Transcripts For CNBC Worldwide Exchange 20171103

Good morning very warm welcome to Worldwide Exchange. Im wilfred frost. Im Courtney Reagan in for sara eisen thanks for having me no shortage of news today. We have a lot to talk about. And its friday what more could we want . Great to have you with us. Lets check in on the market picture. We got a laterally yesterday, pretty much in line with when President Trump announced jay powell as his pick for the fed we saw markets rally up towards the close. Not a huge rally but the nasdaq ended essentially flat the dow up 0. 35 the s p was up fractionally. Banks rallied a bit as well. Jay powell in a short speech had time to say he felt the banks were safer than they used to be. That was encouraging in terms of the deregulatory outlook this morning were pointing higher the dow up by 17 points. Nasdaq by 19 s p by 1 tenyear treasury note has seen yields slip significantly over the past week or so. Down to the mid 2. 3 level. 2. 35 . Looking at the action around the world starting with asia we had a mixed picture in asia, especially in china overnight. The nikkei is closed today for culture day in japan as you can see, we had the shanghai down, thats the outlier, down 0. 3 lets move on to europe. Yesterday europe was mostly negative the pound suffering its biggest oneday fall against the dollar since june after that bank of england Interest Rate rise for the fist time in morst time in decade the only way to stop the nikkei run is to close the market for a day so its flat instead of up. Oil prices have had another good week up 0. 5 yesterday for the week up about a percent or so before today. So adding another 0. 7 of gains today. 54. 9 for wti dollar board for you, we did see the dollar up a little yesterday. That was more because of the pounds big fall, down more than a percent. Elsewhere essentially flat its essentially flat again today. No move against the yen, no move against the euro or the pound either gold prices for you, flat yesterday, down slightly today up about half a percent for the week as a whole. 1276 the price of gold. The october employment report will be out at 8 00 a. M. Eastern. Nonfarm payrolls are expected to rise 315,000, following a 33,000 decline in october. In addition to the jobs report, we will get the september trade deficit at 8 30, followed by the is mark servi ism Services Look for results from duke energy, sothebys and berkshire hathaway. Apple beat on every major metric the Company Offering an upbeat forecast for the Holiday Shopping season, alleviating investor concerns about iphone x production delays. The report coming as the new device hits shelves around the world this morning joining us to discuss is dan ives from gbh insights good morning great to be here. Whats the key standout factor here . People point to the strong guidance on iphone x that did not fall into the last quaurts e quarters numbers, but the guidance strong. The street was looking for a w hohom qua hohum quarter, but china is front and center and getting sea legs thats been weak you saw strength this quarter, thats huge. That china factor, is this a onequarter bounce from weakness or do we think this is the start of a meaning trend back to where it used to be we believe this is the start of a trend about 60 million chi nuz cnese consumers could upgrade to the f iphone x we believe its a trend towards a super cycle. 260 million units. There was a prove me situation for cook last night. They showed it in terms of guidance we believe underlying preorder demand is up to about 50 million shipments for iphone, its a positive trend going into 2018 this is the most expensive iphone weve had we say that almost every time with the innovation that comes out. Why is that important if youre an apple investor and looking at the price tag and Strong Demand . What does that mean for the expectations this past quarter, if you look at asps, the average selling price was 600s we believe that goes to about 750 for 2018 you times that by one iphone and by 260 million, thats the keye. Final i think the elusive trillion dollar market cap is in sights now from a multiple and earnings power based on this strength, really you can start to justify it. They just got past 900 million. Still another 100 billion more to go lets focus on that iphone beat. It is very much more pricing thats delivering the sector as opposed to extra volume. Is that right . Right now its definitely asps, but when you look at volume, if you look at the skeptics, they were saying 70 million, 72 million iphone units for this quarter coming up now its closer to 80 million. Demand versus supply is 2 1. The big issue is can they alleviate supply issues . They are having a tough time producing the phone given the complexity cook was tight lipped. We believe the supply demand imbalance doesnt happen until 2018 in terms of that longer trend, wanting to have a bigger portion of earnings on services revenue, where are they on that in terms of total revenue . Services when you look, youre looking at something thats 15 of revenue, we do believe ultimately in the next two years, 20 plus of revenue that could be a 5 50 billion annual thing it is key. Its all about the ecosystem and the iphone seeing strength on Services Even the watch came in better than expected. For the next 6 to 9 months, the key to the growth and the stock is iphone x. We believe this was a feather in the cap for the bulls last night. Great stuff thanks for joining us. Thanks for having me. Apple up nicely in the premarket. Other stocks to watch. Starbucks shares are under pressure Quarterly Sales falling short of estimates. The company is trimming its profit forecast. Starbucks announcing a deal to sell its tazo brand to yune leave every for 3 384 million shares down about 3 dont miss Kevin Johnson later this morning on squawk on the street at 9 40 eastern time hell dig deeper into what we saw. Aig reporting a bigger than expected quarterly loss. They had huge catastrophic losses mostly from hurricane harvey, irma and maria also announcing a pretax vreceiv boost. Shares of aig down more than 3 . Tmobile and sprint are said to b merger talking last week word was that negotiations were falling apart over which side would control the combined company both are up in the early hours if that comes out to be true, kudos to david faber for reporting along those lines earlier this week. The stock is reacting as if that could be true. Activision blizzards Third Quarter results missed forecasts. Active users fell 20 . Activision is raising the fullyear outlook as it releases a new call of duty game today, but that forecast trails analyst estimates. Its up 1. 6 . Cbss Third Quarter earnings beat forecast, but the revenue fell short due to lower ad sales. Cbs earned about 35 of total revenue from ads in the quarter. It owns more revenue per subscriber from digital versus traditional platforms. Pandora reported a narrower Third Quarter loss but revenues slightly missed forecasts. They predicted Fourth Quarter sales that fell short of estimates. Ad revenue sales rose 1 as they were hurt by the shutdown of offices in australia and new zealand. President trump making it official nominating jay powell yesterday to succeed janet yellen as fed share. The president described powell as a committed leader who would build on Janet Yellens achievements on steering the u. S. Economy powell pledged to be attuned to emerging Financial Risks and the impact the fed has on average americans. While postcrisis improvements in regulation and supervision helped to achieve these gains, i will continue to work with my colleagues to make sure the Federal Reserve remains vigilant and prepare to respond to changes in markets and evolving risks for more on jay powell and the jobs report, lets bring in Daniel Dimartino booth thanks for joining us. Some point to jowls laay powelk of economic experience, he doesnt have a ph. D. But he has other attributes that you like in experience and in tollcy. You can describe why you think jay powell is the right choice the first thing to his not being a ph. D. In economics, that might be his best attribute. Its impossible he has not absorbed so much information i understand from people who worked with jay that he is a very quick and enthusiastic study when it comes to Economic Data i look to the risks that are percolating in our shadow Banking System, in our conventional Banking System. We have overvaluation spread across a wide swath of asset markets. I like to think of somebody who intervened and investigated solomon brothers yeared ago in his role at treasury as being somebody who is capable of bridging the divide between the markets and the economy. Thats what we heard in some of his opening remarks. I was fascinated by those opening remarks. It was a short speech but he found time to say our banks have much higher capital liquidity and are more aware of the risks they run, they are better ability to manage those risks. What did you take from that that he singled out specifically those points and banking risks is that encouraging for the outlook in terms of deregulation its encouraging for the big ef biggest banks he will be working closely with randy quarrels because he always had an eye on the banks and those big bank balance sheets. But i speak to his private equity experience as well. For many years he was at the carlisle group, he founded the industrial group, so i give him credit for understanding not just the conventional Banking System but the shadow Banking System and how that interacts with ceos and cfos running these companies who have been on the receiving end of fed policy for so many years wherein you keep Interest Rates too low for too long you begin to disincentivize Capital Expenditure and you end up with companies borrowing debt in the cheap debt markets to buy back shares. Powell will recognize a lot of these things and be a broad, good leader at the fed lets talk about tax reform as well. Clearly we got meat on the bones in terms of the aim of the Republican Party and the administration is to deliver were you even couraged by that do you think it can deliver this significant boost to growth that donald trump will look for if you look if you think of the country having a rubber band around it, a lot of the states on the coasts, if you will, where the taxes are so very high, you add that to the lobbying power of the National Association of home builders, the mortgage Interest Deduction is such a sacred cow state taxes, property tax being capped at 10,000, a lot of the specifics that will help to pay for the tax reform i think will be an uphill battle for the Current Administration and for the Congress Going forward this is going to be a long haul. So your point is youre worried it wont get passed at all . Well, i think that its im not so sure that well see that 20 i think that might have come in lower than what some people were anticipating to give wiggle room i would have preferred to have seen a cleaner tax reform bill as opposed to something that just seems to add layers on to what your cpa will be doing for you before the next tax day. Very quickly, final preview for the jobs number . I think this will ab blowout report i wouldnt be surprised if we had an annual 3 gdp figure, because you dont have four natural gast disasters, the hurricanes and see something well north of 300,000 this morning at 8 30 a. M. Eastern when that number hits. Such a busy day, we only got to jobs right at the end thank you still to come, the new iphone goes on sale around the world today. We will bring you pictures of the lines, mrafrparticularly in london where ware vee li at the moment building a website in under an hour is easy with gocentral. From godaddy in fact, 68 of people who have built their. Website using gocentral, did it in under an hour, and you can too. Build a better website in under an hour. With gocentral from godaddy. Welcome back to Worldwide Exchange. The new iphone is hitting store shelves in 50 country thsz mornimor countries this morning Arjun Kharpal joins us live from london theres a huge line here at the apple iphone store at Regent Street for this, the iphone x. Huge cheers when the doors opened here. Fans were out in force i was speaking to the first guy in the queue, he was lining up since tuesday. He said i buy my iphone every two years, but this time he bought the iphone after one year because he saw the iphone x as a radical redesign of the iphone something that consumers have been wanting for a long time hes willing to fork out the 1,000 for the phone for that. Thats something that the ceo tim cook is going to happen. The there is a lot of pent up demand for the new devices. We saw it in the Earnings Figures yesterday. The iphone 8 was performing better than expected the Earnings Guidance is positive thats a lot to do for demand for the iphone 8 and the iphone x. This is a make or break device for apple. There are supply issues. Apple had to sort out the kinks in the supply chain to meet demand many expect this demand supply balance wont be sorted until about april Time Next Year if that gets ironed out, if those get sorted out, this could be a huge hit for apple. Do you have any idea in terms of that big queue youre talking about, people coming in, what percentage of people have already played on preorders and are coming to collect their phone and what is new demand that will come in across the world today, those 50 cities where theyre available . Probably about 200 people in line this morning. A lot of the traffic coming in seems to be picking up the phone. That seems to be the effective way. No one from apple was clear to tell me how many iphone xs they had in stock to give to people who were walkins. The majority were preorders. A few people were waiting to get their hands on one its difficult to tell, but im sure the next quarter earnings will give us more visibility as to that kind of demand were seeing a quarter which had great guidance last night. Arjun, thank you very much speaking of supply constraints, check this out. More than 300 iphone x devices were reportedly stolen from a u. P. S. Truck in San Francisco earlier this week. Local Media Outlets say the thieves have yet to be caught. With the iphone selling for about 1,000 each, the robbers got away with 300,000 in merchandise. Theres a little bit of a supply chain crimp, too yeah. 300 less iphones in San Francisco. A great way to highlight the price of these 300,000. Just 300,000. Much easier than stealing cash you would need a heavier bag to hide a shorter supply in San Francisco. Still to come, a busy week for President Trump, or it has been a tax plan, a pick to run the fed and now hes ready to embark on a major trip to asia. A live report is next. This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for business. Yours. Okay, iunderwear thatsd say this, bactually pretty. Er leak surprised . Its called always discreet boutique. It looks and fits like my underwear. I know what youre thinking. How can something this pretty protect . Hidden inside is a super absorbent core that quickly turns liquid to gel. For incredible protection. So i feel protected. And pretty. New always discreet boutique. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley President Trump leaves this morning for a tenday five country tour of asia, but with the goal of passing tax legislation before thanksgiving, he will leave many of his top advisers back in washington. Blayne alexander has all the latest details reporter hello to you. Certainly big missions for President Trump at home and abroad on his foreign trip this will prove to be a major trip for the president. His first time as commander in chief in north koreas backyard. He will be looking at those surrounding countries for help in getting north korea in line President Trump leaving washington for his longest most high stakes foreign trip yet ten days, five countries, stopping in china, japan, south korea, vietnam and the philippines. His first president ial visit to the region amid growing tension with north korea the president telling fox news hes confident his trip and talks with north korean ally, china, will help reel in the rogue regime north koreas a thing that i think we will solve, if we dont solve it, it wont be pleasant for them it wont be pleasant i guess for anybody. The National Security adviser saying do not expect the president to take a different tone i dont think the president really modulates his language. Have you noticed him do that hes been clear about it reporter while President Trump is overseas, some of his top adviser also stay behind pushing republican tax reform. The plan includes fewer tax brackets, higher standard deductions and a new Family Credit along with a lower Corporate Tax rate some families will be better off, others will not well shift who is paying more and paying less. Reporter republicans saying the plan helps the middle class. Democrats argue it does the exact opposite and back to the president s foreign trip, one thing that is not on his agenda is a visit to the Demilitarized Zone that fortified border between north and south korea. The white house saying the president will forgo that visit because of scheduling. In the past some of these foreign trips helped the president. Its either taken the focus off issues back at home or given him grounds to make progress abroad. Do we think this trip could help his advisers get the tax reform bill over the line whilst hes away i think any bit of success for the president would be a beneficial one tax reform is going to be a difficult needle to thread because you have it working in the house, then it goes over to the senate, we know already some Senate Republicans are saying theyre not necessarily in favor of this. They will likely change it around, put their own sauce on it and send it back over to the house. When it comes to tax reform, if it does make it to the president s desk, this will look like a very different version than the one we see before us now. Yes, certainly the fact the two are happening simultaneously, people will be watching both of those and watching them ping off the other in terms of success. Thank you very much for that report courtney, i would also say to viewers to check out kayla tausches report on cnbc. Com in terms of the Companies Going on this trip as well. Its a fascinating list. Across multi sectors, but looking at my sector, only Lloyd Blankfein of Goldman Sachs is going, some other big banks leaders are not. Clearly before when theres big trips to the middle east, theres deals for blackstone but not other rivals so going on these trips could be important for these companies. Coming up, the top headlines and a round of the global markets. Plus a sweet story in our trending stories hersheysedy be eddebuting theit new candy bar in two decades jimmys gotten used to his whole room smelling like sweaty odors. Yup, hes gone noseblind. He thinks it smells fine, but his mom smells this. Luckily for all your hardtowash fabrics. Theres febreze fabric refresher. Febreze doesnt just mask, it eliminates odors youve. Gone noseblind to. And try Febreze Unstopables for fabric. With up to twice the fresh scent power, youll want to try it. Again and again and maybe just one more time. Indulge in irresistible freshness. Febreze unstopables. Breathe happy. Futures pointing to a higher open after a wild day on wall street a big jobs bounce back thats what investors are expecting after last months disappointing numbers. What to watch for in todays report. And trumps twitter troubles the president s account going dark last night. Well tell who is responsible. Its friday, november 3, 2017. Youre what happening Worldwide Exchange on cnbc. Good morning a very warm welcome to Worldwide Exchange on cnbc im wilfred frost. Im Courtney Reagan in for sara eisen were kicking it off with taylor swi swifts new song which chris has said is likely to be the first one on the new album that i like, based on its slow pace you dont like the other ones its more my thing. The first couple of ones were more aggressive. I like the story of this song, bringing taylor back to her country roots. Theres other country stars you love shes still writing for other country stars, thats good lets look at futures we hinted at what they were doing in the open to this half hour were seeing them point to a higher open on wall street its likely going to be another busy day with that jobs report coming up and still some Market Participants digesting what we heard yesterday about the tax bill and the new fed chair, jay powell so you can see shares are indicated higher for the dow jones by 30 points lets look at the tenyear note and see what the reaction is ahead of that jobs report. Pretty much flat unchanged, just above 2. 3. Lets look at markets around the rest of the world. Japan is closed today. No big gain as weve seen recently for the japanese market gains for south korea and Hong Kong Shanghai slightly lower. Germany is up nicely, 1. 5 week to date. The ftse 100 enjoying a big bounce yesterday as the pound softened elsewhere slight gains across the board. Ftse 100 up 0. 25 . We hit uk services pmi, which was strong 55. 6, forecast at 53. 4 the Services Sector in the uk is important. 65 to 70 of gdp. Lets look at whats going on with the broader market, starting with oil. Yesterday both wti and brent were higher. Actually wti was settling at its highest close in more than two years, 54. 54 so adding slightly to those gains today, up by a half percent beyond that at this point. Look at whats going on with the dollar steadying itself against the basket of currencies not Much Movement against the yen. We did note the nikkei is closed today for culture day in japan flat here against the pound which is interesting after what we saw yesterday with the pounds fall in reaction to the bank of england Interest Rate rise the price of gold, relatively flat yesterday not a lot of movement today. Slightly lower here, sitting at 1,275. The u. S. Market, of coeure, always in focus. Jobs market. The jobs report comes out at 8 30 a. M. Eastern time nonfarm payrolls forecast to rise by 315,000 following the decline of 33,000 in september, which was impacted by the hurricanes unemployment expected to hold at 4. 2 joining us now is David Rosenberg from Gluskin Sheff do you agree we could have a big number over 300,000 . It wouldnt surprise me we saw a bounce back in the adp. Most of the employment components in the survey data have been good, including the Consumer Confidence survey that came out it would be reasonable to expect a strong number today. Like with adp, you have to average out the two months compared to the 12month moving average. A number close to 300,000, thats a good bet. Do you have any thoughts on the nomination of jay powell in regard to the patterns that you have noticed in the past where newly appointed fed chairs often face a pretty big challenge out of the gate with the exception of janet yellen. Do you anticipate thats what mr. Powell will be dealing with when he takes over i think thats a good chance when you consider all the excesses out there and various parts of the markets, whether its commercial real estate or cni loans on commercial bank balance sheets, credit cards, subprime autos its not the Residential Mortgage market, but one reason why the fed is raising Interest Rates, its not because of core inflation. Maybe some folks are concerned about what wages will do because of a 4. 2 unemployment rate. The fed has been talking more and more about excesses in the financial markets. It will be interesting to see what its cadence will be in terms of raises Interest Rates and flattening the yield curve further than it has. My sense is that he will be facing quite a few challenges. Everybody is focused on the extent to which we will see tax cuts people call it fax reform. Its tax relief at a time when several people in the fed are concerned that we hit the wall in the labor market. To me, the el vant in the room is feds reaction function at a time when we have a 4. 2 unemployment rate. It will be interesting to see how a powellled fed will react to tax stimulus. What do you think his response will be if his view is like yours, this is late cycle . Its uncertain now. You know, im not making big bets as to what happens with tax reform any more than you would wanted to make big bets on healthcare reform. Whats interesting is that practically every fed chairman that has been a newbie back to arthur burns made Interest Rate increases their first move a lot of the time were already in that process. Look what happened with alan greenspan, took over from volcker, raised Interest Rates, flattened the yield curve and then 1987. Im not saying that will happen this time around, but were in the full swing of the fed tightening cycle people call it normalization, thats a nice way of saying theyre tightening flattening the yield curve my sense is that everybody talks about powell and a new fed chairman but you are very rarely seeing initially that the new chairman puts his or her own stamp on the fed. You have to remember its a whole committee. The fed chairman has just one vote its not like canada where its almost a dictatorship in terms of what drives policy. Im not making a big forecast as to what powell will do or not do except follow what janet yellen has already been doing lets face facts here. Were only two to three hikes away from inverting the yield curve, then you will find all the economists out there saying dismiss the yield curve this time even though its the best leading indicator. Theres been focus this week on the very strong rallies we saw around the rest of the world during the month of october. The nikkei up 8 india up 6, germany up 3 . To what extent do you think the big market gains around the rest of the world are justified by the Economic Performance do you worry thats just because those Central Banks are still facing loose policy and thats just spurring stock market gains as opposed to fundamental gains in the economy japan is a more special situation operating on its own set of economic and political dynamics a big sigh of relief over abes landslide victory there. In the case of europe, you have ma kr macron making huge strides in terms of pro business policies and cutting taxes. Thats helping out sentiment on the european side. In the u. S. , i think you have very powerfully positive seasonal effects theres obviously some positive sentiment. This is in my opinion a sentiment driven market. Not taking anything away from the corporate earnings corporate earnings, we all know, are beating estimates. In the past coupleof months, a lot of the clouds have dissipated two months ago, north korea was making the headlines all the time its not making headlines now. Even though i dont think theres going to be anything big in tax reform coming, the hopes are high compared to two months ago that we will get tax reform. The Economic Data has held in reasonably well. Were in the space now where youre taking sour cream and turning it into ice cream in the sense that the hurricanes two months ago were thought it will tip the economy over far from that. As we saw in the Third Quarter data, as we have seen backtoback auto sales data whats happening now is a lot of stimulus from the rebuilding efforts following Hurricane Irma and harvey look at the ism report that came out the other day. All the commentary from the industries that reported, the stimulative effects of the hurricane are reporting through to the data. Its part of the artificial but creating positive sentiment at a time when equities tend to do well david, as always, pleasure to see you. David rosenberg. Thank you stocks for you to watch today. Apple blowing past wall street estimates in its latest quarter beating every major metric the Company Offering an upbeat forecast for the Holiday Shopping season, too thats alleviating investor concerns about iphone x production delays. The new device hit shelves around the world this morning. Shares higher by more than 3 . And shares of starbucks are under pressure as sales disappoint Quarterly Sales falling short of estimates. The company is trimming its profit forecast. Starbucks announcing a deal to sell its tazo brand to yune leave every for 384 million shares down about 3 dont miss Kevin Johnson later this morning on squawk on the street at 9 40 eastern time hell dig deeper into what we saw. Johnson johnson says it was contacted by the attorneys general in new hampshire, new jersey, tennessee and washington the company and its fa Pharmaceuticals Unit were served with subpoenas into the marketing probe of opioids socgen missing the mark on its latest quarter net income dropping 15 . The french bank put aside more for the legal side the swiss drugmaker novartis is exploring options for its dermatology business which could lead to a 1. 5 billion sale. The unit includes ointments and creams, and would keep with recent moves to cut back on noncore assets amazon is shutting down some of its Fresh Grocery Delivery Services in some stating President Trumpsporarily w last night this happened after a twitter employee deactivated the account. It was the employees last day of work. The company said the account was inadvertently shut down. It returned to normal after 11 minutes. Thats a punchy joke was it his last day before he did that or was it his last day because he did that . It was framed addres if it w his last day any way and he was on his way out 11 minutes before it gets recti rectified. Anybody else it would take weeks. The other question is will he be tweeting actively in china its banned there. Yeah. If he can. It will be interesting. Well see if it gets if he gets special clearance or if hell have to email tweets home to someone else. Have someone else do it for him. Well see if the voice changes. Steph curry got name dropped in a gop tax bill and rolled with it. The nba star was used as an example of how the plan separates millionaires from Small Business owners. It said it would distinguish between the individual wage income of steph curry and the pass through income of steves bike shop. Steph curry said i wonder if steves bike shop is hiring. Posted an application for steve kerrs bike shop on his instagram story. Im glad he rolled with it. He does make more than a million dollars, obviously i think quite comfortably hershey is debuting its first new candy bar in 20 years. The chocolate maker says it is the gold bar caramelized cream bar with peanut peanut bits inse im not liking the look of that british confectionary is better than american. Come on it is im afraid to say. You have wine gums, fruit pastels. Cadburys chocolate a lot better. I guess its also what you have grown up with. Obviously i reckon theres a bit of i think a lot of people, you say that to here, even americans say i agree when i go to london. I think the quality is better. Ill have to try it im september skeptical. Im a doubting thomas on that one. Still to come, the mustreads including Donald Trumps Federal Reserve, why one op sed saed says the president s choice wont be free from challenges we were at 10. 4, 10. 5 sorry, 2. 45 on the tenyear that would be a big week. 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Get your domain today and get a free trial of gocentral. Build a better website in under an hour. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Welcome back to Worldwide Exchange. Doubting thomas is a global phrase a Global English speaking phrase yeah, its been around for a long time. Since biblical days. So that was just my ignorance. Its okay yeah. Its all right. You cant know everything. I certainly dont youre good at european politics this is a good example of one of the many holes. Welcome back in global news, venezuelas president announced plans late yesterday to restructure the countrys foreign debt the move could lead to a detault default. Nicolas maduro said sanctions are crippling its ability to pay down debt, but he says he wants to avoid a fight with international lendering ord inss time for our mustreads catching our attention my pick is in the new york times. Will the Harvey Weinstein effect derail brexit. This relating to the fact that Sexual Harassment allegations have proliferated in parliament. All sides of the political aisle at the moment. The handling of it by the Prime Minister definitely creating extra pressure on her already weak position. This article writing the problem for mrs. May is that almost overnight the previously moderate center of the party has been galvanized. Until now they, unlike the hard line brexiteers have not made trouble for the Prime Minister, recognizing how tough the task ahead of her is and giving her the ben fet of the doubt not mihm, one said to me grimly. This shows how the Sexual Harassment allegations in Parliament Led to a member of the cabinet to resign and causing pressure for the Prime Minister and maybe changing the brexit debate. My pick is in project syndicate. Donald trumps Federal Reserve the pick of jay powell is a sane and sober choice that heralds shortterm continuity in fed Interest Rate policy and perhaps a simpler and cleaner approach to regulatory policy he points out the challenges powell will have to deal with, the least of which is inflation which makes it harder to normalize policy we talked about the challenges powell has in the show important decision yesterday, gave the markets a bounce. Still to come, jobs front and center well have a preview of that after the break. [vo] progress is an unstoppable force. The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. From godaddy in fact, 68 of people who have built their. Website using gocentral, did it in under an hour, and you can too. Build a better website in under an hour. With gocentral from godaddy. Your privacy makes you myt number 1 place to go number 2. I love you, but sometimes you stink. Febreze air effects doesnt just mask, it cleans away odors. Because the things you love the most can stink. And try febreze small spaces to clean away odors for up to 30 days. Breathe happy with febreze. Welcome back to Worldwide Exchange. Just about two and a half hours away from the release of the jobs report. Joining us from new york is Michael Gapen from barclays. Lets start with that jobs report number. Everybody is expecting a big increase, up 300,000 or so is that what you expect . It is were looking at forecast of 325. And i think the point here is that we all believe the hurricanes took about 200,000 or so jobs off of september employment the u. S. Economy has generally rebounded quite strongly in the month of september the activity data rebounded. So we think higher income is back mr. Or less in line with what weve been seeing in the broader economy. If thats true, the underlying trend has been running around 175. You build in some pick up from what we saw last month and you get a number in the 300, 325 range. I think thats the math that everybody is doing we do expect a good number today on the employment side what about when you dig into the numbers a bit for the rebuilding from the hurricanes diana olick has been talking about how theres a shortage of the number of folks who can rebuild these houses that will possibly take some time is there concern about whats going on there and the lag time to get to that growth and fill those positions that are needed most i would take a slightly different tact its a lot easier to make up good sector activity you postpone a purchase but you just execute it later. Its tougher to make up Services Sector activity. The adage if you miss a hair cut, you dont get two times the next time around you saw this in the gdp data so it suggests there was an unevenness in the recovery in the september data, which is why you might not get the full payback this month what is your take on the tax reform bill as it stands if it were to be passed . In a short condensed version, i think its much more about cuts than reform im worried that the ultimate deficit number would be above the 1. 5 trillion that theyre estimating at this point in time so im still skeptical about what it might do for the supply side of the economiment and im wo worried it feels like a late cycle sugar high the appointment of jay powell s that something youre encouraged about the markets enjoyed a bounce in the final hour of the trait after the announcement was made. Maybe the story is that the administration has a pension of putting people in place who are generally disruptive but here we got a consensus oriented continuity type pick thats the good news for markets. Markets like continuity. This is about as close as you could get to renominating yellen without renominating yellen. You have a theory sort of that the u. S. Has gotten some tailwind from what weve seen around the world economically as well as sort of in markets as well do you theorize this continues as different Central Banks start to veer off into different paths for their policies under Jerome Powell what do you expect do you expect Global Growth will help fuel the u. S. We do i think the nuance would be that things have accelerated outside the u. S. Global growth in the three quarters Global Growth exu. S. In the three quarters has been running 4. 4 , the three quarters prior, 3. 7. We dont look for the rate of growth to accelerate but the stronger level of growth to persist. The answer is yes. Thank you very much for joining us thank you wldde it for orwi exchange. Have a lovely rnweekend. Ah, dinner. Throughout history, the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. Just, uh one second voice guy. [ bloop ] huh . Hey . I paused it. Bam, family time. So how is everyone . Find your awesome with xfinity xfi and change the way you wifi. Good morning u. S. Stocks coming off a record close after the release of the gops tax bill and trumps fed chair pick, jay powell and tale of two stocks apples market cap topping 9 900 billion on an upbeat earnings report, but starbucks under pressure as sales disappoint its friday, november 3, 2017, squawk box begins snow live from new york where business never sleeps, this is squawk box. Good morning. Welcome to squawk box here on cnbc we are live from the Nasdaq Market sitd e in times square. Im becky quick, along with Andrew Ross Sorkin joe is out today, but we have a special guest host, shark tanks kevin oleary. Thank you for being here thank you we had a massive amount of news dumped on us yesterday. Every time i tune in to you every morning, market goes up. I have not seen a bad day since i was here last. We are counting down this morning to the october jobs report out at 8 30 eastern time. Nonfarm payrolls forecast to rise by 315,000 following the decline of 33,000 in september, which was impacted by the hurricanes unemployment expected to hold at 4. 2 watching the futures, gree