Transcripts For CNBC Squawk Box 20141024

This wasnt much doubt. Take a look at future this morning. You see red arrows. At this point, dow futures are down, but only by about 9 points. Nasdaq off by 10 points. In some of the early trading in europe, again, some modest declines. The cac in france down by 0. 4 had . The dax and the ftse down by closer to 0. 2 . Lets get over to meg now who has been crisscrossing the country from dallas to washington and now in new york city. Shes standing by outside Bellevue Hospital. Good morning to you, me meg. Good morning, andrew. Now closer to home, the patient dr. Craig spencer is 33. He was working and we know about the time line when he came back. He arrived here on the 17th having gone to europe. Now, we know that he didnt have any symptoms. I wasnt until tuesday that he started to feel sluggish or tired and not until yesterday morning that he kaem down with a fever which Health Officials emphasize is important because ebola is not contagious if youre not symptomatic with things like fever. De blasio is emphasizing the situation is ready. We have been waiting for months for a threat posed by ebola. We have clear and strong protocols which are being scrupulously followed and were followed in this instance. They have identified four peop people. Health officials are emphasizing theres very low risk of spreading it to the general population here in new york. Again, its important to emphasize we remember Thomas Duncan in dallas. Out a lot more that dr. Spencer was. None of his contact from the general population came down with ebola. It was Health Care Workers. I happen youre not contagious until you have a temperature. But every person reacts differently. The ideal by 11 00 the new york morning, he had a temperature of 103. 5 makes you wonder about the nice before when he was out. Thats the question everybody is asking. Health Officials Say they know its when you have a fever that only is communicable. Everyone is wonder background the spectrum. He woke up with a fever. It wasnt when he was out on wednesday that he felt that way. Everybody is emphasizing that hes feeling tired, feeling sluggish. I apologize for the noise behind us. However, theyre being very careful. They say he has his metro card. Theyre emphasizes theres little concern about spreading this to the community here. I dont know if you saw that, theres reports that he took uber. They said the driver had no contact with him and that the driver is going to continue to drive, theyre not quarentining the car or doing Something Like that. Have you heard more on that . Uber said they knew it was one of their drivers, but the city has been very careful to say they dont think the person who is at high risk didnt have close contact at all. When people are in contact with someone with ebola, this gentleman was in full contact 10 or 11 days ago with people in west africa fully treating him in the you know, the and then is not in quarentine at all when he comes back. Hes totally out on the subway and in the Bowling Alley just like dr. Nancy snyderman when she came back. Doesnt he have a much better i dont understand why there isnt a policy, they get credit for being Compassionate Care givers, but it seems like a logical conclusion that you would come back and put yourself in quarentine. The argument is that if youre not symptomatic, youre not going to be contagious. What Doctors Without Borders is expected to do is be monitored for 21 days, take their temperature. And thats what dr. Spencer was doing. Also, he didnt go back to work. Doctors without borders has a policy that for 21 days when you come back to the country you should fought go to work. Not just because of potential exposure, but because you could be tired from traveling, you could come down with other things. You know, the risk of having ebola. Meg, thank you. And paul allen, there are going to be some strange segues today, but this is a related story. Paul allen has ramped up his commitment to fight ebola in a big way. The billionaire microsoft cofounder is donating 100 million. Hes partnering with the state department and the w. H. O. To create medivac containment units that will be used to evacuate medical professionals from west africa. Hes teaming up to provide training and christmastime for medical workers. Lets talk more about this latest case and how its being handle. Former deputy hhs secretary tevy troy joins us this morning. Thank you for being here this morning. Id like to talk a little bit about what you think, with the idea that ebola is now in new york city. We knew other cases would take place. How prepared do you think we are . Obviously, new york is the most likely city where ebola would have appeared, given how much traffic goes through new york. And it sounds like new york is mostly prepared. The hospital that mr. Spencer is at or dr. Spencer is at is one of the hospitals that is ready to deal with this. He was selfmonitoring. He does live that hipster youthful lifestyle. He was at a Bowling Alley, he was on the subway and took uber. You wonder about what happened in that period. Unlike the dallas patient, he went straight in there and he in a protection suit and theyre taking care of him appropriately now. He told the hospital he had been at a hospital in west africa. They didnt pick up on that. If youve been in contact with ebola patients, wouldnt it make sense that if you come back to the united states, you selfquarantine . Yeah. In fact, the initial reports i read sounded like he was selfquarantining. The dallas station did show up there, but then he went out into the broader population. Again, fought his fault. But he was out when he was contagious and symptomatic. Is there some unwritten rule that he was supposed to selfisolate . I would say the initial reports seem to indicate that he was doing some kind of selfisolation. But apparently he was not. He was just doing selfmonitoring. Doctors without boarders has the right policy saying doctors dont go back to work. But i dont know how you tell someone to completely selfisolate for 21 days. I completely admire these people who are covering this. But the idea that you bring him back and expose other people to it, including your loved ones, seems outrageous. Yeah. I think thats a really good point. And i think that i i certainly green agree that we have to be compassionate about the people who are there and appreciative of what they are doing. I do think they need to be more aggressive about not getting thmz oat there, going on the gutters, Bowling Alley or uber. What is the cost of treating somebody like this . You look at the apparatus, even when theres the larger cost, the fear cost from an economic perspective, but just the physical cost. You saw the apparatus go through new york city. They have to track everybody, theres hospitals on stand by, people are flying in from the cdc. Do you have any sense of what the numbers look like . And this would be for one individual. Thats what im trying to understand the math. If it were to become a bigger situation. I dont know the exact numbers for each patient. Its labor intensive, the patient in dallas supposedly had about 40 Health Care Workers, which is a lot. You wonder if you have multiple cases, to what extent does this begin to tax the health care system, the protective equipment, the number of Health Care Workers monitoring the person. Ultimately, you think this is a situation that would be repeated in different cities . How long before we actually get our hands around this and think about some sort of solution . This is a situation that what is the situation . The duncan situation was one thing where he spread the infection to two other people. How many people you spread the infection to, and he spread it to two. How many people will dr. Spencer spread it to . If we keep that number on zero, if we could limit the spread, that would be a good thing. Were going to check on the markets and zero would be better than two. But two was pretty darn good and thats why the futures are down a little bit today. If this were patient zero, then if a nurse had if we hadnt been through that already two weeks ago where you had the family members and then you had for a while the a lot of good stuff happen since patient zero, including nigeria and senegal and the family members and everything else. As a result, we gave some back yesterday when it was 103 temperature but, you know, Doctors Without Borders back ten days. If you pass bodily fluids and you dont have the symptoms at the time, does the bodily fluid part that im confused about. You can still transmit it for six or seven weeks after youre clear. Were industrial trying to figure out when you can why when youre asymptomatic cant you do the blood test for ebola and is when you are and the idea that theres a perfect Tipping Point where you can from not being contagious to being contagious. Its not like a flipped switch. Thats what i think is hard to pin down. We will hear people politicalize this latest. Were going to hear that. Lets see where the future is this morning. Down 15 points. Well see how that progresses this morning. Crude rebounded sharply yesterday. Stocks are moving in the same direction as crude right now. Sort of an indicator of how we feel about global growth. Theres the tenyear, 2. 24. Yield has moved over. Higher also for equityies. 1. 26 now on the euro. 108 on the yen. And that is at 108. Also, take a quick look at gold. Goal has made its way back to 32, right in the middle of its oneyear trading range. Coming up next, a look inside amazons big miss and not anyway, its a joke, and why the company is sale saying sales for the Holiday Season will be weaker than wall street is expecting. The stock is getting crushed. And later, who says microsoft is not doing well any more . They beat on the top and bottom line. The stock is now up close to 25 this year. Is hold new again for investors . Were going to find out when squawk box returns. Announcer here is your travel travelers check. Major u. S. Airlines have just raised oneway fairs by 2 on average. What other travel related costs have gone up . Find out next. vo you are a business pro. Solver of the slice. Teacher of the unteachable. You lower handicaps. And raise hopes. And you. Rent from national. 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Very narrow trading range for the entire year. Former jcpenney ceo and apple retail chief ron johnson has a new startup. Johnson said the wall street journal has raised 30 million including a buy in for horwitz. A slam on the top and bottom line for amazon has the stock under pressure. For the year, the stock down now around 30 . The question is has wall street finally grown tired of the well, well grow a profit later strategy . Jeff besos is here. Scott, help us understand this. At what point do we just say, you know, the numbers dont matter . Its really the case of enough is enough over the last few years. The margins begin to show signs of life, spending that just hasnt happened. So i guess the question becomes is do you want them to stop spending . Theres a fine line. Amazon has a history and culture of innovation. Need to spend to do that. Theyre rolling out prime, rolling out digital media. But there seems to be this disconnect between the ability to drive operating profit and drive cash flow and where the spend sg being directed. Right now, over the last few quarters, weve seen some misdirected spending with the company having to take a writedown in the most recent quarter for inventory. What do you think similar to the grocery business that theyre getting into and these other things . Does that make sense to you . Do you want them spending on things like that . You know, that in particular is a tough business. Clearly, theyre focused on a rollout. Thats fine. Theyre not going into 50 markets all at once and given their frut, i think it makes sense for them to attempt it. Youll be happy seeing a lot of traction in that business. So i think its a tough go. But its another area where they the infrastructure, theyve become more of a Logistics Company rather than just a retailer. Theyre trying to figure out ways not just of what they built, but the Customer Data that they have. Amazons cfo once said effectively, you know, every single quarter we dont always care did we need one i know if we meet your expectations. The question is when do you think they are going to try to put up some of those numbers just to prove everybody wrong . Keep in mind, he is retiring in a few quarters. As we look at the expense trend, they keep showing signs of slowing. They show another quarter or two of slowdown. I think we should begin to see the margin improvement for them as part of the revenue update take. International has been one of the bigger drags. Currency has moved against them. Theyve had a few head whippeds in terms of their rollout. Now theres speculation they may be getting in two. I think thats on a limited basis. Essentially, using that storefront as a showcase and as a distribution hub. I wouldnt be surprised to see them do that in some of the more concentrated urban areas, but i dont think its going to be a broader strategy for them. It just doesnt fit with what theyve tried to do on the delivery of the structure. And how do you measure the webb service piece of their business . That is difficult. As most people know, amazon sa black box. They dont provide a lot of detail. Clearly, they have the technological background to offer services to a broad hoet of clients. The high margin business is one that continues to grow nicely. We have running even higher growth rates in previous quarters to force some price increases. I think that is something that we will continue to see from them. The infrastructure makes the company here, they have a similar structure. Model out for us, what does this stock look like in the next 12 months and how do you even get there, whatever your number is . Right now, the Free Cash Flow is so much suspect given what weve seen on the expense side of the equation. We took our target price down overnight to 296. So a little bit above where the stock was trading aftermarket. That we had been at 350. Our concern going into the quarter was currency was going to be an issue and expenses for guide yaps was going to be an issue. We got all three in the report last night. Looking forward, the key, again, going back to your earlier question is whether or not the company can continue to make that turn on the margin front. But that turn is really what will drive valuation. And if we dont get that, theyre probably looking at further down side. How finish is it to come up with a price target on a company like that . Weve always relied on a discounted cash flow model for amazon. Over the last nine years, its pretty well. Given that some quarters work, some quarters dont, investments are longterm in nature its captured that way. But with the spending free that weve had, really, since 2010, its become more and more challenging to justify some of the inputs and at the same time, if you look on a relative valuation basis, a lot of the multiples continue to be well above the peers while growth is slowing. Were going to leave it there. Scott, thank you for joining us this morning. Thank you. Up next, a wave of strong earnings getting the bulls all charged up. The dow, nasdaq and s p set to break a fouryear losing streit streak. How comfortable should investors feel . Stick around to find out. Net flex may have more offerings along the way. Right now as we head to a break, take a look at yesterdays big winners and losers. Financial noise financial noise financial noise woman what do you mean, Homeowners Insurance doesnt cover floods . [ heart rate increases ] man a few inches of water caused all this . [ heart rate increases ] woman 2 but i dont even live near the water. What you dont know about Flood Insurance may shock you including the fact that a preferred risk policy starts as low as 129 a year. For an agent, call the number that appears on your screen. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Good morning. Welcome back to squawk box. Im joe kernen along with becky quick and Andrew Ross Sorkin. A new york city doctor tested positive for ebola. He had been treating patients in africa of ebola. The news late yesterday that he is being tested for ebola did take some wind out of the sails of the markets rally. It was up about 300, ended up still over 200 this morning. Sort of a wait and see attitude with the futures. The last i looked, they were down about 15. Automaker ford and Procter Gamble are among the Companies Set to issue earnings this morning. Well get the latest numbers from Bristol Meyers and johnson and johnson has been found not liable in a case involve something allegedly defective im plants. The Company Maintains that injuries suffered by patients were the result of improper positioning. This was the first of about 6600 cases involving those implants to go to trial. We were just talking about the s p 500 and the other markets. The nasdaq, both of these on track for their best week since january 2013. And its despite ebola fears here and around the globe. Barbara reinhart at Credit Suisse and david joy, chief market at ameriprize financial. Two weeks ago, we talked a lot about ebola. This time around, i dont know what kind of assumption is to make. And its just conjecture. Lets focus on earnings. That is what has given us this great week, barbara. It has been better than expected. Do you expect that to continue in terms of results . We do. There are a couple of things for the economy that is propelling it forward. One has been this decline in gasoline prices over the past three months. That can at like an 80 billion lift to consumers over the course of the next 12 months and its right in front of the holiday selling season, which means it will be all the more powerful. Its hard to stay away from the other because if you look at the airline stocks, they go down about 20 . They come right back you. And they went down in the face of lower oil prices. So that was all about ebola fears and well see whether it depends on the next few days and what happens. We have to monitor things like that. Ebola is one of the most scary things. Clearly, the countries where the disease is starting and the most vicious have the greatest stalls in gdp growth. 0. 7 off of u. S. Gdp. It depends how the disease allows and take it in the context of how its affecting economic growth. Ive used the term, low probability, high impact. Oh, yeah. Its not a new term, but its new for me. Boy, ive used it a lot, david. Thats how you talk about ebola. Low probability, that is a high impact if something were to get out of hand. But low probability is the operative term. I cant put a number on it, but probably less than 0. 1 of something really getting out of control, isnt it . Yeah, i think thats right. Its sort of in the wings. Its affecting sentiment. Of course, in the retail space, as you would imagine. When we talk to some of our retail clients, thats something they want to talk about, really, right off the top. But, you know, if you back that out, the fundamentals are pretty good in the u. S. In addition to lower oil prices. A lot of strength in the transports, part of it is an entity related but the railroads have been very strong. Youre seeing great earnings out of caterpillar. Great strength in technology on the business side with Cloud Computing expanding. Will r but the other thing i would add is the floor under this market in the last couple of weeks, were assuming comments from the central banks. You had the ecb starting to buy covered bonds, now theyre talking about buying corporate bonds. You had the Federal Reserve at least James Bullard saying, you know, maybe we extend qe. At the very least, that sent a message that youre not going to start fightening aggressively. The tabloid wrote about the feds plunge Protection Program again. Implying there is a fed put still in place. I expect it to come to an end. But how they talk about that transition, which presumably starts to come down at some point to higher Interest Rates. That is going to probably be a lot shortterm for the markets. And theyre going to do it in a twostep role. Theyre ending qe, but then theyre going to use the language to say were not going to raise rates anytime soon. The issue with quantity taifb easing. Do you think its going to be bad news . Its difficult to say at this point. I think you have to watch the data points. Weve kind of been waiting for it. You just have to say what the results actually say. But i think the ecb is willing to support the banks in terms of any Capital Raising that they need to do. Clearly, they want to make sure the eurozone does not sit into deflation at the Central Point of their mandate. If you pay close attention to the outlook from a lot of these companies and should we put any faith or confident that they have any idea about the next few months, given all the uncertainties that were facing right now . I think big data gives lots of Companies Data points to take a look at. So i put the guidance at full face value. Really . Yeah, i do. I think theres enough data points that you can get if youre a company treasurerer or cfo on Realtime Data sales for webb traffic. You dont think big data is giving them an artificial confidence about the numbers . No. Given the shifts and how quickly the shifts can happen . The shifts can happen quickly. But i can tell you within even an outbreak of ebola is that any big data numbers . Well, no, but it doesnt in the necessarily stop you from Online Shopping at that point. Amazon missed royally yesterday. Yes, they did. So either all the analysts are wrong, amazon to some degree was wrong. In terms of what amazon is telling the market. They have more numbers and more data essentially than most companies. Again, im going back to why are you confident in big daetd . Because i think companies are figuring out and data scientists are able to decipher kind of what theyre seeing from big data patterns. Its not an exact science just yesterday, but its more information than the company would have had five years ago. How do you explain an ibm or coke or machicdone als. Ta make it low enough. The one thing you want to watch out of this earnings season has been Top Line Sales growth. If you see Top Line Sales growth continue to do well in the Second Quarter going into the third quarter, its a farther disappointment in the margin. Its funny, companies on a roll like apple, they down play the outlook. Companies that are not a roll, they seem to make it look better. Ibm, they said specifically they thought it was ibm specific. Yeah. She told us after it blew up. They didnt try and blame the she didnt say anything over the last six months. And i imagine were going to talk to him about buybacks. Broadly speaking. Did you forget about her completely . You have a feeling about buybacks. I think buybacks have their place. In the pecking order, once you your Capital Needs are met and your dividend needs are met, if you cant find a place to invest that month and get a return on equities, by all means, give it back to shareholders. Would you like them just to cut a check . Id rather have a check, to tell you the truth. The one thing i dont like about buybacks is the strategy where you borrow money simply to buy back stock. I think thats sort of selfdefeating. I understand rates are low, but at the same time, id rather keep the Balance Sheet stronger than that. I think buybacks have their place. Theres Nothing Better to do with the money, but only if youve exhausted the possibility for a decent return on equity. With the decline that youve had in the equity markets, there may be pockets. Do you think the lack of buybacks with earnings, they cant buy, right . Yeah. So would you ascribe whatever volatility weve had or some sense of volatility and some sense of the drop off to what percentage of the market do you think were corporate buybacks . Well, the decline that we saw from the middle of september to the middle of october was really about three quarter technical, one quarter fundamental. 0. 75 technical is investor conplace endsy and a buy back period. Youve got valuations for some portion of the markets that have been beaten down by energy, going into the end of the year. Seasonally, november and december sees the best back to back month gains and the biggest drops in volatility throughout the year. Youre going to have the last word. Youre here. Thank you. David stayed up in boston. You see, thats what happens, david. But anyway, we appreciate it. Enjoy. Thanks for joining us. Thank you. Thank you. On twitter, asking how much ebola is going to cost is a disgusting question. This is called cnbc. Were in the business of doing Disgusting Things every day. These are your these are your people. These are the people that follow you. And anything that is untoward and disgusting as money and profits, youre going to get those. But you attract those people. Think about that. Thank you, joseph. Youre welcome. Coming up, microsoft pushes into the clouds and paying dividend sales with that segment of the Company Double westbound is this a sign moving away from Traditional Software is the way to go . As we head to this break, take a look at whats happening in european markets right now with red arrows across the major averages. Squawk box returns in just a moment. Sglooe welcome back, everybody. Were seeing modest declierchbs th declines this morning. The nasdaq down by 11. 5. Netflix announcing three new original series. A newseries called f. Is for family, bloodline, and another about a mysterious disease that has killed everyone above the age of 21. You can see at this point, theyre back around 382. Not a massive increase, but off the lowest levels. Microsoft beating levels, stocks rooid rising on that news. Its up nearly 37 over the past year. Joining us now on set is ed mcguire, director and senior analyst. We will stick with that. And you came here with your microsoft phone. Nokia. I got a nokia phone. I had problems with the others. What i dont understand is the company gets a new ceo and the stock goes on a tear. But has the business gone on a tear or has youre seeing the benefit of a lot of years of planning. Im not going to say Steve Ballmer deserves the credit. But the company deserves the credit for sowing the seeds for success. But this whole idea of making the transition from being a product to a Production Services related company took a lot of planning. They caught a lot of flack over the years for running, booel being at a loss and now what were seeing is that customers are adopting office 365 and azure dynamics, some of their other Cloud Services and you can see it in the numbers. The multiple, 30 or 25 and what is the multiple now . Has the multiple expanded . Sure. The results have gone up, but not as much as the multiple. The results have gone up they havent gone up at all . No, they have gone up. It didnt go from 10 to 20 times earnings . No, it went from high Single Digits to low teens. Transparency helps a lot, too. Last year with the new cfo, we got new reporting segments. All of a sudden, investors could look into the numbers and see whats driving this transition. You can see the traditional licenses are inching along, just barely growing a lot like the other software companies. But their Cloud Business has grown 100 . If i were ballmer, whether i slept well at night was what kind of shape i left microsoft in, i would be sleeping every night like a baby. Revenues probably went up a thousand percent. They tripled. My other question, though, like this phone deal, he did do this phone deal before he left. Do you want them in the phone business . It was a it was a bad choice. They could have let nokia just die or they could have bought it. I think they had to do that for the survival of the platform. Whats interesting about windows 10 is theyre looking to unify all their operating systems. This may be a game changer down the road because if youre a developer, you can write an applicati application for a tablet, for a smartphone that will run all three. Theyre in the consumer game, obviously. Do you think they ever become a done nant force again in the consumer business . In the consumer phone business, i think that shifted. Phone tablets, pc. Well, i think the days of 95 market shares are long past us, but theyre humble. Theyve been an underdog for a while. So theyre competing on the merits. So office 365 had 7 million new subscribers this quarter. People see value in it. They realize they have to compete in the merits of an open environment. Theyre supporting android. You can get office on your ipad. They know that its you cant play the mono po lous game any more. Not too many 372 billion companies around, are there . 371 billion. Exxon. Let me ask you, last week, nadella was interviewed by jon fortt here at cnbc. He said there are three Big Companies that are real players and cloud. He listed microsoft, amazon and google. He didnt mention Companies Like an hp or oracle or an ibm. Is that a fair assessment, are they the three big players and is it going to be profitable . Yes and yes. So servers and storage as a Service Amazon is giving it away though. I think you have to throw sales force. Com in there. There are some Smaller Companies too. But hp is a slow mover. Ibm was trying to straddle a number of worlds and keep some of their lucrative businesses. Theres a couple of other things going on out there. Theres open source software. Satya nadella said they are run on linix. So this is a very different its surprising that that mirrors the general share of workloads in the market overall. But google has the scale, amazon has the scale, and microsoft has the cloud scale. When you start to play a race to the bottom which is what amazon has done, it may be coming back to bite them after this quarter. Microsoft is focusing on higher value applications. Like office, like dynamics. Thats what sales force. Com does too. When you buy applications, that doesnt get commoditized. One a 371. 361 is microsoft. I have it on my screen. So theyre in based on the close. Every tick. Wheres apple and i think thats tied for third, isnt it . Apple at 614. Exxon at 400 and change. Then i think microsoft and google. Many times in the past people have come in and said i would go short or long. And now thats walmart and ge are there. We appreciate it. Coming up, a medical breakthrough. Giving Heart Patients a Second Chance. Stay tuned. And when a market move affects, say, a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move, wherever you are. And start working on your next big idea. Introducing synchrony financial. Bringing new meaning to the word, partnership. Banking. Loyalty. Analytics. Synchrony financial. Engage with us. How couin jellyfish, protein impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Ok, if youre up there, i coulsmart sarah. Elp. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Yei could come by your place. My place . Uhh. Um. Hold on. Introducing the allnew volkswagen golf. Plenty of room for whatever life throws at you. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Medical breakthrough in australia, surgeons there have successfully transplanted hearts that had stopped beating. Typical heart transplants rely on still beating hearts. Allows doctors to transplant hearts that have been still for as long as 20 minutes. Three people have received hearts using that new technique. Up next, ford is in the central making autolane. We will have results after this break. The all new, head turning cadillac ats coupe. Its irresistible. Sometimes, healthys not on the menu. Luckily, always keep my Meta Health Bars handy. My favorite bar, hands down. From the makers of metamucil, new multi health Meta Health Bars have natural psyllium fiber that helps promote heart health, with a taste that consumers prefer. Would you like one of these instead . Yummy thanks experience the meta effect, with our new multi Health Wellness line. And see how one small change can lead to good things. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with joe kernen and becky quick. Our top story, ebola in new york city. A doctor that treated those with the disease in western africa has tested positive after showing symptoms on thursday morning. Hes now in isolation at Bellevue Hospital. Well have a live report in just a few moments. In the meantime, the news putting the brakes on the futures. The dow would open down about 25 points. Nasdaq down 14 points. And the s p 500 down about five. Ford rolling out quarterly results. Lets get to phil lebeau who has those numbers. We knew it was going to be a bit of a messy quarter. Thats what we get from ford. But ford beat the street earning 24 cents a share. Thats a nickel better than analysts were expecting. Overall ford earning 1. 2 billion. Thats a drop of 1. 4 billion from the same quarter a year ago. A little light of what analysts were expecting coming in at 32. 9 billion. Just shy of the 33. 1 billion. A couple things to point out about the quarter. First of all, in north america, a profit of 1. 4 billion, down almost a billion dollars compared to a year ago. A lot of this due to the fact theyre in transition to the new fseries. And their production was down 25,000 more units than previous guidance. We just talked to some of the executives at ford. They said there were parts shortages for four vehicles. Europe continues to be a problem. We talked about this for some time. A loss of 29 million. Nearly a third of the increase in losses can be attributed to russia. The volume was cut in half. Negative cash flow from ford for the first time in more than four years. Down 700 million. People will look at that and say what happened. They shut down production the finl five weeks. That obviously impacted receivables and as a result negative cash flow for the third quarter. But heres something that people will grab onto when they look at the positives here. Pricing in the third quarter, an increase of 281 million. What was that due to . Trucks and suvs. Weve talked about this for some time. Well talk about it as well with bob shanks, the cfo of ford when we talk with him on squawk alley later this morning. Pricing is where its at this morning for trucks and suvs. Thats a big part of some positives in this quarter where ford beat the street earning 24 cents a share. Back to you. All right. Thank you. Procter gamble reporting too. The number was in line with expectations. It was 1. 07 which was right in line. However, the revenue number was above. I believe wait a minute. Yeah, okay. 21. 313 was the revenue. I saw 20. 8. And actually the number that the company went with on revenue was 20. 79. Okay. So more or less in line. The organic number for sales growth was 2 . Theyre saying that is basically in line. Theres also the recent management shakeup. I just went through the actual memo. A couple of them got new positions. Were going to talk to the cfo. Im sure he wont have a lot to say about the management restructuring. But we will ask him about that as well. Hes going to be on in just about 10, 12 minutes. Talking about the guidance for the full year. Theyre reiterating their guidance ranges for the full year. They say that earnings will be heavily influenced by the variation of Foreign Exchange impacts from period to period. They do expect significant negative sales impacts from Foreign Exchange for the current quarter. The october to december 2014 quarter. They expect organic sales growth in the low single digit range. Theyre trying to slim down the product mix. Once again p g has had to reinvent itself. You never know when to expand your offerings. Whats too much . With the product that has a very loyal following of people. The Company Achieved these results despite what he calls a difficult operating environment. All i know is those pods, those tide pods, people steal those. Theyre expensive. Same thing with razor blades. Thats why theyre locked up. And if you put them in your luggage, they can be missing when you get to where youre going. Like, wheres my pods . Theyre small, theyre salable. More now, shifting gears entirely again like we have to now when theres a case confirmed in new york. Im talking about ebola. Meg first rtirrell joins us fro york. Hello. Were here outside of bellevue where the patient is in isolation treatment. We know hes 33. He was working in guinea, one of the three affected areas in africa. He arrived at jfk on the 17th. Tuesday night he was feeling tired. It wasnt until yesterday morning that he became feverish. Its important to note Health Officials say ebola is not contagious unless patients have fever. He was out on wednesday night. He went to williamsburg and also was at the high line park. Mayor bill de blasio yesterday emphasizing that people who have taken the subway with him shouldnt be worried. There was little risk on the car with him considering he wasnt feverish at the time. Its also important to note that Thomas Eric Duncan who was the first patient diagnosed in the u. S. In dallas had 48 contacts in the community and among Health Care Workers. None of those folks came down with ebola in the community. It was Health Care Work who are did. So thats a concern here. But bellevue is one of the designated hospitals in new york to be prepared for ebola. Theyre handling that here. Andrew cuomo yesterday emphasizing there was a lot learned from dallas. And we know the cdc is looking here to help with the efforts. All right, meg. Thank you. Just Something Different about we have treated doctors that have come back but we knew as they were coming back. Right . They brought them back to make sure they get better care. Right. So its just that period where he was theres a period when youre lethargic and a period where you have 103. And you got to hope that if you think youre lethargic, talk about selfcontainment or selfisolation. Thats when you should do it. He said afterwards he was tired the night before. But that was the night he was out. But he became lethargic to me the second you become lethargic he said it was higher the night before. Did he take his temperature . Taking it twice a day. He said the first time he caught it was yesterday morning at 11 30. But it was already 103. 5. I dont know how you go from 98. 6 to 103. 5. I dont either, but it reacts different in each person. Just being nice . Yes, i am. Because you know what i said off the air before. The dow down just over 2 for october so far. Our next guest is one of the top deal makers and says there are ten reasons to be worried about the markets right now and ebola is just one of them. Joining us is Peter Weinberg. Thanks so much for coming in. Thanks for having me. What does this list of ten include . Well, you know it as well as i do. Just start in the middle east and that fills up at least half of them. Whether its iran, syria, isis, israel. And then moving to the larger economies in the world. Look at europe and china and how those are very different economies today. So ive always recently said markets are quite resilient. Id agree. But you add on yet another issue, maybe this ebola issue, i dont know, it could be a significant problem. Maybe its a Tipping Point. Maybe all these other things that hadnt mattered to this point. Thats how weve all seen it over the years. Little things make a big difference in the market. And its never that one thing. Its always just the accumulation of concerns. 0 money around the world could explain a little of the resilient, could it not . It could and it certainly does. But thats also one of the concerns. Were not going to be there forever. It looks like the u. S. Is letting out a bit of line on that. Or will at some point. We always say this economy is resilient. Maybe im just not noticing the real reason for it. I feel maybe the real reason for it isnt as confident. I think theres strength in companies. There are some very fundamental progress operating separate. Like last week with all the negive externalitieexternalitie. If were why does the market go up after the minute we see a respite for the bad news . Because theres nowhere else. And if theres no inflation until 2008, youve got to buy anything with a dividend. Nowhere else in the u. S. I dont know. You want to buy italian bonds . Theyre the same price as ours. I agree with that. The u. S. Is really we have issues, but on a relative basis, its attractive. Is it alternative because theres nothing else or is there really something good happening here . I think its a bit of both. Theres an e mor mouse amount of capital that buys around stress. Connect the deal making aspect of your life to the markets for a second. I always think of deal making as a barometer of confidence. In the Corporate Board room. You think were on the cusp or worried about all of these problems. Im trying to understand the disconnect. I think were i dont know what were on the cusp of yet. Well see. But im saying there are a lot of things in the world to be worried about. The volatility of the past couple weeks does that slow stuff down for you . No. It really doesnt. Board rooms dont sit there and make a different decision because of a hugely up day or down day. Theyll make decisions if the value of their own stock is significantly lower for a significant period of time. But it doesnt the volatility really has not affected our view of the deal activity. And all the factors that weve talked about many times. Which, you know, low Interest Rates. What about all these misforecasts though . You know, i think were going to continue to see that. And i think its i think the market is much, much too focused on the quarterly numbers. And it doesnt really matter. I mean, if you miss sometimes company wills come in over forecast and their stock will get hit. Sometimes theyll miss by a couple of cents and therell be lots of concern. You know, its more a question of the next three, four, five years. Where is the Earnings Base of the Company Going . Unless you have an activist investor on your tail. Well, that does, indeed, affect how a company will behave, how the board behaves and how theyll react. No question about that. So you think activists and investors are for the good or for the bad for a longterm investor . I think they can theyre both. We wrote this oped some time ago that said there are some activist who is are actually welcome investors and do create change that would not have otherwise been executed. But there are some shorttermers. Which i think are damaging to the market. But it just depends on all activists are not created equal. Peter is our guest host today. Well have more from him throughout the hour. Coming up, the breakdown of p g. And then later the professor and squawk market master jeremy siegel. Always bullish but what does he make of the volatility in the markets . Thats at 8 00 a. M. Eastern time. Squawk box returns a this short break. Sun will come up tomorrow. Procter gambles results out just moments ago. Matching estimates on revenue. 20. 8 billion. Initially the shares were a little bit lower. And now theyre higher. I mentioned that this guy was going to come on. John moeller. I think it turned around, john, which wouldnt be surprising. Now youre up 77 cents at 84. Tell me about the i always get confused about the organic sales growth. I thought you were three to five or something. The low end, isnt that what you told us you were going to do . Weve had some slowdowns. So were within that range. And one to three . Low to mid singles. Interpret that however you want. It was pretty much an online quarter. As you mentioned we delivered earnings per share that were pretty good. Up 9 which in this environment is very healthy. Paid 1. 8 billion in dividends. So it was a good quarter given the conditions. The all the scuttlebutt thats been out recently, are you narrowing products now . What is the rationale . Can you give me a quick summary on what you think the next manager will try to be doing to move into the future . What are you doing . Well, were strategically focusing the portfolio at about 70 or 80 brands across four Industry Groups and 12 categories. These are brands that are leaders in the industry. And we should be able to create a company that maintains the benefits of the scale of the Current Company but grows a little bit faster and is more profitable. Thats a really good summary of it. And long ago i stopped being just absolutely blown away by how many things Procter Gamble makes. Trying to have all those brands and how each one of them performs in every country around the world means you better have Great Computers and a really good ceo and good lieutenants and everything else. I dont know how you do it. So at this point, with the number you just said, is that below the number youre currently trying to sell around the world or about the same . Well be going down between 90 and 100 brands. Weve already done through the last five quarters weve discontinued or chosen to consolidate about 25 brands. Were well along this path. But we will have a significantly fewer number of brands. That will i allow us to focus all those activities you talked about son the biggest opportunities. We think that will make this a stronger company. Will you answer a political question or will you just blow me off if i ask . I dont know if i want to waste my time asking it. You have to ask before i can answer. Around the water coolers over the past week, like four people have been put into not early retirement but theyre leaving. People that were earmarked for bigger jobs. There are also others who got bigger jobs. Have you been sitting around figuring who is going to run this place or be in charge . Is it talking about nothing else over the past week . Were pretty focused on running the business. Were taking advantage of some normal retirements and normal attrition to build the structure to operate this more Strategic Company i talked about. Its interesting. Well have the the size of the Management Team will be equal to what it was in 2000 and the company will be twice as be ig. So its just about taking advantage of normal retirement and attrition to build the structure. The way you answer these questions, i would ive got my ceo. Yeah. No comment. Wont be part of the cfo council anymore. He listens and then just says no comment. All right. Well, thank you for go ahead. Jon, real quickly, with the different environment described in the release, what is that referring to . Is that the currency headwinds . The strength of the consumer around the globe . Its really referring to two things. One, Market Growth rates which continue to contract and develop in developing markets. And the currency headwinds. As well as some of the political mentionings. Developing markets are still growing midsingles. There are many opportunities in developed markets. Think of the aging demographic, for example. 10,000 americans are passing the age of 65 every day. Weve Just Launched a revolutionary treatment for tooth sensitivity. So its difficult but there are lots of reasons to be hopeful. Okay. Were going to let you go. All right. I have did you see the colts game . The bengals colts . Unfortunately, i did. Im done. Im done. Im done with the bengals now. I wanted to let you know that. You got to give it one more we week. No. Ive done it too many times. Monday night games, primetime games. Im done. Im done. Go ahead. Its called fair weather, joe. No. Ive had 25 years of torture and misery. Jon, p g is such an active participate and has been for many years. You have a view on tax reform and is part of that inversions . First of all, weve been a u. S. Domicile company for 177 years. So if the past is any indication of the future, were not going anywhere. But i think, you know, its an important question. When you have an uncompetitive tax rate and an economy thats globalizing, three things are bound to happen relative to domicile and mna. One, companies will move. Two, company wills get started offshore rather than onshore. And three, u. S. Assets will increasingly be purchased by foreigners. So company wills move, theyll get bought, theyll get started somewhere else. Thats one of the reasons among the many that i believe we need to seriously consider tax reform. That would you know, we want u. S. Companies to be fully competitive with the International Domicile competito competitors. Doing that will give American Companies opportunities to create jobs. This is a critical issue not just for our company but many. Were talking about american jobs, american industry, and American Standard of living. I want you to go back and just replay that, what he just said. This is the way midwesterners think without any of the b. S. That was simple, wasnt it . Thank you, mr. Ceo. Im just saying, i dont know whether thats going to happen. But anyway, we appreciate it. Thank you. Have a good day. Thank you. Breath in. And. Exhale. 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You can make your move, wherever you are. And start working on your next big idea. I wish. Please, please, please, please, please. [ male announcer ] the wish we wish above all. Is health. So we quit selling cigarettes in our cvs pharmacies. Expanded minuteclinic, for walkin medical care. And created programs that encourage people to take their medications regularly. Introducing cvs health. A new purpose. A new promise. To help all those wishes come true. Cvs health. Because health is everything. E cvs health. Financial noise financial noise financial noise financial noise welcome back to squawk box, everybody. In our headlines this morning, a new york city doctor is being treated in isolation this morning after testing positive for ebola. Hed been in west africa with the Doctors Without Borders group treating ebola patients. Well have more coming up later in the show. Also Procter Gamble at 1. 07 a share this morning. Its also exiting the duracell battery business. And mixed quarter for ford. The revenue was slightly below forecast. Ibm spent a hundred billion dollars over the past ten years buying its own shares. And yesterday pfizer announced a repurposing plan. Has the buyback binge gone too far . Were going to talk about that. Our next guest sits on the board of four fortune 500 companies. Suzanne nora johnson, she currently is on the boards of aig, visa, intuit, and pfizer. And Peter Weinberg is still with us. The ibm thing, when everybody looked at their earnings started a conversation about whether this whole buyback thing has gone too far. Where are you on this and i assume you must think theyre at least okay in some degree because youre on the board of pfizer. Theres been a question for a long time about whether Capital Allocation is correct. I think this is just part of the conversation. If you look over the last couple years, it has eped and flowed. Its something on every boards mind. Because theres no investor who isnt focused on it in some way. If you pursued a strategy three, four, five years ago, you looked like you were brilliant. Now it gets a little bit harder given where the market is to look as brilliant. Then the question becomes if you were going to use that money and try to give it back to shareholders, is it better to do it in the form of the buyback or a dividend or frankly better to do it in mna and try to actually build the actual business . I think the best Management Teams are always looking whats the best use of cash. And if theres organic opportunities, inorganic opportunities, that always comes to the top of the list. But i think theres a sensitivity of making sure that the cash is not there burning a hole in your pocket. And again, there are times when dividends make sense. This is not a new question or controversy at all. The only reason its back in the spotlight is because ibm is borrowing money and getting closer to the earnings, you cant do it right before. But theyre getting the stock up to a point to try to get the float down to get a better earnings per share number because theyve got nothing else going on. There are times that buybacks make sense. Look at icahns strategy with apple. Are there better investments to make or if not do you just retire some of your stock and put it down . Think if ge had bought back. 10 billion shares outstanding. Many say not all the acquisitions were brilliant. Its been at 25 for 15 years. Youre right. The discussions been a long one standing. I think particularly when youre in an environment of low Interest Rates, the opportunity to borrow is a unique opportunity from that standpoint. And dont forget that ceo when we link pay to performance, suddenly theres an additional reason to get the stock higher. When the share price goes up is ceo pay linked to earnings per share or other metrics . Its like the stock price. If you want to get the stock price up, you dont have to do anything right. You just get higher earnings per share numbers. The stock buybacks are not a gimmick or theyre not financial adhering. Unless they are. In a most simple sense, if youre sitting there with cash with zero yield to simply reduce the share count to provide those earnings to a fewer number of shares is a good thing. Thats just smart. Its not a gimmick. Its smart if you think the stock is undervalued or possibly fairly valued maybe. What do you do when thats not necessarily true. You dont think thats true . No. Because you can lower the stock value by retiring so how do you measure it . Institutions and suzanne youd have a good sense of this, but institutions are clamoring for capital. So every company doesnt have kind of limitless Growth Opportunities to plow capital into either growth or acquisitions that might not make sense. And most stocks dont range year to year. If youre running it right, it goes 30 to 100 to 300 to split. That means you might be buying stock. Joes right. You look over a period of time. Whats the average price you purchased that and what are they over time . Kodak, thats what everybody talking about. Buying back shares at 75 and 80. That probably was not that smart as it was going. Right . But with a microsoft or google, as youre buying, its like dollar cost averaging if youre buying back shares the entire time. But does it make sense to buyback shares especially if youre looking at zero Interest Rate . It certainly can. Theres been lots of examples where that worked. Look at gap stores. Gap stores has been a flat topline for ten years. A flat bottom line. But their stock has done beautifully well. Its a high cash flow of business. Which is from mostly cash generation. So better for dif dend or better what would you rather have . Or both . Whats better . It used to be the fact that Capital Gains was a more attractive tax rate than dividend. Its more complex. Many investors who are not taxable so they dont really care. I think it gives choices to move back. And from a Corporate Planning point of view, i think that Management Teams and boards take very seriously every time you issue dividends that theres a commitment this is going to continue over a period of time. Clearly with repurchases theyre clear with flexibility and what your other opportunities are. Let me ask you one other question because i know youre on the board of pfizer. We talk inversions a lot around this table. Your company had considered one or maybe is still considering one. How do you think about that particular issue both from what the government has done over the past two months. Do you think its now changed the game where companies arent going to do it . The political sort of response, the public sort of response especially when you think about Companies Like a pfizer that are living in the public arena. The most important thing here is we get some kind of tax reform that makes the u. S. In a competitive situation. And that is critical. Because if we really do want to be on a level playing field, we need to get it right. Thats a hard thing to do. Fax reform has many mouths it has to feed. Such a ridiculous argument. You look at the walgreens transaction that did not turn into an inversion. You may argue off the air. But they didnt. I could argue to you and i think if you talk to people in the room, part of the reason they did not do that deal was they literally believed the consumers, there would be a backlash. Right. You should not have our companies wanting to leave and have to worry about a pr back lasch. They should want to stay here because of the Business Environment we have for attracting capital. To talk about patriotism and whether you want to pay taxes . Its a moot point. Its stupid to have this argument. We need to fix it. But i think its about strategy. I really do. A strategically attractive transaction. Forget the whole tax but some of them werent. Some were done just some were not. I dont fault them. I talked to ian reed about why he was thinking about doing it. He could spend a billion and a half more money on Research Based purely on not paying that billion and a half in taxes. On facilities, on manufacturing, on all these different things. And you knew he would . No. I think hes lie and wants to get it in his paycheck. Not in his paycheck. I take him at face value. As a dividend or as a buyback. Oh, no. It might go to shareholders and then they pay taxes on their dividends . Thats a bad thing . Im just saying the arguments all im suggesting is the arguments made for can you come back on other days to help me . I cant get anywhere. Its the generation x thing. The two of us have differences as generation baby boomers. My parents are baby boomers. Im like generation a if you guys are x. Thank you for coming in. It was good. Thank you. Youll be here for awhile longer, wont you . I will be. Were baby boomer bros. Up next, craft beer golfer and brewer Graeme Mcdowell. This guy, anyone who watches the rider cup, you love him but he kills us. Hes going to tell us about his new Business Venture after the break. Irement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Its in this spirit that ingu u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. A pet friendly hotel. Visit a tripadvisor pet friendly hotel. With millions of reviews, tripadvisor makes any destination better. Chocolate, soybeans, thisand apricots. Made with what kind of chef comes up with this . A chef working with ibm watson, on the cloud. Ingredients are just data. Watson turns big data into new ideas. And not just for food. Watson is working with doctors and bankers to help transform their industries. Today theres a new way to work. And its made with ibm. Three of the top names in professional golf are now in the beer game. Bradley, mcdowell are launching a series of craft beers through golf beer brewing. Fas joining us now to talk about his new venture is Graeme Mcdowell. Its good to see you. Thanks for joining us. Good morning, guys. Thanks for having me on. Appreciate pit. A lot of other stuff going or, so we got to do this fairly quick. You love a certain style of beer. Thats the rationale. Freddys got the scandinavian deal. You got the celtic style. And keegan is doing new england. Youre going to brew it in lakeland. So sort of the craft beer phase and its telegolf pros. The concept being golf and beer are very synonymous with each other. Many golfers getting in the wine business. We felt there was a niche opportunity to get into the beer market. Craft beers being the emerging market here in the u. S. And, you know, obviously trying to get golfers away from maybe their standard brew that they enjoy on the golf course. Were trying to create approachable craft beers that can bridge that gap between the light beer drinker into the craft beer industry. Some of the craft beers can be a heavy taste profile. Weve gone with more approachable taste profiles. We hope golfers can choose a beer and have a little fun with it. I think that makes fun. I cant imagine ordering a glass of wine there. Unless they face you in the ryder cup, i think id have something harder maybe. Especially after who was that Jordan Spieth that ran into the buzz saw that was Graeme Mcdowell . What were you three or four down . Yeah. I was three down. I thought i was running into the buzz saw that was Jordan Spieth but managed to dig deep there. That was an amazing weekend. The ryder cup is special. I played with keegan on friday afternoon. We were joking around we needed some of our brews to be around on sunday evening. Perhaps after the ryder cup, something harder. People go into wine, i think if its something you like why not give it a shot. Youve got to expand your horizons. Youre not going to be you know, you probably played for a long time. Golf can do that. But youve got some other Business Ventures as well. I know youve got a tracking device as well. But, you know, were going to have to have you in studio at some point. And talk more about it. Were huge fans even though you hurt us badly the last two ryder cups. But thank you. Were going to keep it short today and im going to try some. Its called gmats celtic style pale ale. I think its approachable, refreshing. Its a 19th holer. Whatever youre into. And we got to do u. P. S. Theres a lot of earnings hitting. Thank you. More on where we can buy it and well check back with you in the next couple months. One of these days were going to get out, ive invited you before. I know you can play without me. But id like to play with you. Thank you. See you later. Definitely. Ill pop in and see you guys some time. Thank you. U. P. S. Coming out with better than expected earnings. Came in at 1. 32. That stock is up right now by about 1. 5 . I had indications higher in the last couple minutes. Thats a 13. 8 improvement. U. P. S. Says its because of growth across all three of their segments. They talked about daily packages in the u. S. The man both from the consumer side and the business side improving here. Shipments up 9. 4 . And they say that they delivered 1. 1 billion packages around the world. Thats up over a year earlier. Also talked about how they continued to make investments in expanding. Thats going to be watched so closely. Last year with the weather, it was a problem for both fedex and u. P. S. Thats what people will be watching closely. Right now you can see that that stock is up by about 1. 5 . When we come back, were going to ask Peter Weinberg more after the break. And in the next hour reaction to u. P. S. Earnings. Squawk box will be right back. . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. You know how fast you were going . About 55. Where you headed at such an appropriate speed . Across the country to enhance the nations most reliable 4g lte network. Hows it working for ya . Better than ever. Howd you do it . Added cell sites. Increased capacity. And your point is. So you can download music, games, and directions for the road when you need them. Whos this guy . Oh thats charlie. You ever put pepper spray on your burrito . I like it spicy but not like uggggh spicy. He always like this . You have no idea. At t. The nations most reliable 4g lte network. Welcome back, everybody. Lets talk soft drinks. During a rapid fire question and answer period with Mario Gabelli yesterday, we asked him which stock he likes better. Coke or pepsi. I like them both, but im betting on dr pepper because its 15 billion. Has good numbers, good cash flow. Buying back stock. Dr pepper snapple stock jumped yesterday after they reported earnings of 98 cents a share. The stock hitting a new high. One of the biggest gainers yesterday was dana corporation. Mario talked about that earlier as well. Just tells you the power of the guest host. Joe . Toyota selling some of the stick in tesla. Toyota said it will continue to study possible cooperation with tesla in the future. It had sold 4 stake in tesla for 780 million. I dont know what any of this means. Why would they sell . Maybe it says something. Facebook announcing its latest project. It is a throwback to the early days of the internet. Facebook rooms is an app that hopes to revive the idea of internet forums on mobile devices. No identifying information is collected. Users can create an Anonymous User name and share ideas. It is available with apple and theres an Android Version in the works. What is it called . Rooms anonymously. Im still a myspace guy. Love it. No. Ive never gone on either one of those things. Ive tweeted. But now im souring on tweeting. I am. Are you . I soured a long time ago on tweeting. Did you really . Yeah. There are many people on twitter for just one reason. Just to be obnoxious. Ive been tweeting this morning. I caught one of those this morning too. Really obnoxious tweeter. Its like, weird. Theyre sitting there waiting to trolls. Theyre called trolls for a reason. Theyre under the bridge. We got to get to our guest host, get a bit of an outlook on todays deal environment from shakeups to breakups. Peter weinberg partner and head of corporate advisory. Before we get to that, i want to ask you, two things that have happened in the boutique advisory business recently. One is you hired a ceo in bob steele. I want to understand the thinking behind that as a founder and then deciding youre going to let somebody else kind of run the place. And then peter paul toudman former Morgan Stanley is going to take over a blackstone business and what that means to the landscape. We met as a partnership last fall and came to the congratulations that we were not market share constrained. We happened to be in the fortunate position where the boutique model is attractive to clients and there are enormous opportunities. Were just thrilled to have bob, a person of his experience and the divorcety of his experience. Ive known bob for many, many years. Hes fit us like a glove. Hes been with us for three or four months. So its great. With paul, to me, its sort of a similar theme in that its the ultimate affirmation of the independent model. Here youve got blackstone who started life as an Advisory Firm surrendering that business or giving that business in exchange for equity. Its a wonderful affirmation of the independent model. And so what happens to jpmorgan . Its never binary. I think the boutiques have more market to run. I think they have 25 of the market now. I dont think its going to 50 . Maybe close. But the big firms need to provide a very Important Role in advising. Spinoffs, weve seen at hp. You had advised them years ago when they were thinking of doing Something Like this maybe ahead of time. Then we have ebay doing the same thing. Were going to see more of that . This has always been the issue where you have a business where you have a cash cow and you have a growth business. Theres some markets that like those coupled together. And theres some markets that like those split. This is a low Interest Rate environment. So the cash cow independently can pay back capital to shareholders. Thats a good thing. And the growth businesses can finance in this low Interest Rate environment. So this happens to be an environment that will sort of provoke and embrace spinoffs and splitoffs. Okay. Peter, thank you. Thank you. Appreciate it. Thank you very much. Good to see you. Thanks. When we come back this morning, a new york city doctor is in isolation after testing positive for ebola. Before that he was on the subway, he went bowling, he jogged, he was in an uber car. How difficult it is to retrace his steps and locate who might have come into contact with him. Up next, Market Reaction to the news of ebola in new york city. We saw some declines from the highs yesterday although the dow still finished up by 216 points. Modest declines right now. Question is there markets follow europe lower after yesterdays 216 point rally . Squawk box will be right back. You probably know xerox as the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Andrew Ross Sorkin and becky quick. Youre looking at a live shot now of Bellevue Hospital. Where last night dr. Craig spencer tested positive for ebola. Spencer was working in guinea and returned from west africa to the u. S. Last friday. He lives in harlem. Took a subway, went bowling. Its unclear whether hes going to be moved to one of the hospitals that has successfully treated other u. S. Ebola patients. A new york mayor says that Bellevue Hospital for its own right is prepared and equipped to handle dr. Spencers treatment. He didnt go in until he had a 103. 5 temperature. I think he was vomiting at 103. 5 yesterday. Maybe just felt lethargic and tired prior to that. Hopefully when he became symptommatic the first place he went was in. He knew because he was selfquarantining himself. Bad selfquarantine. Not really. He was staying away from other patients. We should tell you about another disturbing situation. A man wielding a hatchet attacking on the street. Video shows the man charging towards the officers. One officer was struck in the head and is in critical condition. Another was struck in his arm and is in stable condition. And a female bystander was struck by a bullet and underwent surgery. Police are investigating whether it could have been inspired by the terrorist attacks in canada on wednesday. And in the post and daily news, it points out theres nothing we know at this point. But he had recently converted to islam. We dont say that . No, we said that yesterday. In canada, yeah. This guy. Oh, this guy. That i did not know. This guy too. I think. Unless i read it wrong. Unless im reading it whether its related to the guy yesterday. I thought i read that. Were going to switch gears for a moment. Well come back to that in a bit. That matches estimates on revenues at 20. 8 billion. The company will split off duracell into a separate company. Also ford reporting earnings of 24 cents per share. That beat expectations. Revenue was short of wall street expectations. And u. P. S. Beat estimates with revenue beating forecasts as well. It sees december shipments up 11 from a year ago. Its been a big week here on cnbc. Bold calls by big market players. Dominic chu has been tracking the whos who of wall street and joins us now with that this morning. Good morning to you. Good morning. Our air this week at cnbc has been chockfull of heavy hitters in the markets. You name them, theyve been here. We picked out about four of them to give you an idea of the big elements these guys have said. Now, first of all youve got Mario Gabelli on yesterday here of squawk box talking about the current level of the market. He said and this is interesting, that, quote, this is a reasonable place to kind of pick your place and start buying stocks. So gabelli who handles a lot of institutional money says this is a good place to start buying stocks. He likes graco, a couple of big names he thinks are good buys at this moment. Gabelli, buying the dip. Another guy buying as well is David Einhorn. This guy, a Big Hedge Fund manager. Makes a lot of smart bets. He has been buying the dip as well. In the last couple of weeks weve been able to pick up a bunch of things were pretty excited about. Now, of course, David Einhorn has most closely been associated in recent knews with stakes and views on apple. Also the Semiconductor Company as well as sun edison. Now, carl icahn lets go to kyle bass first. Kyle bass, the end of qe on a macro theme says, quote, when the training wheels come off the market in central bank land macro becomes functionally much more relevant. Other places like japan also, japan maybe going to ramp things up. We know europe has its own problems. So again, thats it. Kyle bass. The one that were talking about right now overall, this idea that we have macro and micro effects, the idea we have all these things at once, maybe the heavy hitters have something at least we know about. With einhorn, gold was his thing for awhile. Not the only thing, but dead wrong on gold. By saying wow, i like some of these and then turn bullish. I dont think he was that bullish on a lot of the overall prior to that. To say, wow, we were able to buy things indicates to me he might have come out over the past three years. If youre one of those guys that were worried they werent in. They do pick their spots on the market. Its about whether they can string these stock picks together. Thats what generates the returns. Past performance is not indicative of future performance. You have to say probably pretty indicative of but you cant give a past to everybody. You can be hot and cold. Even john paulson, guys like that. He made a great bet and maybe not a great bet on gold. Youre right. These guys do have their ups and downs for sure. So let me do this. Let me give this. Lets welcome in one of our squawk market masters jeremy siegel. He is a finance professor at university of pennsylvania wharton school. Good morning. Good morning. Happy to be here. I would not know what to do if they did you hear my question, professor . Are we on track to hit 18,000 . It looks more likely now than it did about ten days ago. I remember when we were talking last week, what did we say . We said everyones waiting for that 10 break. When everyone waits for something, its not going to happen. It certainly looks like we put in a bottom last week. Of course with this rapid comeback, almost 2 3 of the decline, it might take a rest far little while. But i just read a report weve had almost 200 firms reporting third quarter. 79 . Professor, when did we get ebola scare mostly alleviated . Yeah. I think when those individuals in isolation in texas before the latest news. Before the latest news. Well, i think that we also heard some major countries in africa have been declared ebola free. I mean, i think a combination of those things have lowered the anxiety. I mean, this new york city much less anxiety associated with this. I think as a result of what happened in texas was happened in many countries. I think this also will be isolated and taken care of. A major cause of the bounceback we have seen. Right. And i think no one should panic at this point. I think you can take a lot of consolation from the way things did play out. Not only in nigeria but also in dallas as you point out. As someone that for years you have a certain target in mind for the way the global economy, how it should play out in terms of the stock market but when Something Like ebola does come along, were there moments where you say all bets were off low probably, high impact. Are there times you say everything could be moot based on this . There always could be threats. I personally didnt feel that ebola was going to be, but bird flu which is transmitted through coughing in the air, that sits as a threat that could come up at any time. You know, weve seen a few episodes of that. We are just one step ahead of some of these possible pandemics that can throw a wrench into the estimation of the markets. And theres a lot of different gradations. Fewer people shopping in crowded stores or anything any of those things. You dont need a full bloen outbreak to affect that. I think the connectedness of everyone, were all on the web. Wow in a matter of a few hours you have everyone staying home. You know, its a first reaction that you have. So in some ways, i love the connectedness of everyone. But it can spread rumors. It can spread fears, anxieties much faster than weve ever seen before in the past. Do you think the fed is standing there ready . Thats one of the things people pointed out last week. We got down 5 and we already had guys saying if we need more qe, were standing here ready. They do seem ready to prevent things before it goes down. It was the time we heard the yellen put. I do think the reaction of a few of those fed members last week was really based on what we saw with prices. Everyone the hawks will soften up when they see prices going down. So it was not just the stock market. It was also a trajectory of prices below the fed target. Wref had a bit of a bounce in oil. But the hawks and the doves both look at those prices. If you take a look at the futures market theyre saying we may not start hiking Interest Rates until late next year. Not just spring which is what the expectation was before this oil price declined. So theres a lot in the mix. Weve got to go. Back to my intro that was so i like sod much. Do we hit 18,000 . 30 we do . You know what . Im going to say 50 50. Now no one can say im wrong. Dont do time and direction. You got to do one or the other. I know. I know. Perhaps ive been sticking my neck out too much. But listen, november and december have been good months for the market. Were only about 7 away. Right. Its definitely possible. And another possible bottom in october. Its so weird. Its weird it keeps happening if it does. Its like halloween, its that weird. All right. We are schizophrenic with the music this morning. Scary stuff to the happy stuff. All right, professor, thanks. Well see you again. Thank you. The tease im about to read is the scary stuff. How many people could have been exposed to a doctor who has tested positive for ebola. As we head to the break, look at equity futures at the hour. Dow looks like it would open off down 27 points. S p 500 looking like it would open down at five points. Back in a moment. She inspires y. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. 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Craig spencers steps is of utmost importance and a serious challenge. Meg tirrell is outside Bellevue Hospital where hes being treated. We just got word we know youre going to talk about. We said 103, you dont go from 98. 6 to 103. That worries us because he was out the night before. Now thats been corrected. Its not 103. He had a temperature of 100. 3 which would seem to be more that would be a positive data point. Hugely positive. Can you confirm that . Yeah. Nbc has confirmed it was 100. 3, not 103 degree fever that dr. Spencer came down with yesterday morning. Thats a lot lower obviously than 103 degrees which people were questioning. That seems very high. So 100. 3 is what we know right now. This is new york citys first case of ebola. Were here outside of Bellevue Hospital where he is being treated in isolation. Im sure a lot of new yorkers are feeling concerned this morning. But the governor and the mayor out there trying to reassure people there is little risk of this spreading in the community. Governor cuomo on the today show saying theyve learned from experiences in dallas. We have been preparing literally for weeks on a coordinated plan between new york city, new york state, federal government, cdc. There are also a lot of concerns from new yorkers that dr. Spencer got on the subway. That was before he started feeling feverish yesterday morning. But we know he was feeling tired as soon as tuesday. This is not spread within the community in the united states. Only among Health Care Workers. Bellevue says its been prepared for months to do this. And theyre one of the designated ebola hospitals in new york. Hes in a designated unit here in isolation. Other calming words today from kent brantly saying in part, quote, it sounds like new york has done everything right to contain the case. I hope the of new york can set an example for the rest of the country by handling this with reason and calm. Thank you very much. Well check in with you later this morning. Joining us with dr. Scott gottlieb. He is at the American Enterprise institute. Youve been following ebola along with us for some time now. I wonder what you think about this latest development. Well it looks like were having some problems. Hes in san juan. We knew there had been some technical difficulties. Again, the issue is he back . Oh, scott are you with us now . Yes, i am. I was saying you have to admire this individuals courage for going over. You knew the risks he was taking. It does appear he presented hot. Now the new information the tests came back very quick which suggested there was more virus in his blood. The fact he got a quick early result on the test to determine he was positive. All right. Yeah, weve been grappling with that and how to interpret when you are able to do the tests. So youre now confirming it has to do with whether how much virus is actually in the blood stream before you can actually pick it up. Why isnt it more isnt there a way to do it its an rna virus isnt it . Looking for the rna. The assumption youre not contagious until you develop a fever is based on what we know. You dont have detected virus in your blood until you have a fever typically. But keep in mind our entire body of Clinical Knowledge constitutes at 1600 cases. Most of the time we didnt have sophisticated tools to really examine those patients. So were learning a lot. Theres a lot we dont know. There is a variable presentation. Some people present with higher virus loads early in the course of the illness. Some people dont. I think were seeing that with the cases here in the u. S. Some people present very sick. Others dont. Do you make a distinction. I mean, we took it as good news this morning that it was at 100. 3 fever opposed to 103 fever. And we took that and i think people are taking that as good news because the view was if he was out the night before, had been to a Bowling Alley, on the subway, perhaps maybe he wasnt contagious then. If he was 103, its a rd to get to 103 without having gotten hotter along the way and maybe the night before he was sicker than we thought. Right. The lower temperature is reassuring to some degree. It suggests he was less hot. The fact the test came back positive so quickly, suggests that he was. Keep in mind there isnt this binary moment where you become all contagious and youre completely not contagious prior to the onset of the fever. We dont really know. You typically are not very tajs. And the virus itself accumulates first in the liver and not in the lung tissue. Its harder to transmit it early in the course of the illness. Very quickly, weve talked about the idea this is a heroic individual over there trying to help people in western africa. Should there be any sort of a quarantine period if you are coming back from working with patients directly who had ebola, should you be in a selfimposed quarantine period for 21 days . Well, sounds like he was being careful and selfmonitoring and watching his context. Although one is now under quarantine here in the hospital. Cdc should actively monitor people who come back with telephone calls and followup. Its less likely for a Health Care Worker that is going to know about the onset of the disease. But you want them, though, this goes to the idea of do you want them in a subway, taxi, thats the issue. Right. I think thats going to be hard to impose. If we do do that, if we impose a system to quarantine people up to a month after they arrive back, thats going to discourage Health Care Workers for going over there. He wasnt providing medical care. It looks like he was taking proper precautions based on what we know and im speculating here. But it looks like he was taking proper steps. Scott, in a word were you surprised at the positive outcome in dallas . Did that even as much as you know did that surprise you that no family members i mean, thats good. Yeah, i was very surprised by that. And that is reassuring. I was under the assumption based on what we were told that some of the family members would be positive. All right. Dr. Scott, thank you. We appreciate it. Coming up, with the busy season for u. P. S. Around the corner, were going to talk to analysts about what you can expect. Ding never stops, tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea, schwab can help you take it on. Tdd 18003452550 were getting a lot of questions tdd 18003452550 about organic food stocks. Tdd 18003452550 [ male announcer ] sharpen your instincts tdd 18003452550 with indepth analysis by schwab experts. 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The all new, head turning cadillac ats coupe. Its irresistible. Still to come this morning, brown delivering for investors. Well find out what theyre saying about the state of the economy. Squawk box will be right back. Financial noise financial noise financial noise train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. Welcome back to squawk box, everyone. Among the Companies Reporting on the bottom line is ford, u. P. S. Well also get fresh data on Housing Market data in about 90 minutes. The government out with new september sales. Theyre expected to fall 6. 9 negating part of augusts 18 jump. And pfizer has announced an 11 million stock buyback. But its hurt az astrazeneca. Also a partial Solar Eclipse made for a wonderful sight. This is a time lapsed view as the eclipse began. The moon blocked out part of the sun. People watched all over the country, weather permitting. Expect for areas in Northern New England and maritime provinces. The last eclipse occurred on april 29th of this year. Lets assess how companies are fairing. 40 of s p 500 companies have reported results. That would be roughly 200. Good. Thank you. 73 of now its going to get complicated those companies have beat expectations. Breaking that down even further, 91 of industrials and 89 of Health Care Companies have beaten the street while 100 of the telecom Companies Reported disappointing results. Here with us now is ceo of consensus matrix. I dont understand. Can you explain . What is this basically saying . Is it a bifurcated number . It could be the analysts are wrong. I think the analysts always get that wrapped that the expectations are low. I think earnings have been strong. Consumer discretionary, some weakness there. Had a couple of industrial names that came out really strong. I dont think we should be apologetic. Earnings have been strong. Well say theyre strong. Theres a lot of fear thats driving tnt we saw last week. If you look ate it from a corporate fundamental standpoint. Earnings are strong. That could push the markets higher. I like hearing that industrials are doing well. Consumer discretionary is out to me. It could be better because of prices. There seems to be a hangover from housing or something that still has people maybe its the unemployment doesnt feel like under 6 right now. Consumer discretionary is very misleading. I think you have Companies Like apple, chipotle, michael kors that are just outperforming the market like crazy. Then you have the laggers. Like mcdonalds who reported weak u. S. Numbers. And so its a mixed bag. You got to pick your spots there. But i think overall, i think oil prices are going to help. I think its going to be very interesting to see as the retailers start reporting, do they make mention of the fact that oil prices are down significantly. Where are you spending that money at . Are you dining with that, using it on retail . Youve got to pick your spots whereas i think in some of the other sectors, it tends to be a little bit more easy to pick whereas in consumer discretion, youve got to be selective. How do you explain this sort of multinational cocacola do you look at a cocacola situation and say its a cocacola problem . Its a mcdonalds problem. A lot of these u. S. Companies that are now relying on international for pretty much all their growth. You know, theyre going to be affected by currency fluctuations. Which have been well documented. But these companies that have just been dominating the u. S. So long are looking for other avenues. The International Market is really the only place where they can get that sort of growth. So i think its very interesting. Are we at a turning point with Companies Like that . Or is this a blip along the road . The reason i ask, you spend time with someone like warren buffett. Hell say coke is a company thats here to stay forever. Right. I dont personally cover the stock, but i think coke will be around in 20 years. Again, is it a good stock . Theres a difference between is it a good stock or is it a good company or is it a good, you know, like just is it going to be here in 20 years. Theres a big difference. Would i think coke is a good stock for the next 20 years . I dont think so. But is it a good company . Yeah. I dont know much more beyond that. The system to deliver whatever people are drink at whatever point in the future, you ought to be able to buy whatever. You think it should be a great business. If you manage it right. Even b if people arent drinking regular coke anymore. They might be drinking water. So sell the water. I think our perception of these names in the u. S. Is very different than it is internationally. I think thats something to really keep in mind. If you believe in the International Growth story, then Companies Like coke, mcdonalds, company with a lot of legs moving forward. Our perception is different. Our perception of coke is a sugary drink we dont want our kids to drink. Right. And the other question is does the rest of the world go on with the way we are going. Theyre still chain smoking in other parts of the world. I dont know. Its a tough call. Theres a time and place for that. Late at night, you know, cocktails. I dont mind it. Smoking . Yeah. I mean, im just not as much of a purist. Im not you havent been around it in awhile. I havent. I was at a cigar everybody smoking cigars. For the next week i walked in the closet and could tell i was at a cigar place. Anyway, thanks. Whats wrong with telecom . I think thats misleading. There arent too many reporting yet. Thats a bit misleading. Thats never stopped us before from making a statement. Thank you. Thanks. Up next, safety regulators urging car owners to repair their vehicles if it was recalled for a takata air bag. But is it too little too late . Is there a lot of confusion out there at this point . What should the government be doing . Were going to talk about that after this. Plus lets look at how the futures are shaping up now that were heading towards the open. Dow futures have pointed positive. Up one point above fair value. Everybodys waiting to see what happens next. Squawk box will be right back. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov welcome back, everyone. Capitol hill is increasing pressure on safety regulators. Takata to fix millions of defective and potentially deadly air bags. It could become the largest automotive recall in history. David shepherdson of the detroit news joins us with more right now. Thank you for being here today. No problem. This is a situation where not all recalls are equal. Some have varying degrees of urgency. This one seems like a pretty urgent one. Because if youre in a small minor accident, you could have metal shards thrown in your face. How do we get our arms around this . It is very serious although its a relatively small number of incidents. When it happens, its violent consequences. The government did take really an unusual step of urging people to immediately get fixed. A lot of companies dont have enough replacement parts. Companies like toyota are moving parts from the northeast and other parts of the country to the humid areas where they think the problem is more severe. Thats fine and well to be telling people not to be sitting in the passenger front side seat. But somebody has to sit in the front if theyre driving the vehicles. Toid said theyre going to have a case by case basis. Saying in the gate of gm, they did provide tens of thousands of recalls. Why doesnt toyota and these other Companies Take the same step . I think there is a lot of pressure on them to provide those loaners. I guess thats where we start to learn what the government response will be. Do you think there will be a stronger response from the government saying the companies do have to provide to me it seems ridiculous to say dont sit in the front seat but still told to drive the car. What this is going to do is put pressure on congress to decide if more safety reforms are needed. Nitsa requires a cumbersome twostep process requiring months and months and going to court. There are proposals to require the government to get urgently unsafe vehicles off the road. So i think the government is somewhat ham strung by relatively limited staffing and limited power. And the question is will the government get more power and will they take a tougher line . I think there is pressure on the government to do that. Who do you think are the winners and losers in this case . If you look at the Car Companies and takata . I think certainly takatas competitors in the air bag space like autoleave which provides air bags to other major auto companies. I dont think theres any winners in the auto space although there are some Companies Like volkswagen who dont use takata air bags. I think longterm it puts a lot of pressure on the companies to really look closely at these air bags. Remember, because there are so few suppliers more and more if theres a problematic part, it affects the entire industry. All right. David, thank you for joining us. Thank you. Coming up next, jim cramer live from the New York Stock Exchange as we get ready to wrap up another wild week on wall street. Then a look back at the week that was on squawk box from Richard Fisher to doug o oberhelman. All that when we come back. Dont just visit rome. Visit tripadvisor rome. With millions of reviews, tripadvisor makes any destination better. So visit tripadvisor. Com now. E financial noise financial noise financial noise financial noise u. P. S. Predicting a double digit increase in Holiday Season. Joining us now with reaction im sorry, i should not be laughing is don broaden. She a Senior Research analyst at avondale partners. You worked on that and then messed up half of it help me with this. Whats going to happen when we get to the holidays given the problems u. P. S. Had last year and how much theyre going to spend this year and how much we should be worried or the market should be worried about that . Well, that u. P. S. Has been very clear with shareholders, very clear with the public that they cannot allow what happened last holiday to happen again. And they have expanded infrastructure by 175 million and theyve gone to their line haul suppliers, people who supply them Surge Capacity and said build it for easter sunday. We will make sure youre compensated. We need the capacity. We cant let this happen two years in a row. And therefore, though, how much is that going to impact earnings . Well, thats the real question. I think theyre going to be successful in their efforts. Theyre got operating engineers. I think the concern in longterm and why we have the stock ready to hold is volume may come. But will the margins . I worry they may spend so much the margins will be detrimental. You just said 170 million. How much will they spend . Originally they said they would in addition to that spend more on transportation. Don, what do you make of whats going on in amazon, the whole move towards Free Shipping and how long that lasts given the margins that the market now wants to see from an amazon. I imagine at some point the other retailers too. Thats going to continue. That is an incentive by retail toers close the gap between i mean, think about it. Ecommerce. What is an advantage of brick and mortar over ecommerce . Immediacy. An etailer able to say well give you free expedited shipping in amazon prime. Thats a value that closes the gap at brick and mortar. Thats something id expect it to continue to be. After all, u. P. S. , fedex, the post office, theyre still getting paid. Its just embedded into the price. Well leave the conversation there. Thank you so much. Thank you. Down at the New York Stock Exchange, we are joined by jim cramer who joins us now with more. Jim, when we were talking a week or two ago, we talked about and agreed that there was an effect from the fear conjured up by the case in dallas. Patient zero. And it does appear now, jim, because of the positive outcome there, that i dont know, all of us have experienced a little bit more, i guess, to where we dont necessarily jump to the same conclusions begin. Is that fair to say with the markets being unchanged today . I think it is. If youre at the gutter bowlingr balling in brooklyn you would say, if the people who shared the apartment with mr. Duncan did not get ebola, i probably didnt get ebola because he was in the same room with me. People who rode on that subway car, i think they are less petrified versus a plane ride. When the New York Times led with it on the upper left hand column, i thought i wish they hadnt done that, but its a local story. People have come to the conclusion, those who said its morphed into something that spreads in the air were wrong. We just have to own the fact theyre wrong. Therefore, we cannot be as frightened as we were ten days ago. Right. Weve been using the low probability high impact. Impact means a lot of different things. Theres impact where maybe people dont go to crowded places as much or maybe they dont fly or maybe they dont who knows how that then theres the impact where youre really worried about some end of day scenario, which there is no reason to think of. There is a defensive what is it 110,000 Something Like that could happen . There are black swans we need to be aware of. Chance of being attacked with a hatchet on the subway yesterday were greater than the chances of getting ebola. That is true. As far as the numbers weve seen today, procter and gamble. That was significant. Are they going down 50 in the number of products they have . I dont know if you saw that interview, but it made sense to me why they would do that . Yeah. Getting out of the business duracell they bought. I think theres a lot of cats and dogs brands. They should be concentrated on a few billion dollar brands. Its like disney. Disney when they recognize weve got these billion dollar franchises. Lets keep making movies. Lets stop making these movies that bomb. I feel like proctor has products that are bombing. You are not allowed to take them out of existence. I think they really gotten religion, especially after unilever had a poor number yesterday. Proctor has to get its brands in a row and put the money behind the successful brands. Stop trying to beat everything. Kimberlyclark realized they cant beat everything. They got out of a lot of businesses. Proctor has to follow that model. Mr. Faulk got that right. I know that guy. He comes on. Yes. What other numbers stood out today . The bengal number against the ravens. He is a Second Chance guy. Im a little bit ive got a few years on him. He is still ready to bounce back from some of the recent things. I am not. I tried for a long time. I am still open to suggestions. We both like dallas, right . Dalton and duracell. Im wondering about marvin lewis at this point whether he gets the fire in the belly. You do have to wonder. I thing ravens take that division. Its a weak division. Afc north. There was a game on last night. I didnt know much about it. I didnt watch. I watched the whole thing. I feel for anyone who plays peyton. When the world series numbers came out, joe, and i saw those numbers, its getting beaten by reruns of how i met somebody, it is incredible. Its just devastating. I had Martin Franklin on last night from jarden. Gloves arent selling. No one wants a glove. We always had a glove when we went to the stadium. Games have gotten longer, less runs being scored. I dont know what to do about that. Give me world cup at this point. Womens gymnastics. Live sports is where its at, but pick your sport. Hockey. Im watching hockey now. Regular season games. Are you . Fliers pittsburgh they sang o canada and everybody cried. Watching that guy. Why was i you know, all our guys we lost over the years. For some reason that young canadian guy. Every inch of that article. Absolutely. So right. I know. Have a great weekend. You, too. Up next, a look at what the week that was. Opportunities arent 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. And youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. 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I do not believe we are going to delay the exit from qe. Nor do i believe we are going to see qe4 any time soon. What we will see is low rates for longer. Its a disruptive company. You talk about media, television, over the top, content, the one company that always comes up is netflix. When you look at what they are doing, very little content is being created in the united states. I think its going to extend there nationally without someone talking to netflix to see if they are interested in investing in that content first. No question the recovery is going to be slow. If you look at our sales history over my career, almost 40 years at caterpillar, most recoveries come out of the blocks pretty fast. This one is probably going to be a lot slower. In a way, its probably good for caterpillar and maybe good for the world arguably. Those are just some of the comments we heard this week. You have to admit, this was a big week for earnings. Weve seen quite a number of the s p. This is the heaviest week for s p earnings that come out. This gives us a good idea where we stand. All in even though there were high fliers that crashed and burned. All in, a fairly decent earnings. Good earnings. That accounts for the big move. One of the best weeks we had in a while. Even when talking to people today, i said lets just talk, just because we dont know. We dont know about these unknowns. We dont know about ebola. We cannot help but reference it from time to time. It would be something even if there were a slight transmission. On the margin could cause people to not spend, could cause a slowdown. What do you account for what happened two weeks ago . That had a favorable resolution for the markets. Hopefully happens again this time. Oh, yes. And for everybody involved. The doctor and his loved ones and everyone else. Well be here monday. Join us. Squawk on the street is next. Good friday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber back at the New York Stock Exchange. Once again, we are watching the premarket to judge investors reaction to that new case of ebola, this time in new york city. A lot of earnings to get to. Tenyear yields down 2. 24. Well get new home sales in about an hour. Gas prices at a fiveyear low of 3. 07 a gallon around the country. R