eastern time that's expected to rise from a month ago.

still to come -- still come in below the 50 mark that separates expansion from contraction. as andrew just mentioned, we are less than 30 minutes away from the government jobs report for the month of october economists are looking for an addition of 75,000 jobs to nonfarm payrolls let's get right to our jobs panel as we start and joining us is kate moore, from black rock's allocation investment team jason furman, former council of economic advisers chair, he's now a professor with harvard's kennedy school and michael strain who is economic policy studies director at the american enterprise institute. kate, let's start with you between these numbers today, jobs and ism, how important are they and how much to discounting for the gm strike? >> our expectation is considerably below where consensus is and we think this will be transitory i think the private payroll side will look pretty good in general

when you take out what's going on with gm a lot of the earnings stories have been strong this week we've seen companies who have beaten on the top and bottom line get rewarded even more in price than they had been in previous quarters. we've had good messaging from the fed as joe was just mentioning they will be here to back us up but the economy is on strong enough footing that we don't need to cut rates further. you know, if we get a decent ism print, again perhaps sub50 but still a little bit of a bounce from last month, i think we have this really interesting solid macro, solid policy, solid earnings story and the market can grinding higher. >> jason, what do you think about the economy? trying to strip out all the noise, where we're headed for here gdp is down significantly from a year ago but what do you think we're heading into at this point? what do you expect for the year ahead? >> sure. and remember we got that 1.9% gdp even with a falling unemployment rate. so just think about what growth rates are going to be like when the unemployment rate eventually

stops falling. i've been saying this for a while and all the data is consistent with it the trending growth rate in our economy is something more like 1.75%. even without any trade wars, stupid attacks on the fed, all sorts of raziness, global slowdown, that's where our economy would ultimately be headed in terms of jobs -- >> the only thing i would add to that is i do think the trade talk, all of these attacks on that front have slowed business confidence but when we're looking at earnings numbers that are picking up, if you get any sort of a detente at least in those trade talks, would you anticipate that businesses would go back ahead and start putting more cap ex to work? >> look, we've had two quarters in a row of business investment falling. we're going to have faster business investment growth than the contraction we've seen but i think the consumers may end up going the other way

t to understand that, the most important thing to look at isn't the total number of jobs but wages. they grew zero last month. what's going to happen to those wages this month that's what you need for consumer spending. that's what you need to keep growth up over the next year. >> michael, do you agree with that take? >> yeah, i basically do. i think we're downshifting i think relative to 2018, the performance of the economy overall is moving closer to its potential underlying growth rate the stimulus effects of the tax cuts, the stimulus side of the tax cuts is wearing off. we've seen some effects from monetary policy. certainly the trade war has had a major impact on business investment so we're seeing the economy move closer to that 2% growth rate level. we're seeing the labor market respond to that. so instead of expecting 200,000 jobs a month, we should start

expecting 100,000 to 150,000 jobs a month i think that's roughly what we're going to see today when you strip out gm >> kate, we look at the performance for 2019 i mentioned earlier we've had multiple expansion, earnings are basically flat on the year it's about liquidity that the federal reserve has provided to the capital markets. the federal reserve will step back, we have a strong consumer but we have manufacturing weakness that one can argue is never going to recover quickly what do you see the next leg to advance asset prices higher? >> there's a lot of tension in this one we have had a big snapback in terms of multiples but that was after a massive contraction in the fourth quarter of 2018 it's my view that multiples should stay structurally higher than they had been in previous cycles or over the long-term average for a number of reasons. information availability, the cross asset comparisons. i think what the fed is going to continue to do in terms of

providing liquidity but not just the fed, central banks and policy makers around the world that liquidity environment and the change in composition of the market and the cross asset valuation comparison, i think multiples stay higher. but you're totally right earnings will be basically flat for 2019 unless there's some big surprise to the upside in the fourth quarter and i think investors have to get comfortable with investing in companies and industries that can produce above flat earnings growth in a slower trend growth environment. we're starting to see that bifurcation. there has been a real spread between winners and losers within industries and sectors. as i was mentioning before, companies beating on the top and bottom line and even those giving more solid guidance about the future are doing even better so i think we'll have more differentiation, more dispersion in 2020 and onwards in the slower growth environment. it's an interesting environment from where we've been where it's just been about monetary policy and just only about liquidity.

>> it becomes a margin story. >> yeah. >> we'll have more from our jobs panel coming up in just a little bit. coming up when we return, the big number of the morning, the october jobs report is on the way. we are right back with that and so much more up next, the new front in the streaming wars. >> for centuries we feared this day would come. >> on a make-or-break day for apple and netflix, we break down the biggest bets on top hollywood names and tell you which tech and media giants are poised for success >> what happened to your tv? >> we had a disagreement. >> sy netatud. you're watching "squawk box" on cnbc robinhood believes now is the time to do money. without the commission fees and account minimums. so, you can start investing wherever you are -

even on the bus. download now and get your first stock on us. robinhood.

thbecause with nband after thleague pass on xfinityr. you can watch the out of market games you want- all season long.

and with the all-new xfinity sports zone, you get everything nba all in one place- even notifications about your favorite teams. watch the dropped dimes, monster blocks, and showstopping dunks. plus get instant access to your teams with the power of your voice. that's simple, easy, awesome. say nba league pass into your voice remote to upgrade for a great low price - or go online today. apple tv plus launches today. the tech giant using big stars like jason memoa, jennifer aniston and reese witherspoon to kick off the highly anticipated streaming service. apple now becomes a direct competitor to netflix, but the rivals have two very different strategies julia boorstin joins us with more on that front

hi, julia. >> good morning to you that's right, just as apple tv plus launches, netflix is debuting "the irishman" in a han handful of theaters before it starts streaming at the end of the month. apple tv plus is $5 a month which is free for those who purchase an apple device it's all about prestige content, all from the biggest creators in hollywood. it will regularly add more content but its appeal is all about having fewer, better options. the challenge of exclusively premium content is reviews have not been great its flagship morning show getting just 58% on rotten tomatoes meanwhile "the irishman" is probably the most prestigious film ever from the streamer known most for its volume of options. "the irishman" cost netflix about $160 million to make, more to market. it aims to draw awards attention

with nearly perfect reviews to help in turn draw filmmakers and subscribers to netflix now, for this weekend's content battle, netflix may be winning with reviews but we'll have to see if its investment in movies pays off with subscribers, especially as netflix' most popular shows which are licensed, not originals, leave the service. >> julia, what is the scuttlebutt in l.a. among the content hollywood fox about apple right now? >> well, i think that the buzz on the street here, that apple is paying so much for content. because they're doing a different model, they're not doing pilots of shows like you see for television, it's going to take them longer to find their footing but what i have heard is that people have it out for apple. maybe the reviews are more negative than they would be otherwise. but sort of apple was seen as having a lot of hubris to say that it could just jump in and

only have a handful of shows and it would turn out great. so maybe the content is better than the reviews would indicate but we'll have to see. i haven't seen the morning show yet but i'm curious to watch it. >> i have and i liked it julia, thank you for that. i still have a lot more episodes to go. for more on the streaming wars and what the launch of apple tv plus means, we're joined by former showtime ceo matt blank what do you think about this idea of just having a handful of shows? do you think that's a workable model? >> well, it's the ultimate curation it's interesting because the rest of the business seems to be going away from curation look, apple is interesting they're the only one of these launches coming up where, you know, they're not playing defense. they're not trying to rationalize a legacy content business that's what nbcu is doing, what warner media is doing and what disney is doing. apple has the luxury of taking a different approach we'll see if this content really makes a difference you know, it's interesting, big stars, jennifer aniston, reese

wir witherspoon. who was the star of "stranger things" before it was on the air? you know, that's not marquee mrs. maisel. game of thrones. so that is not necessarily the path to glory. >> since we last saw you, we've heard a lot more about hbo max and what that's going to look like and we've been debating whether that is a workable model, adding all of these other assets does it change the brand proposition for what hbo is? >> i think it does change the brand proposition but maybe successfully one of the things that's going to make it hard to evaluate all of these launches is in the past couple of weeks we're hearing about free hbo subscribers are going to get hbo max for free apple is going to give away a lot of content so you have one of those pig in the python situations. if we're sitting here a year from now or two years from now,

there's going to be a giant mass of free subscribers moving through the streaming infrastructure it's going to make it very hard to say if any of these strategies are really successful a year from now. >> but barry diller was here early are this week and we were talking about john stankey who may have gotten a bad rap. would you bet on that? >> hbo is a great brand. when we talk about a lot of the content we're talking about, it's hard to beat things like "game of thrones." i think one of the things we're seeing right now, it's very easy for tech companies to buy content and get into the content business it's a little harder for content companies to become tech companies. and i think that's significant when you look at some of the cultural aspects here -- >> what do you do about netflix and valuation? >> well, you know, you and i have actually talked about it. it's interesting you've all spent a good deal of time in the past weeks and months talking about ipos and

the issues that wework had, wme, peloton. it's an interesting question what would happen if netflix was going public today with the balance sheet that they have now they have tremendous revenue, tremendous revenue growth, but would they get the valuation that they have in the public markets today >> if they have as many subscribers as they have right now, potentially it's huge. >> they might. but again, at some point, when do these valuations start to merge? what valuation does hbo max get? what valuation does disney get and what does that mean in the long term? by the way, getting back to apple, i'm in the corner of they need to buy content. >> you think they had need a library. >> i think they need a library, i think they need a lot of content production capability. it's great to say we don't need that, but i'm not sure what their long-term objectives are. >> matt, when you talk about the valuations kind of merging for the old line stuff and netflix, you think that happens because

netflix comes down because the old line guys come up? do they meet in the middle >> if disney has 50 million subscribers in two years, i can't see anybody valuing that part of the business the way netflix is currently valued. you may say it's just going to go on like this forever, but i don't think that's the case. >> when you say merging, you think dragging down. >> i think so. by the way, i'm a big netflix fan. these guys are killers, they really know how to do it. >> does it meet in the middle? >> it may. >> if successful i think one of the things that the legacy media companies have to contendi with is they had soe really good businesses you look at disney, no business in the history of media had the better metrics than espn did ten years ago. >> do you think netflix could be as successful and spend less money on programming >> i do. i do >> they're going to have to.

>> they're going to have to. somebody used a term this morning, netflix is a long tail business. >> right. >> long tail business referred to the book business, the music business where ip didn't cost anything, there was existing ip. netflix is in a long tail business where they have to spend a lot of money on new ip every day. but, you know, you can never sell those guys short. every day you hear about the netflix killers. they are not sitting out there saying, oh, gosh, it was a good run. you're going to hear a lot more from them. >> final question, how many of these things do you think you can really buy do you look and say -- we've been talking about this a lot in terms of competition is it netflix versus hbo max versus hulu and that's one group? then apple plus and is that in a separate class is disney plus in a separate group? >> i think all of that may not be terribly relevant the relevant factor is you can push a button and get rid of these services and come back on

six months later and watch what you want to watch, which is why i think that you may see some changes in the way these -- >> pricing >> the pricing, the way these shows are released it's just going to be different. >> great to see you. >> thank you when we come back, the big number wall street has been waiting for. we'll get the october jobs report we'll get the data in just a few minutes. and don't forget to subscribe to our podcast you can get interviews, behind-the-scenes access and much more. look for us on apple podcast or on your favorite podcast app subscribe to squawk pod today. stay tuned, erod wlle ghbackyby,e' b edit card. cr apple,not a bank. with a better way to track where you spend. a new level of privacy and security. daily cash you get back every day. and no fees. not even hidden ones. oh, and if you happen to be somewhere that doesn't accept apple pay yet, there's this. nice.

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

still to come, the final countdown. the october jobs report is just minutes away futures ahead of that are a little higher. the dow up by about 35 points, s&p up by 5, the nasdaq up by 12 final predictions are next stay tuned, you're watching "squawk box" right here on cnbc. for instance, we know how your customers shop. and what they've already purchased. like this lamp. and we use those insights to show you what they might consider buying next. mid-century modern, nice. that way, you can keep sending them offers for the perfect products. and that keeps them coming back.

how's that for changing what's possible?

dana-farber cancer institute discovered the pd-l1 pathway. pd-l1. they changed how the world fights cancer. blocking the pd-l1 protein, lets the immune system attack, attack, attack cancer. pd-l1 transformed, revolutionized, immunotherapy. pd-l1 saved my life. saved my life. saved my life. what we do here at dana-faber, changes lives everywhere. everywhere. everywhere. everywhere. everywhere. there are things we would change about work. and there are things we wouldn't.

♪ when work is worth it. work is worth it. work can be closer to home... pay more... make us proud. careerbuilder. work can work. find your work at careerbuilder.com welcome back to "squawk box" on cnbc. we're live at the nabz market site in times square and just minutes away from the october jobs report. we'll get some final predictions from our jobs panel. kate, what have you got? >> net 43 because of the gm strike. >> jason >> i'm optimistic, 120 despite

the gm strike. >> michael >> 75k, including the gm strike. >> okay. joe terranova and i also want to get some wage issues from you. >> the important thing is the unemployment rate. watch the rate that's where the fear on main street comes from. if that's at a trough, that impacts consumer spending if the rate begins to rise. >> okay. mr. liesman? >> i think sub-100,000 is possible but i don't -- i wouldn't read too much into it because you have the strike but also have the census workers >> we're going to be discounting -- >> rick santelli, we've got to get to washington in a second, what do you think, sir >> 109,000 109. >> 109 >> nothing on the unemployment. >> yes, sir. >> and how are you factoring in gm there >> i subtracted about 75,000

from what my number would have been >> okay. >> look very quickly to see where the dow is ahead of this you can see it's up by 23 points ahead of the -- the futures would open up. we were also watching the 10-year, to take a look at that and that was yielding around 1.68. >> now let's get to ylan mui. >> 128,000 nonfarm payrolls rose by 128,000 jobs in october, solidly beating expectations the unemployment rate ticked up slightly to 3.6% now, average hourly earnings, they also rose by a solid 6 cents to $28.18. that's a 0.2% increase over the month and a 3% increase over the year now, there were some big upward revisions to previous months' jobs numbers as well the august number was revised higher by 51,000 jobs going from 168,000 to 219,000 september's number also up by

44,000 jobs from 186 to -- i'm sorry, from 136,000 to 180,000 jobs all told, that is 95,000 more jobs than previously reported. that puts a three-month moving average now at 176,000 jobs. now, those strong numbers come despite two big drags, gm strike as well as the census. the strike caused jobs down 42,000 that brought manufacturing down by 36,000 jobs it may have also weighed on the workweek the manufacturing workweek was down 0.2 hours to 40.3 now, the federal government's employment of census workers was down by 17,000 as those temporary workers finish their jobs now, the sectors that were leading in job growth in the month of october, restaurant and bars, that was up by 48,000. social assistance was up by

20,000 and financial activities driven by real estate activity, that was up by 16,000 jobs. the labor force participation rate ticked up from 63.2% to 63.3%. the broadest measure of unemployment, that rose from 6.9% to 7% guys. >> okay, thank you for that. steve liesman is here. you have been -- >> commenting. i was doing the play-by-play. >> as we were going. so give it to the audience. >> this is a potentially game-changing employment report. and i'll tell you what has changed here we had pretty good data that the jobs market was slowing and we're pretty darn sure it was slowing. the labor department comes forward and says, no, you had that nearly completely wrong well, not nearly we were thinking about low 100s, below 100. let's take today's number, 131, but you had the census workers

come off, which was the opposite of what was expected and you had the strike so let's add back, let's go 131, put back 15 for census, put back 40, we might be upper near 2, okay stop there september was 114,000. that's a lot weaker than we thought. now it's 167 august, 122, now it's 163. i'm just talking about the private sector here, not to mention the overall. i think one of them was up above 200,000 if i'm correct about that with the revision anyway, we have to think that the jobs market is potentially slowing less than we thought to a much higher sustainable rate and that powell had this pretty well right when he called a hold here i don't know what he knew. we always have that discussion it's not worth having. in any event the idea that the job market has not slowed as much, i think was it joe said the 10-year was higher that makes sense

some sort of lift to the term structure because that's going to back off the idea that we have this gathering weakness whatever is happening in the economy, it hasn't shown up in claims and it's really not in a big way showing up in the jobs report. >> except one is worried about cap ex, which is not represented here. >> that's the interesting part we worry about corporate confidence deteriorating because of trade and are they going to stop spending as well as hiring. that doesn't turn out to be the case i think this is unequivocally a strong report. to echo this point, the fed is telling us they were doing a mid-cycle adjustment and that is in fact what that was. the economy is in fine shape. >> we haven't given a shoutout to jason yet winner winner, chicken dinner. >> yeah. >> why did you see a stronger number >> this is stronger than i would have expected because you had those revisions to the previous two months i think steve has it right here. i don't think any one number on jobs should change our view of the economy.

this one changes mine a bit more than your average month does. >> because >> you have the pace of job growth in the last three months exceeding the pace of job growth we had in the first seven months of this year that's something that's surprising, given all the increase in uncertainty we've seen, given that that should be trending down. you had wage growth okay this month. you had the participation rate rising this past month so this to me looks like a very surprisingly healthy labor market i wouldn't go as far as steve -- >> let me put a quick number on that if you remember at 7:30 i did a quick hit that showed the three-month average was 157,000. that's wrong the three-month average now that i would have reported back then had i known what we know now was 188,000 and the new three-month average is 176,000

sorry, jason, i just want to put some numbers on that change that you're talking about. >> and i wouldn't expect we can keep up with 176,000 i mean that -- to have that for the next year. >> you think it's going to come down. >> yeah, i think it's going still come down but it's coming down more slowly than i thought. >> do we wait now until 10:00 to make sure ism manufacturing doesn't curb the enthusiasm from this report? >> you know, we have to really think hard about how this economy operates and i think we all grow up with a certain understanding of the economy. and i remember my dad coming to me and saying how are we going to survive without manufacturing? are we all going to sell each other insurance policies that's a direct quote from marvin liesman in case anybody is interested. i didn't really have a good answer i still don't have a good answer what i know is that we seem to be able to survive selling each other insurance policies with manufacturing going down as a percentage of employment and remaining stagnant or pretty much the same or stable as a percentage of total overall output. >> yeah, i would echo that i think the service side will be

much more important. given how strong and how broad that strength was in this labor market report, i would be surprised if the market reacted negatively to a weaker than expected ism. >> in terms of stocks that you would look at, sectors, names, as a result of this, is there anything you would focus on? >> the last couple of days there's been a little bit of a favorability back towards the technology growth-oriented names. now, we had seen a move towards value. we had seen that there were european opportunities, emerging market opportunities, opportunities in financials. there was the expectation that there was going to be a cyclical recovery so does this revert back to that thinking that there is a little bit of a cyclical recovery going on domestically and globally in which that makes value come back once again i need further evidence for that i still suspect that for the investment community, the right way is to look for companies

that are cash rich, low in debt, strong margins, and that takes you to technology and to growth-oriented type of equity names. >> is michael there? >> michael is there. we've got to get to rick we've got a lot of folks who have been waiting patiently. michael, go ahead. >> i've been trying to keep quiet because i don't want to be the guy that pours cold water all over the celebration. >> that sounds like it's about to happen. >> that's precisely what's about to happen. i think there's no question it was a strong report and certainly it kind of nudges up my view of the underlying strength of the labor market i think it's important to kind of step back and look at where we are at the 30,000 foot. yes, we're stronger than we thought we were yesterday. but we are still seeing a deceleration relative to a year ago. we're seeing that in the labor market we're seeing that also in the gdp numbers. so we're seeing a weakening. the slope is negative over a year, but we're still in a good

place. and that is surprising, given all the headwinds that the economy is facing from the reduction of fiscal stimulus, from the trade war the question, i think, is how long does this last? how long can we continue to have cap ex not grow without that affecting hiring, how long will it take for that not to affect consumers who are really holding up the economy. >> the market is not agreeing with you right now we're looking at the 10-year yield 1.7%, the dow futures up by triple digits we also have some breaking news or at least something we should alert you to >> there's been speculation all week after a reuters report earlier in the week that alphabet was in talks to buy fitbit we don't have that news crossing just yet, we're waiting for news pending, but i imagine that will be the news unless there is a surprise bidder or buyer that we don't know about. >> or unless they say never mind. >> they could say never mind but i don't think you'd halt on

that. >> the stock has been up pretty significantly as a result of that it's still a $6 stock but it was below $5. >> you know what the most important stock might be today based on this jobs report? jpmorgan. >> why >> jpmorgan is indicative of the exact sentiment that i described about the switch back to the belief that there is a little bit of a cyclical rebound. you see strength in jpmorgan which full disclosure i am long. if you see that strength, that is the investment community giving some confidence behind this report. >> we should get to rick too. >> can we also put up a chart of the dollar, which is kind of interesting this morning maybe rick will also talk about that as well but just wanted to throw that out there as something to discuss. >> rick, what do you think about the market reactions you're seeing to this number? >> i think it's very anticipated given the size and the strength embedded in this report. we're up about 5 basis points in 2s and 10s from where they were right before the number. what's really fascinating is when rates go down, we saw bull

flattening now rates are going up and we're seeing bear flattening another flattening between 10s and 2s we saw it rebound a little bit yesterday. you know, many big institutions really are playing this curve in how they leg in and play some of their treasury exposure. the dollar index, it's not up a lot but it is up a bit the real key to the dollar index is that it needs to regain the 98 handle. let's not lose sight of the fact that it dropped almost two full percent in the month of october alone. i think the anomalies were the last several months of weakness. this was more in line. if i had my 75,000, i'd get up to right around my 184,000 which is really what i would have came in without the gm strike the revisions give me hope let's put it this way, i think we're creating a lot more jobs than we are accurate data describing them. >> hey, rick, does it surprise you that you have a bear flattening here? let's explain what we're talking about to people. if you thought the economy was going to do better, you would

have steepness in other words, shorter rates would be lower than longer rates and they would get steeper but instead we have the opposite happening, which is indicative of the bond market either not buying into the strength in this report and/or figuring out a way to be pessimistic in the face of it, rick. >> you know, i would agree and most people on this floor, the first thing they'd say is when you get a steepening, especially like yesterday, the bull flattener, is that the fed is behind the curve but here's what i would caution. don't make any quick decisions because much of the movement was based on logistics when markets were crazy, either with the fed and the statement or now with the number i would say give it a day or so to simmer. i would be very surprised if this curve doesn't start to regain steepening. >> it's a blue moon week of a fed meeting and a payroll number in the same week a lot to digest. we're going to get a lot of fed speak, some later on this afternoon. we've got ism manufacturing.

the ism services, which i am trying to convince over time to the market is more important but nobody listens to me either way. >> it's not important. >> who just told me that >> this is jason we looked at this once i think it's not important at all. >> but it goes to the economy, jason. >> it's so badly measured, though >> i agree i agree. now that's an issue, right we have a wonderful statistical measurement for the u.s. economy right now in the 1950s and we just don't have any data for the modern economy as we know it. i think rick's point is, look, okay, over three months in time we figured out what the real number was in jobs you've got the market trading right now over all this stuff. it always confuses me why the market trades on stuff that it knows to be plus or minus 100,000 right. >> jason, let me ask you one more question, wage growth obviously this is a much stronger than expected jobs report, shows that it's not only this month, it's been the last couple of months with those big revisions, but what about wage

growth at this point how would you categorize that? >> you actually see something interesting right now which is wage growth for managers is slower than wage growth for production and nonsupervisory workers. over the last 12 months production and nonsupervisory is up 3.5 >> stick it to the bosses. >> so we're seeing more wage growth at the bottom we're seeing that in a lot of different data we've seen that in the numbers in the last couple of months. >> and we can see it that the wage growth is slower. we've been seeing it for a few years. >> that's true >> steve, just in terms of that, in terms of what we're watching with wage growth maybe coming up a little, it's still so low there's no way it's going to kick off inflation it means the fed is not going to have to step in any time soon either. >> we can talk about what the reality is here or just deal with what the fed thinks about it which is probably most

important as to what policy will be the fed adds productivity to inflation and says anything above that is potentially inflationary so let's pick inflation at 1.7, let's pick productivity at 1.25, 1.5. add those together and you get 3% if you get 3% wage growth that is not inflationary. plus, remember powell is piling on top of that calculation the idea that he would not be concerned if we ran a little hot for a little while so if we did 4% wage growth, look, that is one of the most important puzzles of this economy. a job market so tight that does not have strong wage growth in it, we don't really understand or know why. >> this plays into your theory what you were saying earlier this morning about the idea that we have a lot building in the last couple of months that could still come in and push markets higher. >> we do it has been a liquidity fueled, multi asset rally throughout 2019 i don't see how any of that

changes. we've been able to digest that we've got this trade dispute we've been able to digest we've got a manufacturing slowdown here in the u.s. and outside of the u.s. so i do see this as over the next 61 days until we close out this decade that the upside -- >> i didn't think about this, 61 days until we close out this decade >> i see the upside as the path of least resistance. i know that's very unpopular and i know many have said, well, you can measure sentiment in different ways, but i just look at positioning and talking in the investment world to how everyone is positioned everyone was positioned so defensively and we're finally coming out of that a little bit. i don't see much to disrupt that >> i think the really interesting thing is we talk about wages and what ends up happening with margins that's where everyone is going to go next i think as companies reported third quarter 2019 earnings, we got the same thing we got the last couple of quarters.

actually i would argue for the last couple of years, which is companies are super focused on delivering on the bottom line. that means managing their costs outside of wages if there was a departure from that, i would get a little bit more concerned but if we're getting strong wages and the consumer looks healthy and companies are being thoughtful about managing their total expenses and, to joe's point, positioning has been skewing towards the bearish, i think the market rides higher into the year ending. >> i just want to understand because this whole rally has been on the come, if you play craps at all we've had three quarters of negative comps on earnings and hit new record highs in this environment, right >> multiple expansion. >> multiple expansion, because the stimulus in train is really one of the things i think the market is betting on, which is the things you talked about and kate is talking about are going to come true you're going to have good margins, you're going to be able

to turn the earnings around. one of the things out there is you have this massive global stimulus going on. >> i would argue that earnings aren't that bad. expectations were so, so negative we're going to come in flattish for the year every quarter for the last three people have said we are in a serious earnings recession and we just didn't show up there. >> have we hit the bottom in terms of that? have we troughed in terms of the earnings recession or not? that's the biggest question, right? >> i'll be clear i think the next couple of quarters are also going to be challenging, but it's really going to be up to the big companies who have the ability to manage their expenses and generating free cash to carry us through. >> i want to throw a monkey wrench into this whole conversation we all got in a little deba debate/fight yesterday about what the president might do with regard to china. mr. kernen had the view when he feels like he has house money and things are going well, that he can lean into the situation a little more because he has more leverage so my question actually is you look at where we are now, you look at what the markets are

doing, feeling that actually things are better than we thought. >> fatal mistake to do that because of the calendar. if he's going to make that mistake, if he's going to feel he's playing with house money, he's going to be doing it in the month of december, closing out the year when liquidity begins to dry up and you're moving into the next year, which is an election year. that is a fatal mistake for the market you cannot make -- you can't take that risk in december of 2019 >> of all the liquidity issues this year, there's no way the central banks of the world are going to have a liquidity issue in the month of december >> i'm not saying the central banks will have a liquidity issue. >> no. no, but what you're saying is, is that he's not going to be bold i think it's going to be his platform i think he's going to stay tough on china, and i think the american people that are his base will cheer that notion versus playing the political timeline >> i think there are people around the president who know that the market could be higher,

the economy could be stronger, not if the trade dispute goes away, but if the trade dispute were on a tact that the market could predict. it's the unpredictability -- >> we're at all-time highs that's pretty good, isn't it >> steve, there's no way -- you couldn't put this trade dispute on a predictable path as long as president trump is president >> the market has. the market has >> my point was trying to be nice and say there are people around the president who know t to him and the question is whether or not the president will take advantage of the possibilities out there for him to fight this trade war in a less disruptive way. >> but even if it looked good -- >> fewer people -- >> guys, we want to thank the brady bunch. that's what it looks like on the screen right now we only have six, so i think a tr true brady bunch is nine we want to thank the panel for

the remarkable conversation. thank you, all we should tell you under an hour, we're under an hour until the opening bell dom chu has a look at this morning's key stock movers, including two energy giants as well. >> and dow components. let's kick off our friday morning movers, exxonmobil, they're up by half a percent or so, roughly 105,000 shares of premarket volume this is america's biggest energy company. it reported profits and sales at both top analyst estimates driven in part by better than expected results in its down stream operations, those tied to refining and the marketing of end use fuel products. those shares in focus. dow component. next up, shares of chevron, which is america's second biggest energy company they're down roughly 1% right now on around 17,000 shares of premarket volume the company missed estimates on profit -- citing lower crude and natural gas prices alongside higher operating expenses. so those shares moving the opposite direction for a dow component.

and then we'll end on a non-dow xu component, newell, 60,000 shares of premarket volume. the consumer goods company behind everything from sharpie pens and elmers glue to marmot and crock pots came in with better than expected profits and sales and raised full year profit and sales forecast as well newell will end its asset sale program and keep two units it had planned to sell off. those shares higher, 4%. i'll send things over to you. >> dom, thank you very much. we should mention one more stock we're watching now it is not trading. that's the news. fitbit shares halted for news pending. you can anticipate that it could be the idea that alphabet was going to purchase fitbit that was reported earlier this week that stock has risen sharply since that time over the course of this week the shares were trading around $4.38 before you heard any of that news. you see the big swing up it last traded at $6.16. again, we are waiting to see what happened.

fitbit shares halted for news pending and we'll continue to keep an eye on that as well. >> okay. want to get down to the new york stock exchange right now, where jim cramer joins us now. jim, i don't know if you're following twitter, but i believe mr. trump, president, has just tweeted about the jobs he says, wow, a blowout jobs number just out, adjusted for revisions and general motors strike 303,000 is his number. this is far greater than the expectations usa rocks, exclamation point. >> some different math new kind of math. >> new kind of math there. >> new kind of math. it is a revisionist math look, i think the numbers are okay look, i keep coming back to -- we got to focus more on boeing i think boeing is hugely important to the economy and people were -- suppliers to boeing are pulling back. and i think we're -- if we're going to see problems in the economy, it is going to be

people maybe realizing that boeing is probably the largest generator of jobs in this country now. and i'm very worried about boeing and i think this jobs number will get worse if boeing isn't resolved. >> the new boeing news we haven't talked about this morning is that qantas has grounded three of its boeing 737s, not maxes. that to me is a story kind of quietly percolating in the background if you got problems with more than the 737 max what does that mean too >> we have to go to phil on that phil has been spot on. there was a moment where phil confronted dennis muilenburg, reminded me when cronkite went to vietnam after the tet offensive and said we're losing this war boeing is losing the war here. and i just am very concerned that this is a pile-on at this point. i don't know about the 737

regular. i have doug clarker, he didn't mention a problem with that. and that's american and gary kelly from southwest didn't mention anything about it. boeing has to get this -- i mean, boeing has to get this behind them. i don't know this was a very tough week for what i regard as america's greatest company >> hey, jim, real quick, and i apologize, i don't know if you're seeing this crossing the wire as well. >> fitbit in. >> elizabeth warren -- no, we saw the fitbit news. i think it is still halted i'm seeing elizabeth warren proposing a $20.5 trillion in new federal spending for medicare for all program this is apparently financed by taxes on businesses and the wealthy. just -- >> leon leah >> -- not -- >> apple buybacks too. >> you spoke to her about her plans before. >> lee's letter, let's not be

incendiary, it is not an incendiary letter. he's debating their math, just like the president's math on the 303,000. i think that that's -- the american people may not like that number. i think the american people are convinced you see the word trillion involved, i mean, they can handle billion, they can't handle trillion. let's see what she says. you're not going to be able to so-called soak the rich and get that kind of money it is a substantive debate it is not a name calling debate. >> i think she's using it as red meat i don't noknow people are diggi into the substance. >> i'm getting emails from people in her base that aren't on the substance part of this. i think the letter he wrote is substantive and maybe it is a function of twitter, maybe a function of anytime calling, i don't think it is -- unfortunately doesn't seem like she's engaging in a meaningful discussion over some of the issues he raises, including by the way, he's not that -- he's far apart from her with wealth

taxes and a lot of the rhetoric, in terms of tax policy and other issues, take the wealth tax off it, but some of the other low hanging fruit, they're on the same page and yet i don't think she really wants to engage with him, wants to use him as a boogie man. >> i wish you would keep talking about this we got to change the dialogue. what you said is 100% right and it is starting to bother me. lee's letter has one negative thing. he wished, you know, not necessarily she should have picked on him, but the substance of the letter is unbelievable. we have to get this thing back on if there is a whipping boy, should not be lee. most charitable guy i ever met making me give money before i had any money. okay, i give she got the wrong guy here >> we're in agreement. >> eyes wide shut, you and me. >> there is an image i can't see. we have to run we'll see you in a couple of minutes coming up. joining us is steven bhwhitn

at citi private bank the numbers, the jobs report, much stronger than you had anticipated. before you saw the numbers, you thought 2020 is setting up for a return of an industrial strength >> yes. >> why is that >> our base case is we're going to have an industrial and trade sector recovery. factories around the world are producing below the demand level. now, there can be some slowing, what you've seen in business investment can feed through some to employment and consumption, today's data is very encouraging, of course i think had you look at november employment, you got to remember, you got to add back those workers. over 225,000 easily for the november report. but put all that aside, so what we're going to see out of the purchasing managers reports is they can't sustain contraction unless consumption goes down i see this in markets all around the world, europe, asia, united states, we have a healthy enough consumer to outlast this industrial downturn, and factories will start producing

to the demand level. that is going to be a recovery industrial production and trade. >> you're very bullish, you agree with that? >> i'm bullish on multiassets. i'm not specifically bullish on equities bullish on assets. today, let's see if financials validate the enthusiasm that we have around this jobs report let's see what happens with manufacturing and it is interesting to me, on a day where we're having this conversation about elizabeth warren and leon cooperman, we get a strong jobs report indicative of a strong economy setting up for 2020 where we have an election based on do we go for social justice or do we go for the strongeconomy that's an interesting question. >> about 30 seconds. >> so, look, i think we have gone from complete exaggeration how weak the economy would be, the bond market was amazingly overbought, the only thing i say about -- with industrial recovery, all these things, in the u.s. stock market, this is getting priced in. and, you know, next year will

not be another 20% year. that's what this year was about. what last year's mass evaluation decline was about. it is good news that we can pull this together and we have to avoid any shocks >> steven, thank you very much for being here jobs numbers, much stronger than anticipated. 128,000. we have seen the dow pick up sharply and we hand it over to "squawk on the street" right now so they can keep you up to date. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim crame, david faber at the new york stock exchange. strong jobs number not only for october, 128, but revisions up as well. dow futures bounce more than 100. we'll wait to see if ism in an hour can rebound europe green in the meantime ten year yield just north of 1.7. road map begins with that big beat for jobs. stock futures jump as october gains far surpass expectations