tv Worldwide Exchange CNBC November 3, 2016 5:00am-6:01am EDT
good morning. no lights for facebook. shares of the social network droppi inping on growth concern. earnings alert, three european banks rolling out better than expected results today, but not all the stocks are trading higher. we'll tell you why. plus, the cubs bury the curse. chicago bringing home its first world series title in 108 years. it's thursday, november the 3rd, 2016. "worldwide exchange" begins right now.
welcome to "worldwide exchange" on cnbc. i'm sara eisen. >> and i'm wilfried frost. good morning from me as well. the celebration is still going on this morning. the cubs giving their fans reason to cheer, beating the cleveland indians 8-7 in a dramatic ten innings world series game, the cubs coming back from a deficit to win their first champion sip since 1908. >> it's funny to see the celebration at wrigley field when the game was played in cleveland. the cubs have been waiting a long time for this. congratulations to all my cubs' friends and all the cubs fans out there. u.s. equity futures are under pressure. this is after we've seen seven straight days of declines for u.s. stocks. longest losing streak since 2011. a bit of improvement just in the last few moments or so. dow futures have now turned positive, up seven. s&p and nasdaq still negative. down 19 points in the
pre-market. as for the ten-year treasury note yield this morning, post federal reserve, a pretty boring fed, as far as fed meetings and statements go. 180 is your yield on the ten-year. they're still waiting for some evidence before raising rates. they're getting a little bit closer. the probability goes near 80% for december. we'll see what happens with the election. >> yeah, so some relief there on the ten-year note. we were down to 1.77 at one point yesterday, seeing some buying in light of political fears. and whilst we see equity sell-off and the dollar sell-off, we had seen bonds go up and the yields come down. just move the other direction today. let's have a look at european equities. the selling there this week has been more pronounced than what we've seen in the u.s. in fact, the broader stock, 600, was down about 3% for the week as a whole. it's probably not moved much, we're pretty much flat across europe. germany, just negative. france and the ftse 100, just positive. in asia, japan was closed for a
holiday today. china, a private survey showed growth in the country's services sector picked up last month. asian trade, as you can see, shanghai up, hong kong and australia down a little bit. let's have a look at broader markets, as well. oil prices rising this morning, after militants attacked a nigerian oil pipeline. we have seen quite a little weakness over the last couple of days. wti getting a bit of a bounce today, 25.55, up half a percent. >> and currencies now. we go to currencies, where we've seen the dollar under pressure for several sessions in a row now. continues this morning, though just fractional moves against the euro, 109. against the yen, the dollar continues to weaken that safe haven yen goes up and the pound rallies. we do have a bank of england meeting. we'll get a preview for you in just a few moments. gold has been in demand. gold trading at a one-month high. it briefly went above $1,300 an ounce. strength in gold, two factors there. the heightened uncertainty in
the u.s. election with the polls tingt by the day, and the weakness in the u.s. dollar, whether that's about the election or maybe the idea that the fed won't raise rates if trump gets victory and there's some sort of market turmoil. there's a lot to have derisking going on and cold has been a beneficiary. it's down thrn 1%. >> it's been broad, there's momentum behind it. all the sectors were down yesterday, seven days in a row for the s&p and nasdaq. but the size isn't too bad yet. week to date, we're down 1.5% compared to the indices, down 3.5. but seven days in a row, there's something happening there. >> that's the longest losing streak since 2011. over the course of this period, though, to your point, it's been about 2% moved down. during 2011, that was an 8% move down. so not quit the magnitude, but certainly the jitters and angst is there as the probabilities this morning continue to move away from clinton, even though she still has almost 70% in the betting odds. >> we'll dive a bit more into detail in the political stories
later. let's get to top corporate news. facebook's results last night. the company reported a better than expected quarter thanks to strong mobile advertising sales. revenue also topped forecasts, but share are slipping on growth concerns. the social media giant says it can't maintain its current pace of growth starting in the middle of next year. it will start showing users more ads in its news feeds. on the earnings call, ceo mark zuckerberg stressed that the company's strategy is to prioritize a video in order to boost the amount of time users spend on facebook. >> we think it's pretty clear that video is only going to become more important. so that's why we're prioritizing putting video first across our family of apps, and taking steps to make it even easier for people to express themselves in richer ways. >> joining us now on the cnbc newsline to discuss those facebook results, richard cramer, managing partner at err ite research. last i looked, facebook us with trading lower by almost 8% after
that call. is that justified for a company that's posting almost 50% revenue growth? >> that's a great question. and i think what you're looking at is a reaction in a stock that has performed tremendously well, it's near all-time highs. and you know, quite simply, facebook is just suggesting to investors and to the analysts who are asking really for more precision than the company's able to provide right now, that it's simply unsustainable to grow a top line 60% in perpetuity. and i think that's quite natural. people were forecasting a decline, but on the cfo call after the main earnings call last night, you had analysts asking seven ways to sunday, please, can you just tell us the number, and the company is not prepared to do that. >> and outside of that guidance, the expense growth was quite significant. yes, revenue growth was up more. but is the expense growth something of concern as well? >> absolutely -- actually, you've got that entirely the
opposite. that's incorrect. facebook has had 11 percentage points of margin increase in each of the three quarters this year. the issue is that it simply can't spend money fast enough. it's had a tremendous increase in margins. now, they've put everybody on notice saying, we would like to hire more engineers, we would like to invest in more projects. the fact is, for the last two years, they've told you that at the beginning of the year. at the beginning of this year, the expense growth guidance was 45 to 55%. and it turns out it's going to grow maybe 50%. so this is a constant case of a company trying to dampen expectations, again, while the way we look at these companies, they generated 2.5 billion of free cash flow in the quarter, had a tremendous improvement in profitability, and some of these increases are just simply unsustainable for any company at any scale. >> so bottom line, on the stock,
this cuts into the year-to-date gains, which before the quarter were about 22%. and you mentioned a record high hit last week. are you a buyer on the dip? >> i think most of the sensible long-term investors will look at this company which has a user base of 1.8 billion users, you know, basically a fifth of the people on the planet are using facebook six days out of seven a week. are daily active users. and they'll say, this is a tremendous franchise. maybe, and i don't think the company management cares that much about these short-term gyrations in the stock price, but maybe this points to the fact that facebook, like google as well, is going to constantly be searching for a busy outside of advertising that doesn't mean they have to go and effectively take share of what for 50 years has been growing a gdp type
industry. >> richard, thank you richard cramer. they may be going after tv ads. i just mentioned 50% revenue growth. that's the fourth quarter in a row that we've seen that out of facebook. it's hard to find that growth story like that. >> it's amazing, when you just have a slightly stronger rhetoric than normal in terms of guidance, into how this can slow. >> and they're doing it on their own. they're reducing ad load on their own, because they don't want the crowd the user feed. credit suisse posting better than expected earnings amid restructuring and cost cutting. but it warns it expects the outlook to remain challenging. the bank is also raising its litigation provisions by $368 million. ceo on cnbc earlier this morning. >> it's a tale of two cities. america is doing very well. up 1% in america, which is quite a strong performance. but we have been under pressure in europe, where to be frank, we
had a bad quarter in the equity. >> shares of credit suisse suffering, down 5%, despite hitting that profit, which was not expected. that was a beat, seen as a sort of one quarter thing. not dissimilar from the u.s. banks, very much trading capital markets-led thing. and in the u.s. as opposed to the fundamental business in europe. more european bank news. socgen benefitting from lower costs and provisions set against bad loans. it's having the opposite share price reaction, up 5% in european trade. >> ing's rofts raising 22% in the latest quarter, topping estimates among fee incomes. last month, the dutch bank said it would cut about 12% of its workforce in order to save $900 million euros by 2021. adidas out with results this morning. shares falling overseas. the german sportswear giant saying it would take one-off costs to restructure its reebok brand and invest in growth, the move coming as its sales slowed in the firm's latest quarter.
however, profits did beat estimates in the latest quarter on urban wear sales strength. adidas has made a comeback in the u.s., putting pressure on under armour and nike and the shares have done very well this year. >> and there's some fx headwinds in their guidance. now to today's agenda. overseas, we'll get the bank of england's position decision at 8:00 a.m. eastern time. it's different this time, because europe wound back the clock before we did. in the week, it's just this week. in the u.s., weekly jobless claims and preliminary read on third quarter productivity and labor costs are out at 8:30 a.m. earp time, followed by the october ism services index and september factory orders at 10:00 a.m. and the earnings continue, the big action comes after the close today. we'll get starbucks, activision blizzard, cbs, and kraft heinz. and landen dowdy joining us now with three things to watch from
those starbucks numbers. >> the street is looking for starbucks to brew up earnings of 55 cents a share on revenue of $5.7 billion. beyond those numbers, here are the three things to watch. first, same-store sales, the coffee maker has missed its sales target for three quarters in a row, and the company citing a profound weakening in consumer confidence ahead of election. however, decent overall consumer spending and confidence levels in the quarter should help calm some of those nerves there. second, its growth plans. as starbucks matures, the key will be how it finds new ways to grow and it aims to diversity beyond coffee, with the goal of doubling its food revenue and investing in digital initiatives. and investors will want to see if these efforts are boosting sales. the third thing to watch, traffic. a note to investors. oppenheimer saying traffic could dip negative for the first time since 2009. they do expect the industry to improve. and the stock has been less caffeinated this year as well, down nearly 12%. it's on track for its first
decline since 2008, which could present an opportunity for some bargain hunting. have you seen the holiday cups yet or lack thereof? >> i've seen green cups. >> they're green with a bunch of faces. they got so much flack last year because they were red and blank canvases, now they have a bunch of faces on them. people are tweeting -- >> i thought it was an environmental thing. >> i liked the red ones last year. >> nothing says the holiday like that -- >> they're always green, aren't they? >> so this is an all-green cup. it's very unusual. >> and bunches of faces. but the ceo is saying, it's about the need for each other. >> faces on their cups. >> no, not the beautiful faces of wof and sarah, unfortunately. >> landen, thanks very much for that. in other corporate news, the fcc is reportedly looking into wells fargo violated rules around investor disclosures.
"the wall street journal" says they're also looking into other matters. the fcc is requesting documents from wells following calls to look into whether the lender misled investors. to date, we hear from mary mac for the first time on the record at about 8:15. when we come back, a key court ruling could impact the uk exit from the eu. it's coming today and we'll bring you the details, next. 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. yeah. well, we gotta hand it thto fedex. glasses. they've helped make our e-commerce so easy,
welcome back. in global news, it's 6:00 a.m. eastern time. the high court in the uk will decide whether the government can invoke article 60, which would start the two-year time clock to brexit without a parliamentary vote. it would come as both a surprise and a blow to prime minister theresa may if the need for parliamentary vote is imposed on her. either way, the opposing side is likely to oppose the decision, sending it to the supreme court in december. invoking article 50 by march next year is still possible regardless. and if a vote is required, it would add unwanted pressure on the government, but worth noting that theresa may and the conservatives do enjoy a parliamentary majority. that decision is at 6:00. >> is that a market mover? >> could be, yeah. if a vote isn't required, that would perhaps have to force the government to soften its hard brexit position in order to get a vote through parliament. the market is expecting it. if we got a decision, albeit one
that would be appealed to say a vote is needed, we could see a bit of a rally in the pound. speaking of the boe, we want to talk about an interest rate decision that is due out from the bank of england around 8:00 a.m. eastern time. our jeff cutmore joins outside the bank. >> reporter: here the bank is under considerable pressure to get the tone right. we're not expecting any change in interest rates, but it could be market moving, depending on the tone. if the bank is too dovish, they may be accused of being too negative on the growth outlook. and as we know, the bank has done a pretty poor job so far of forecasting how the economy is going to grow post-brexit. if they are too hawkish, that might unwind some of the positive work that's been done by the weaker pound. so i think mr. carney here will have to take a very pressured position on just what the impacts of brexit could be,
running into 2017. but they do need to revise upwards, both their growth forecasts, which have been way off the pace. they forecast 0.1% for the third quarter. the number actually came in at 0.5%. obviously, we look at the quarterly growth number, rather than the annualized, as you do in the united states. inflation, that is the key, though. to what extent will inflation get away from the bank, because of this very big move we've seen in sterling? but for the time being, the pound is coming back and we watch mr. carney today for the tone. back to you guys. >> jeff, just a quick question on this high court ruling in terms of whether a parliamentary vote will be needed to invoke article 50 or not, is there much focus on that in london? is that expected to go the government's way? >> reporter: it's huge, to borrow a phrase from one of your presidential candidates. clearly, wilfred, the markets
are watching it very, very closely. because as you pointed out, there are in parliament lots of mps who would rather we hadn't gone down the brexit route. and they will all want their say if they get the opportunity to vote on this. now, i don't think anybody's saying that even if parliament gets the final say, it means that they won't follow the will of the people, as expressed in the referendum, but it does mean it could make it much harder for the government to pursue the hard brexit option. back to you. >> jeff, great stuff. thanks very much for that. the pound up 0.2% this morning, bank of england coming at 8:00 and brexit court ruling coming at 6:00 eastern time. >> and a donald trump impersonation, to boot. >> we needed a few points from jeff. still to come, a live report from wrigley field, where cubs fans are ecstatic. stay tuned. you're watching "worldwide exchange" on cnbc. t? is it a caregiver determined to take care of her own?
welcome back. sports news. it took 108 years, a game seven, and have an extra inning, but this morning, the chicago cubs are world series champions. nbc's jay gray joins us live from outside wrigley field, where the party continues. jay, good morning. what's the atmosphere like? >> it's 4:23 there, by the way, a.m.. >> good morning. it is -- yeah, it's 4:30 in the morning, or so, and the party is still going on. as you can see. the game went into extra innings. the party may never end here.
they are going to continue to celebrate this cubs world championship for as long as it's physically possible. it's, again, 4:30 in the morning, and we still see people coming down, newcomers to the party here. there's an army of police. it's all been safe, to this point, as far as we know. and they've even brought out street sweepers at times, to not only clear away some of the clutter, but try to clear away the streets. it's become just a moving celebration, moving from block to block, here in wrigleyville, and a lot of people say that when you wait 108 years to celebrate something, you've got to do it right. so here's what i think we'll see today in chicago. a little bit later this morning, a lot of people either very late for work or not showing up at all. and those that are there will likely have a headache. i think we'll see a lot of kids absent from school today as they continue to have fun after the cubs win. >> jay -- still partying behind
him. >> i don't think -- i think there are beginning to be a lot of people taking off work. >> exactly. productivity's going to be off. >> and they deserve to do that, as well. >> they know how to party in chicago. >> i haven't been yet. tempted. >> it's a beautiful city. you should go in the summer. it's too cold in the weren't. >> i know it's the end of the season. i've got to get to a baseball game, early next season. i'm ticking off the u.s. sports. we'll get to it. congratulations, again, to the cubs, on their 108-year wait. >> and it was a good game and they were both underdogs. the indians and the cubs. >> went the distance, went to ten unings, great stuff. still come this morning, the top stories, plus we'll hit the campaign trail. less than a week to go before the election. a live report from the battleground state of ohio to come. stay tuned, you're watching "worldwide exchange" on cnbc. . before his mom earned 1% cash back everywhere, every time. [ dinosaur growls ] and his dad earned 2% back at grocery stores and wholesale clubs. yeah!
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good morning. facebook falls. shares of the social network dropping on growth concerns. your money, your vote. only five days to go until the presidential election. a live report from battleground state, ohio, coming up. >> plus, the cubs bury the curse. chicago bringing home its first world series in 108 years. it's thursday, november the 3rd, 2016. you're watching "worldwide exchange" on cnbc. ♪ chicago, chicago >> good morning and welcome back to "worldwide exchange" on cnbc. i'm sara eisen.
>> and i'm wilfred frost. >> it's american songs ahead of the election with a few chicago -- >> sprinkled in. >> makes sense. let's get to the market action this morning. seven straight sessions of decline for the s&p and nasdaq, five for the dow. it looks like there's momentum behind the selling, albeit, the size, not blowout. we're down 1.5% for the week as a whole. and as you can see, we are flat in the premarket. the dow, fractionally higher, the s&p and nasdaq, fractionally lower. the selling in europe also continues and has been more pronounced. we're down some 3% for the week as a whole for the broader europe stock 600 index today. a little bit mixed. we've got the dax was down earlier with the french market and the ftse 100 higher. is that still the case? pretty much. in fact, the dax is now just higher in the green as well. the number of companies reporting most notably credit
suisse, which did turn in a profit, however, the guidance was soft and some costs in asia building up, which means the stock is down 5%. but others doing well, including socgen up 5% and taking the french market higher wit. asian trade for you there. japan is closed. we've got mixed trade elsewhere. shanghai up, hong kong, down. >> culture day in japan, a national holiday. so they can celebrate the arts, promoting culture, the arts, and academic endeavor. they have the best holidays in japan. >> my favorite asian holiday in hong kong is tomb-sweeping day. it's a national holiday. >> really? >> i assume what happens is in the title, but it's a good reason for a holiday. as for a broader market picture here, check out the price of oil. it's rebounding a bit. wti back to 45 after a sell-off yesterday on that bigger build in crude inventories we got from the u.s. government. brent is back above 47.11.
gasoline rebounding as well. as for the ten-year treasury note yield, we sit around 1.80 post federal reserve statement yesterday. the possibility for december did move up a few percentage points after the fed came out with its statement and said that they need to see some more evidence to raise interest rates, signaling they were moving a little bit closer. december looks like a go. almost 80% odds in the futures market. as for the u.s. dollar, the dollar has been weaker lately, over the last few sessions. that continues against the euro this morning. there it is, unchanged, but at 1.1094. dollar continues to be weaker against the japanese yen. that safe haven yen has been bought along with the sell-off in stocks. the pound is up a little more than 0.25% ahead of the bank of england immediating. gold has been the recipient of a lot of the market anxiety, the jitters. you've seen vix, the volatility
and fear index spike up and gold is at a one-month high, backing off by about 1% this morning. earlier, we saw it cross the $1,300 an ounce level. >> overall, we've seen selling of u.s. assets as the polls have got closers and markets slightly fear a donald trump presidency, whether that's a correct position to take or not, but it's interesting to see that bonds have been bought. the u.s. treasury -- perhaps the most american asset of all of them, but clearly, as we're selling riskier assets, there was bond buying. and that was similar to what we saw with brexit, a short-term purchasing of bonds and yields coming down. that has an added effect on the dollar. interesting to see if that continues if we do get that result. >> and there's a lot of debate about how you price in a donald trump presidency, as the odds go up. does it mean selling of stocks and bonds and the dollar? bill gross made some headlines when he said that. but trump has outlined policies
to borrow more, spend more, boost the economy. those are inflationary and that trade would be selling in bonds with higher yields. >> the move seems like we would have a short-term purchasing of bonds if the last week's anything to go by. let's move on to the top corporate story of the day. facebook's results. the company reported better than expected quarter thanks to strong mobile advertising sales. revenue topping the forecasts, but shares slipping significantly on growth concerns, down about 6% in the pre-mark this morning. the social media giant says that it can't maintain its current pace of growth, starting in the middle of next year. it will stop showing users more ads in their news feed, which has been its strategy to hike earnings growth recently. on its earnings call, mark zuckerberg says the election has helped the engagement. >> in the first nine months of this year, 109 million people on facebook in the u.s. generated over 5.3 billion post, comments, and likes and shares is related to the election.
during the primaries and in september, we also added a register to vote link at the top of our facebook app that we estimate helped the more than 2 million people register to vote. some who are registering for the first time. >> the key word we heard last night from the cfo, he said the word "meaningfully" in terms of the guidance of where ad sales would slow down. >> pretty spooky to the markets, even though they did manage to post another blockbuster beat on the bottom line. they trumped estimates there, posted more than 50% revenue growth. but they did say expect in the middle of 2017 for us to cut down on the ad load, which is something they're engineering. they don't want to bombard user's feeds with ads, which is how they have grown revenue. so the stock correcting on that move. it's still up double digits so far this year, before yesterday, it was up almost 22%. so potentially investors taking it adds an opportunity to take some profits. mizuho for one saying --
reiterating its buy on this market sell-off pip expect a lot of analysts who do love this company and this growth story to say that as well this morning. now to politics. five days to go until the elections. the polls are tightening, as we've been reporting. our john harwood joins us from the battleground state of ohio. good morning to you, john. >> reporter: good morning. i'm in lima, ohio. this is donald trump country, we're testing sentiment here. and as you indicated, the polls have closed nationally. look at these real clear politics averages, the clinton lead down to 2 percentage points, 45-43. it had been more than 6, but the nbc news estimate of electoral votes is that hillary clinton is still favored to win, more than the 270 electoral votes she needs to become president, and here is why. look on this battleground state map at the new state polls we got yesterday. in the midwest state of wisconsin, which is critical for hillary clinton, she's got a six-point lead. if you go down to florida, she's
got a one-point lead. trump needs to win that. hillary clinton doesn't. if you go to north carolina, hillary clinton's got a three-point lead. that's a takeaway. mitt romney carried it four years ago. then you go to pennsylvania, a state donald trump has desperately wanted to break through in, she is ahead by five percentage points. here in ohio, donald trump has built in a new quinnipiac poll that was out yesterday a five percentage point lead. that is valuable for donald trump, but it's not enough. he's got to get more momentum in these last five days and figure out ways to take the state of florida, take the state of iowa, take the state of nevada and try to find something else to get over the hump, guys. >> john, i know ohio is always critically important, but you say he's in the lead there. it looks like from some of the maps i'm watching, the michigans, wisconsins, and north carolina, to some extent, are going to become even more important swing states in terms of getting her over the hump.
>> reporter: that's right. those are swing states that are holding for her. wisconsin and michigan have gone consistently democratic lately. donald trump's campaign has tried to build momentum among bad luck wlhites. there are a lot of blue collar whites. so far, donald trump has not been able to achieve a polling majority in those states. so you look at pennsylvania, wisconsin, you look at michigan. all of those are big rust belt targets for donald trump. he hasn't gotten there yet. he's giving it a shot. he's been putting new effort in those states, but we'll have to see what the last five days yields for him in terms of movement in the polls. >> john, we've seen that early voting is up significantly compared to last elections and the previous averages. who does that favor? is that in hillary clinton's camp or donald trump's camp? >> reporter: not necessarily in either one. we've got a trend in this country over the last two decades for more and more people
to vote early. we're ahead of the pace from 2012. we've seen in some of those earlier votes that hillary clinton's having trouble motivating and turning out the african-american base, which was so critical to barack obama's victory in 2012 and also in 2008. however, he's done a little bit better -- or hillary clinton's done a little bit better with the hispanic vote, which has been galvanized by donald trump and some of the stances he's taken on immigration, that sort of thing. but you can't make a blanket statement either way, because donald trump has generated a lot of enthusiasm among his base and some of the early vote indicators suggest that he's going to have a good turnout. >> and john, what do those early vote indicators suggest about turnout overall? because if i remember back to june and the brexit vote, the increased turnout by about 7 percentage points compared to the general election the year before was a massive swing factor, which, of course, added to the wild card nature of the result. >> reporter: the last few
elections, turnout nationally in the united states has been drifting up. and has been doing very well relative to recent history. we do not expect that 2016 is going to reach the levels of 2008 and 2012. so i think it is likely to be a decent turnout, not a super heavy turnout, but, of course, the mix of who is in that turnout is what's going to decide the election. if donald trump can super charge the turnout among those blue collar white voters who represent his base, he has got a shot. so far, we don't see evidence that it is supercharged relative to recent history. >> john, thank you very much for joining us this morning. john harwood in ohio. >> and lima, my home state. enjoy. important state. >> i would just add one further point. clearly, the electoral college math as john went through is not working in donald trump's favor. but, the real clear politics average is so, so close now. but the prediction markets and the betting odds still have a significant gap between the two,
in what is essentially a two-horse race. >> 538 has been my go to. and some of the charts there that show, especially on electoral map, there's a snake chart that shows which states he would need to get to cross over the line and which states she would need to get. based on the polling, it still gives it to her but she's back down in the 60s and that's where she was in september. and it's widened significantly since just friday. >> i just said maps there, i'm real adapting. >> you're learning. yacht words. not all of them. back to corporate news. wynn results falling short of forecasts, the company citing costs related to opening a second casino in macau and how construction of the hotels in the areas is making it hard for customers to get to that resort, down 6%. whole foods' fourth quarter profit beating forecasts while revenue was in line. same-store sales fell more than expected. but the company saying those declines have been easing
lately. and whole foods doing away with its jewel cofounder. shares up 3.7%. aig swinging to a profit in the third quarter, driven by higher returns on investments and lower costs, but the insurer's results missed forecasts. aig is increasing its stock buyback program by $3 billion. shares down 2.6%. on a programming note, aig's ceo peter hancock will be cnbc at 9:45 a.m. eastern. a few other stocks to s t gr the fourth quarter which does include the important holiday season also missing analyst's estimates, hurt by soft demand and production analysts related to its new flex band wrist device. avis budget topping forecasts on higher rental volumes and increased prices. the company now expects full-year profits to come in at the low end of its previous estimates, due to softer demand in europe and the americas. 21st century fox reporting
better than expected first quarter results, driven primarily by higher ad and affiliate revenue from its cable channels, including fx and fox news. the company's movie studios saw higher revenue as well, despite the box office disappointment of "independence day: resurgence." >> i've still got to see that film. >> to to the cinema. >> except it's not in the cinema anymore. let's move on to today's top trending stories. the campaign trail couldn't help hillary clinton from supporting her hometown chicago cubs. clinton watching game seven on an ipad last night during a book signing in arizona. hillary and her team continuing to live stream the game from their car. as the game came to its dramatic finish, clinton and her staff waving a huge "w" flag to support her team. beyonce surprising fans at the country music awards. they performed her country-themed song, "daddy
lesson." halfway through the song, beyonce mixed in several lines from the dixey chick's 2002 hit "long time gone." >> would that have resonated a lot with country fans? >> beyonce resonates with everyone. she's not a country singer. >> are the dixie chicks big? >> they were, sort of like 15 years ago. i grew up with the dixchiy chicks. >> garth brooks, is it? >> yes. >> he's the big one. play-doh is getting a facelift with a new toy to life app. it animates them in a virtual world using the camera on your iphone or ipad. you can play the game for free with any can of play-doh or buy a $40 shape to life studio set. that's actually pretty impressive. >> play-doh for the digital age. but to kids still play with play-doh? i can't believe that they wouldn't. >> i was always more of a lego man than play-doh. i needed that help, the guidance to actually form something. >> very masculine.
>> you need to be more talented to have play-doh. >> artistic. creative. i played with play-doh. >> lego was easier to work with for me. anyway, we should move on. coming up, today's must-reads. here's a look at european kpas head the to break. we are if the green by a quarter of a percent. we're back in a couple of minutes. you're watching "worldwide exchange."
welcome back to worldwide exchange. to today's must-read stories capturing our attention. in the "financial times," probability of a trump victory remains underpriced by the markets. the author, john authors, who is senior investment commentator for the paper, says it looks as though the probability of a trump victory remains underpriced and could easily swing wildly in the next few days. so the next week is perilous. a little gold or some vix futures might be a good idea. treat it as an insurance premium. volatility could easily rise far higher from here. and within reason, it is good to hold cash. this is an interesting take of the sort of arguments we've been airing in terms of the other perspective as to whether this is closer than people expect. and he says, in these kind of prediction markets, where you can trade, not in huge volume, he says, trump futures offer value at this stage. an interesting take from the "financial times" on that. >> in other words, it's not being priced correctly? >> it should be closer than it is. he looks at all the polls, the
real clear politics average, and takes an appreciation of the geographical spill of the electoral college as well. this is value, in a two-horse race. >> they're not significant probabilities. in other words, nick colast of convergex always does a good research note and he looked at the odds of trump winning and compared to other odds, the odds of the patriots winning the super bowl, the odds of a british teenager making it to 100 years old, also around 30%. >> did you see i replied to that? i asked about a 31-year-old getting to 100? >> we don't have the statistics, but he said based on the looks of you, pretty high. >> oh, good. he said the people that bought those sort of trades a week ago are laughing. >> there was a complain sensy in the market for a real long time that clinton would be the choice. my pick is also in the "financial times" and it's also about politics, but it's about the business of trump. the future of trump ink. it's really not an opinion piece.
the columnist, gary silverman, goes through some of trump's. it's a long read, but very detailed and very good, trump's business ventures, his past, what he might have in store for the future. he writes, according to mr. trump, his father told him everything he touched turned to gold. in atlantic city, his son did act as if he believed him. even as the economy stumbled in late 1980s, he built a third casino, the junk bond-financed trump taj mahal. when industry analyst richard rothman said he doubted there were enough customers for those trump pleasure domes, mr. trump called up his boss and demand head be fired. we know what happened next, trump taj mahal went out of business. but it is fact based and it doesn't really come to a conclusion in the end, just that it's going to be fascinating to watch the reality star- turned business mogul, no matter what happens, if he wins or doesn't. >> and there's also talk about the possibility of trump tv and things like that. but more generally, his overall brand, has it been enhanced or
tarnished? it's certainly risen his profile to extraordinary levels, but does it help him if he does fail to win this election? >> there are some examples that it's hurt him, especially after those "access hollywood" take place. in new york, his name has buildings on them. some of the residents want the name taken off of the building, for instance. we'll see overall. he certainly has a higher profile. >> irrelevant with five days to go, because his job may be taken. the business world might have to -- he might have to leave -- >> leave it to his children, which still have the trump name. when we come back, david roenzberg, chief economist will be talking about the markets, the fed, and the election as well as the economy. stay tuned, you're watching "worldwide exchange on cnbc. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line.
with new cabinets this wfrom this shop,house, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured. we are in the context of unusual uncertainty, not just political, but financial, economic, and institutional. this is a time to reduce your exposure to the public markets that has been. keep a higher level of cash than
you normally be, and be much more tactical than what you're inclined to be. >> mohammed el-errian on cnbc last night. joining us, david rosenberg, chief economist at glusk kikin f sheff. does this uncertainty over the election and some of the market turbulence we're seeing make the outlook even worse for you? >> well, you know, i would say that heading into this situation with a forward multiple on the s&p of over 18, trailing multiple of 20, we're almost priced for perfection. and we're going to find out that the world isn't exactly perfect. so i would say that when you take a look, not even at, say, the event risk around the u.s. election or the italian constitutional vote on december the 4th or the european elections next year or the fed, the reality is that you have a v-shaped recovery embedded in the current valuations of the stock market. so i think that we're just richly priced right now and my
sense that we're in a transition phase. so the answer is yes. we've been cautious for the past several months and that continues. >> what about the election? where are you on a trump presidency, as the odds do increase? whether that's sufficiently priced into the market at this point, and what it may mean for the market in the long-term? >> well, it's probably not completely priced in. i think that in the past week, we've seen a microcosm, just looking at the vix going from 15 to 20, that there's some nervousness, the uncertainty factor coming in. i would expect that if donald trump does win, we'll probably see a compression in the market multiple, just because of the uncertainty factor. my sense is that if the market does correct significantly, let's say at least 10% on a trump victory, my sense is that we're going to start to put money to work in the market. because what we know from history is that what you see isn't always what you get from the presidential campaign. i think the most dangerous thing
an investor can do is to take anything that donald trump or hillary clinton says and extrapolate it into the future. i seem to remember that when barack obama got elected in late 2008, the view was that he was some wild socialist. but early '09, the banks were priced for zero, because apparently this new president was going to nationalize them. i'm not going to say that barack obama's responsible for a tripling of the stock market, but no one was betting that under his presidency that was going to happen. >> david, you just said a 10% fall in equity markets a possibility in donald trump is elected. is that your best case reactions from the markets if he wins? >> well, look, we have that and we have the fed raising rates likely in december or so. the experts seem to think that's the case. you know, we had 70% probabilities being priced in at this point last year for that december hike. and everybody thought, oh, it's going to be just fine. but the problem with the fed raising interest rates was that it wasn't just one rate hike, it felt like three, because of the overall financial conditions tightening, and especially the
transmission mechanism through a stronger dollar. so i don't think the fed's got to raise interest rates. a lot of people disagree with me. but if you remember last year, the fed raised rates, a couple months later, the s&p is down more than 12%. why would it be different this time, especially considering that the market is more expensive across any valuation metric today than it was 12 months ago. >> it could be different if they don't forecast four hikes in the year ahead. you remember, they hiked rates and predicted it was going to happen four more times this year, and that set off anxiety, because they tilted hawkish. if they don't do that again, it could have a different effect, couldn't it? >> is the fed tightening into an accelerated growth environment? what's interesting is everybody is talking about how they toughen up the inflation language yesterday. my lord, this is the central bank that has faced 53 months in a row of inflation coming in below its target. what i find interesting is when you take a look a year ago, sarah, at least they had in their press statement that business investment and consumer spending were rising at a solid clip. that was their view.
meanwhile, we have 1% growth in the fourth quarter yesterday. they downgraded their view on the economy -- >> we've got to leave it there, david. thank you! sorry to cut you off. that does it for us here. "squawk box" is next. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
good morning. facebook shares are getting slammed after the company's guidance in this case sparked concerns about the future growth in advertising. full results are straight ahead. fitbit stock plummeting after an earnings miss and is a sales warning for the holiday season. it's down nearly 70% now since the june 2015 ipo. and ecstasy in the windy city. the chicago cubs capturing their first world series title since 1908. we will show you the highlights. i saw the first inning. it's thursday, november 3rd,
2016 and "squawk box" begins right now. >> announcer: life from new york whereby where business never sleeps, this is "squawk box". >> good morning. welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with joe kernan this morning. the celebration still going on in chicago this morning. the cubs giving their fans reason to cheer, beating the cleveland indians 8-7 in a dramatic 10-inning world series game seven. the cubs coming back from a deficit to win their first world championship since 1908. i only saw the first couple of innings and went to sleep and happened to wake up, wanted to check, thinking it was all over, and it wasn't over, there was the rain delay, and i got to see the 10th inning and i got very excited. and we should tha