actor. >> we've detained two different individuals who've worked as sean penn's body double, thinking they were jason brown in the san francisco area. >> narrator: there's a theory that jason may have reunited with his father, who disappeared a decade before him. but the feds aren't buying it. >> both jason and his dad had a motivation to flee. and i guess that's a conspiracy theory that they're somewhere together. but we haven't determined that to be a fact. >> narrator: authorities say just one good tip is all it would take to bring this mystery to an end. >> we're not gonna stop. we're gonna keep looking for him. he's gonna stay on that top ten him. he's gonna stay on that top ten list, and we're gonna find him. ♪ stock markets are open for action and the early picture is brighter than closing out trade

last week. a lot of earnings dominate anan the european scene with action to the downside as investors took stock of the numbers. as we pick up for monday, we had friday trade on wall street which was negligenative. most of the direction for the week was negative on the back of the earnings reports in terms of the action this morning, you see we are slightly positive at .40% early on. we were down more than .80% on the friday session for the trading month, 4.5%. looking to claw back that territory to close out the month of october in terms of the green, the early action is in utilities to the upside at the bottom is oil and gas we have another retreat.

the sector is down .25%. sl slight fade in the names of bp and shell. the next sector is an underperformer, but positive which is telco elsewhere is bt at the top of the basket and telco is up .20%. the banking stocks are repositioning toward the bottom of the board slightly positive with the green arrow. reaction to hsbc numbers today we had standard chartered trade last week and that is still weak at this stage. it is a lot to take from the bank earnings and uk names financials toward the bottom is seeing further improvement travel and leisure is up .20%.

autos this morning on the back of the union agreements with .30% down that is positive retail names are .70% higher racing past industrials. we have the halloween festival coming up and that gives the retailers a nudge. construction is .80% real estate names is a better performer. don't forget the focus on semiconductors and apple supply chain which is key for european players. every stock in the basket is trading firmer today in terms of the boards across here on the european indices, 7,326 on the ftse 100. we bounced .50%. similar for the french market, but shy of 77,000 handle similar for spanish and eitalia stocks

lock-step this morning, steve. >>. very well behaved spanish data the core cpi up 5.2% year on year which is down from 5.8% year on year karen, it is useful in spain and they have given us great details. increases to the upside is housing with the variation increasing five points that is due to price electricity in contrast with the full one-year earlier transport and electricity costs to the upside. to the downside, leisure and culture were the biggest sectors are the negative contribution. evolution with package tour prices falling more than

september of last year karen. steve, let's go to hsbc and market reaction. slightly weaker. it launched a $3 billion share buyback program after the third quarter profit which missed estimates. pre-tax profit rose to $7.7 billion from $3.2 billion a year ago. the margin rose 19 basis points on year to 1.7%. it did dip two basis points on the previous quarter as customers moved to fix term dep deposits the rest of the uk banks after the challenging trade last week by comparison versus hsbc with falls in nat west and standard chartered as well as barclays slightly closer to the flat line now. patches of green upsetting the board with lloyds of london. and a 24% rise of income in the

first nine months of the year. the australian banking has seen growth in all markets and operating income should increase the stock is down 1.7% it is still positive to date to the tune of 10%. the cfo expected the margins to peak. >> we see some margin compression here and there from re-pricing the deposit base. nothing unexpected we believe loan growth will return to the region which will drive before the increase. the margins may be peaking here. let's look at the auto names. including stellantis the uaw struck a deal with stellantis to end strike action. the move is similar to the move with ford last week with pay hikes of 30% over the contract including cost of living

payments a look at the auto names in contrast it has been a mixed bag. mercedes-benz and renault in reverse. steve, we have, of course, a lot of the auto volumes telling us just what the margins look like in the sector. >> let me give you the details with stellantis and uaw. it is important to keep in mind this is a tentative deal it still needs to be voted by the members of the union we know they agreed to 25% pay increase with regular bumps pegged to inflation. at the same time, the united auto workers announced they agreed to reopen the belvedere production plant in illinois at the beginning of the discussions, in fact, stellantis was considering a 5,000 job cut.

in the end, after the deal was happening, they are adding 5,000 new jobs this is according to the united auto workers also worth noting, this announcement comes after the similar deal with the same trade union and ford that was an important development we saw last week of course, there is the question mark of whether we will see the same with gm this trade union has been striking against these three big auto hemakers in the united sta. we have seen two deals so far and yet to see what will happen in regards to general motors when it comes to that, the trade union announced they are expanding its strike action against general motors still pressure there also worth looking at is in context of the resurgence of trade unions in the united states particularly in the wake of covid. we are seeing the deals not just

in the auto secretary tornado watch -- sector, but with the writers union as well. >> sylvia, thank you let's move on to glencore. it reiterated the dguidance for copper and nickel amid strikes and main the maintenance we have a firmer trade for rio which is .90% higher pearson is a stock we are looking at this morning which stretched out 1% firmer this morning. it raised full-year guidance after underline revenue growth for the first nine months of the year the education group has seen higher demand for assessment and qualification and feedback to the generative a.i. tools.

easos is considering sellin to topshop it is not sure how much it could raise selling the brand, but it is more cautious at this end of the market it is impacting the topshop brand. you see the shuffling of the portfolio with the bounce at 3.5% steve. karen, we asked the right question when is the right time to raise debtor spend free cash flow on x, y, or zit it is the question that they are pontificating here at goldman. the cost ratio is down from a 7 handle to a 4. i have seen it with meta with the year of efficiency you have been saying what is the right thing to do with your

money? spend on acquisition or staff or investment or give back to h shareholders there is never one right answer. >> if you are a worker, you like to see it go up in wages if you are a shareholder, what you are tending toward most of all, shareholders and prices are going up most if companies are buying back shares if they he are not doing something aggressive like an acquisition, i think the way the market is rewarding is more dividends and returning money to shareholders >> it is not as exciting with zero interest rates and now we spent so much time talking about bonds. they are more attractive my problem with buybacks is and i had an eternal problem with it is like we have nothing else to

do benefit the staff and the c-suite by buying back shares. we will have less shares the "s" of the eps as we get into correction territory, those buybacks look appalling. >> there is an argument of the buy back that it is not a growth investment or acquiring another company. >> it is not imaginative >> i would say europe is accused, european equities, accused of older economy companies with not much growth if this is the case, it should give back to shareholders to invest in more growth companies. if you are a financial or oil company, do you want them to be investing at the moment in areas that won't give a lot of return or give back to shareholders to allocate it to more growthy areas. >> i have seen this the other

day with the mining sector and it is going through the balance sheet plan of the past ten years as a sector and throwing off a load of cash to investors. my view is that is changing now because i don't have the necessary right assets in the portfolio with electric vehicles and energy transition and need to invest for the future what do you think the strategy is for the resources >> for the miners, it goes in cycles they do a spending binge at the top. >> and then settle off the bo bottom >> by is not helpful in the last few years, they have not been in a spending binge they have been doing buybacks and raising dividends. they have been enjoying a period of a more rational market with lower supply of things a lot of miners would like to pivot with high potential returns and supply the electric

vehicle industry of course, the prices of those things have gone up. use your balance sheet and buy other assets at the moment they will be cautious at this cycle. managers are adaptive to what the market is telling them the market is saying we want buybacks and dividends >> we know the competition and you think about getting in yields on the bank account near on 5% if you are not getting a dividend yield beyond that how do companies justify paying dividends when they have earnings compression margins or also being squeezed in the cycle. how do they justify? >> paying dividends are not particularly at the moment. it is around 45% it has been higher than that on average at 50% pay ratios are not huge.

they have a little bit of room to payout. >> what about the cost of capital change the trick which is disspiriting with the buyback is well done. they have been doing it with cheap debt before. cost of raising the debt is zilch. this is not a slam dunk to raise that money and buyback your shares. >> i agree with that if you are a company with a high leverage, you didn't want to endanger your buyback or use cash unwisely. you want to be cautious in this period of time i would say a couple of things look at the large listed corporate secretorsector, the di is not high. you think of the late '90s or

previous financial crisis. big boom in m&a. this is not the case this time around if anything, the problem in debt is in the government sector rather than the corporate sector i think there is more leeway the other point is corporates and telecoms with big balance sheets is the average duration is long. 10, 12 or 14 years it is a long time. they will see the cost of that go up over time. it is like having a fixed rate mortgage, but with a ten-year fix which is not bad at the moment for them. >> looking at the free cash flow yield at 6% for the stoxx 600. autos and parts at high end of this with 12.4 on this does the free cash flow changes for the automakers with the

reset on wages and prices are coming down and the competitive environment is very much ramping up is that the narrative with no one from the traditional autos >> i will prefer companies in energy and banks to buyback and dividends, those types of sectors, i see as lower long-term growth in case of autos, they have the rising cost problems that free cash flow yield may not be all that it seems you know, with the extra cost of the transition to ev and chinese ev manufacturers, all of that will dampen cash flow. >> sharon, thank you for joining us strategy ideas that. thank you for running through that european strategist at goldman sachs. clarion reported a 20% decline in sales to september.

the swiss chemicals company beat on the top and bottom lines and bounced back guidance. con kad keijzer, the ceo of clariant joins us. the marketplace has been seen as a takeover target in the recent months >> karen, an interesting question what do companies need to do with cash today. you noticed we announced the acquisition of meyer for $810 million. we were able to take advantage of the current valuations and pick up this great asset >> run us through it $810 million u.s. dollars. which direction does it take why this particular acquisition? what does it do to benefit the

company portfolio? >> if you look at specialty chemicals in general, the cosmetics specialty ingredients segment is the most attractive in the terms of growth and profit profitability. it takes us in the direction of becoming more specialty ch chemicals to the growth point of view and margin. >> conrad, good to speak to you today. i'm looking at one of the a ana analysts jeffreys takes it is a good fit for you with the quality of care and chemicals business they have not seen revenue or cost disclosed do you want to disclose? >> we have disclosed some of the items you are talking about. headline numbers is this is $100 million u.s. business and we basically stated our ambition to grow this to $180 million u.s.

dollars in the next five years historically, the business had a gross of 10% we think by combining sales force and the teams, we actually can step it up to 12.5% in the next five years to come. >> for the three months in, september, conrad, sales fell 21%. core operating profit 28% lower. do you want to run us through some of the factors for people who have not been looking at the company and what has taken the sales numbers lower? >> sure. steve, what is important to note is when you say 21% sales down, that is actually including a significant currency 8% currency effect from the strength of the swiss franc. we see in local currency sales down by 13%, but there is an

effect of 5% from the diff divestment our volumes year on year were down 5% and our pricing is 3%. in the current environment year on year volume down 5%, that is a robust performance we are very pleased about, steve, is the pick up if you compare numbers against q2 we saw volume pickup of 2% and like for like our ebita in q3 over q2, 21%. >> strongest decline with the destocking problems. did that improve >> you look at the segment and this is the only segment where we see destocking. there is a very long supply chain down from the active producers to the farmers with distribution between in crop solutions, we still see

volumes down because of the destocking we think destocking in the segment will continue throughout the season and crop solutions probably will resume growth early into next year the underlining demand in the end for crop protection ch chemicals there is protective. >> conrad,d hamas. to what extent is the instabity il the middle east showing sentiment in the business >> obviously a human tragedy let me start with that it also halso has its impacts o business for us, from the revenue perspective, we do not see effects. we have limited business turnover in israel as a country. you do see the impact on oil

price where brent is now $90 prior to the conflict starting you see the pricing in europe. back up to 50 euros per megawatt hour significant increase when measured before the conflict started. >> when it comes to whine a down 2 -- when it comes to china, down 2%, are you seeing improvement with activity on the ground in china? >> we are seeing improvement in china. i was just there two weeks ago what you see is definitely optimism an important metric is the manufacturing pmi. china is now at 51 they are above 50. as a reminder, the u.s. is 50. europe is in challenging territory with pmi manufacturing index of 43 right now. in china, what we see is a very mixed performance by segment for us, important for markets like computers and lap tap lapt

cell phones. the real positive is electric vehicles which is up 36% glob globally >> conrad, back to where we started, credit costs is focus for investors and that will have bearing on companies you are throwing yousrself into the mix with the acquisition funded with debt interest would consume the profit with this acquisition you made today were you not concerned about the rising debt situation and credit cost in the cycle? >> karen, we have a very strong balance sheet to allow us to take advantage of the lower valuations in the sector if you specifically look at the leverage, it is up to 2.8 times ebita.

this includes our pensions excluding the pension liability, it is 2.2 multiple what is important for us is we have positive eps and earnings per share already in year two in the mid single digits. it is creating substantial shareholder value creation. >> conrad, thank you for running through the numbers and talking through the latest acquisition conrad kjzer 45 people have died at a hire in the coal mine in kazakhstan workers were evacuated on saturday following what the firm's local unit said was a methane blast. they signed a deal to transfer from kazakhstan days before the incident siemens shares are rebounding as the state guarantee talks continue

shares sliding 39% after details of the talks were revealed. coming up on the show, the latest on the developing situation in the middle east as israel steps up ground attacks on gaza.

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welcome back to "squawk box. look at the s&p which is closing in correction territory at the tail end of last week. investors are bracing for central bank decisions hsbc announcing a $3 billion share buyback program. shares are mildly higher this after the bank posts a third quarter pre-tax profit of $7.7 billion that's more than double last year, but below expectations israel expanding offensive in northern gaza ra razing partf the city to the ground and the palestinian health officials are saying the death toll tops 8,000. and expressing concerns of the export curbs in the middle east

the u.s. trade representative tells cnbc she embraces the opportunity to help form the wto. >> it is the institution that embodies the international rules based order when heit comes to trade. it also needs to catch up with the times. yoeuropean stock markets ha been open for half an hour we have seen the break from the rest of the core markets french and german stocks to the tune of .60% stronger on the ftse 100 up 1% at this stage. heavy lifting as a result with the stoxx 600 up close to .80% under the hood, after what is a green bounce now at this stage, you can see we have no red inc we have given way to positive to

oil and gas which was a weaker area that sector is bouncing .50% autos are up .40%. you see media names up 1.4% and surpassing healthcare and insurance. some peraformers on the chart after thursday and friday here in europe which were given way to solid gains today as markets see a clawback taking place across the parts of the board. let's take a look at the stocks moving to the upside siemens is 9.5% higher and electrolux is weaker m let me take you to u.s. futures

and the picture from the states, no doubt, is helping the sentiment in europe. we watch triple digit point numbers for the dow and across the other indices. as we closed out on friday, it was negative from the nasdaq and s&p. we see a slide here from peak to trough >> the part of the month where we look at the monthly declines. as much as we talk about the ten oil stocks 4.4% decline i will do what i did last week to reiterate the point dow and russell 2000 have led the declines in the states the former is down 9.4% for the month. the latter is down 8.3%. >> the european markets in the context at 4.5% for the month. today is helping, obviously. that is more than what you had off the dow and similar range to with what you are seeing off the

nasdaq >> look, let's move on to the big story. the g7 called for immediate repeal of import restrictions on japanese food products with chinese and russian curbs on fish imports tokyo started pumping water from the fukushima power plant into the ocean. we asked about the future of the trade organization with katherine tai. >> it is not functioning as it used to. from our perspective, that is part of the process and reform conversation we need to have at the wto. how can we have a dispute settlement function that helps its members settle disputes and is not just a forum for lengthy and expensive litigation how do we have a system that

facilitates the wto and doesn't stifle the work which is what we saw in the last 10 or 15 years israel is continuing to launch air tries on the north of gaza and tanks advance into the territory in the second phase of the war with hamas the health ministry of gaza says the death toll surpassed 8,000 and including 3,000 children sky news security and defense editor deborah haynes has more >> reporter: we counted eight war planes this morning and multiple strikes you see gaza behind me a lot of them have been targeted toward gaza city in that direction. you can probably see some smoke behind me in the distance and also up at the northern tip of gaza, we don't know, obviously,

what is targeted this is different than the previous two mornings we have been here where it has been much more the sound of artillery fire and tank fire and groups on the ground moving through the smoke and into gaza. obviously, we are reliant upon what the israeli military tells us in terms of what is actually happening on the ground because we can't be there ourselves at the moment in terms of the latest update that they've given on the operation on day three of the expanded ground offensive, they described how israeli forces insidengaged with hamas fighters inside buildings and network of tunnels that the group uses to operate and launched attacks against israel. the israeli military claiming they killed dozens of hamas fighters we cannot confirm that, but what we can confirm is the intensification of air strikes

this morning clearly for israel, the goal is to destroy hamas and they want to rescue more than 200 hostages that have been held inside gas -- gaza in terms of how that operation is going to play out, israelis say it will take a long time and it will be a long war. they will want to have maybe quick results when it comes to the hostages and all the while, there is mounting concern of the huge civilian toll that is being paid by palestinian civilians living inside gaza according to the health ministry officials in gaza, hamas controlled ministry, more than 8,000 civilians have been killed and pressure on israel to try to be proportionate and operate

within the rules of war. >> the director of the middle east and north africa and chatham house is joining us. as we hear, israeli forces are in densely populated areas of gaza there is a question of ground invasion and if there is any headway made by israel will israel set up to meet that obje objective? >> i think the strategy of eliminating hamas is almost an impossibility. if they are success thful and o by one killing off hamas leadership, what they have done is transferred this conflict to another generation through the immense and enormous humanitarian catastrophe under

way. over 8,000 have been killed and 3,000 of which have been children the flagrant issues with the international lawsunravel. >> in terms of how we view the conflict of how devastating an impact on gaza and various nations in the area, there is a border concern of the conflict spilling across lines here and that proxies for iran could get involved is that still a threat in your view >> it is a threat. we are really walking on a fragile tightrope. there have been incursions and escalations on the southern lebanese border with attacks going back and forth between israeli forces and hezbollah the fear is they can cascade iranian-backed me ilitias have been responding.

the houthi group have sent drones and attacks from iraq and syria. the united states did respond last week and tried to put an end to this escalation rea reasserting deterrence it is unclear. we could be walking into a broader crisis nobody would like it the messaging is strong all sides that they are seeking limited brinksmanship. things could always get out of hand >> we have not seen iran and israel come to blows yet let's be honest about it that is the fear of many people that this does become a direct conflict with iran and israel. do we know these initiatives from qatar or others is bearing fruit behind the scene clearly not for gaza, but

stopping the wider conflict? >> let me take the first point iran and israel have been involved in a shadow war those will certainly step up and increase after israel feels confident about its operation in gaza i anticipate a longer-term conflict with iran and israel resurfacing. for the time being, qataris are key in trying to attain two aims release of as many hostages as possible, as we only have seen four released, but as part of the negotiations, they heare seeking a cease-fire this is the two-prong effort behind the scenes and qataris are tasked with this with the relationship with hamas and have been successful with

negotiating. >> the largest middle east player is saudi arabia i appreciate that from the economic point of view saudi and israel have had historical rivalries israel had rivals with iran. saudi and iran that relationship is frosty for all reasons. su was the aim of hamas to create some form of pan-islamic or pan-arab view and have the forces turn against israel as such, has hamas had some degree of successor or is that wrong narrative? >> i would call against that iran is the backer of hamas is p predominately a shi'ite population those don't always hold. what brings iran and the militia groups together is anti-israeli

posture and feeling. that creates the alliance. it is all falling apart where all of these groups and iran, itself, have a hierarchy of objectives islamic is looking to security through the supportive groups, it pushes the threats. the biggest threat is iran and the u.s. support for israel closer to israel border than iran if you tie to the initial question with saudi arabia, iran and saudis have escalated and restored ties. of course, things are not fully solved there is deep tension. for saudi arabia, iran support of the proxy groups across the region is ultimately the biggest destabilizer at the end of the conflict, if you begin to think about that, and it is very early so i'm

cautious about going there means there are two issues that need fundamental resolution one, of course, is the issue of palestinian self determination, but secondly is the iran destabilizing role in the middle east and iran funds and supports groups in other countries and this, of course, produces a cascade of challenges not just for israel, but the wider region and broader regional stability >> can i ask quickly around u.s. policy here? there was a move by biden after afghanistan to extract the americans from so-called forever wars this conflict is seen as one that could go on for a while now. how does biden navigate this and how do others consider the foreign policy with the u.s. presidential election coming up? >> biden is under a bit of pressure just before the war broke out,

there was hub rerous that washington was stable. the biden administration had been supporting normalization and diplomatic reengagement across the middle east here, the u.s. has reinforced israel at the highest levels vice president kamala harris stated they will not put ground troops in the war and conflict biden is looking to restore plerk confidence in the conflict and protect the partnerships in the region going into the war, it is going to be providing, i think, greater support for diplomacy. i think that is how biden will have to position himself going into the u.s. election >> we have learned a lot today thank you very much for giving us the round robin and specific stories about what is going on with israel and gaza we appreciate it

the director of the middle east and north africa program at chatham house. for more on the latest on the ground, check out our blog on cnbc.com. it is a huge week. no doubt about it. a big week for the markets with the rate move from the fed there is plenty to go. we'll have morafr e eae tethbrk.

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big news from the technology event that we attend you may recall there were comments made by the former ceo about the israel-hamas war which led to withdrawals from attendees this year. the ceo and now the announcement that katharine may will step in as chief executive the former wikipedia boss. she will bring the expertise into the mix in terms of her own cv, she

brings to the table experience from unicef and access now and world bank she will step into the role as the former ibm has withdrawn all decided not to send the same level of executives to the event. this is now in a bid to try to salvage a large piece of the tech pie here as it is large on the calendar. we are preparing for another big week on the data front today and tomorrow, we have first inflation readings across the eurozone and flash growth date from germany. wednesday is the fed latest rate decision before the bank of england on thursday. we bring a slew of pmi data and private sector data from china and readings across the eurozone another jobs report stateside on

friday also this week, we aretalking about earnings 30% of the s&p 500 companies report stateside including apple, chip giants amd and qualcomm along with eli lilly and pfizer we heard from hsbc this morning. soc gen and metro bank with results this week. it is a big week for the energy giants with bp and shell due to report tomorrow. novo will be out with numbers and we will closely watching reports from bmw and stellantis. >> you are chatting in the wilderness, which i feel i do all the time, what about supply? ever since i looked at the analysis with the congressional budget office analysis of the supplier bond looks like up to 2030 and beyond, i have been trying to balance it out and no one has taken attention. >> the market has taken note

>> now, everyone is talking about issuance now i feel i have to move on >> the bond vigilantes have been asleep for a while now thanks to the central banks. qt is slowly waking up >> i don't do the reads. the u.s. treasury is likely to increase the size of bonds and bills in the fourth quarter. the treasury will help fund a budget deficit with increasing borrowing costs. this is not going away it is all of a sudden, we have the biggest story in town. it's not just all of a sudden. people in the fixed income market have known about this for a long time. they know the u.s. has lost one agency, the top rating of credit they have known for a long time that the japanese will have a higher interest rate going forward which might take away

that money geopolitical tensions taking away chinese money tightening going on and that means the fed is not mopping up as buyer of last result. all of a sudden it is a big story? >> a lot of times the big market players are looking at the big bear story that doesn't play out. the economic cycle gets in the way and you have a sudden recession or landing and it takes the steam out of the yields which naturally corrects. it takes away from the borrowing costs from the u.s there is hope that the economy just gets in the way we could pose the question. >> you mean there is a recession? >> peaks and troughs >> our best scenario to get the treasuries up and yields down is recession. >> yes f fingers crossed for that scenario the japanese would get into the way. the buyers strike with the dip

>> 150 yen. lots to talk about that's it for karen and myself just to say, did you enjoy your extra hour >> i wondered why. >> someone should have told my dog howling at 5:00 a.m. for brea breakfast. he is like a rooster exactly. never have a black lab that it is for "squawk box." it is not "street signs. it is "worldwide exchange. that is next on cnbc

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it is 5:00 a.m. here at cnbc global headquarters and here is your "five@5." futures are higher for the week. and central bank decisions and economic reports we highlight the market moving events on tap. also ahead, as