Skip to main content

tv   Squawk Box  CNBC  October 26, 2015 6:00am-9:01am EDT

6:00 am
where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. let's check out the markets this morning following the big friday rally. you can see this morning a very slight amount of give back with the dow futures down 39 points. s&p futures 5.5 and nasdaq down 11.5. the early trading in europe you'll see at this point it looks like the dax is higher. up by .3 of a percent. the other major indices are lower with the cac down to close to half a percent at this point. a big week for the markets and in politics. first, the earnings calendar. dozens more companies that are reporting this week including apple which will be released after the bell tomorrow. twitter, pfizer, murk, exxon mobil as well. we'll check the earnings
6:01 am
scorecard later this hour to see where things stand after a busy week this week. while that's happening we're counting down to the fed's next decision. the central bank's two-day meeting kicking off tomorrow with the policy meeting wednesday at 2:00 p.m. eastern time. the economists not expecting a rate hike. no news conference after the decision this time around. that leads up to the main event of the week. cnbc's republican presidential debate. it starts at 5:00 p.m. eastern time. >> this week? >> this week. are you ready? >> i thought you were leaving. >> i am -- >> no, that's tomorrow. >> i was leaving on a tuesday on a jet plane. ♪ i'm leaving >> you're leaving today? >> uh-huh. >> who's in tomorrow? >> i don't know. you two. >> just us. >> just the guys. >> all right. >> there you have it. michelle is here, too. >> michelle is coming. when is apple? >> tomorrow. >> i'm about to talk about apple. >> you are? >> because i don't -- i'm torn. i'm split.
6:02 am
i think it's going to be very interesting because we'll see a lot about china. >> you want to -- >> but do you think he already allayed fears about china? >> who. >> -- by saying china sales are stronger? >> yes, but he has to back it up. >> if they aren't strong, there will be a real problem. >> there will be a real problem. >> tech has done well? >> yeah. >> tech has been doing well. the market's back to 17.6. >> i no he. >> on the dow. >> it's done nothing but go up since it looked like the economy was leaking. >> right. meaning that you think it's still because -- >> no. if the fed had raised, the dollar on euro is back to 1.11 because everybody else is easing zblen right. >> if we had raised -- i think they knew everybody else was going to do another round. if we had raised we'd be at 107. >> that means you can't raise this week, you probably can't raise in december. >> did you see this the first time the profits and sales are going to show a quarterly decline -- >> yes.
6:03 am
>> for industrials. >> overwhelming some of the positives in aerospace and technology. >> big u.s. technology. >> let me get you caught up with app zbll the anthem. >> no, i was going to talk about apple. we have to talk about valeant. news. >> steve jobs. you can't believe a movie without -- a ceo movie didn't do well. i can't believe it's not the biggest -- it's like what happened to the "lost arc." >> what happened in the movie? >> i'm not rushing out to see -- >> no, what happened in the box office? >> didn't do well, right? >> why aren't you surprised though? >> let me tell you what's going on on apple. reporting results tomorrow but today the company is starting to take orders for its apple tv relaunch. should start shipping at the end of the week. microsoft's new flag ship in new york happens today while our show is on. i got a strange invitation to go while the show was on. >> i did, too. >> the laptop and surface pro
6:04 am
four tablets will be available today. microsoft one of the tech stocks that surged after the earnings. the stock back over $50. the other big story of the day, i think, before the bell this morning valeant pharmaceutical holding an 8:00 a.m. eastern time conference call. the company will be addressing allegations from citreon. ten executives will be included on this call including ceo michael pearson. already denying the claims. a piece in the wall street journal suggesting that people were using fake names. >> customers using fake names? >> no, no, no. employees, the specialty pharmacy group, and then the valeant changing their names in one instance saying their name is one thing, in e-mails using a different name. one of them was calling themselves peter parker. there's a lot of questions about whether, again, we talked about
6:05 am
stuffing the channel, whether they were using this specialty pharma company to effectively move drugs or product through and create fake revenue. >> he's been on, right? >> michael pearson, several times. >> what was the company he bought? >> it was after the alleqgan. >> he bought the female viagra, remember? >> yes. >> for about a billion dollars. there was a woman who started the company who came on with him. he's been on a couple of times to defend himself. >> at other points, too. >> it will be interesting in ackman's perspective. >> do you know what his average cost is yet? >> i do not know. >> down? >> i don't know. >> i would think from the -- when -- >> bought more. >> 40% drop although it came back from some of that. let me look it up. general motors and the uaw reached a new contract agreement. the tentative deal avoids a strike and local union leaders
6:06 am
will meet in detroit on wednesday to vote on that agreement. no details disclosed but the deal was reached minutes before midnight. >> sam zell is selling apartments. selling 23,000 apartments for $5.4 billion. it's the second big apartment deal in less than a week. blackstone group recently announced that it's buying peter cooper village in manhattan for $5.3 million. i think we need to book some people on this. i think we need la frac back in here. his favorite business is apartments. >> it's weird to seeing sam zell sell. >> then barry sternlick says it's a great business. >> it was interesting because when sam was here, what was it, just a week or two ago, he kind of upheld the idea that millennials will be staying and
6:07 am
apartments are the way forward. it's interesting to hear him discussing it and selling t. >> there are times when it looks like he thinks he will do well fundamental fundamentally. i bought it for this, i'm going to to it. see what happens. maybe he does it because he's -- >> the price is right, i guess you could say. >> another game show. that's too divisive to talk about the final jeopardy. i'm not going to do that. i'm not going to do that. >> okay. >> you can look it up on "huffington post." all over that site this morning. >> the conservative hero this morning. going to leave it at that. not going to mention any -- >> no, too divisive. too divisive. >> andrew, stocks to watch. >> among the stocks to watch
6:08 am
this morning, keurig green mountain will be importing through different warehouses. toyota sold 7.5 million vehicles passing it past volkswagen. u.s.aa, one of the largest credit card issuers in the u.s. dumping master card for visa. this will start in 19 -- 1996. that would be back to the future. 2016. usaa says the switch will allow it to offer its customers more benefits. let's talk about the price of gasoline falling once again. according to the latest lundberg survey the average price fell 10.5% to 2.24 cents. the lowest average price per gallon is in charleston, south carolina. that comes in at $1.85 a gallon. los angeles came in the highest at $2.87.
6:09 am
let's get a check on the markets once again this morning. the futures are a little bit weaker. the dow was up by 430 points. that's a 2.5% gable. s&p was up sharply and the nasdaq. check out what's been happening in europe. you'll see that the markets there are mixed. you have germany you have by half a percent. the cac and crance down. asia markets closed up for the anythi nikkei. the shanghai composite was up by half a percent. let's take a look at oil prices. oil last week down by about $3. 44.60. this morning up by 34.90 cents. if you want to check out what's happening in the treasury market, ten year yield sitting at 2.085%. in terms of foreign exchange, looks like the dollar is down across the board today.
6:10 am
euro's at $110.26. the dollar yen is at $1.21. gold prices are up slightly, $1,165.90. >> people are counting on this being the worst quarter for comps. if it goes to 10 8, it won't be. there will be a new down leg in revenue that is -- >> probably one of the issues weighing on the fed. probably one of the biggest issues. >> let's talk to -- got a big fed person here. did you know i was talking about you? then we have a market person here. right? >> do my best. >> we're joined with issues very related. good morning to you both. the journal today, jason -- i'm sorry, i'll be right there. the journal today, it will be a down quarter most likely. in the face of the down quarter
6:11 am
in profits and revenue at big u.s. companies, the market has gone straight up since the bad jobs number, straight up based on what? based on -- >> based on the expectation of more liquidity. >> not more bad news is good news. >> no. >> dying market. >> although my own opinion, joe, is that whatever positive news we're getting now from the market is largely going to be borrowing from 2016 unless we start to get better earnings and revenues because -- this is mainly because i believe the fed's credibility has been damaged. i don't think -- i think most people have come to the realization that the fed's ability to really influence the outcome of the economy is weak. >> the market has gone up 1600 points. why? >> it's only because they knew that the fed wasn't going to go in september. now in december. >> we didn't need strong earnings. we didn't need the notion that the economy is above stall speed to get it going. in fact, when it did look like it was above stall speed we were sort of flailing. really? >> listen, i think that you make
6:12 am
a strong case but my own opinion though is to get -- you have to say, listen, the s&p this year is flat. gone straight up. >> now it's down. >> it's flat for the year so to get significant gains i think you have to have the real thing. >> what quarter are we in, the fourth quarter? >> fourth quarter now. >> first quarter ears always slow. is it setting itself up -- >> then you have the elections. >> right. is it happening again? >> so are we talking about now we have to wait until 2017? i'll tell you, joe, in the markets we've gone from the fed's -- when is the fed going to hike to the next fed move is going to be an ease. >> no one's really there, are they? the qe? >> they're not but there's a lot more discussion about what would it take to get the fed to engage in another round of qe or have they missed their window altogether? i'm hearing that. i get that question more often now than when do you think the first rate hike is going to be. have they just missed it
6:13 am
altogether. so i think -- i'm getting a lot -- i do get a lot more questions about is the economy faltering? are we late cycle? i think the economy is in pretty solid ground. there's a lot more concern out there. a lot of it's sparked by even the fed's apparent concern about the impact that the global economy will ultimately have on u.s. growth. >> the l.e.i., i saw that was not great. >> exactly. >> can a profit recession or profit slowdown in industrial companies cause the consumer -- can it cause housing to become weak? can it cause sought tow sal-- a sales to become weak? can a profit recession cause the overall economy to slow to under 2% again? >> it may have caused it to slow. whether it's under 2% and possibly derail the expansion, i guess that's where i'm skeptical. >> were we at 3.8?
6:14 am
>> we were. if you look at consumer, domestic spending and housing has been growing better than 3%. we've had drags from trade, of course inventories are a big part. thursday's gdp number not good on the surface. if you look at consumer spending, housing, business spending the numbers are close to 4%. i think the u.s. economy is stronger than people are giving -- stronger than the credit it's getting to some extent. the concern that people have is, you know, is there going to be a blow back from the global weakness that ultimately is some of the softening we're seeing now. the first hints of the recession to come. >> he said late -- he's going to keep qe going until, when, late in -- >> exactly. >> they're talking. >> they're panicked over there. >> we'll hear in december ultimately what the expansion potentially of their stimulus program will be, but at rbs we're looking for an extension of the program.
6:15 am
not yet looking for further rate cuts but we expect you'll be looking at easy money out of europe all the way to 2017. >> i don't know what you're saying. you're saying we've seen four years of the market going up. you would say that we're paying it forward for four straight years. you're saying that the market is now ahead of itself because of earnings and -- >> i think -- >> that's why blowing up without earnings. >> i think the fed has gotten to the point where it understands that further easing is probably causing misallocation of capitol. it's doing more harm than good. it's at that point. my own view is the fed is going to start tightening in december. >> oh, no. >> we can all take a bet on that, jack daniels. but i think the fed has to get off the zero ground here because this whole discussion, frankly, has become infantile. >> i think it's murphy's law. you know, the serious stuff tomorrow night, murphy. murphy's law is not hitting a
6:16 am
home run. murphy's law is that the worst thing does happen. the worst thing is we're at zero and we can't deal with the next slowdown. >> the policy mistake in that regard you would say has already been made. >> yes. >> it was made by not -- i'm not arguing for what the fed is doing. i'm saying as far as the market is concerned, i really believe you're at a point for further advances in the market -- >> this is your -- >> the tina guy. >> i'm there. this year the market has been flat despite the fact -- >> we're lucky to be flat after what happened in august. >> precisely. but i'm saying to get more juice in this you have to get the real thing. s&p 500 operating earnings were $114 after the thirteenth third quarter of 2014. they're $107 now. you're already down about 7, 8%. most of that is energy. from here though you have to get
6:17 am
a broadening out of the profit sector my view unless you're going to pound the table on multiple. >> we get a first quarter slump again. how many years in a rojas it been, three or four? >> are we not already on to this? to some extent at some point we have to be able to look through that. i want to get back to what i said in terms of fed credibility. there is a real issue here i think in the market. people who agree and disagree with what the fed is doing, everyone agrees that communication has been a real problem. there's a real credibility start. people feel like we've understood. ready to see you go in september. you didn't. now you're saying that you didn't go in december. that may ironically be the exact worst time to go given how illiquid the market is, given the uncertainties. if you don't go, you further undermine your credibility. the fed has backed itself into a situation where they feel they must go to deliver on the guidance they've been giving.
6:18 am
i always say i'm the biggest hawk in the room and even i wouldn't vote to go in december. just having waited so long i don't think that's the right time for liftoff. >> gdp for the first quarter, what's it going to be. >> 2%. >> it will? >> i'm allowing for slowdown. >> we've had decimal points in previous first quarters. >> some people are looking for a decimal point for the third. >> third quarter that we're going to get on thursday. i'm close to 1.5. what the widely watched atlanta's now saying .9. that's a huge inventory drag on top of the trade drag. you know, that's -- and stronger numbers obviously. as i said if you look under nooetd that headline number it will look stronger. >> this week employee cost index. >> that's probably the most important number of the week. >> most important number of the week. >> for the fed. because the one thing that changes everything for the fed
6:19 am
is if we get wage growth. then you have a wild swing and they're behind the curve. >> you're in the weeds. i think there's a reason that you can be grumpy cat right now. why are all these republicans grumpy cat. going down to 1% again? back to 1%? >> i can. >> why can't we stay above 3 for two quarters in a row? >> huge, inventories of trade. >> 70%. 5% unemployment and 70% of the people think we're going the wrong way. you wonder why we're grumpy cat. >> that's because the economy is -- >> who's grumpy cat? >> that's you, grumpy cat. >> on "squawk box" in the morning. >> he's got a really -- >> where do you find grumpy cat. >> they are ugly. >> they used to be in f.a.o. schwartz. >> it's a toy, check it out. it's ugly. >> you don't want to call yourself -- >> no, i'm not.
6:20 am
you saw obama say why are republicans grumpy cat. >> you don't want to be that. i've been looking at valeant. he announced the stake in the first quarter. he bought 16.4 million shares and his average price was 143 to 205. he added to it in the second quarter. the stock had continued to climb above $200 so the stock right now sitting at $100. looks like it's going to open at 101 today. even though he added 2 million shares, he had already bought more than 16.4 million shares. he added 2 million when it dropped 40%. doesn't look like he could possibly be in the black at this point. >> okay. thanks, guys. when we come back, big week ahead in washington from the export/import bank to voting on a new house speaker. we haven't talked about the debt ceiling and what's the beef with bacon? we have some meaty news coming up as we head to a break.
6:21 am
check out this date in history. when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about.
6:22 am
that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
6:23 am
welcome back, everybody. we have some breaking news. valeant is just out with a news release.
6:24 am
expecting a conference call later this morning an hour and a half from the company. ahead of that they put out a news release saying based on the review conducted to date the company believes that it is in compliance with applicable law. it also says though that in light of the recent allegations made at philador the board of directors is going to make an ad hoc committee. now it's going to concern people in a big way. you can see that stock already under pressure even before this release came out, but it's not going to be as easy as saying all of these claims that are made are inaccurate. this is going to take time for the company to review this further. they've already spent a lot of time with their accounting and their audit and risk committee going through their accounting practices. this is going to take even longer. michael pearson, the chairman of the board and the chief executive officer and ceo says he is in favor of this further review and the board has come out and made this statement. the board has complete
6:25 am
confidence in mike pearson's strategy. the idea that this is going to take a while and it's not going to be easy to back down all of the allegations that it made means it's a more complicated matter. >> i put it worse than that. to me, the second you start an independent committee, this is not about checking -- crossing your ts, dotting your is, this is something different. if you knew about it and felt comfortable with it as a board, you would be fine. >> right. >> if you start an independent committee, there's something wrong. >> we're already looking -- >> you're not fine. that's the end of the story. if you're worried, you should be worried or it sounds like you should be more worried than you thought. >> very likely. >> i think it's amazing that a company -- to me, the lesson in this, i'm not saying they're enron, but the fact that a company could have 40% of their stock shaved and that nobody, all of the quote, unquote, smart money didn't realize there's something amiss if there is something amiss, you know, that's truth through lie. >> we'll continue to watch this
6:26 am
story. again, the company is coming out with a conference call with analysts coming up in an hour and a half time. in the meantime, the countdown is on. it's two days until cnbc's gop debate. let's bring in ben white. he is chief economic correspondent at politico. ben, the story this week had to be carson's rise and what trump's going to do about that. >> good question. this debate will offer trump his first moment where he's not the absolute unquestioned front-runner. he is nationally the front-runner. now trails ben carson in iowa. already gone on the attack against carson, mentioning his religi religion. backing off. he clearly brought that up in iowa because he is worried about the rise of carson. what does he do in the debate? does he blow up against ben carson? it's jobs, the economy, that's his bailiwick. an opportunity for him. the other candidates have a lot of work to do to get into that top tier with those two guys. >> the big questions about his
6:27 am
campaign at this point, the need to cut back by 40% their salaries, where does that leave bush? >> leaves him in not a great position. obviously raised a lot of money. super pac has a lot of money. money wise he's fine. his poll numbers haven't moved. he's still mired well back in the field. marco rubio has gone above him. he needs a breakout moment. it's hard in debates because he tends to give long answers very policy oriented. speaks very good in debate. trump very good in debates because he can give you the punchy fast quick answer. does bush have a pass? there's not a great market for establishment politicians. trump and carson are people doing well. still early. talk to me when the voting starts. >> trump took shots at bush this weekend. bush was going to convene with his family to try to figure out what to do about it. >> trump made statements saying, look at that, he's going to run to mommy and daddy.
6:28 am
>> he's bringing in w to get the donors back involved. the fundraising fell off a bit in the last quarter. the headline should be trump takes shots at insert x candidate because he's going to take shots at everybody. he has moved his fire from jeb who is not that big of a threat to carson who clearly is. who notion what will happen in the debate. he'll probably go after everybody. you never know what you'll get, whether you get big punching donald trump or laid back donald trump. people want the high energy, go after everybody ben. i think he'll bring that. >> we watched some of what had happened just in terms of kind of gameyness out of this. do you take any guesses as to proving him wrong? >> i should have looked up all the times that i have said donald trump is starting to fade. it hasn't been true. i still don't think it's trump. >> you say it a lot to get there. you fade a lot at this point. >> people do fade quickly in this process when people start to focus very clearly on the candidates themselves. we're still way out.
6:29 am
national polls at this point in the gop primary don't mean that much. state level polls mean a lot more. i would focus on those. if new hampshire starts to move, you have a big lead in new hampshire. >> people don't pay that much attention to the national polls. if you are getting 1, 2, 3% do you have a shot at it? >> no, you don't. i don't see a big move coming from governor christie. bob yby jindal. >> when do they say enough? those numbers are low. >> yeah. >> those numbers are legit low. >> rand paul in that field as well. >> this is a very different setup than we've ever seen before. >> it is. >> if you have 50% of the vote being taken by two guys who are outsiders who haven't been there and pundants think they're going to drop off, there's still a lot to split up. >> that's why you hang around. >> double digits? >> double beginning gits. >> 9, 10. >> everybody else is 4, 5, 6. >> double what they are. >> 9%. >> no, i don't think -- i think
6:30 am
it's too early. >> wa ty too early. that's why it makes sense to hang around. >> wait. >> when it starts to shift. >> who doesn't have enough money? who doesn't have enough known who at some point has to say, i can't do this? >> i don't think any of them right now that are still in. christie does not have a lot. at some point he may have to reassess. do i really have a path forward here? some of the others, jindahl, rand paul. the top tier folks, bush, rubio, carson obviously have tons of money. they can stay in this race for the long haul and wait to see. i saw a couple of comments this morning from somebody saying we're going to have a brokered convention this time around. i don't think that's true. it never winds up to be true even when people talk about it. it is so unsettled and there's such a question about where these big numbers for trump and carson go if they ultimately go anywhere. we could be talking about this well into the primary season like who's going to get the
6:31 am
nomination. it's not an obvious things to me. >> very strange political environment. >> it is. >> the biggest, i dare say laughing stock, of the far left are carson and trump and they're the ones being embraced by -- >> right. >> -- the aints-establishment republicans. they're the ones that seriously, the entire city of new york is going to have to move to paris. you know how they're going to have to -- >> going to have to helicopter air lifting zbleem if ben carson or donald trump -- the liberals are just -- >> consider a trump win in the general election matching up against hillary clinton. >> we all need to move. >> out of the country? >> but anyway -- >> it was a pleasure. we didn't get to the debt limit. >> can you say something quickly about your 'skins? >> kirk cousins, hail to the redskins. 24-0 down to beat the mighty buccaneers 31-30. i'll take any win i can get at
6:32 am
this point for the 'skins. good comeback. >> tomorrow night we have the series starting, too. >> yeah. are you a mets guy? >> i'm not jumping on the bandwagon. >> cincinnati. >> i like watching. >> although i get a lot of grief for -- i'm a yankees guy. i switched to the mets in the postseason. >> great story. >> nah, it's the evil empire. this is a great story, great team. >> the mets are the evil empire? >> no, the yankees, i'll agree with that. >> hey, man, go hets. i'm all for it. >> that's big of you. >> coming up, valeant pharmaceuticals firing back. the stock getting slammed last week. is this the right strategy when your stock is under fire? that is next on "squawk box."
6:33 am
but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.
6:34 am
6:35 am
6:36 am
♪ ♪ welcome back to "squawk box." energy sector takeover deal. duke energy buying paid month gas for $4.9 billion cash. that's a 42% premium over friday's close. in the meantime, let's talk about valeant. valeant pharmaceuticals putting out a news release ahead of the 8:00 a.m. conference call. cnbc contributor. meg turrell here as well. you've both looked through the statement. are you surprised?
6:37 am
let's start with the statement itself which suggests they're going to call it an independent committee, they call it an ad hoc committee. i'm going to call it an independent committee which i think spells trouble. you can tell me otherwise. >> this is the first step towards unwinding the relationship which one analyst called for last week. they say that they believe the accounting, they reviewed the accounting. they say it's all above board, however, this -- >> basically above the letter of the law. >> the letter of the law. the allegations around what was going on. >> gets your ears up like, what? >> yeah. the allegations about -- the separate allegations about what the company has been involved in. that's what valeant has appointed the committee to review. just how involved is valeant in this specialty pharmacy, filador. is it indemnified if filador is doing things that are not above board? it seems like the formation of the committee is a way to make sure that valeant is like, we're
6:38 am
okay. >> if everything was truly buttoned up, if the board felt like it understood everything about this, knew it all in advance there wouldn't be a special committee? >> andrew, i couldn't agree with you more. i was asking meg as we sat down if she was surprised. she said she's not surprised. i'm not exactly surprised. i'm a little bit surprised at the timing. this should have happened last week, four hours before now but not before the 8:00 a.m. management call. it completely undercuts management. people are one defrg whatever you're going to say is insufficient. your bosses are going to give us the true story sometime later. bob inning galls who is chairing this. it's about time we heard from him and others on the board. this he have very good. >> do you feel better bob ingalls is on this? >> very much. >> bosh ingram. >> what did i say? >> ingalls.
6:39 am
>> my good friend bob -- i do know him but he's a very good guy on board. there are very good people on this board. i can't believe if you -- you know, you read today's wall street journal or some of the stops the shorts have been putting out about the name game. perfect company for halloween time. the people are practically wearing costume disguises. all of these different names. filador as you talk about it, you just sort of wonder. supposedly it's only 6 or 10% or sometimes mike pearson said 20% of these specialty pharma companies, nobody else has these captive pharma companies. what's the reason for them? they don't have other customers other than valeant? is it because they're splitting profits with the government? hopefully not. very expensive drugs that supposedly other drug distribution firms won't handle but that's not true. >> well, no, not that they won't
6:40 am
handle them. they're using this as a tool to streamline the high price drugs to patients and make sure they don't run into problems. >> takes a while to pay. >> not government. >> concern about getting into certain states. one of the reasons that they did this in california was because they didn't have necessarily access to sell them in california. >> that was the question around filador. filador didn't get the ability to operate in california because there were questions about how it actually did its business. >> right. >> so there are allegations that filador was trying to buy a steak in r and o to operate in california. those are some of the questions. >> r and o is a smaller pharmacy company that seems like they're being pressured into a sale and there's some illusions it was almost a mob style type pressure on them. they're not even sure who they're dealing with. the use of all these different chess game acronyms, too, to try to describe their strategy.
6:41 am
one of the companies buying them turns out to be a front for another condition, a front for another company. >> the fake names. >> "the wall street journal" reporter, i have to give a shout out to my colleagues. >> one of the guys is calling himself peter parker. his real name is bajak catell perhaps. >> right. this is so bizarre that these valeant employees are operating under fake names. brian wilson i think was another one. >> for the beach boys, which is a good choice. >> in order to work with filador. filador is explaining it they have to create different names so they wouldn't get confused with the valeant business and filador business. >> nobody else in the drug business operates this way. one of the issues is their core business model which was controversial in itself. there are people who make money in the life sciences by invention, and we love them, whether or not they're biotech or big pharma. they do 15 to 20% of revenues going to r&d.
6:42 am
that's all the big pharma and biotech. not even 2% in r&d but they're allowed to do it. there are other people who make money in life sciences by cutting costs on drugs through distribution or the generic companies. these guys aren't either. they're expensive drugs but they're not inventing. where is that money going? it's a roll off strategy. if you believe mike pearson's numbers that are 25 acquisitions a year, since he's been there it's about 250 companies he's hauled into this thing. what a blur that is. it's not like tyco, not like dennis koslowski. these are somewhat related businesses but you still, it's quite a blur of the rolloffs. there's no r&d that's coming from it all. that's the traditional problem because it's based on having -- this is now a canadian company. the only thing 10% tax so it's a lot they've gotten cheaper acquisition costs. their acquisition capital was
6:43 am
pretty good. they had $90 billion of value. now it's 60% less. they don't have the same capital for acquisitions and their debt with all of this scandal is going to be harder. that hurts the core model. and now on top of it what's going on in terms of life sciences, are we seeing in the aftermath of theranose? are we getting the true business model. looking at touring. these are companies run by 31-year-olds doing weird things. theranose, the guy was jacking up his prices, 600%. >> torey. >> i don't bother with the details. i leave that to you. >> thank you. meg's going to be -- i assume you're going to be on the call at 8:00. >> oh, yeah. >> we'll be listening to you hopefully with details on that. thanks. bacon under attack, this time by the world health organization. it's on the breakfast table. we'll talk about it next. try to book that 118-year-old lady who eats bacon every day. she's out running a marathon.
6:44 am
as we head to break, a quick check on what's happening in the european markets. gement can protect capital long term. active management can tap global insights. active management can seek to outperform. that's the power of active management. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away.
6:45 am
ask your doctor about cialis for daily use and a free 30-tablet trial. the most advanced iphone yet. get the new iphone 6s at t-mobile. the network that's doubled its lte coverage in the past year. our new extended range lte signal now reaches twice as far as before. and is four times better in buildings. get our lowest price on iphone 6s with trade-in. zero upfront and just 5 bucks a month with jump on demand.
6:46 am
get it now at t-mobile.
6:47 am
we have some bacon news. bacon news this morning. the world health organization expected to rule that processed meats such as bacon and sausages are cancer causing and that red meat is probably carcinogenic as well. i like the probably in there so don't eat anymore of it. the global meat is firing back. calling it dramatic and alarmist overreach. nitrates and nitrites that are in bacon for 25 years.
6:48 am
this is not new news. how often do you have bacon? >> once in a blue moon. >> once every three weekends. >> not that often. it's good. >> it is good. >> bacon sandwich. >> red meat. >> this report also says that sitting near sun-filled win tow is -- sun coming in through windows -- >> right. right. >> class one. wine is class one. coffee class 2a. grilled food class 2a. aloe vieira. >> not a lot left. >> everything causes cancer. >> in europe now, gmos are -- ask anyone on the street and they'll tell you that you'll die from a gmo -- from grain -- or from an animal that may have been fed grain that was genetically modified. >> right. >> they don't care anything about science. >> it scares me. you want to know what actually causes cancer and what doesn't. when the list is this broad -- >> i did not. >> it was in the weekend review and it said europeans turn their back on science.
6:49 am
i was like, okay, what's this going to be about? it was actually that europeans are so anti-gmo without looking at any of the evidence. it was actually a pro gmo piece in "the new york times." >> kudos. >> kudos i give it as well as -- >> on that note, let's get out of here. coming up, another packed earnings calendar this week and apple will be one of the major highlights. that comes tomorrow after the bell. we'll get the scorecard next. right now as we head to the break, check out the futures this morning. dow futures down by 33 points. this comes after a week where the dow was up 2.5%. s&p down by 5 and nasdaq down by 10. "squawk box" will be right back. you
6:50 am
6:51 am
actions. they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things.
6:52 am
changes you'll notice. wherever you are in the world. sheraton. can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?
6:53 am
. welcome back, everybody. we're kicking off peak third quarter earning season. this week 150 s&p 500 companies that are set to report. joining us right now is mike thompson, s&p vest adviser and serves as chairman. the story in the "wall street journal" today points out we're now looking at profit and revenue falling for the first time in six years. what's going on. >> it's a phenomenon that hasn't been seen in kind of a very long time and it's just the fact that companies seem to be just hitting a wall. they are hitting the ceiling. can't break out in the top line. the bottom line success maintained basically through a lot of cost-cutting, and
6:54 am
efficiency gathering. strangely enough, perversely enough valuations are well above historic -- >> we're watching a big pick up in the market. is the wall that these companies are running into the strong dollar >> i don't think so. it's more about the fact that the economy just doesn't want to have that kind of growth pickup. you have some deflakesary pressu -- deflationary globally. >> when you lose 12% of your sales because the dollar moved it's hard to overcome. >> two-thirds of the u.s. economy is driven by the u.s. consumer and it's really, i want defy as little bies a little bi. there's been a rocket ship since the lows of '09. so, you know, it hurts on the
6:55 am
per per p periphery it's not enough to have negativity around the numbers. >> i heard it's much more international. >> it is. in fact, it is. it's not 50%. this is a little bit anecdotal but it's between 42 and 47%. that being said what's happening is a lot of the manufacturing, you know, functions within u.s. companies have migrated outside of the united states. at the same time you're trying to export finished products and services you get a head wind there. in fact you're getting a tail wind by the fact that goods and transportation costs of your manufacturing are basically more beneficial because for example china, china again the way they manage their currency against the u.s. dollar, it's cheaper for companies on the cost of goods sold portion to get the things that they are delivering. there's a little bit of an
6:56 am
offset. people talk about the top line and export, you know, head wind but not talking that there's a benefit to the fact that the dollar is a little stronger particularly with manufacturing. >> mike, thank you. >> coming up the nfl making its streaming debut on yahoo!. did it pay off for the company and the league? we have that coming up on "squawk box" when we return.
6:57 am
6:58 am
6:59 am
. it's been four straight weeks of gains for major u.s. indexes but a flood of earnings and report october fed meeting could test the winning streak this week. market analysis from top wall street watchers straight ahead. >> the countdown to a government shutdown is on. congress has a week to reach an agreement on the country's debt limit. we'll talk about the challenge
7:00 am
for paul ryan. coach up. been called the per for coaches and getting some big backers. >> it was terrible mistake, sir, believe me i would never do anything to offend a man of your size. >> including form hockey star. he'll join us with the company's founder. second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box". welcome back to "squawk box," everybody. this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. let's check out the u.s. equity futures. they have been lower. you have to be this comes after some big gains even on friday over the last week. over the course of the week the dow was up by over 400 points, a gain of 2.5%. this morning it's giving back 31 points. s&p 500 is down by five, nasdaq
7:01 am
is down by 10. >> the fed kick off a two day fed meeting tomorrow. they are putting out mixed messages since the september meeting. janet yell len and vice chair say the fed needs to raise interest rates but governors publicly warning that risks to economic growth that suggested rate hikes should wait dissent of course is not unusual. no fed governor has voted against the chair since 2005. also on our watch list this morning top members of china's ruling communist party meeting this week. china's leaders will focus on financial reforms and how to maintain economic growth and one more for your calendar the next gop debate is on this wednesday and happening on cnbc. coverage starting at 5:00 p.m. eastern. does it start at 5:00 or when is the pre-show >> 5:00. >> no. the first debate starts at 6:00 p.m. eastern time.
7:02 am
your pre-show -- >> starts at 5:00. i'm ready to start earlier. >> 5:00 p.m. eastern time. first debate at 6:00 p.m. second debate at 8:00 p.m. eastern time in primetime. >> then there's -- >> you might be doing a halftime show. >> halftime show too. okay. all right. i'm ready. i'm ready now. energy sector took over deal duke energy is buying piedmont for 4 point 9 billion in change. there's a time change too. >> mountain time and eastern time. >> is it two hours? >> two hours. >> okay. >> $60 a share for piedmont shareholders, 42% premium over friday's close. also gas prices sliding by 10.5 cents over the last two weeks. the average price of a gallon of gasoline is $2.24.
7:03 am
>> negotiators for -- move on. negotiators for the united auto workers and general motors reached an agreement late last night. details were not released but uaw leaders are expected to approve the deal later this week and that will revert the threatened strike. >> dow and s&p 500 coming off four straight weeks of gains. dominic chu joins us now with more. >> it's gotten us back to flat maybe slightly positive for the year. on balance if you look through, we're almost in november at this point, if you take a look at the s&p 500 over the course since the august 25th lows that we saw, the turmoil loss the market superalmost by 10%. all the sectors have been participating. if you take a look now again year-to-date, .8 of 1%.
7:04 am
we're back to about flat for the year. year-to-date period is positive for right now. bulls will hang their hat on that as we end a seasonably strong period for markets. you take a look at the best and worst sectors. tech and energy, tech is interesting because it's the biggest sector in the s&p. energy working off a low base. energy stocks have taken quite a bit of a hit. telecom and health care those guys have been the laggards. health care one of the big leaders in the past few years. now company wise, deal related or hypothetically deal related transactions, sandisk and cameron. the best performing stocks in the s&p, tenet health care pulling up the rear. you got 30 times since the s&p 500 started way back when where
7:05 am
we've been negative going year-to-date again through september 30. through september talking about 30 times. on average, those during those time periods if you take a look at that, that performance has been relatively mixed. q4 has been mixed half the time. interestingly enough we talk about these times, joe, when the seasonably strong fourth quarter emerges but since 1995 we do know this has been a very, very strong time for the markets. whether this plays out this time around still remains to be seen. >> highs are within spitting distance. >> yes. >> we had our 10%. how many years was it? we kept saying -- >> 11. >> we did 10%. now we're back on the year, nobody rang a bell. you didn't ring a bell. >> i didn't raining bell at the bottom, you're right. >> still waiting for a test of the loss. >> we are still talking about that. there's a reason why everybody is saying hey, since 2011 the
7:06 am
average pull back we've seen has been about 5%. we did it double this time. >> then if it's gone straight up once everything looked crappie again, jobs number was bad. all of a sudden -- terrible corporate earnings are bad. done nothing but go straight up. it shows you main lining again. liquidity. thanks. for more on the markets after a sunny week on wall street let's bring in chief u.s. equity strategist at credit suisse and a senior cnbc markets commentator. is that your new title? >> it is. >> that's the first time i said it? what was it again? >> senior markets commentator. >> senior market commentator. you're like chief. what do you have to do to get chief. i'll give you a chance to be right. do you believe how this
7:07 am
happened? nobody rang the bell. was that it? >> it was it for now. honestly it's been mostly about -- we walked a pretty narrow line between a bull and bear market. credit markets were in disarray. people got defensive and negative and raised a lot of cash and nothing broke. we didn't see one of these big funds go belly up. that was a risk. as you say people start pushing out anything like a liftoff from the fed and then it becomes the old game plan again. the character of this rally has been odd. usually you see small caps lead. it's negative caps. nifty 50-50 growth names. it's been the biggest 20% gain, 20 day sprint in like four years. so i think we have to be careful whether this is a great entry point even if we can say the storm is past. >> was it built on anything substantial or morphed easing >> we did see people rotate into laggards. people rotated out of health care.
7:08 am
some smart things were done. at the end of the day we never fixed the market's main problem which is valuation. we never got around those september, october loss. >> why should we get cheaper rates. you deserve 20 times earnings. >> when rates move up multiples get depressed. >> that's not is going to happen. >> you're starting to see investors worry about it and potion for it. that's one of the big reasons why health care is pulling back. >> it's five years now. it's almost literally five years we said rates have to go up. >> how fast did we go from definitely this year to there's no way. it happened within six weeks. well guess what? it sits going to be six weeks soon since we said no way. friday utilities were for say and banks were rallying. so are we going to start to say maybe sooner not later. >> i think you're also seeing a certain part of the equity community wanting rates to be risen because essentially it's a
7:09 am
rubber stamp the economy is okay we can with stand this. >> the economy has gotten worse since they didn't raise. >> there's that hope trade out there. >> do you think they will raise this year >> our house view is still technically for december. >> what's that house view? >> distancing yourself from that anyway you can't. >> i don't make the fed call. it's our economists feel. my view is we're kind of in a poor potion either way. if the fed raise you get turmoil. if we don't raise it's a signal that the economy has got some major problems. >> when paulson, jim paulson said the market has gone up for five years. nothing significant which keeps the fed -- the reason he got negative is because the economy is starting to improve. once it looked like the company isn't going to improve here we are back within spitting distance of the highs again.
7:10 am
>> i don't think it's quite that simple. the market was panicking the fed was going to move even without some kind of a cushion of economic growth, even without some kind of momentum. the fed was being dogmatic. i don't think the market wants to see the fed operate in its own timetable. if things get better and we're talking nominal changes. so far we've had just, it's been just the right amount of wrong in the economy to keep the fed -- >> the house started looking better as far as, best house in a bad neighborhood. china last week they are going to do what they need to do but it hasn't worked. they keep adding more and more to try to get things started. once again the dollar strengthened. >> you're also starting to hear investors in the u.s. talk about where has recession stem. they are looking at capital goods. people want to say okay what has
7:11 am
been the risk. where can i go and find value opportunities. that's actually pretty healthy. >> how so? >> you're seeing an appetite to buy. trading volumes are lousy. people have not seen a lot that they want to buy. there's been a few opportunities opened up in the market that raise those animal spirits. >> valuation wasn't cured. do we see new highs between now and the end of the year? >> i think all the arguments about seasonality is right. i wonder if you start seeing that trade pull forward because i've been hearing about there for two months. >> we do hit new highs. >> we may have hit them. there's this seasonality trade that happens at year earned, when i marry people talking about that two months ahead of time i start to wonder. short term seems very iffy to me. >> which means dump the stock? >> i'm neutral on the short term. >> three or four weeks ago was
7:12 am
yeah at some opportunity fourth quarter trade but not until mid-october. >> the other thing was switch from buying the dips. you can sell right then? >> yes. if the rules have changed. >> i don't know. >> in terms of where a recession might be priced in, more consumer discretionary stocks are down than up. few mega caps, starbucks, home depot, the any keys. not the average retail stock that's doing well. >> every day when we're here the market seems to get stronger. almost like money ready. ever since jobs friday. >> from 6:00 to 9:00 it's down. by tend of the day -- >> overnight is unreliable. stloo straight up since friday. how many down days have we had since that jobs report? >> not many. >> not many. add it up. what does that indicate?
7:13 am
all these people are wrong? it's a head fake? >> you've had a lot of etf money slushing around the markets. that makes me nervous. >> although, you know, the longer we stay at zero you don't worry as much. the discounted model of where stocks are supposed to be priced. where are we? >> we've drifted up again by 17 times. >> high of zero. >> it's not zero i'm worried about. 6% jump bond spread. not about the risk free number. >> let me give you one stat. if you look at valuation and we kpien p erc combine pes, we're higher than we were heading in to the financial crisis. not quite as high as the tech bubble. right now we're at 1.1 standard deviation. not quite as bad as we were. >> 1.1 sounds like .1 above
7:14 am
history. >> if you look at what that means for forward returns going forward we typically only see the s&p rise 3% from those kind of levels. that doesn't get me that excited. we only got down to .65 at the low. we never got to that spring board opportunity. >> okay. i don't know. i know less now. thank you. >> confused? >> yeah. okay. we got a couple of other things to talk about. another big event before the bell. valeant pharmaceuticals is holding that 8:00 a.m. conference call. the company planning to address allegations from citron. they plan to refute claims it used pharmacy specialties. its accounting policies are appropriate but establishing an ad hoc committee and not an
7:15 am
independent committee to review the allegations about its business relationships and questions on the conference call about what we saw in the "wall street journal" this weekend with the idea that some employees of valeant are using fake names like peter parker and other thing. so we'll get that. in the meantime when we return a new era for the nfl distribution. yahoo! streaming yesterday's match-up between buffalo and jacksonville. julie boorstin will join us now on the execution how that went and implication for streaming future games. and then presidential candidates and the looming threat of a government shutdown. then later a startup that matches aspiring athletes with top level coaches, gatorade bath not included. "squawk box" returns in just a moment. opportunities aren't always obvious. sometimes they just drop in.
7:16 am
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. bob dylan. to improve my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? do be bop. be bop do. do be do be do. do do do be do.
7:17 am
7:18 am
>> welcome back to box. nfl make igits streaming debut on yahoo! yesterday morning with the buffalo-jacksonville game. julie boorstin joins us now with what and what it all means. >> andrew, reviews of yahoo!'s live streaming of the buffalo bills-jaguars game were mixed. some complained that parts of the game buffered or pixelated. others noted watching the feed on a tv was not as smooth as on
7:19 am
mobile devices. last night i spoke the nfl's head of media. he said overall response was positive and yahoo! didn't see any issues. yahoo! saw nearly 30 million total streams but still unclear how many unique viewers that represents. as yahoo! counts people who logged on from miami devices as separate streams. yahoo! says nfl anticipates this game to be one of the largest live stream sporting events with far more viewers unanimous it aired on a regional telecast. a game like that draws a million viewers. the feedback they've gotten back from advertisers has been what he said quote across the board positive. now yahoo! reportedly had to cut the cost of its ads to $100,000 over the course of negotiations. i do expect to get a full rundown of numbers as unique
7:20 am
viewers from yahoo! in just a couple of hours. >> do we think this will happen more often? >> i think what we'll see is that while the majority of nfl rights are locked up through the 2020-'21 season nfl will be looking for those extra games like this one where it's worth it for them to try to distribute it digitally. they get more revenue, they get more viewers. it won't happen with the core games because those are really nailed down for quite some time but we'll start seeing it happen more on the edges. >> who are the players that would actually buy. yahoo! may try to buy, google. would netflix get in this business. they historically have not done anything live >> they think sports rights aren't worth it because it's too expensive. for netflix it doesn't make sense for them to shift from that on demand programming to live to do something like this. i do think the two obvious players are yahoo! and then, of course, youtube.
7:21 am
>> julie boorstin, thank you. coming up a warning on bacon and red meat from the world health organization. we'll have the details straight ahead.
7:22 am
7:23 am
7:24 am
there is an announcement just out from nbc universal parent comcast, comcast is reclassifying their common sock into special common stock. but now as you can see suddenly cncsk is trading above. so i don't under it completely. seems like a time when they can get rid of the dual -- those are sort of out of favor. people say why do you have them. >> we're ending the dual class. >> yes. >> that's a big story. >> that's a huge story. >> you saw some stuff on this? you were what when a?
7:25 am
>> it's a big deal. the shares have been above. >> in bacon news world health organization expected to release a report that says red and processed meats probably increase the risk of bowel cancer. processed meats are those that have been smoked, cured or all terrified with preservatives to extend shelf life. the report is expected to be released today. north american meat institute isn't waiting for the official release. the group says it's inappropriate to compare bacon and sausage to tobacco smoke. that's what i read. >> there were 91 items and issues they were looking at. these are two of them. >> so, you know, arrange your habits accordingly. how old was that lady that had bacon every day? >> 113 or 112. way over 100. >> obviously there's, you know, genetic factors and you can't
7:26 am
tie one person, obviously to saying that bacon is fine and we've known for a long time nitrates -- >> there's new bacon that doesn't have it anyway. that's what i order. >> new bacon made out of plants. bacon that is made out of turkey and tastes like crap and puts you to sleep. and then there's microwave bacon, it doesn't work. no pain, no gain. you got to be there. you got to get hit. i want it crisp. that's the way i like it. >> burned a little bit. but then when it's all said and done. >> you're not growing it. you're not putting it over the grill. >> i do. >> you do? >> yeah. >> that's impressive. she's a great cook. a lot of times she has things going on. it's all twisted. i get it -- you can imagine
7:27 am
mine -- i press down parts -- i'm there and it comes out. it's beautiful. beautiful. >> when we come back this morning the u.s. is quickly approaching the deadline for an agreement raise the debt ceiling and avoid a government shutdown. it will be a big topic on wednesday's republican debate. we'll talk taxes and the presidential candidates next. right now look at the equity futures. s&p down by five, do you down by 35. we'll be right back.
7:28 am
7:29 am
7:30 am
♪ welcome back to "squawk box" right here on cnbc. among the stories that's front and center valeant family families will begin a conference call in 30 minutes. ahead of that the drugmaker issue ad news release saying its accounting is appropriate but will form an ad hoc committee to
7:31 am
examine its business relationships. one economic report due today with the government issuing september new home sales. 10:00 eastern time. economists are looking for an increase of half of a percent and economists are expecting modest economic growth for the rest of 2015. 80% of those surveyed by national association for business economics are predicting fourth quarter growth of 2% but 7% think the number will be as high as 3%. before we get to next topic, we talked about comcast and the stock issue. >> class a shares. so there were special class a shares that had the symbol cmcsk. there will still be the b shares. it's not ending the dual -- you know it's kind of -- in connection -- okay. yeah. okay. by a majority vote by shareholders classic common stock spaernl a common stock voting privately as a class, class a and class b common
7:32 am
rolled as a single class. shareholders record -- i don't know, has to do with voting and special class a shares. i don't know the symbol on the class b shares. i'm getting into an area i don't know about. k was a class a, it was a special kind of a, i guess that now has gone away. check this out. a golfer in south africa over the weekend had an unfortunately lie that turned into a painful looking shock. he was up against a tree in the first-round of the sunshine tour. his shot ricochets against the tree and -- where did it hit him? i didn't see where it hit him. his leg or knee. >> i don't think so. >> white balls, white ball complicated. >> in cad die shack and gags
7:33 am
that's where it always hit. fun swriest videos. that's always the -- yeah that's where the ball usually hits. yeah. wow. i have a joke about that. not worth telling it. about the triple bogey -- i can't tell it. cnbc republican debate is this wednesday. here with wrap up of the political headlines over the weekend, eamon javers joins us from washington. >> it's heating up between number one and number two in the republican field. take a look at the iowa polls. according to the cbs/yougov, carson 27, trump is 27. that's neck and neck. "des moines registe
7:34 am
"des moines register"/bloomberg poll had carson ahead, 28% to trump 19%. that's the first stumble we've seen for trump's momentum. this is why we saw this comment from donald trump over the weekend about ben carson and his religion. take a listen. >> i mean seventh day adventist i don't know about. >> trump saying he himself is a presbyterian. middle kind of the road kind of religion calling into question ben carson's religious affiliation. this is about appealing to evangelical voters in iowa. carson was asked whether trump should apologize for that comment. he said he expected that donald trump would layoff on this kind of attack. trump himself said he's not going apologize for this because he didn't criticize ben carson's religious affiliation as a he s seventh day adventist. ben carson raised religious
7:35 am
affiliation saying he wouldn't support a muslim candidate for president. so all of this religious talk, all about iowa, the polls there, it's all tightening up and obviously heading in to our debate wednesday night in colorado number one and number two, neck and neck. >> thank you. the business roundtable issuing a statement last week urging congress and the administration to address the debt limit ahead of the move to 3rd deadline. joining us is mark weinberger. he's ceo and chair of the business roundtable. by the way, mark also previously served as assistant secretary of the united states treasury under tax policy in the george w. bush administration and, mark, jack lew takes out this entire op-ed pushing congress to get their act together and get a deal done quickly. what happens if they don't? >> well, obviously good to see you, becky. self-imposed wound right now. we're trying to get the economy
7:36 am
back on track. one of the things we haven't talked about is u.s. government shutting down, not paying its debts. we have all this other geopolitical concerns all over the world. the united states government would be is the uncertainty tax to be raised. >> in terms what this cause, there's some numbers. he said the debt limit impasse back in 2013 cost the american taxpayer somewhere between $38 and $70 million in additional borrowing costs. how do we get our arms what it means. >> it's hard to put a number interest. what i can tell you is the confidence in investing, confidence in hiring is starting to wane. we do a survey every quarter and seeing our investment in cap x going down each quarter. you don't know whether we'll have a stock market volatility, another closed government, higher interest rates, china slowing, all these things just add to slowing down the decision-making on big investments.
7:37 am
that hurts cap x, investments, jobs. >> there has been an impasse in washington in general, a refusal of the two sides to meet and try to find compromise. >> you had a great discussion this morning on the federal reserve which is coming in to manipulate markets so to speak, create liquidity. it really being a great to have fiscal policy back on the table to do something. but unable to do anything. you look at the big issues to help business. some sort of tax reform however define. it would be immigration reform. getting these trade deals done. all seem stalled. >> it's interesting because those are the types of issues where we at least heard some bipartisan support on some of these issues. >> do you. great to talk about but you have to get through the congressional system. for a while there before the august recess congress was start network well with the president, thing were getting done. we've seen real progress. august recess hit. seven weeks left and got to deal with the debt limit, deal with
7:38 am
the closing of the government by december 11th. it seems to stalled. february is the iowa caucus. >> nothing will get done in an election year in terms of tax policy or these big issues. it will be hard to get things through. you'll have more talk. all the candidate are talking about tax reform. when we see tax reform the president has led whether it was kennedy, reagan, bush they talked about tax reform. that's what it takes to get through congress. >> whoever gets elected that is the sort of thing to set up. >> i want has to be a real effort by the president working cross aisle. when you think about reagan and the democratic leader of the ways and means committee, got it done. >> thank you so much for coming in. coroner nbc's republican deputy bait is wednesday in case you missed our mention of that. coverage starts at 5:00 p.m. eastern time. check it out. >> when we come back a start up
7:39 am
to take your game to the next level. the company's founder will join with us the boston bruins president and a former hockey star next. make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives.
7:40 am
♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
7:41 am
welcome back to box.
7:42 am
take a look at futures. market setting itself up. let's show you that board. dow will open down 35 points. nasdaq looks like it will open off 12 points. s&p 500 off by 5.5 points. if you have ever dreamed of getting pointers from a professional athlete listen up. coach ups connects aspiring athletes with top level coaches through its online and mobile platforms and the sport start up as a team of pro athletes already on the bench. nba all-star stef curry and julian edelman and former nhl star and president cam nealy is an investor. he joins us now with coach up founder and president. i know how after looking into it, jordan and cam, i know how it works at this point but probably be a good idea to explain to viewers how it works at this point.
7:43 am
one of you take it away. >> yeah. absolutely. we're the nation's leader in sports coaching industry. we connect athletes with great private coaches for one on one or small group training sessions that have in person all across the country in a range of sports from basketball, soccer, football to tennis, yoga and dance. you go on the site and you enter where you live and you say a little bit what you're looking for, what potion your child plays or what you're looking for yourself and we'll show you the best coaches in your area and you can read real reviews about them, message them, ask them questions and when ready book them through the site and we take care of everything to make sure you have a great experience. >> cam, why does this -- does it make sense for hockey? >> well, probably more challenging for hockey than some of the other sports, but i have been asked a lot over the years if i knew of a private skating instructor or shooting coach,
7:44 am
and then i got introduced to coach up and i thought what a great idea to introduce former players, whether it's at the pro level or collegiate level to continue their passion for the sport, and realize that there's so many other families out there that are looking to help their kids improve various aspects of their games. >> jordan, you point out that money is tight at a lot of secondary schools and actually across the board money is tight. that probably affects coaching and everything else. if you can do it individually i know a lot of paint would say this is exactly what we need to do, if they are really serious, i guess. >> that's absolutely right. unfortunately a lot of schools are being forced to cut their athletic budgets, especially at public schools and often inner cities and so for better or worse sports is being privatized at the youth level. but there's no platform to make sure that coaches who are by most accounts the most
7:45 am
influential person aside from their person. i don't remember every teacher i had. coaches are so important for our kids. no platform to make sure coaches are good, they pass back brown checks, they have actual reviews. and to make sure that kids have a great experience in sports. so i saw an opportunity to build a better platform for parents, athletes and coaches that ever existed before. >> jordan, you got any room for golf? i mean, does it have to be for my kids. do you have anyone who is a good golfer and also a psychiatrist? how specialized can it be? >> are you asking for yourself? absolutely. >> i got a friend. yeah. he doesn't want to ask himself. yeah. can you help him? >> absolutely. we do have golf. you know what happens often is parents will come and look for a football coach for their son during fall and then a basketball coach for a son in
7:46 am
the winter and field hockey instructor for hair daughter. they start booking coaches for their kids. they realize gee i should try this for myself. we have tennis, personal instructors, dance lessons, yoga instruction. we do have a lot of parents and adults booking themselves. triathlon, parents training. >> what's your background? how did you get in terms of thisser and what qualifies to you do this this time around? >> coach up is extremely personal business. our mission is to help athletes reach the next level in sports and life and that's exactly what happened to me. so i was a very mediocre high school basketball player, i was on the team as a freshman. this coach agreed to work with me. he was a camp counselor. through his coaching i improved
7:47 am
from being an average high school player with no hopes of playing college to playing at both in college and going on to play professional basketball in israel and europe and that entire experience made me a better basketball player but it made me more confident person. i became a better student. i realized if i put my mind to it and sought out help and electrifiedance i can achieve anything. not only are they becoming better but they are becoming more confident. i've been coaching kids for ten years. i wanted the same impact my coach had on me. i saw it from sides of the ails. it's hard to find the best coach and then how do you create a website and market your services and these business challenges that as a coach i just wanted to work with kids. that was my passion. so i thought that we could build a better system that work well for both sides. >> so, cam, i can't -- julian
7:48 am
edelman is a backer. i can't hang out with him for an hour for 60 bucks. that would raise all kinds of problems. you would have more groupies trying to -- like me. creepy -- really. autograph is worth $60. i could recoup my investment right there. >> maybe in the offseason but during the season might be tough to get an hour with him for 60 bucks. >> i need a quarterback coach. brady is he available tomorrow night? >> we can take a look at that. i don't know, joe. that might be a tough one. >> is that asking a lot. i need a golf coach with a degree in psychiatry -- anyway sounds great and i appreciate it. good luck. you got some unbelievable backers obviously so far jordan thanks.
7:49 am
cam, thanks. appreciate it. when we come back this morning we'll get to some big movers ahead of the opening bell. got your list of stocks to watch right after this. surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is?
7:50 am
7:51 am
♪ ♪ hello, is there anybody in there ♪ ♪ can you hear me ♪ is there anyone home
7:52 am
make you comfortably numb now with the way i read these stocks to watch this morning. first one out of the box, xerox. earning 24 cents a share. the latest quarter. penny ahead of forecast. revenue, though -- i can't keep it up. i don't know. shut up. shut up. revenue fell short, xerox was hurt by strong dollar -- why are you always drinking. semiconductor review of its business operation. lab corp beat estimates by a penny. revenue was also above estimates. medical lab operator did narrow its full year outlook and lowered its projected spending
7:53 am
for 2015. and costco was upgraded at ubs to buy from neutral due to higher membership fees and benefits from its credit card switch to visa from american express. now a serious flooding thing on talk about now. >> which you're quickly trying to turn my attention. >> texas is drink out after torrential rain. remnants of hurricane patricia swecht across the state bringing high winds and floods. as i saw some of this video last night they showed a rescue that came up and pulled a guy out of his truck. a guy and his son. water was within inches, it was like this, within inches of the top of the car. came on very quick. >> nothing stops football. there it is. >> they pulled two people out. >> you saw baylor, all the fans at the baylor game they were soaking.
7:54 am
double digit amount of rainfall. didn't stopped baylor fans. they will play no matter what. >> couple other nairobiors for uaw reached an agreement. details not released but uaw leaders are expected to approve that deal. that's averting a threatened strike. disappointing weekend at the box office. here's what happened. "the martian" taking the top spot only making $16 million. goosebumps came in second. and "bridge of spies" took the third spot. in total doing the best. universal steve jobs, the bio pick expected among a lot of business folk were interested in, i seen it opening this weekend -- >> i'm still interested in it. >> pulled in $7.3 million.
7:55 am
>> it could go a while. >> the hope on hold if they can get some oscar buzz and stay in theaters long enough especially in new york and san francisco maybe they can get their money back. it's a hard movie to do well in foreign markets because it's andrew ross sorkin and v-very fast speaking, no action. several other movies falling short," the last witch-hunter," bill rur ray's "rock" and i should tell you what movie i saw this weekend may be the best motive i've seen called "room" is absolutely amazing. it's going wide in two weeks. was in new york this weekend. it's about without giving it away a mother and a child who live in a very, very tiny room for most of the movie. that's all i will tell you. >> sounds like a play. >> nope it's not like a play. it's honestly -- i laughed, i
7:56 am
cried, my heart came out of my body. you know emotionally you watch a movie and it's all encompassing. those are the best kind of movies. emotionally spent. unbelievable movie. unbelievable. that's what a movie is supposed to do to you. don't look at me as if i'm crazy. >> it's not that. is at any time wind beneath your wing? >> it's not that. >> you were crying? >> there were times where you'll cry, there are times where your heart is palpitating out of your brain. >> here's what he thinks. >> it's not that at all. >> a little scary. ♪ >> terrible topic. >> it's the best reviewed movie of the year. >> i was thinking fried green
7:57 am
tomatoes, steel magnolias. >> you'll think of different things. >> we should play comfortably numb again. >> i had to -- i couldn't read. there's a lot of people that can't hear any pause when they are on tv they get so nervous. very disconcerting. you feel you have to talk. coming up a big week. big week for tech earnings with apple and twitter anong highlights.
7:58 am
7:59 am
when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business.
8:00 am
leaving you free to focus on what matters most. >> a big week for the markets. earnings parade moves on. plus a fed meeting on interest rates. we'll talk tech and where you should purity money. >> could halloween candy and costume sales send a signal to the economy? the numbers and potential impact on santa straight ahead. plus a new service that ships your golf clubs. the ceo of ship sticks on their budding new business as the final hour of "squawk box" tees
8:01 am
off right now. >> fore! ♪ >> announcer: live from the most powerful city in the world, new york. this is box. welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we're less than 90 minutes away from the opening bell on wall street. we've been watching the futures this morning. they have been weaker all morning long. the dow futures are still down by 26 points below fair value. s&p futures are down by five. nasdaq is down by nine. this comes after a big week of gains last week. check out what's been happening in europe. the dax is still hanging in. up about .2 of a percent. rest of the major indices are
8:02 am
weaker. let's get to stories investors will be talking about. nearly $5 billion take over deal in the natural gas industry. duke energy is buyi ining piedm. the house will begin a series of votes that could revive the import-export bank. even if it passes in the house it will face stiff competition in the senate. and zell is selling apartments. the deal is expected to close to in 2016's first quarter. a big issue for sam for a long time. he has thought that apartments were really the fliebs. he told us that again even in the last couple of weeks when he was here on set with us but obviously this is a price he likes. >> stocks we're watching and watching this all morning,
8:03 am
valeant pharmaceuticals is just beginning that analyst krengs call right now. we'll elaborate on the controversy, controversy and how surrounding its accounting. early this morning the drugmaker said its account cigarette appropriate and legal but form an ad hoc committee to look into its business relationships. and we're monitoring the conference call. microsoft opening its first flagship store in new york today located on fifth avenue. store is part of the company's strategy to boost it's direct contact with consumers. the second floor features large areas for playing x-box games. okay. that's good because, wow, have you got the new windows 9. can i see it? it's a box, isn't it? just like cardboard box. but x-box that's cool. x-box and x-box games as well as an answer desk and an community theater on the fourth floor providing space for employees
8:04 am
and other back store operations. fifth floor holds a space to host meetings as well as events and we'll see whether -- more than one of these >> there's one already, i know, i've seen one, a microsoft store. big and flashy. >> right. it looks very similar to the apple stores. >> apple has a lot more consumer friendly stuff, gadgets and things. it's main product isn't software. it's not an operating system. >> it works as a great kind of standing off point to reach out to the consumers. that's what they are doing. we should tell you it's a big day for apple. the company will take pre-orders of the re-launch of apple tv. fourth quarter numbers will be released. it could set off another big week. >> let's start with that set top
8:05 am
box it starts at 149, it's faster, offers a siri enabled remote. you can create games and apps for the television. the tv will add only about 1% to revenues in the december quarter by his estimates but munster thinks tv has real important skrans. the tv can allow apple to capitalize on powerful trends. our friends and neighbors still spend a lot of time in front of their televisions and viewing contend through internet connected devices like smartphones, tablets and set top boxes have surged. tv might be a financial winner for apple in the long term but right now it's still all about the iphone. we'll find out how the iphone is performing after apple reports tomorrow. concern for apple investors can apple grow iphone shipments in the quarters ahead given maturing smartphone market and slowing china economy.
8:06 am
but bull's say there's a lot of iphone fans waiting to upgrade. the street right now thinks apple shipped 48 million iphones in q4. that's the bogey to beat if this stock is to move higher. back to you. >> we do have a slew of positive earning reports last week that helped push the nasdaq back above 5,000. can that momentum continue? guys, welcome. when we start off talking about apple, what do you think? earnings coming up. we heard they think china sales are going very well. what does that mean >> the bar has been pretty high. but there's a good chance they will meet it, beat it and that's what they've been signalling for weeks in terms of little notes to investors don't worry our china stuff has been doing fine. i think as china becomes more of a consumer economy companies like apple products, apple appeal to them and well poti
8:07 am
positioned for that. >> apple has gotten really big. when you have a $700 million market cap and karl icahn going around saying this thing will double. top five of the ten companies in the s&p 500 right now are tech companies. they equal more than 10% to the overall value of the stock market. at some point trees don't grow to the sky. >> seen other financials, when tech was like that. one other time. >> finances. more than 30% of the s&p 500. 2007 and very badly. i'm not saying it's going to happen. not saying apple is expensive. but the problem we have is right now, you know, apple car, got the apple this. >> 679. it was 780. at 780 everybody said it would be at a trillion next quarter. last quarter -- apple went down last quarter.
8:08 am
>> but that happens with every earns period. they run up to the announcement, you see it move. >> here's my question, are we sure -- i mean we see china is scary macro. little scary macro. we know tim cook said something to cramer. would they definitely -- can we tell from their body language if it wasn't as good so we know for sure there's not a huge surprise coming out of china >> i'm not expecting a huge surprise. >> what you're saying, usually when it does -- because it doesn't grow there's a fundamental reason we know after it doesn't grow to the sky and we find out hindsight. i wonder what it will be for apple. >> you never know. i saw you earlier talking about xerox. it was a great tech company. people forget technology, the top five companies, how many of them exist. microsoft existed. but how many digital equipment,
8:09 am
compact, hewlett-packard. my point is not to say -- apple is a great well run company. that's not tissue. the issue is if you're an investor and set upping back and going okay tech is exploding do you want to chase the value jays. amazon is up 90%. you want to chase that. >> your concerned about tech companies. >> concerned about getting too enthusiastic. >> xerox created the xerox park. we need to find occupant what's happening with this. the thing about apple, google, any of the top flight tech companies these days, the story for all of them is what's next? apple is an iphone company. one product company. what's after the iphone. google was after a search. they are spending a lot of their money to figure that out. could be car, tv, who knows what. most important thing to look at
8:10 am
what are they doing now to get ahead of that. >> there's another company with a bunch of young 25-year-olds that's disrupting -- if they don't do the next thing. microsoft still a great company but didn't do games, search, phones. >> didn't get ahead of the curve. >> google should be able to. >> internet came along and microsoft was like what is this internet thing. so, again they missed the boat on that. for apple i'm saying yes, they got challenges ahead. as i said one product company. they need to figure out what the next product is. >> i wouldn't bet on a car. you gynecologist to bank on iphone. five years from now people got to be using iphones walking down the street tripping over things. >> we call it a phone but it's more than a phone. it's your device you use for
8:11 am
everything. >> the issue for me if you step back and i'm not a tech investor i'm a regular investor, am i going chase tech stocks going into the fourth quarter. next year do i want to be chasing tech stocks up. facebook is up 30%. amazon is up almost 100%. when you start seeing gains in stocks that have multihundred billion dollar valuations you start asking yourself, you know, is the s&p 500 with over 30% of the a lllocation is that good f me. these companies are well run companies. they have a global footprint. great products. >> we call them tech stocks but we have to think of them industrials. tech is not separate. every part of our every day lives. there's a reason for them tube bigger part of the economy because they simply are. >> all right. guys, thanks. >> that sound it's different this time. >> did i say different this time
8:12 am
>> kind of did. >> thanks guys. coming up, jpmorgan asset management joins us. why the market rally will continue right into year end. a programming reminder, cnbc's republican presidential debate will take place this wednesday night. special coverage, i think, starts before 5:00. no that's my special coverage. that's when it starts. that's when the most special coverage. i'm so confused by the time change. >> i haven't figured it out. i can't help you.
8:13 am
opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
8:14 am
8:15 am
we are back. what's happening in >> valeant that conference call taking place and mega is listening in. the sec is investigating citron. the people who put out the or the guy who put out this original report questioning what happened. not a lot of heladlines. but meg is on the call.
8:16 am
when they put out that release earlier, things have bounced since then. looked like it was going to go down. >> elsewhere it is another big week for earnings. we're in full swing as far as earnings season plus the fed, the fed, the fed, media again. they can't meet enough for me. they should meet every day. meeting again to discuss interest rates. do we stay at zero or go up a quarter point. jpmorgan asset management analyst good morning. it's the world we're in. we're getting tired of it. god they are a big part of our life. so many mandates. what have they got, three, four dozen? >> it's expanding. you would think it's just the unemployment, inflation mandate. it's everything that's impacting it. the dollar, the international growth. yes, joe, we'll be hearing in december once again talking about the fed and will they or
8:17 am
won't they raise rates. we think they are not going to raise rates come october. this is not come this week. this is not the meeting to do it. september might have been it. june might have been it. december might be it. to your point, a lot of things need to line up between now and december. not just the economic data a lot of market data too. market i would say is part of the mandate too. >> yeah. how are things going tienon the island of cyprus. there's a little bit of a slow down there. that's hyperbole and exaggeration. >> they admitted strong dollar is an issue. >> the weak dollar would be an issue. how is everything going to be just right for them? it's never just right then another recession will come along and we'll still be at zero. >> it's possible to see progress between now and december. the reason why in retrospect they did not hike rates in september because a, you can do that into a slowing global economy.
8:18 am
b, you can do it when the vix is at 22. when the market is melting down. when the credit spread are widening out. >> i don't think you can do it. you see what the rest of the world did. they eased and the dollar strengthened again. had they gone, euro would be under 110. >> that's right. i don't think what the ecb did that deters the fed or prompts them. i would say it prompts them to hike rates. this means since ecb and boj are joining this fight against low inflation the fed is not alone. it means with potentially expanding quantitative easing in europe you have better economic growth, potentially better economic growth in china and that all helps the fed's reaction. >> hard to do opposite what the rest of the word, hard to go against. and then we're first. >> that's why bank of england is not doing it. they want the foebd the first one. >> what about just the prospects
8:19 am
for the economy, more of the same, more of this 2% sort of thing to average out over a year we're in a 2% world. we were up to three eight. >> this quarter which we get the gdp number out on thursday is 1.5%. pretty lackluster. what's really important right now is the earnings season. what's playing out in the earnings season is this bifurcated economy and bifurcated market backdrop. if you have anything tied to the u.s. consumer, health care, parts of info tech you're doing fine. perfect example was csx. when they report earnings a couple of weeks ago they said auto sales are helping us, our shipments are doing great. anything that's tied to shipping containers for consumers is doing great. that's more than yoch set by the weakness that you see from crude oil transport, from coal transport and so forth. so that's what we have playing
8:20 am
out in the economy right,000. it's challenging for an investor because if you invest in the s&p you just taking all those things together. you just offset the two and you're left with not a whole lot of anything. so, with my message to investors being in this economy first you got to be selective. second you got to be nimble too because what's rallied the most since the bottom in august have been the cyclical sectors. it's the bounce back not the fundamental change in neartive. >> you think the six nine we see out of china you don't think it's four, do you? >> i don't think it's four. >> is it going to four or going back above seven >> it's not going to four. it goes back up above seven it's not much. this week we might hear they are willing to lower the range somewhat. what's been in china -- >> plus of the plenary --
8:21 am
>> because of the five year meeting. >> figure out how the government -- >> it's central planning. right. central planning. they are trying to figure out what is the appropriate target. what is the appropriate growth target for next five years and the hints that we're getting it's not 7%. it may be somewhere between 6% and 7%. >> if they come out and lower the growth expectations does that surprise or shock the markets? is this what we're expecting going in? >> it's a good, interesting question. it just means that the market -- it just meets the market expectations. it has been below 7% for some time and we know even 7% may not be sustainable. it just converges to market expectations. to your point, joe, i think if we go somewhere between 6.5 or 7%, we're not getting back to 10% chinese growth any time soon. that's why it's challenging for the industrial complex right now
8:22 am
because energy cap x has gone away and china's cap x has gone away. china contributed driven 85% of capital expenditures for the last five years. they won't do that most likely for next five years. >> that sounds like new normal but doesn't sound great. i don't know, we keep hearing there's a lack of demand. where is the demand going to come from. >> you and i and all of us, hopefully. snoou consumer. >> u.s. consumer is. >> all our eggs in one basket. broad shoulders. usually they do it, right? >> the consumer is 68% of the u.s. economy. unemployment rate is low. personal savings is high. hopefully we'll spend. >> i'm doing my part. not me. >> i am too. >> people in my family. exactly. thank you. >> thank you. we still have a lot to come this hour including a preview of what
8:23 am
the fed may or may not do. back when we return what halloween sales could say about this holiday season shopping. the numbers may scare you. we'll be right back.
8:24 am
♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck.
8:25 am
retailers could be in for quite a fright this holiday season. national retail federation
8:26 am
reports that halloween sales, which surged from 2005 to 2012 are expected to fall almost 7% to just under $7 billion. that's the lowest total since 2011. hall seen with often seen as a barometer for holiday consumer spending. it could spell trouble for the christmas shopping holiday season. there's a shift in spending habits from good and clothing to food and experiences. you know millennial stuff. >> you can do that. you do it on piano and people in the house get scared. >> yeah. >> i don't know. that shark is not as scary. >> are you kidding me >> the night he came home, yeah. >> swimming in an ocean every time. >> now 30 years -- >> you always tell me the odds. what are the odds i get eaten by a shark versus killed by michael
8:27 am
myers. >> we've watched that guy for 20 years and there's nothing inside. no kconscience. the shark was just doing his thing. this person is pure -- >> doesn't matter. >> go ahead. you worry about the ocean, i'm worrying about -- >> the real issues that might come up. when we come back the fed is set to kick off a two day meeting. last month gentleman met yellen said global uncertainty outweighs. we'll see if there's improvement. we've got trouble in tummy town.
8:28 am
peptocopter! ♪ when cold cuts give your belly thunder, pink relief is the first responder, so you can be a business boy wonder! ♪ fix stomach trouble fast with pepto.
8:29 am
8:30 am
welcome back to "squawk box," everyone. let's get to the morning hms. fedex is predict record holiday season volume. says it will move a record of 317 million shipments. today is the day that the 2016 health care premiums will be revealed under the affordable care act. a new sign up season begins on november 1st. 2016 will be the third year for
8:31 am
the site and state-run markets will be offering health care plans. treasury secretary jack lew sent another plea to donetsk raise the debt limit. in a "usa today" op-ed he says there's only eight days left and congress is endangering the economy by not acting. >> breaking news this hour from valeant pharmaceuticals. holding a news driens dress and review allegations. meg joins us with more. it bounce ad little bit. hearing anything else? >> hearing quite a bit. the way the company has been portrayed this week is one he doesn't ek though he did admit part of the blame is on the company for being slow to respond to questions. a lot of people wondered why they waited until monday. he did address the short sell report last week that spurred such investor panic. >> to protect our shareholders after we saw the false report from citron we coordinated with
8:32 am
our outside regulatory counsel to make a request that the sec investigate citron. our counsel has met with the sec to discuss the matter. >> beyond that all the discussion on the call has been about valeant's accounting with the pharmacy. they gave some numbers how much of their revenue flowed through. 7.2% of valeant's revenue. just for one of its main drugs alone, 44% of its net revenue in the third quarter flow ed through filidor. filidor is considered a spraep entity. one slide we have, it paid $100 million upfront for ten year option to purchase filidor for zero dollars. that's kind of i wanting. they already paid $100 million and can acquire the company for nothing.
8:33 am
pearson said it will address its option with filidor. make being investors wonder whether they will continue this relationship. >> thank you. stay on that call. i want to hear more. the fed's two day meeting on interest rates kicks off tomorrow. didn't they just do that. marking the second to last time they meet this year. let's get more on what to expect. steve liesman is with us along with steve is the isi group vice chairman. he'll get to him in just a second. you don't agree -- you love this. you wish it was every day they met. >> it's exciting. i think what they may try to do is claw back a bit of the bearishness that came out of the last statement. there's a sense perhaps it went a little too far in being too
8:34 am
concerned about global economies. and i think what they will talk about is the weakness right now which you can see in our cnbc wrap it up. we're tracking thoirnd quarter with atlanta fed which is below markets. you can see right there. they are at 0.9. bank of tokyo is the most optimistic out there and they are at 2.5%. we know a lot of that is inventories. it's trading not necessarily domestic demand. one of the quandaries the fed has is these payroll numbers. cruising along at 200 and drops right down to 142. why it is in the claims? there's the payroll numbers. you look at the next chart which has the claims numbers. we're at a near historic level of job insurance claims as a percentage of the total employment population out there. just 1.6%.
8:35 am
if we were really weakening on payrolls we would expect to see claims. that's a quandary. part of the fed's optimism. at least at some point in time -- so i think what happens is you have a retracement. things are a bit weaker but not as weak as we let on in september. >> a lot of guests have come on and talked about how we measure the jobs economy, ways that they are trying to fix it. steve case was here last week talking about this how we're not measuring the economy properly any more. >> we haven't spent the money. the money we spent to get the data has not been well spend. we still have a data bureaucracy that i know they are trying to change and there's good people over there but very much mired in industrial economy. much more of a service economy. as i said repeatedly on this show, we're 70% of the economy is services. and yet there's a single
8:36 am
quarterly report that comes out only with the second advance report on gdp to tell us what's going on in the service economy. >> chris, comment on that or the environment that we're in right now? where are you for the quarter. your down with the atlanta fed? >> look, my view is that what the fed is going to try focus our attention is on the real final demand. final purchases. look through the inventories a bit. the economy is looking okay. the q3 number will look fine on a real final sales basis. slight loss of momentum. employment data, of course, sequentially retail sales turned a little bit soggier as well. so i think the circumstances really how do they characterize in the statement the slight loss of momentum in the most recent
8:37 am
few employment data points and also of course that retail sale? that will be giving you the clue as to how seriously they are still contemplating that december rate hike. >> i can chime in here. people need to know there's no economic forecast from the fed this quarter and that's a problem, chris, as i get it. because my guess is given what we've heard from the fed over the past several months a lot of guys may have backed off that 2015 call. guys if the fed, and i wonder if that number which was 13 fed officials forecasting a 2015 rate hike is now down maybe 10 or even lower right now? >> i'm sure that number would be a bit lower today, steve. but i think it's important to understand that while you've had some people go out there, plant the flag for a delay into 2016, in my view the leadership is still hedging its betts. reserving judgment. waypointing to see what those
8:38 am
next two employment reports have to say. waiting to see more consumption data. waiting to see whether the chinese have near term success and stabilizing their economy albeit at relatively weak levels. i don't think they are going to throw in the towel on december. >> this is important because if you're right, and i'm pretty sure i agree with you here that means it leans -- the statement liens slightly hawkish in the sense they are trying to get back the flexibility for december and i wonder if the market which is increasingly pricing out this year is prepared for what could be a statement for a hawkish year. >> i would certainly sitting here this morning i would see the risk as tilting a little bit more in the direction of it being slightly more hawkish than people are expecting rather than leaning more dovish than people are expecting. i think the goal going in is not to double down on the idea that for sure they are committed to hiking in december but to make sure they have all options open
8:39 am
and people don't conclude already that december is written off. >> i think that's pretty important, guys. i don't know if you had the market prepared for a statement that says you know what? things are not as weak as we maybe indicated. i think the fed believes it made a mistake in going too far. >> actually plan on raising rates any time soon -- >> they have to get the flexibility from the market. they don't want a hike against that tide. >> next recession won't come when we're still at zero. >> let's hope it does not. i cannot say that. >> do you have a high degree of confidence? they will raise before the next recession? >> i think in general recessions are caused by fed tightening. >> that makes me feel better. thanks, steve. thanks chris. i don't know i heard that before. nothing to worry about. up next, a new service that ships your golf clubs anywhere in the world from your door step right to your destination.
8:40 am
ceo of ship sticks joins us right after the break. first, those news of another takeover deal. breakstone is buying pep boys. worth $5 a piece for each of the brothers. we'll return. the new consultan it's not just big data, its bigger data. we're beta testing the new wearable interface... ♪ xerox believes finding the right solution shouldn't be so much work. by engineering a better way for people, process and technology to work together. work can work better. with xerox. so wi got a job!ews? i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates)
8:41 am
look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? the market.redict... but at t. rowe price, we can help guide your investments through good times and bad. for over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions...
8:42 am
you can feel confident... our experience. call a t. rowe price retirement specialist or your advisor see how we can help make the most of your retirement savings. t. rowe price. invest with confidence. >> welcome back. donald trump center of "today" show town hall meeting this morning. gop presidential candidate and current front-runner is very
8:43 am
confident about his chances in iowa. >> i believe and i've been winning in iowa and by the way i have other polls in iowa that say i am winning. this was two small polls. all over the country i'm winning by massive numbers. i will say i'm winning in iowa. i'm doing really well with evangelicals, with tea party. we'll see what happens. >> a lot more coming on that. donald trump will be center stage at the cnbc republican debate on wednesday live from boulder, colorado. our coverage starts at 5:00 p.m. eastern time. we have a lot of stuff to get through so make sure you join us early. a not so sunday fun day for golfer jacque. he had an unfortunate lie that turned into a painful shot which ricochets off a tree and into his -- let's just say he was in obvious pain, probably still in pain to some extent.
8:44 am
and when it happens -- whenever you see out takes on america's funniest home videos or whatever it seems to make a bee line right for that area for some reason. you know, there's a reason they call me a man of steel. i'm not that worried about that. look at this. look what it says here. look what it says here. this is not me. in read the teleprompter i on the care what's in it. speaking of bags more than 24 million bags were delayed, damaged or lost at the hands of the airline industry last year. a company hoping to curb that statistic at least for golf lovers ships sticks, offers door-to-door shipping solutions for golf gear partnering with u.p.s. and fedex to provide cheaper rates and on time delivery to and from golf
8:45 am
courses. when you look at all things in total most airlines you have to pay for bags and it's a pain to get the big -- to carry it through the airport. you pay for it and you can do it before you even leave for almost the same price that the airline charges because you do it in bulk. that in a nutshell is what you're doing. >> that's correct, joe. thank you very much for having me on the show. the mission of ship sticks is to simplify the way you travel and offer an alternate way to travel with your gear at airports. >> they lost my club. i don't know how you lose golf clubs because it's so big. lot of different airports have different procedures. sometimes you go to the oversized place, other times it comes couldn't the main carousel. you're not going to lose them and they will get there on time >> we would like to think we won't lose them but there are
8:46 am
accidents that do happen. there are delays that do happen. there are acts of god or weather issues that do delay bags in some instance. what we do is we help to effectuate those delivery methods. by having access to particular u.p.s. or fedex or dhl hubs allows us to get those bags out on time and get them delivered to the course or hotel or home. >> you call-up. how far in advance? how much does it cost? they will come and pick it up from your house and put it in the packaging four and just end up where you're going. how much will that cost me? >> sure. we ship to or from anywhere. and price is predicated upon two factors. time and transit and distance. further and faster you want to go more expensive it would be. shorter range travel and the
8:47 am
more time that you have for your bag to be in transit the less expensive. our prices range from $39 on the low side to $159 on the high side. if you want to ship from, you know, florida to oregon which is probably one of the furthest distances $159 to get it there tomorrow. unlike other couriers or other white glove service like ourselves you don't need do a 24 hours in advance. call us up right now and we can execute that shipment for you as we speak. >> nothing worse than not having your own clubs, becky, when you go to play in tournaments. to shoot consistently 98, 99, i need my clubs. in need my clubs. i need very special wedge that i can either hit three yards or 120 yards. >> as a bowler, to shoot 82 or 83 you need your own shoes. sorry. >>.
8:48 am
i was going to say absolutely. that's one of the particular reasons why we targeted this niche. we understand the sensitivity that surrounds shipping golf clubs. >> shoes. who i do sound like? we'll see him wednesday night. nick, thank you. appreciate it. good luck. >> thank you very much. >> when we come back, jim cramer from the new york stock exchange. take a look at the futures right now. a bit under pressure for of the of the morning although they are inching back. dow futures are down but only by 14 points. nasdaq down by five. s&p 500 down by three. "squawk box" will be right back.
8:49 am
8:50 am
8:51 am
down to the new york stock exchange, jim cramer joins us now. i know you're monitoring what's happening with valeant. what's your gut feeling? it's impossible to know, i know, what's your gut feeling? >> when i saw those names, the aliases that were talked about in the weekend papers, it's kind of -- some of those characters that were fictional, that gave a bad taste for me. i would love to hear how people have two names what does that
8:52 am
mean? typically you wouldn't use two names if you didn't have anything to hide. that's curious. >> yeah. the names are curious, too. kind of aliases from movies. >> yeah. >> isn't that bad? shouldn't we be tyler eifert, or dalton, somebody like a football team? >> i like the name you picked. >> because i got him on my fantasy, he's money. >> unreal. >> how about gronk, too? >> ugh, takes a village to tackle that guy. >> no village needed. he was all by himself. >> there was one he was dragging about six guys. >> the end, sealed the deal. he was by himself. >> i wanted the jets to win, but there's a destiny thing going. at least somebody has to lose thursday night. green bay, denver, somebody's got to lose. >> when is -- bengals playing
8:53 am
cleveland -- not that i know. i don't follow the bengals. i know tyler eifert may play for them. cam newton, does that take the sting out? >> he's my fantasy quarterback. there's have, have-nots. california is a real have. the bengals are a real have. you're already seeing who is in the playoffs. i have not seen this, teams just don't lose it makes the san little bit less palatable. >> i could definitely curse the bengals. if i say i like them, they will lose to cleveland, i guarantee you. jim, any way that apple disappoints? would they have let us know if things in china were -- >> i think they would have. i think the problem with apple, you set the bar last week with google. it was so unbelievable. amazon incredible. even though apple has a. lower multiple, you have a
8:54 am
couple companies that are social mobile in cloud, it's difficult to keep up with them. we'll see. they're not expensive. i think apple can do well. i want to own it. i think it's too cheap. people should own it for capital return which has been extraordinarily good. >> who were you going to ask the question to? can you tell me what question is and -- can you whisper it to me. >> i wish we knew more. it's such a work in progress. i have to hand it to our staff. every day there's another meeting. every day the meetings are good. i was going back and forth with jason. unbelievable. all weekend, just going back and forth. the amount of work that's put in, becky knows this. we are giving it our all. we have to hand it to our team. >> we do have a great team. >> team is fabulous. if i wasn't up on my economic plan, tax plan or something, i might call in sick. you know what i mean? i might come down with something. >> i think we'll offer the best that cnbc has.
8:55 am
i'm thrilled to be involved. >> i would be afraid not to know something about tax policy. you know what i mean? >> i hear you. >> oops. >> one oops and a three term governor of the biggest state of the country -- that's unbelievable that can happen. i don't want to do it. >> i think they would remember those cabinet positions, that's key. >> right. jim, thanks. we'll see you in a couple minutes. >> yep. when we come back this morning, we have a merger monday. we have the details after the break, along with some other stocks to watch. and more on the valeant news conference.
8:56 am
8:57 am
the great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families of modest income safe and good accommodation. citi got involved very early on and showed an enormous commitment. and that gave other investors confidence. citi's really unique, because they bring deep understanding of what's happening in africa. i really believe we only live once, and so you need to take an idea that you have and go for it. you have the opportunity to say, "i've been part of the creation of over 27,000 units of housing," and to replicate this across the entire african continent.
8:58 am
we have some more headlines from the valeant conference call. meg has been listening in. >> the q & a is just starting now. we'll get back to you with any of those headlines, but the board reiterated its support of mike pearson, the ceo of valeant. valiant saying all the accounting relating to that specialty pharmacy philidor and its network is appropriate. but saying it will review all of its options regarding philidor including acquiring t severing ties and moving to one or thirm
8:59 am
third party pharmacy. >> meg, thank you. >> yeah. this has been an interesting one to watch. watching the stock's performance today, now back at 109. even before the conference call, before the press release that the company sent out, it looked like it would open up 101, 102. closed friday at 116. a huge amount of volatility as investors try to game out what will happen with the stock. >> so peter parker was one of the names, brian wilson. did you see any of the other names? >> i didn't. obviously some pop culture references. >> weird. >> a little strange. >> though i like peter parker, that's -- he's nerdy. >> spider-man. >> some stocks to watch. duke energy buying piedmont for 4.9 billion, $60 a share that represents 42% premium for piedmont.
9:00 am
pay pal added to the conviction buy list. and bridgestone is buying pep boys. the price $15 a share, $835 million. 23% premium over friday's close. congratulations, manny, mo and jack. >> join us tomorrow. "squawk on the street" is next. good monday morning. welcome to "squawk on the street," i'm karl carl, with jim cramer, david faber at the new york stock exchange. final week of october. a lot to watch. a fed meeting, a cnbc presidential debate, 150 s&p earnings, world series, pre-markets have been soft after four weeks higher. bonds will have plenty to digest and oil is a tad lower after the worst week in about two months.


info Stream Only

Uploaded by TV Archive on