Transcripts For CNBC Squawk Box 20150911

Anybody on board why bother having the meetings at this point . Its a great place. I dont think they want to pay for the hotel room at this point. Our colleagues caught up with a member of the saudi royal family earlier today. Well bring you that in a few minutes. First lets talk about the goldman call on crude. The firm is cutting its forecasts. Its one month view is 38 barrel. Thats a significant decline and thats a fairly short time measure. Theyre saying 38 within the next month. A decline of 7 off the 45 its sitting at right now. The 12 month target is down to 45 barrel but goldman says the risk is that oil could fall as low as 20 barrel. They say that risk is rising. Among the reasons, a big sur plus of oil with the scarcity of storage space. In fairness its a differ guy. That was the super spike. All right. Equals, 300. No, wait a minute. All right. No, thats the wrong okay. 20 we think its going to 20. It was a different guy. But wasnt it 2007 right before i dont know. It was like 250 or 300. Its going to be a super cycle. But oh, no, okay. Let me just give me a second. No, not 300, 20. So make sure that you plan all of your investors based on this goldman call. Theyre sure this time. Its a pretty bold call to say 38. 300 was a bold call too. But remember we had Raymond James on and he said when the bottom was. Do you remember when he actually gave us he said to the day, we tried to ask him what was in the model. Wouldnt tell us what was going on. Joe continues to do. That was around the bottom. Let me check. For the shortterm. Joe continues checking Goldman Sacks math and well get you caught up this morning. Another big economic report ahead of the fed meeting. The focus on inflation today. The august Consumer Price index coming up at 8 30 eastern time. Also new data showing that investors pulling 16. 2 billion from u. S. Based stock funds from the weekending wednesday. This is nearly 4 billion in inflows during the prior week. Meantime attracting their first inemployees in three weeks. Washington news, treasury secretary jack lew says the u. S. Will still be able to borrow until late october but in a letter to congress hes calling on leaders to raise the debt limit as soon as possible to avoid unnecessary risk. I dont think well have another debt ceiling. I misspoke on oil. I said it was down yesterday. Yesterday it was up 4 but that was after a 4 decline the day before. Are you sure they knew that all of that stuff was definitely going down . Are you sure they knew the securities were shorter. You know my deal on that. There was nothing wrong with them. Did they really know okay did they say these are all going to go down because theyre going to sour these mortgages . I think they put together a deck of cards and another group of people thought they were great cards and they decided they liked those cards. Anyone that thinks that anybody knows anything. That they knew for sure what was going to happen. In Corporate News General Electric is selling the transportation finance unit of ge capital to bmo. They have been working on shedding financial businesses and says the latest transaction brings the total for 2015 sales to 85 billion. Shares of zs pharma getting a boost this morning. It initiated preliminary discussion with the Bio Tech Company and the Fiber Optics Company posting earnings and revenue below estimates and also offering weak guidance in announcing that the ceo resigned. A Small Cap Stock to tell you about this morning, its getting hurt particularly bad, zumiez. Its a retailer. It will fall short of wall street expectation. A big 20 hair cut on that stock today. The company blamed fashion mishits and back to school promotional pushes. If you have stuff not selling at full price thats probably harder than figuring out oil i cant imagine. Plus it has to be different. I looked at this today. I have another by the same maker, same type that just happens to be two inches thicker and now have to wear this. What have you got on today . Are you going to be anchor monster. Its a thinner tie. Multitone. Its two colors. Yes, yes, i do. I thought you dipped that in coffee or something this morning. Thats cool. Dark is a slimming effect. Yeah he needs a slimming effect. What do i need. Thats what they to with womens dresses. Look at him. If i sneeze youre going to go out on 6th avenue. Were still going to do our push up contest. Its not over. I hope youre training because you were not ready last time. You were not ready. Give me time. I dont even need the time. What have you been doing . Getting ready. You have . Thats good to know. You two go get ready. Youre involved in the next one. No, im not. You can use the girly knee push ups if you want. Im going to get in trouble for saying that because i know a lot of women at my gym that could kill me as far as push ups go. I cant get to 20. Its hard. Lets get a check on the markets this morning. Take a look at whats happening with the futures today. Yesterday we saw the futures all over the map. The same thing happened once you got into the actual trading session. The dow trading on a 230 point range. That was about a gain of about. 5 . You saw a similar gain for the s p 500. This morning it looks like the futures so far look to be indicating an open down by 54 points. S p futures are down by 7. 5 and the nasdaq is 20 points off of fair value. Markets show similar declines. The cac in france is down. 7 . Its down by less than. 2 . Overnight in asia you saw that the nikkei closed down by. 2 as well. Hang seng was a little weaker and shanghai was flat. When it comes to the ten year 2. 197 . The dollar is a little stronger against the euro but down against the yen. 11269 and dollar yen at 11256. Lets talk more about oil. Saudi arabia saying it sees no need for the summit saying its best to leave the markets alone. Hadley has an exclusive interview with the member of the saudi family. Good morning. This has always been about maintaining market share. I got the chance to sit down with his royal highness, the former head of saudi intelligence and i asked him basically does that mean your governments policies have been working. Take a listen. Everybody wants to protect their share of the market. Even nonopec companies. The u. S. Now is producing a lot of oil and they havent decreased their production of oil. So there is a consensus in the world community, particularly in Oil Producing countries within and out opec that things are going to change with demand and excess oil availability. I also asked the prince at length about the situation in syria. We talked about russia. Their military involvement in the country. That would be a huge mistake to continue. Thats despite a growing relationship. Back to you. Lets get back to the markets. David joined us in a squawk box exclusive yesterday urging a cautious approach. Im not probably as bullish as i could be because i have problems with earnings growth. I have problems with multiples. I have problems with all kind of problems so i cant really call myself a bull. However i will say this if you invest today in the stock market and people said that in five years even if you invest in 1800 and earnings grow a little bit. They grow 5. 5 a year or Something Like that you all make money and at the end of five years. Did that work for you guys. Is that in anchor Training School . Thats the toss . Is that how you i havent been to anchor school. Im not sure what theyre teaching over there. Here with their thoughts on comments on the broader market. How much money do you need to consider someone as a client. I dont want anything special but normal what is it . About 40 million. What . 40 million. About 40 million. Pretty good. You don go that high do you, david . At jeffreys . We probably go a little bit lower than that. Not too much. Do either of you im not going to ask you if watch, im going to assume that everybody watches. But tepper yesterday his basic contention is that things probably rnlt quite as bullish or friendly to Financial Markets as they have for the past five or six years. Do you agree with that . It makes sense. Growth momentum slowing. U. S. Forecasts have been okay but come in a little bit and thats translating to earnings numbers and downgrades and thats fed through this system. The surprise has been the surprising actions in august. One of the things that tepper kept noting is he thinks that multiples are based on Growth Prospects and not as much on interest rates. And they should stay low but he said if growth is slowing you put a lower multiple on there. If you two back 50 years, think of the average ten year note yield at 6. 5 . Its about a 16 multiple which is where the equity markets traded. If were going to go to five as the new 6. 5 or 4 as the new 6. 5 for the longterm yield then youre talking about a 20 or 25 multiple and thats a reasonable story line for a very long horizon but its still very longterm bullish. Why do i want to mess around with this when the fed is transitions. I think it was more of what the fed is going to do. I dont think he was looking ahead over the next two years and hes more worried about china and russia and brazil and Everything Else. His bigger point was we have been conditioned to think every time theres a dip you buy. Hes saying the new reality might be that every time theres a rally you sell. Thats a very shortterm transitioning period from the fed going from uber accommoda accommodative to slightly restrictive. Why do you want to mess around with the one period where theyre changing tact . Its a confusing time. Its the unwind of the greatest Monetary Policy experiment in history. Theyre turning it around. They dont know what theyre doing. The ioer is confusing and theres targeting of the short rate. The currency reverse could be drying up. Absolutely. But theyre still coming out of europe and japan. Follow the reserve growth. Out flows from mutual fund. Is that what happens at a market top. Theres a lot of things going on. People dont sell at market tops. Usually theyre crazy highs. By default they do. But you have other things going on. Nobody goes there anymore. You cant read a lot into the numbers. Its a september or october period. People pointed out it hasnt been the most lovable market. It hasnt at all. Theres been more money into bonds and clients looking at this as an tun to rebalance portfolios. Has any millennial ever bought a stock . Theyre looking at facebook or something. The 401 k is another thing. They have. I have decided im not worried. Theyre not watching so i cant make any of them mad. Cant offend them. Anybody millennials that are watching, tweet us. To try to bring them in is futile. 20 oil will help. Yeah, 20 oil will help. So both of you are saying keep a toe out of the door. Be careful in the u. S. And follow the stimulus. It worked here and the j. K. And worked well in europe and japan. Qe stimulus. I think it shopped great. Im shocked that its going to create a rocking of the foundation of the roach motel we created. How many guest versus been on here telling you shouldnt take the qe away. You shoechbt take rates higher. You had a parade of imf, world banks, academics, Fund Managers but this economy cannot take 25 basis points i want to know about it. I want to know about it now. Everybody is saying the ceo is the dollar getting stronger. The story behind that, not just qe is to follow the margin. If you think about the last couple of years youve seen a lot of trends develop. Youve seen the extension of the lead into high Profit Margins be sustained not just in the u. S. Youre starting to see that pick up in parts of europe and not quite there in japan but part of the story which is the monetary accommodation, free money but its been followed by nu fundamentals. If your horizon slong enough thats going to matter is that margin improvement over the next several years. Can i get a berkshire class b investment with merrill . No, because youre not allowed to own individual stocks. I know but for them to handle me. Blind trust. Blind trust. Blind trust. Its 40 million. I need like a millionth. We have smaller. Berkshire a is what im talking about. Im talking about that one. Im talking about the ones you wouldnt take my call if i called you. Id take your call. No, you wouldnt. We could pool no, we could never. That was a quick no. Give us a call. Jeffries is our place. Coming up when we return the mornings big political stories including the final cut list for the next gop debate and later our news maker of the morning. Bill ackman is going to join us. Hes ready sound off on his latest target. Snack giant mondelez. Well talk about that more at 7 00 eastern time. Were back in a moment. Take ted here. Im pulling together data he shared from his wearables, Health Records and family history, so we can analyze it. Hes doing everything right. For the most part. No pain, no gain. You are a beast, ted. My name is watson. How can i help you . Without the internet i would probably be like a c student. Internet essentials from comcast has brought lowcost high Speed Internet into the homes of hundreds of thousands of lowincome families. It lets students do homework and study at home. So far more than two Million People across america have benefitted. Internet essentials is going to transform the lives of families. I see myself as maybe an entrepreneur. Internet essentials from comcast. Helping to bridge the digital divide. Unless number one they know exactly why they would want to be president and two they can look at the folks out there and say i promise you have my whole heart, my whole soul, my energy and my passion to do this and id be lying if i said i knew i was there. Vice President Joe Biden opening up to Stephen Colbert last night and john harwood joins us this morning. That doesnt sound anything like somebody thats ready to he didnt have the greatest experience the first couple of times. Who needs it . At his age and hes sort of at a point where i think he is just going to ruin things if he were to challenge hilary and hes in a sweet spot right now. Obviously not in terms of beau but in every other respect probably john its a good time in life and he didnt sound like a guy thats ready to decide to do that. I think youre right. Thats exactly how i see it. Hes run twice for president before. You dont lose that desire to do it but given the tremendous run hes had as vice president. The personal tragedy hes gone through. His age, you can just see him. You can see him with a glow of good feeling from the country that would be in real jeopardy if he got into devicive race with Hillary Clinton. He is late in the game. She has been working at this a long time. So i dont think the pieces are there for him to decide to run for president. He hasnt he didnt definitively rule it out. His advisors have been game planning for him but thats what i saw from that appearance last night. Ive even seen and what he would be facing. I even saw someone bringing up anita hills. He was one of the headlines on the clarence thomas. They were going to go back to try to imtpune him. I looked at it like if i were joe biden, to go back and bring up my college career, all of that stuff, who needs it, right . And during the work hearings and the hearings over anita hill and clarence thomas. Those would be front and center. The things that took down his campaign for president in 19 88. The whole deal at syracuse with the allegations of plagiarism. Stuff gets drudged up in campaigns and joe biden is not in a position to embrace that possibility. Whether it will eventually happen or not. Lets switch gears to Bernie Sanders. Daniel craig likes Bernie Sanders but the public editor thinks hes not getting a fair shake. Do you agree with that . Hes been getting a lot of publicity and doing well on the trail. Run the best campaign of anybody so far if you look at what his assets are and what he was facing, hes been tremendously effective but i think that the argument was that theyre not treating sanders as somebody thats a real potential president in the event that he was able to knockoff Hillary Clinton. Its for me difficult to imagine Bernie Sanders winning to democratic nomination or getting elected president and i cant say i argue with that. Iowa and New Hampshire, thats what is weird about the process that we use here. It kind of gives you a head fake and it has in many previous elections where someone like a Bernie Sanders wins an iowa or New Hampshire but the clinton people know that that firewall in the south is probably going to hole, right . Yes, although if she sends up hughesing both iowa and New Hampshire thats a rough situation for her. Probably wont happen anymore. Is he waiting to see what happens with her before he decides in. People dont get in all that late. You have filing deadlines. I dont think that anybody has the luxury of saying im going to jump in in march after weve had a couple of primaries. I think that in that situation, if that happened, if Hillary Clinton took heavy blows in iowa and New Hampshire, her staggering in a very bloody fight in the nomination to see if somebody, maybe Martin Omalley who is somebody that more more than Bernie Sanders hasnt gotten much traction so far. If none of that is viable, maybe Bernie Sanders gets nominated. Its hard for me to see that. What do you make of cnns decision to put carly and christie into the next debate. After of the performance that she had in the kids debate last time, certainly theres powerful sentiment in including her and the cnn criteria was a little off. So they had reason to change their criteria. And its people they want to have in the doe bait. So you want chris christie. Hes a good performer on that stage. You want john kasich though hes doing well in New Hampshire, nationally hes not doing nearly that well. So theres nobody obvious you want to knockoff that stage. Rand paul has is in a logical place. We want the information but the way you just said it i was like yeah, for entertainment reasons but i looked at who they had and im look good im glad they have all of these also looking like king maker. Its a ratings thing. At what point does the crowd get thin . Cnbc is going to do a debate in october. Well find out when we have our debate in october, right . We havent published our criteria yet and thats still in a state of some evolution but debates increasingly are going to filter out. Those five people that are going to be in the secondary debate at cnn, those people are going to begin to see it clearly that theyre not going anywhere. Does that mean talking about the people not going somewhere does that mean that you think that well be talking about donald trump for another year . I doubt it but its hard to say. Were in uncharted territory and donald trump knocked the traditional bearings that we used to assess the situation all askew. So by any normal calculation you would look at somebody like donald trump and say no, hes not going to be there when it gets serious. I dont know why he would leave. I dont see why he would bow out tnch. 51 of republicans think hes going to be the nominee. Thats the amazing thing. It might be amazing to you. Nobody expected him to be part of the situation but becky if you ask what would make him i dont see it. What potentially could make him bow out is if he sees the prospect of losing primaries and doesnt want to lose. That would be it. I think we just need to watch him and i dont have any predictions anymore. I dont want to have any biases about what i think because i know how the main the Huffington Post decided i mean, how foolish is that to say its just entertainment. You are mainstream media, joe. No, i am not. Dont you call me that. Ill sue you for definition of character. Oh, boy. John, thank you. When we come back, well have a first look at hbos Bernie Madolf movie. Squawk box will be right back. Every insurance policy has a number. But not every Insurance Company understands the life behind it. For those whove served and the families whove supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Nfl season officially kicking off in fox foxborough. Patriots beating the steelers. Im going to do this just for the heck of it. Im not a patriots fan. Now everybody is saying that the head sets when you go to foxboro, theyre imlying that the patriots jammed the head sets. You have that and spy gate and deflategate. I just think that people ought to just beat the patriots. If youre really bad then beat them. Keep sacking brady until he cant throw make sure none of the tight ends catch any passes. Just go out and beat them. Stop wining and crying. He was a partial owner in the steelers and he didnt even bother going. I know. Make them never win another super bowl is what i have to do. So now they have to test the balls every quarter. I asked him. Who is going to inspect bradys balls . I dont know. Got your phone out there. We have suggestions for what to talk about, in this day and age im just reading the suggestion. Im not going to go into it. People have no concentration anymore. How do the noodles get through. Thats one. Save mine because im going to do it. Macafee thinks he should be president. Hes the most competent to run the country. Macys opening best buy shops inside their stores. Thats interesting. He was on colbert getting heckled. I didnt read into it. Man gets beaten in penis by rattlesnake because he was taking a leak out in the field. You made that up. No, i didnt. I thought you didnt like lists. I thought you were against lists. Im going to do it this way. Im adding one to the list. Youre going to go into it. Im going to do it briefly. Take a look at this image. Tell us whether you think this is mr. Madoff or somebody else. Do you know who this is . Its coming. That looks like andrew ross sorkin. There it is. So this is Robert De Niro and then Michelle Pfeiffer playing ruth. This one is for hbo based on wizard of lies. Theres another competing project, a mini series abc put together and that stars Richard Dreyfuss and blythe danner. To me thats like meet t tthe the fockers iii. Did you notice his slippers . Were those if you get down on the slipper there. Theres nothing else i want to know about madoff. Why should i care about wolf of wall street. He has his initials on the slippers and what is that on your ankle. Electronic monitoring. Because youre smart, youre thoughtful, you know these things. Lets see if im missing anything on this list. What else. Oh, theyre bad if someone played my music. I was thinking about doing that. Theres been a lot he played something, didnt he . If its not a cause you believe in you dont want your music and creativity caught up with it. Just be glad that somebody is list listening. I really think thats the first time hes ever been pretentio pretentious. He was so not pc in his response. That was the first time hes ever been selfimimportaportant pretentio pretentious. The migrant crisis. Youre watching cnbc first in business worldwide. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. More data means more freedom to do. Whatever. Thats why at t is giving you 50 more data. Thats 15 gigs of data for the price of 10. Because the more data you have, the better. And right now at at t get 300 credit for every line you switch when you trade in a smartphone and buy any smartphone on at t next. I was going to the library to do my homework. It was a little bit of a walk to get to the bus stop. I had to wait in line to use the computer. Took a lot of juggling to keep it all together. Whats possible when you have highSpeed Internet at home . The Library Never closes. It makes it so much better to do homework when youre at home. Internet essentials from comcast. Helping to bridge the digital divide. Welcome back. The migrant crisis in europe set to shake up the political and economic landscape of the eu. Our next guest is the thousands of people seeking refuge in europe is a bigger crisis for the euro zone than any currency concern or grexit. President obama is preparing to take in 10,000 refugees over the next year. The former german minister of defense and is the founder and share man. Do you think this really we sat around virtually every day for months on end if not month more worried about the grexit and currency issues and i think we should be dedicating every show to this if this is the issue. You do already and do you know why . Because we are talking about a topic which divides europe and a topic where germany for instance is the powerful big player in the euro crisis is showing an admirable amount of compassion but that could tip over at a certain moment when germans start to realize that theyre the only ones doing something. So if we come to the next step of the euro crisis which we will face, the question will be will the germans react properly again. What does it mean . It means to show again also that kind of compassion for other European Union members that are in trouble, that need help, that need a bailout maybe at a certain moment and it doesnt make it easier. So we dont have any unity right now in the European Union or the solutions we have seen so far that have been put on the table like a quota and other things are a big illusion. The front page of the wall street journal has Angela Merkel taking a selfie picture with one of the refugees that have come in and i just wonder from hearing you and seeing this picture is germany unified. How much power do you have to say were doing the right thing. Its unified but thats connected to the power of pictures and the coverage were facing right now. We have all seen the picture of that terrible picture of the dead, young boy and this is the question is how long will that prevail. Angela merkel will do everything to keep that level high but we have to bear 800,000 migrants this year. I talked to government members last week. They say well expect another 800,000 next year and we will face moments when this may face a situation. I dont think well have a Charlie Hebdon in germany. Do you think its fair to talk about Syrian Refugees in the same way were talking about the other companies in europe . Do you think thats an apt comparison . We had people talk about it in that way. Were talking about a dimension which is different to the one we had seen in greece. Its a bad situation without question but we need to connect both aspects in a very real political way to say at what moments will germans think differently . At what moment will british people think differently . At what moment will austrians think differently . At the moment it seems all to be good. We have a quota. Will it function . Probably not. We all know as soon as we have people within europe they can travel within europe. Where will they go . Real quick before we go, what is the answer . The answer is if you were running things . Two things, one thing is look for a european and we need to Work Together as well. Its definitely not enough. The germans and europeans and all of the other things. Of course they pay a lot but we have an experience for many, many years. We need more than that. Thank you. Appreciate it very much. Great to see you. Coming up more on chinas challenges. David tepper thinks that the country is making policy mistake after policy mistake and worries about the global marks getting caught in the triple effects. Well talk to one currency strategist just back from a visit to china after this. But first remember it is september 11th today and heres a live picture from outside of the pentagon. This is a giant u. S. Flag there. Today marks the 14 years since the 9 11 terrorist attacks on america. Hello. Oh. Yes, hi. Want to survive. A crazy busy day . Start with a positive attitude. Great. Thanks. And positively radiant skin. Aveeno® positively radiant moisturizer. With active naturals® soy. To help reduce the look of brown spots in just four weeks. I gotta go. And for gentle makeup removal. Try our nourishing wipes to brighten skin. Aveeno®. Naturally beautiful results®. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Hedge fund titan david tepper warning chinas currency is one of the driving forces behind the Global Market volatility. So the currency is overvalued. You know, people will find a way out of the currency. They can shoot people and keep them from taking the money out. But what they cant do is keep them from paying back dollar debt and euro debt. So that money will leak out. But you can it will leak out regardless of what they do. But what they can do is theyre trying to keep they can try to make it tougher to people to take out money. But when you have an overvalued currency like you had an undervalued currency markets work. Markets work. The rivers flow. If you try to keep the river from flowing and it keeps flowing, flowing, flowing, you better have a very good dam. Kathy li just returned from a trip to china. Tepp teppers point is markets behave like markets and it gets through no matter what. So china may say we want to handle this in an orderly manner. What do you think . Theres been a complete sense of anxiety and nervousness. Theres concern whether the Chinese Government can effectively handle this. Were seeing a lot of outflow of capital. Since there are so many policies that are fiscal, monetary, and throwing everything into the kitchen sink. It seems theyre making things up at this point. And i think, you know, to this day youre just seeing it lead to just 24 hours and 48 hours of stabilization and then were back to it all over again. So i think everyone is very nervous. And that is going to impact the u. S. Markets and the Global Markets for that matter. And so its very important and i think, you know, like your points, they may not be able to stem the crisis. Theyre just going to be able to ease the pain. Go ahead. Just i do my twitter. Fortune piece today, its not the stock market in china to worry about. Its the Real Estate Market as overbuilt by local governments that borrowed money to keep everything going locally and theyve totally overbuilt real estate and thats the thing thats going to come home to roost eventually. Youre right. Weve heard about the ghost towns in china. And i think thats a pretty big issue. Its not just china. Ive been to japan. This is not quite an issue in singapore, but still. The Real Estate Market in those parts of the world are seeing some big risks just from a policy perspective as well as from a demand perspective. And i think, you know, this is not going to improve any time soon. Its the real ticking time bomb in chinas economy is what i dont know. I mean, thats what chanos has been saying for a long time. Right. But its local governments are they borrow from who . From the Central Government or from the central bank . From usually the central bank. But i think to bring this home in terms of what this means for next week and what this means for fed policy. Theres a lot of debate whether or not this is going to impact the federal reserves decision to keep rates or change them. Unfortunately while u. S. Data has been pretty decent does not live in a vacuum. And i think at this stage because theres so much rik and the world cannot or the u. S. Cannot survive by its growth alone that i think theres a very good chance either theyre going to pass on this rate hike or theyre going to basically do one and say theyre not going to raise rates anymore. Everyone is worried about a deep correction as a result of the rate hike. And while i do think we could sell off a little bit off of any tightening, i think with all the stimulus thats going to come into the markets at a possibly lower guidance that its not going to be doomsday in the equity markets. Thanks for coming in. Always a pleasure. Coming up, well be welcoming our guest host. Bill ackman will join us sounding off on his latest giant. Well talk to him about that and more. As we head to break, check out the futures right now. Dow looking to open 82 points off. S p off about 10 points. Youre watching squawk box, here on cnbc, first in biss worldwide. Good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Yes, Investment Opportunities can be anywhere. Or not. But you know the difference. E trades bar code scanner. Shorten the distance between intuition and action. E trade opportunity is everywhere. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Without the internet i would probably be like a c student. Internet essentials from comcast has brought lowcost high Speed Internet into the homes of hundreds of thousands of lowincome families. It lets students do homework and study at home. So far more than two Million People across america have benefitted. Internet essentials is going to transform the lives of families. I see myself as maybe an entrepreneur. Internet essentials from comcast. Helping to bridge the digital divide. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc. If you dont know it, well, were first in business worldwide number one. But number two, that was 20 years ago. I know that for a fact, seals song. And its our 20th anniversary. Im joe kernen with becky quick and andrew ross sorkin. I already said that. Now to get the prompter to go forward, i have to say it again. Uhoh. Now theyre moving too fast. Youre listening to the 1995 hit kiss from a rose by seal. Here to help us celebrate our anniversary, this is the type of guest we can get. We bring in huge names. Bill ackman of Pershing Square. Are you going to hit that number . Yes, may. Wow. Do you feel like youve to me youve accomplished quite a bit by 50 to my endless chagrin. But do you feel like youve accomplished a lot . Theres more to do. Lots more to do. All right. We have a lot to cover with bill, but first becky has your headlines. Among some of the top stories at this hour, investors pulled 19 billion from equity funds in the last week seeking safety in Government Bond funds. Nearly 16 billion of those outflows came from u. S. Equity funds. Japanese funds were the only equity category that actually saw gains. In the last four weeks Global Equity funds have shed 46 billion. Goldman sachs cutting its crude forecast. Its a steep decline of where we are right now. Its 12 month target is now down to 45 a barrel. No expectations on their part that things will improve from here. Goldman said the risk it could low as far as 20 a barrel is rising. Theyre citing a big surplus of oil with a scarcity of storage space. You wont see the drop in production. On our earnings calendar today, the largest Supermarket Chain kroger is to release. And on the economic data, well get the ppi numbers at 8 30 eastern time. Forecasters expect to decrease of. 1 . Check out the u. S. Equity futures at this hour. Of course equity futures when youre looking at these things in the morning have not been a clear indication of where youre going to wind up at the end of the day. Right now dow down. Our guest for the next hour is bill ackman. He has taken an activist stake in companies from target to valiant. His latest in mondelez. Thats the most money ackman has invested in a single company. If you havent been following the activist drama around mondelez. It spun you have from kraft foods. Nels nelson peltz took a stake in that company. Shortly after that Warren Buffett came on squawk, said a deal between mondelez and kraft heinz unlikely. Bill ackman is here. I want to talk to you about the markets and this fortune piece. So many things to talk about. I want to talk about mondelez. This summer has been a tough summer for a lot of activist investors. And you look at mondelez and thats a company that has huge exposure internationally. Before we get into the mondelez drama itself, just where do you think the markets are to the extent you think macro and globally . We had david tepper on yesterday and he seemed to be a little bit more bearish than i imagined. I would say probably im a little more bullish than mr. Tepper. Today i think stock market on call it next year estimates is something less than 15 times earnings. So the earnings yield and the stock markets, something approaching 7 . Right . This is more than a 2 environment. Thats the widest spread. And by the way the expectation over time should be the equity yields will increase as Companies Report over time. Report higher profitability. When you think about profitability, what about the emerging markets he was questioning the e in the pe. I said it earlier in the year that analysts had not properly reflected the impact of currency. I want to say at this point currency has been largely reflected in next years estimates. So i think you know, i think its actually if you look at the market overall and then i put aside energy. Thats not really a field where we invest. I cant predict where oil prices are going to be a year from now. But if you pick energy but youve historically liked retail. Theres always been a view if oil prices are low thats my point. Put aside energy. Im not an investor in energy stocks. But the rest of the market, i think stocks are pretty cheap. Tepper thought overall global expectations had diminished in the last three months. Thats the china question. Anyone knows anything about china, theyll tell you 7 is a fiction. 5 is probably a fiction. And real growth in china is probably Something Like 1 to 4 . In the end it spills over to emerging markets and then you look at big conglomerates like a mondelez who has this Huge International exposure, do you sit there going thats priced right . Emerging markets are growing quickly. If you look at china, its a tiny part of the Business Today but is huge growth part of the business and continues to be despite, you know, events of the last couple of quarters. Again, we are very much we are not market prognosticators. I wouldnt rely on my view here. But in terms of the business we own, if you own a company that sells chocolate and cookies and gum and the price point is brand names as well. Its a little more difficult to predict autosales. But longterm the world middle class continues to rise. Thats going to happen. And american brand names like mondelez, people are going to i think its a high quality Growth Company for a long period of time. What can you get mondelez to do that nelson peltz couldnt . I think at this point i know you introduced me to say i had a lot to talk about mondelez. Im here because its your 20th anniversary. When its my 50th, ill call you and hopefully youll come as well. But i think for us we start with business quality. Right . I think this meets our standard for a simple, predictable, dominant company with a lot of growth ahead of it. So thats a great backdrop for any investment. Then you have a business as you think about the candy business. This is an extremely high margin business. You look at the hersheys of the world. Youre talking mid20s type Profit Margins. This is a business last year or something in the 12. 5 range in terms of profitability. Expectations. Going to 15 by next year. Probably as much as a thousand basis points as it should be. Businesses with this kind of scale. Companies are working very hard. Nelson im sure is part of it in driving that opportunity. So longterm growth and a huge gap in terms of margins. And then the context you mentioned buffetts comments about heinz kraft. I think hes right. Heinz kraft or that transaction, you know, theyve got their hands full. Theyre going to have their hands full for a year. Have you spoken to either buffett or 3g . Ive spoken to 3g. This is the kind of business that you had to make a list of companies that buffett would like to own. Mondelez is on the list. You make a list of companies where 3g is more than reducing costs. I want to talk about that. Its really the Perfect Company and the fit with kraft heinz, mondelez. Its interesting. That said, theyre not going to buy the company tomorrow. Why . Because they just did a massive transaction that will consume a lot of resources. 3g is a small firm. But i think a year from now, 18 months from now is that part of your thesis . That it gets taken out . One way to make money here is the Company Remains a stand alone business and gets to its potential and will do very well. One of e the things buffett said, one of the things he told us was that a lot of the other Food Companies in this arena he thinks are now trading at multiples reflecting as if 3g was in there operating these things. That its not easy to do what they do and really appreciate your margins by that much. Are you concerned that irene can do that on her own . And he says these stocks are already highly priced. The answer is i dont know whether the current team can get to the promised land. But i think one of a couple things will happen. Right . Either the current team will get the business to its potential in a reasonably rapid fashion. Or it will be a target. I think from buffetts perspective, if youre a buyer you dont want to be telling people you wouldnt be recommending stocks in your universe because that would make stocks higher. If i had the capability of doing a deal now if i were 3g i would do it now. The price is going to be higher a year from now. I think whats interesting about kraft and mondelez is its easier than adding campbells to the mix. Why . The companies were together. They have the same systems. Probably the same Compensation Plan structures. You know, a lot of existing arrangements between the two companies in terms of Kraft Mondelez still has some International Rights to kraft products. So its an easier transaction. Could you see yourself trying to get on the board . You never know. You and nelson were delivering alpha together. Did you talk about this . It was funny. I was pretty poker faced on that. Lets switch topics. There was a fortune piece out this week. Long, lengthy, worth reading. At the end of the article and this is about herbalife. Is this guy says what is your end game . And he says specifically because the stock is currently under water, if the ftc were to decide not to go after it, what do you do . Sure. This is not a bet on only what the ftc is going to do. Since weve learned to the world about this company, the ftc and most significantly the doj is a very tough regulator. Recent comments about hes not just going to go for companies. The doj has been involved for over its something if you believe the press reports, 15, 16 months. But things have gotten more intensive in the last three or four months. We know that because the companys acknowledged that they say, you know, Senior Executives of the company, top distributors of the Company Received information requests from the doj. Those information requests come from the form of subpoenas. So i think that we have multiple regulators here that understand that theres a problem. The ftc just shut down a Company Called vema. It is a perfect analog to herbalive. One of the top distributors was a herbalife distributor. If you learned or thought the government wasnt ultimately going to shut down this company meaning there was a seat change within these investigations before something was officially announced, would you sell the position . So remember were short or buy the position. Would you get out of the position . The answer is we the last way is basic deterioration. The company is deteriorating except for in china. China has been the Growth Engine in the last quarters. This characteristic of massive growth and fairly massive declines is something you see in pyramid schemes. Not in something selling food. Think of themselves in the food business. Mondelez doesnt have massive growth in one quarter. Theres lots of ways to win, but if were wrong we fold up the tent and move on. I would say as i said from the very beginning on this one and i would say its even higher today. The certainty factor here is the highest it can be for investment. Youve said that you dont plan to pursue public shorts again. That this was an interesting experience in that regard. Yes. Philosophically and the article sort of gets at this issue, the idea that a Hedge Fund Manager with an investment thesis can actually play the role or try to play the role of regulator. Uhhuh. Try to take yourself out of it. Sure. Do you think this is a good thing, a bad thing, how should it work . So this is i think the most important thing about this article is he basically says short sellers who share their views publicly, something very wrong with that. Its effectively as you say a hedge fund becoming a product regulator. And i think that is absurd. Right . Look at lumber liquidators. Goes public a year ago and says his company is shipping formaldehyde laced products. Ignored by the market. It took a 60 minutes piece which whitney was the p protagonist in. The company is forced to withdraw this product. Theyre under investigation by regulators. I think the consumers have benefitted. The shareholders who sold when whitney went out with his piece have been big beneficiaries. Look at David Einhorn and lehman. He said they need to recapitalize. Lehman ignored him. They continued to buy back stock. They said david was market manipulation. Had the company recapitalized, lehman might have made it through the financial crisis. Shareholders might have gotten somebody out of their investment. I think whats interesting in the article and again there are a lot of factual problems with the article which we can address. But the this is an inherently healthy phenomenon. Whats interesting about the article is the last sentence he talks about, is it right for hedge Fund Managers operating behind closed doors in private meetings. Theres nothing closed door project about our investment in herbalife. With every piece of research weve done plus all the source documents. Snts that an incredibly healthy thing for market transparency . So i think its really disagree. Reporters can write whatever they want to write. I respect that. For someone who spent an enormous amount of time to come to an absurd conclusion. So among the facts he reports in the story, he said herbalife is running 101 orphanages around the world. The only place for him to get that fact was from herbalife. They give a blender or two to a childrens organization in a country and this product that distributors cant sell, they check a box and they donate the product to these places around the world and its fed to small children. I dont know if small children in africa should be drinking this protein shake from herbalife. Thats a doctor question. But the word theyre running orphanages. As a reporter, i would focus on that. I would go see that one. I think its more a tax fraud for distributors than it is helping. Were going to take a pause. Were going to continue this conversation. We appreciate you being here on our anniversary asking and answering questions. By the way, well also be talking about some new executives with bill ackman including two top executives from Canadian Pacific railway. Well be talking about that in just little bit. And ask them about working with ackman. The head winds from oil prices and the dropoff weve seen with whats happening there. First, though, lets get a look at the dow components leading the rally since the august low. Squawk box will be right back. I was going to the library to do my homework. It was a little bit of a walk to get to the bus stop. I had to wait in line to use the computer. Took a lot of juggling to keep it all together. Whats possible when you have highSpeed Internet at home . The Library Never closes. It makes it so much better to do homework when youre at home. Internet essentials from comcast. Helping to bridge the digital divide. Welcome back to squawk box. The futures right now last i saw were down 70 or so. Well take a quick look. 66. 66 on the dow. 8 on the s p. 19 on the nasdaq. And lets get to lets look a little bit more inside the overall market. Tech and energy have been the Top Performing sectors since the august 25th lows. But which dow components have been leading the charge . Cnbcs dom chu joins us now with a look. If you look at some of the best performing stocks within the dow since the turmoil of august 25th, you take a look at some of them overall. The futures board looks interesting. With the dow jones hovering around the 4 to 5 mark, you can see since those lows we are up 8 since then. The entire market has gone up. But the stocks have led the way for the dow higher. Its all about the technology sector. This is raising questions among traders and investors about whether or not it is time to dip your toes into large cap names. For instance, intel shares up by about 13 . So a big chip name there. Also apple, a name that always gets talked about for Value Investors who are looking to perhaps wait for pullbacks and buy apple stocks. Those shares up 8 to 9 since then. Cisco. We dont talk about it often, but they make the backbone of the internet. Up about 8 as well. Then microsoft, 7 of the upside here. Large cap technology, guys, really making its comeback here from those lows. The question is whether or not that remains the case. Remember, a lot of these guys have Dividend Payments that become attractive for Value Investors despite the argument there could be a market that remains overvalued. Back over to you. All right, domino. Domino was a i think she was in one of the james bond she was. She was in thunder ball i think. You know that. I do. Why are you not dominicchu . I dont think it was available. Ill hunt around for it. No, no. Thats the wrong answer. You are the domino because you are the domino. You are the domino. I am the domino. The first one that knocks Everything Else over is what it comes down to. Exactly. Thank you, the domino. Coming up, fast food workers in new york getting a pay raise and the governor says he plans to raise wages in other industries. Details next. Eeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhh ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] new york state has approved a measure to gradually raise the minimum wage of fast food workers to 15 an hour. It will be phased in over three years in the city. Governor cuomo made the announcement yesterday with vice President Joe Biden. He said he would work to expand the minimum wage hike now to all industries. Coming up, Pershing Square has a new ceo, new board member, and new corporate strategy. Weve got some top executives joining us next to talk about working with mr. Ackman. Theres a lot more. Back in a moment. Welcome back to squawk box right here on cnbc. We are celebrating our 20th anniversary this morning. Youre listening to cotten eyed joe one of billboards top songs back in 1995. Among the stories front and center this hour, General Electric selling the transportation financial to bmo. Saying its total for sales up to 85 billion. Also shares of zs pharma and the futures at this hour looking like we are in the red. Dow looks it would open off about 55 points. Ubers ceo making an appearance on the late night show with Stephen Colbert. Heres what he said about driverless cars. Googles doing the driverless thing. Yeah. Teslas doing the driverless thing. Apples doing the driverless thing. This is going to be the world. So the question for a tech company is do you want to be part of the future or do you want to resist the future . And we feel that in many ways we want to not be like the taxi industry before us. And so thats how we think about it. In fact, he got heckled during the taping. Reporters who were in attendance say a protester in the balcony stood up and accused him of destroying the taxi industry jobs. Colbert let the heckler speak for awhile. He later asked about taxi jobs. He said uber pays better than the taxi industry. My daughter is going to start driving around a parking lot this year. Get her license just in time. It scares me, but are we going to i love my car. Is it really going to be like that . You know what happens, though, youre in a driverless car you will be forced to obey the speed limit. I dont think you could handle that. Thats true too. But it would also free up all these same people to be on their stupid electronicings when theyre in the car. Im resisting the future. Theyre already doing that. I know. Youve seen traffic accidents or fatalities are up. Im sure thats the reason why. This is the intro. I dont like this intro, so im going to skip that. Because bill, youre here for our 20 year anniversary. We go back a long way with our relationship. And i remember like it was yesterday this cp thing that you put forth. And it was 2011. It was 44. You were buying it. You said i got this guy hunter harrison. I said who the hell is that . I think i said he was a god. Why do you know about railroads and why do you know about this . Not that you pick your best things to bring in to show how you operate, but this could be in a Harvard Business school course. Okay. 44, you bring this guy in after you get some board seats. It went to what 220 from 44 . Its 192 today. In a bear market because of oil prices. But hunter had a history in running rails efficiently. Sure. Im not saying its not rocket science, but its not apple. You knew how to do this. I think its a lot more complicated than running apple. It is. What did you do when you came in that wasnt being done at Canadian Pacific . And bill, how did you know he was the guy who knew how to do this. Well, ive talked about that before. The chemistry just worked. Bill and i didnt spend a whole lot of time negotiating or talking about i mean, bill knows one side of the world and i know another. And thats railroading. I dont get involved in that side. Bill stays out of the railroad side. I told yall a lot of things three years ago. Nobody believed me. We had a horrible reputation and i think we proved people wrong. And thats nice. I introduced keith. Keith is your coo and youre actually going to we know when youre going to be ceo too, right . That should work out fine. So you will take over, what . Some time in 2017 . 2017, thats the plan. Less than two years now. So lets talk about some other things. You turn it around. Stock got up to where it was. But canada is highly dependent on oil and gas. Its in recession, obviously. And thats a lot of what you move around, right . So that has hurt the operations and the stocks down 20 or so. Right . Yeah, it is. Were not traders or investors. Were railroaders. What we try to do is what we talked about then was provide the best service for the customer at the lowest cost and let the markets work out what the markets work out. People a lot smarter than me are going to try to guess oil prices in asia and china and natural gas. We dont worry about it. If we continue to perform and do our job, all those other things will fall into place. Consolidation is what everybody talks about. Will it be 2017 . Youll be spearheading that or do it before you go . Im not going to speculate on that. Obviously theres an opportunity there. Its up to csx to decide that. Whats interesting about csx is they had an interesting announcement in the last couple days. The heir apparent of the company went kind of left. So its not clear they have actually the leadership to rub the company. Something to speak of to hunter. My colleague who found hunter, reached him at his horse farm and spent a few hours on the phone with him and a few hours paul told me five minutes after the call i think we found someone that knows something about railroading. You know, this is a business. Unfortunately there are you know, if youre running an industrial company, probably 50 ex. Ge people who could run that business. Railroading is a very specific business where longterm experience is helpful. And there arent as many jack welchs. Forget jack welch. There are very few people who can run a large railroad. It requires a lot of skills and experience. Hunter starting squirting grease into the wheels. Thats where he began his career at age 16, 17, Something Like that . Yeah. So 50plus years in the business. When did keith start working with hunter . Two decades now. Hes had 20 years of training under hunter which is the best teacher in the business. But if youre running a railroad if youre on the board of a railroad and you dont have you know, theres a huge difference between the best and even a good railroader in terms of what can be achieved. This company is running at 40 plus Profit Margins. Pretax margins. Thats a remarkable number. What was it . It was 19 . When we first invested in cp, stock was less than 8 billion market cap. The Company Spending around 800 million a year on capex. And the maintenance capex was something more than that. Thats a safety issue and performance issue. Youve got margins up while you were spending more on capex . Yes. Talk about activists cutting cap capex. So this company has 800 million to a billion and a half in capex spending. The Credit Rating has gone to a triple bplus. Hunter, how did you do that . That sounds like a magic trick. Well, thats the problem. People think it takes a magic trick. And i think its more abcs and basics. We know how to railroad, okay . We know how to put ties in which are capital. You just got to get the right formula to bring all those forces together. That we talk about. And it works. It happens. I mean, look back if you look back three years ago, very few, if any, people i could find said this is going to be a success. People were saying, what . Hes coming back to do what . And, you know what the proxy results were and what they went through. I was on the sidelines then. And it just shows what an organization can do when they put their shoulder to it and focus on the basics and understand what the business is about which is providing service to customers. Now, when i was here three years ago, people said youre a mean and ugly guy and youll lose business if you take over. Wrong. Didnt work that way. If you provide the service, you dont have to go with a bunch of rhetoric. Just provide the service to the customer and let them be the judge. You know, you dont have to do a lot of promotions in our business and so forth. And, you know, we showed i think a combination of some people that were there that had been overlooked, that were verial entsed. We brought in some new people from various sources that keith and i had. And its a fit. It worked. Its worked very well. And its been a lot of fun too. Let me ask a question because i think this is the sort of question every shareholder wants to know. Hunter and keith have done an incredible job. Hunter youre going to be retiring less than two years from now. And weve got your heir apparent. How can shareholders be confident that whats been achieved the company can continue to make progress and grow . What are the next five years showing when you didnt werent on the last Conference Call and were having a medical procedure. Stock dropped a bit. So what happens when youre i had a little setback. One last thing, if i remember, made some money because the stock went up. He has to hold that stock after he leaves the company for a year or more. How do you feel as a shareholder at that point in time . I think its kind of ironic, the timing here. I had my Little Health setback. People were questioning the succession plan. Now we dont have to talk about what keith might do or can do. We saw what he did. So he effectively ran for two or three months in my absence. I was pulling for him. But i think that that restored more even confidence to the market place of saying look, weve had a number one. And were going to go to retirement party, but weve got an Exciting Team behind him that is going to continue this march. And we just saw what he can do. We dont have to debate if hes got a record development. Im pushing a question. Keith, what have you learned and whats your plans . When you have full control of the wheel for the next, you know, ten years. What happens . What changes . What doesnt change . Let me say this. Rome wasnt built in a day, right . Weve been doing this for three years. It takes awhile to mine all these opportunities. Theres still so much of our property we havent touched. The culture change were dealing with is an issue. Its an ongoing issue. Revenue growth and opportunity with our customers, this Company Never had an ability to go to a customer and told me if youre a Transportation Decision maker, are you going to trust with the job on the line . The answer was always no. So we got the business through price. Thats the answer. You give them service. You give them an ability to count on you to depend upon the service. Theyre willing to pay for it. Youve got markets working at Competitive Forces but at the same time you can do that. When youre raising price growing the top and slinking the bottom line, thats where the leverage is at. There must be a lot of i. T. Too. So i wasnt even thinking that. You promise an Assembly Line maker its going to be there. You can really screw up if its not there. Then theyre delayed and their business is affected. So thats how you satisfy customers by getting it there safely and on time. Seems like a lot can go wrong even though when it goes right, you dont notice. Youre exactly correct. With a customer effectively theyre trusting us to help them succeed. If we help them succeed in the market place, by nature were going to succeed as well. Did you have to upgrade is it computers that decide when to keep things on time. I mean, were catching up. But the things we will be able to do keith will be able to do. For example, where we schedule cars so every car, not a train, has an individual schedule of when its going to leave baton rouge, louisiana, and when its going to arrive in toronto. Real quick because you did call it an outdoor sport. Theres afs danger of the product not getting there on time but there are rail safety issues these days. You were warned i think by the canadian government about brakes yesterday, for example. Id rather use a different term than warned. Okay but there was investigation into the braking system and how you were monitoring them. How big an issue houp do you need to invest on the safety side and how much of a role does government play in this . Look. Number one, we due respect, we dont need government in our business. We pay our own bills. Just give us a lel level playing field. Were not in washington crying for help. Rail is a critical junction in this history. And im serious. An important juncture is going to take place. People said theyre not taking care of business. Chicago is a mess. What are we doing . Now what are they saying . We got a common carrier obligation to haul stuff. The law says weve got to haul it. Then people criticize us for obeying the law. So its politically all across the board some day people that understand have got to sit down and make some longer term decisions about the infrastructure in north america and the part we play and where its going to take. Whats the future . Youre not going to put this stuff on the highway. Weve got to get our act together. My guess were going to have rail a hundred years from now unless youre hovering around on a hover rail. Anyway, all right. Gentlemen, thank you. Hope your health is good. And good to see you. Thank you. Youll be here for a few moments. I dont want to say goodbye to you. Coming u, well have more from bill ackman. And your list of stocks to watch is just ahead. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Welcome back to squawk box. Verizon says its new video streaming go 90 is successful. Its for those who want to watch without a traditional cable plan. Also google is rolling out android pay. That service allowing users to pay for things at Retail Stores with just a tap of their phone. Google announcing an overhaul of its wallet app as well. The app will now allow users to send money to anyone with an email address free. Also coming up, much more weve got from our guest host bill ackman over there from Pershing Square. Squawk box returns in just a moment. Omy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Alaska. Finally. The search for brown bears begins. Denali highway. Low on gas. Pit stop. Fill up. Double points. Yep, thats cold. Tired. Day 2. Coffee. Eggs. Double points. Beautiful. Majestic. Nothing. Where are you, bear . Warm. Warmer. Warmer. Yes. 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We are wrapping up our 20th anniversary conversation with our special guest bill ackman who is the founder and ceo of the 19 billion hedge fund Pershing Square capital management. We just looked at some of your biggest winners and losers based on the filings we went through. Interesting to know allergan and valeant were your biggest earnings. That happened even though it didnt quite work out the way you planned for the takeover. Is this something you think youll do again . Something along these lines . Sure. Every day there are deals that dont happen. You look at transactions where shareholders are supportive. To pay a big premium where the shareholders get to continue and a board rejects it and they dont happen and the acquiring company, you know, walks away having spent 200 million when you consider all the financing commitments they need to get. What we did in allergan was allow shareholders to decide what to do with their business. And i think that there are inquirers of companies theyd like to buy. There are transactions that dont happen for social issues i think we can cattalize. We may not get it, but, you know, if the outcome for shareholders is the business either improves on its own or it gets sold to someone else, i think thats a win. Those are great returns. This summer has not been great for you nor has it been for much of the hedge fund industry. And last year you had huge returns. What does the end of the year look like for you and people in your business . If it turns out to be negative, what do you think it does to the business . Sure. I think people call us a hedge fund and a whole category. We need to do a few things. From an industry perspective, we need to explain better what a hedge fund is. There are some funds designed not to lose money in almost any market. I think there are few that work but there are some successful in that model. In a down 7 month is like a disaster. Really principally with the exception of herbalife we own stakes in companies weve owned for years. Cp we owned for four years. Well probably own it for many more years. Howard hughes effectively owned for seven years. I cant tell you where any of our stocks will be next month. I cant tell you even where at theened of the year. What i can tell you, mondelez will be a much more Profitable Company than today. And cp is going to be a much more valuable company. Whats interesting with cp, stock price goes up and down based on oil and commodity prices. But what is the value of a business . Its the present value of cash that business generates over its life. Price of oil in the shortterm doesnt have a meaningful impact on that calculation. Seems to have a big impact on the stock price. Volatility is to buy more. In the case of cp, theyre buying more. I feel like youre a split personality. On the one hand youre a longterm investor. On the other hand, a activist. Where do you consider yourself . Activists are longterm investors. Not all of them. Again, what we do is, you know, ten years ago people accused us of being shortterm. We had been in business for a year. Its hard to prove were a longterm investor. You know, when youre moving around 20 billion, its hard to do that constantly buying and selling things. Youre better off buying super high quality companies. Thank you. Thank you for being here. Looking forward to your 50th. Thats right. Its the new 30. Coming up, the cfo of nordstrom is here on the health of the consumer and new trends in retail. The internet of things. What were recommending as your consultants. The new consultants are here. Its not just big data, its bigger data. Were beta testing the new wearable interface. Xerox believes finding the right solution shouldnt be so much work. By engineering a better way for people, process and technology to Work Together. Work can work better. With xerox. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Is it time to buy tech . The senior strategist of Merrill Lynch is bullish on the sector and squawk box Portfolio Lender is here to make the case for twitter. Find out if the recent slide has put the ipo market on hold and if old school big tech names are ready to bounce back. Retail detail. Are Lower Oil Prices translating into sales for nordstrom . The companys cfo talks about the state of business and plans to expand. Tennis, anyone . Former pro turned coach brad gilbert now commentator here to talk serenas quest for the grand slam. And who will win the mens championship at the u. S. Open . We will serve up that in the final hour of squawk box right now. Live from the most powerful city in e the world, new york, this is squawk box. Welcome back to squawk box, everyone. This is cnbc, first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. We are less than 90 minutes from the opening bell on wall street. Weve been watching the futures this morning and theyve been in the red all morning long. Of course based on where weve seen things the last few weeks that doesnt necessarily mean anything at the close let alone at the open. Lets look at whats happening with the dow futures today. Down about 60 points. And nasdaq down by 17. Also in europe, similar trading patterns. The dax is the biggest decliner of the major aerges. Its down by about. 75 and so is the cac in france. Lets look at headlines at this hour. Goldman sachs cutting its oil forecast to 45 a barrel and the bank says the risk of that oil could fall could go down to 20 and that is rising. Among the reasons theres a surplus of oil. Also we should tell you the august Producer Price index due in just about 30 minutes. The headline inflation falling by. 1 . And weve got new data from u. S. Based stock funds in the week ending wednesday. Lipper reports this follows 14 billion in inflows during the prior week. Meantime taxable bonds tracking their first inflows in three weeks. The nfl season officially kicking off last night. And with deflategate behind them at least for now, tom brady picks up where he left off last season. Went 25 of 32 for 288 yards. He threw three touchdown passes. Three of them it says here to his favorite target, rob gronkowski. And the patriots beat the steelers 2821. For awhile he had the same number of touchdowns as incomplete passes. But, i dont know. There must be something going on. They must be doing something here again. Theyre not just this good. The new york fans, do you watch the new york tabloids . Yeah. Theyve had a hay day with it. Bitter, party of two. Daily news and New York Post. Were going to talk tech. Tech leading the markets higher this week with the S P Technology sector up almost 3 and the nasdaq bouncing back after its brief stint in correction territory. Now actually positive. For the year. Dex suzuki is here. Hes been bullish on technology. And kevin landis is also here. You want to call the bottom on whats happened here . On the markets . Not the markets, but technology broadly speaking. Yeah, i think technology is a great buy. Not just for this next 6 to 12 mornts but next 6 to 12 years. Its got all the characteristics you want to look for in stocks today. Theyre trading at 20 discount to historically. Theyre the only sector in the s p that has net cash on the Balance Sheet which i think is going to be important in the next five to ten years. The leveraging environment. Its also the only sector with growth. When people think about it, people dont realize its becoming increasingly high quality defensive sector. If you look at these companies growth, they grow through recessions which is what people associate with health care. But technology has become a defensive sector from a fundamental perspective. What do you say over there . Youre a platinum portfolio guy. Right. So its all about growth. I think the trick with tech is to make sure you dont own what looks like a high comfort name but its done growing. So dont get stuck in oracle and cisco and intel and all that. Go out and buy the names youre uncomfortable with because theyre new to you but theyre growing. So who are you uncomfortable with . Its been a long time since weve owned Applied Materials or intel or hp. Any of the old names from, you know, 10, 20 years ago. And it means you kind of have to, believe it or not, do the uncomfortable thing. Because the growth is still going to be there. Because without growth, tech is just extra risk. Im going to mention the one company we mention every day. Apple. Where do both of you come down right now . Well, im a fan. But, you know, its not exactly an undiscovered story. And its not exactly something thats going to double for you in the next 6 to 12 months because its such a huge market cap. Thats one where you can have your cake and eat it too. You can get a reasonable valuation on something. Ever going to become a trilliondollar company . If theres a company out there that could get there, its apple. For now. If you had to name one now if you had to name one right now, youd probably name apple. But nothing might have named somebody else five years ago and five before that. Clearly it was ge but now you no longer work there, its not but it would have been digital equipment or yeah, sure. Or google. And this is a great point. You have to be prepared to change your mind. You cant get cemented in your beliefs that this is a great company. Theres been a lot of cement in the belief of this company. Yes. And you want everyone else to be stuck there. But its not yet. Not yet. Where are you on that . Yeah, i mean, im a high level guy so i dont focus on the stocks. In the near term with the product cycles got too high. If you look at the attributes of the stock, i think theres a lot to like about it. Its got a great Balance Sheet, obviously. Its got a great product innovation. Unfortunately i think that people are expecting it to take over the world which i think is a tough stretch. Im not an apple guy. Im an android guy. I think competition is getting increasingly tough. The New York Times on page six cartoon is the apple meeting. And tim cook is up there, everybodys oohing out in the audience. He says we have a new charger cord and its in blue. Everyone is going ooh and awe. Page six of the New York Post . Maybe that makes them wrong. Theyre supposed to take over the living room and the apple car. Thats a lot. So wait. Youre going to make the math work. So your critique is they have a great brand, is that it . My critique is other people are trying to make a better smartphone right now and you cant guarantee forever that thats going to be a market share story. It might be reserve market share story some day. I think were in agreement here. People expect a lot of apple. People give apple lots of breaks. They assume the products are going to be terrific. Okay. Let me ask you about another company. Twitter. Yes. People dont have that feeling about twitter. Not at all about twitter. Right, right, right. So ive actually kind of talked myself into dipping a toe back in there. Right. And because . Because everybody has such disrespect for this company now. People just think that theyre done. And its the zuckerberg clown car comment. Hanging around their neck like a dead fish. Its great. Typically when everybody hates something, either you say theyre dead never coming back or theyre alive. What is the next place to take them . You know, my favorite current Conspiracy Theory is they fit well inside of google. And there are reasons its happening slow. Takeover thesis. Its not a thesis. They havent done with the fact that everyone loves to tweet and everyone has a twitter feed. So theyve got a franchise nailed down. And you know what . Its kind of funny. It reminds me of youtube. Once upon a time, there were dozens of media shares sites and youtube became the place where everybody put their video. Google bought it. Everyone said how will they make money, google said dont worry about it. We have enough money. Ten years later this is the gorilla of streaming. You like roku. I do. Which im fascinated by. Now that apple tv has emerged and other set box business. Their customers love their product. Theyve got nowhere else to go. Theyre not going to discontinue their line of product. Apple tv has been at it for awhile, but, you know, i think to joes point apples not invincible everywhere always. Roku is a great company. If you want to do business with two companies. Apple versus roku, who do you think is going to treat you better . Thats a great advantage. Before we go in terms of thinking of technology broadly speaking, companies that are more u. S. Focused versus international or especially exposure to china dwob you try to avoid those companies for now or say its a longterm bet that in china theyre going to have to buy the stuff anyway . Right. I think that, you know, the main thing right now is its gone too far. Sentiment has gone too far. People are baking into thinker expectations em collapse or something along those lines. I think thats overdone. Id gear on the side towards high foreign exposure. Interesting if you look at the volatility over the last couple weeks, the concerns focused around slowing groebl growth. But outperforming the market overthe last couple weeks. It signals a change in leadership and sends them too far one way. Thank you for being here. Thank you. Watch roku. When we come back this morning with locations in state ace cross the country, nordstrom is a great barometer of the consumer. Well talk trends and the Holiday Season coming up. And later, serenas quest for a grand slam hits a rain delay. Well talk about the u. S. Open and a whole lot more. Squawk box will be right back. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep it all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberry apple scones smell about done. Ahh, youre good. I like to bake. Add new Business Services with at t and get up to 500 in total savings. Prge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop, and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Im a Customer Relationship im roy gmanager. Ith pg e. Anderson Valley Brewing company is definitely a leader in the adoption of energy efficiency. Pg e is a strong supporter of solar energy. We focus on helping our customers understand it and be able to apply it in the best way possible. Not only is it good for the environment, its good for the businesses bottom line. These are our neighbors. These are the people that we work with. That matters to me. I have three children that are going to grow up here and i want them to be able to enjoy all the things that i was able to enjoy. Together, were building a better california. Welcome back to squawk box this morning. The futures right now are in the red. Going to open up a little bit lower. Dow looks to open off 55 points. S p down 7 points. Chevron has been upgraded to overweight from neutral at jpmorgan. A pessimism over a possible dividend cut and risks are priced into that stock. Nordstrom is making strides in the offprice retail space and still betting big on north america bringing Flagship Stores to vancouver and new york city and exploring new ways to connect with customers. Joining us now on set is mike koeppel, he is the ceo of nordstrom. Were glad to have you in studio. Thank you. Good to be back. We have been going back and forth with retail. A lot of what were trying to figure out is how the American Consumer is feeling. The feds making a big decision next week. Theyre looking to this too. How do you think americans are faring right now . Generally speaking, were focusedr ov on ouall strategy and how our business is going. Weve seen consistent trends through the first half of the year. We reported high single digit total sales growth. We see our customer responding well to what were doing and relatively healthy. I know part of that has been the strength youve seen in ecommerce. And nordstrom for a long time has played heavily in the online arena. What are you doing now thats different . Whats the latest and greatest . The most important latest and greatest is how do we keep the seamless for our customers . That its not just coming to the store or shopping online. But its engaging with our brand collectively. Whether its using the Digital Technology to improve the experience in the store, learning whats going on in the store, shopping by mobile over the internet. Its really about creating that integrated experience rather than the individual channels. Is that largely a focus on mobile where more people can be anywhere shopping on their phones . Yeah. Well, mobile lately has been the big traction for us. We have over 90 of our customers that have a smartphone. And over a third of everything we do whether its online or store is either informed or engaged by a moem o device. We just introduced a new texting app where salespeople can connect with customers and send a picture or text and that customer can acknowledge that and buy it through the text. Its finding ways to use digital to engage in the stores as well. One of the questions around a lot of retailers has been being able to maintain margins. Sales look strong, but do you have to offer discounts to get people in the door . How do you handle that . I dont think of nordstrom being a discount business. Our regular price business continues to be strong. Our Value Proposition has been much broader than just a sales event, a promotional activity. Its been about our Service Component which is something thats been built over the years with the brand. Its been about product that is latest and fashion oriented. Our goal is always to keep the floors with the latest receipts and new products. We try very hard not to be promotional. We do have an offprice business with the rack that allows us to sell product. Prior season product at a lower price. But as long as we can continue to create that differentiated experience with our customers, we hope we can continue to sell at regular plies. Just in terms of the margin overall, is that a question of people raising issues about this now they dont think youll be able to . You know, i think the challenge today is we have were in the phase of really learning what this new channel of distribution is going to look like and where its going to end up. But you mean the rack. No. Im meaning ecommerce. Ecommer ecommerce, it took years to build the malls in the u. S. Now weve got this whole new channel called ecommerce that were still learning. Theres a tremendous amount of technology o involved in the investment to make sure great experience and to share a secured experience. Fulfillment. Were building new Fulfillment Centers to serve people quickly. Were still learning that and people are asking well what about margins. I always thought of nordstrom having a leg up. Nordstrom was a big winner early on. Maybe thats because you had a good catalog or shipping process in place. Where would you say you are right now in terms of that . Well, i you know, i would say weve certainly come a long way. Youre right. Ecommerce is just another form of fulfillment of the catalog. You know, the challenge today is that every six months to a year theres a new piece of technology thats faster, better, which creates more development, more tools, and Higher Expectations of the customers. And so were still going after that. Were still trying to engage with our customers in a way they expect from us. So i wouldnt say a lot of folks like to use innings. Im a little bit cautious about using innings in saying that i believe were still in some of the early phases of really understanding where we are with ecommerce. Weve had other retailers come including Terry Lundgren of macys who talked about how the stronger dollar has been a huge headwind. Macys is has Flagship Stores in new york city. How has that impacted you . It really hasnt been a story for us. Primarily for what you mentioned. We dont have a presence in new york yet. Were working on that. Theres a major project starting to go up right now. Yourn, were still planning to be there by fall of 18. But it really hasnt been a kbig impact. We have two stores in canada. We open vancouver a week from today. Its relative to the scale of the company that hasnt been the story. What do you worry about the most . What do we worry about the most . Well, the customer continues to be always looking for the best opportunity to get the best value. You know, if things are changing so much in our world is how do we as an organization adapt to that change. You have a Large Organization thats built on executing. Our business is all about execution. And we rely on a lot of people to give our customers a great experience. As things change and introducing new mobile tools, introducing different ways of selling, continuing to bring the Organization Forward so we can deliver whats right for them. Thank you for coming in today. How long have you been at nordstrom . 16 years. Were celebrating our 20th anniversary. Do you remember what we used to do on squawk box with nordstrom . With the piano . He does. I do remember that. I remember from watching at home. Do you how many stores have a piano player in the Shoe Department at this point . Theres very few stores. Why this is the future of changing that im resisting. Why, why, why . Weve got all this internet stuff and catalogs on smartphones. No piano player at nordstrom. Hey, look its not about that. Whats it about . You dont want to do it, thats fine. Its about what our customers want. They dont want this . Our customers want they want disco music . What do they want . What do they want . Katy perry . R. E. M. Anyway, thanks for playing. They dont have the pianos without the that would work. Thats cool too. Like auto. Live piano players. Like the ghost sitting there. When i was a kid i loved seeing those. Nobody does those anymore. You loved ladies shoes, too, right . No. That was me. Im sorry. Thats what haines used to say. Mike, thank you. Thank you for having me. Women in ladies shoes. Great one. My wife is ladies shoes. The august Producer Price index will be released and then former tennis pro turned analyst brad gilbert will join us to talk the u. S. Open and much for. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Heres to breaking more glass ceilings in golf and everywhere else. Kpmg. Continuing our commitment to the next generation of women leaders. Welcome back, everybody. Lets look at some of the stocks on the move in premarket trading. Mattress firm earning 67 cents a share for the latest quarter. It missed estimates by 5 cents. Revenue also below forecast with the company pointing to sales softness second half of the quarter. Reported quarterly profit of 85 cents a share. That was a penny better than the street was expecting. Sales were also better than expected. The company increased the full year forecast. Stock up by about 2 . And finisair missings estimates. Also announcing that executive chairman jerry riles will assume the ceo post. He had previously been the ceo from 19 it to 2008. Take a look. That stock down by almost 17 today. When we come back, we have breaking economic news. Key inflation data. But first we are looking at a live picture outside the pentagon. Today marks 14 years since the september 11th terrorist attacks. The ceremonies are scheduled across the country today as america remembers. We are just seconds away from the Producer Price index for august. We have been watching whats been happening with futures this morning. Again, what happens in the mornings lately is not necessarily what you see in the actual trading day. We have seen some pretty massive swings in recent weeks. You can take a look right now and see the dow futures are under pressure by about 38 points this morning. S p futures down by about 5. Nasdaq is down by just over 11. Of course this is the last week of information that youre going to be getting on the data front before the fed makes its decision next week. Jim iuorio is at cme group. Take it away. We are five days away from the fed meeting and we still have no idea what the fed is going to do. Thats kind of troubling. We have the data coming out. We were expecting negative. 1 for ppi. We get zero. Food and energy we got plus. 3 . Higher on both accounts. Final demand year over year is minus. 8 . We were expecting minus. 9 . As you said the stock market was under a little pressure coming in. This does nothing to help that. Were still under a bit of pressure. Yesterday we had two sets of crummy numbers. I think that was part of the reason the stocks got a bit of a bid. To me the stocks are definitely scared about whats going to happen next week. These numbers are a little higher than expected, so i guess theres no such thing as tier two data when the fed is looking at every clue. I guess this slants them a bit more towards tightening. Back to you, joe. You think theyre really not going to . Think about it this way, becky. Theyd want to be transparent and dont want to shock the market. The market is telling them right now they have no idea if theyre going to tighten or not. For me it would be weird if theyre going to surprise onehalf of the market to be the surprise to what the market views as the negative side, the worse side. Yeah. But they can either surprise next week or next week and see the market reaction. I agree completely. But theyve done a poor job. To me is the theater of absurd where they wanted to be the most transparent ever. And the market has no idea and they have no idea. If they want to parade speakers out there to tell me what theyre going to do is fine. But at the end of the day, you look at the big picture. They nood to do it. I think they need to at some they need to do it so they are like real policy makers. Any of the slightest whims of any market around the world is enough for them to chicken out. They chickened out before and felt bad about it. I think they want to finally show theyve got some resolve to do the right thing. I think they think its the right thing. They need to have the resolve to do it. I agree thats what they should do. At the end of the day i think theyll chicken out because they dont want to sit at the controls when everything falls. No. Youve got to give them confidence that theyre ready now to act in the right way and have faith in that. Now if they disappoint us, theyre going to be open to criticism. You know what . Oddly you know what i think is the best thing for the stock market . Is if they did really tighten and then what theyre going to do is bubble wrap that with a historic amount of dovish rhetoric to make people think everything is fine. I think they could pull that off. At the end of the day, if i have to slide my bet, i say they dont do it. I think theyre watching us talk right now and trying to decide. I think we talked them into it. Thats not scary to you . Not the first time i had delusions of grandeur. Thanks, jim. Coming up, we talk serenas path to the final. But what its interesting. Shes so dominant, isnt she . Im excited about both semifinal mens matches. Both of them. Both of them and theyre going to be today. Anyway, serena just two wins away from a calendar year grand slam which hasnt been done since steffe graf did it. Were going to be joined by brad gilbert. Hes been a friend of squawk for at least 20 years. Well be right back. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Rain out at the u. S. Open last night. Have to wait another day to see the serena is on her way to another final. Its our 20 year anniversary. Joining us now, brad gilbert. Youve definitely been watching for 20 years. Ive been coming to this event every year no. Squawk box. Oh, of course. 20 years, easy. Because people dont know youre a former professional tennis player, coach of the greats. And just to explain, andre had dropped to he was married to brooke and you were his coach, he had dropped out of contention, basically, right . Why we got to go there . Because you guys together watched a lot of squawk box. You and andre back in 1996, 1997. I started coaching him 1994. He was buying intel. Of course he was. Was he still wearing the wig then . Geez, you guys. Heres what ill say. Andre made the hair fashionable. Doing an interview with a british guy saying im going to come back. If i were as joe kernen would say if i was a stock, you should buy me. I got email saying that andre said somebody named joe kernen. I thought it was somebody else. He goes, as joe kernen would say im putting a strong buy on myself. Nice. I was like a year later he was number one. And we were in the box watching exactly. Its been that long for us. Now, now well get to where youve been through then andy roddick. Andy murray. I watched that match the other day. Classic match. I was shocked that four sets, four hours and ten minutes. And then he got taken to the wood shed two days later by stan wawrin wawrinka. Wawrinka, thats going to be today, right . Thats going to be unbelievable to watch. Great match. Two great mens semifinals. Head to head, only three wins are on clay. How about cilic versus youve been watching. I have. Have you been watching . I have not. Are you just a fair weather fan . Ill watch finals. Thats it . Its a 14day tournament. Big event. I was away a week ago with the kids. If i wasnt i would have tried to go. No one will beat serena. But i saw that match of halet. The way its set up now, shes 32 years old. Theres two italians. One 32yearold and one 33yearold. Im thinking if serena had to play them backtoback with no break, shed take them both to the shed. Sere serenas playing unbelievable. At the moment, i said at the start of the tournament theyre all playing for second. And if she was going to lose it would be in the first week. Hallup is a great story. Shes a great fighter. Shes one three headtohead. I think shes going to beat her. Were going to have one versus two in both. Whats going on in the business of tennis . Meaning, i unfortunately have not been watching as i should, but is it better or worse in terms of people watching . Sponsors like nike or somebody like that according to your former guy darren ravell now with espn said on tuesday night we got a 4. 8 rating. Ratings are up because this is the first year weve taken over the entire event. I think the tennis industry is doing great. Roger federer for tennis, i mean, he destroys derek jeter fans. Its a home game for him wherever he goes. Hes getting nine to ten hours of sleep right now and thats getting him through it. Nine to ten . Im lucky to get four. On the mens side we dont have a top five player. Its been awhile since thats happened. But the sport is very healthy. I think americans actually think that Roger Federer is american. Its like the way they root for him or nadal. The sport has become so big that when you become iconic stars, they become more american. For american fans we would love to see a guy in the top five. Its a federer . I big fed. What i saw him do in cincinnati, hes playing unbelievable tennis. Beyond this little sabr that hes been doing with the return, hes playing great. I mean, he hasnt aged. Hes the youngest 34yearold guy ive seen. He looks impeccable. He plays in i mean, whatever he wears. Hes playing great. It doesnt look like he i play with my wife. And she puts it anywhere three feet away. I cant get to it. Why . I dont know. I dont know. I dont start moving. I saw you talking about Automatic Cars this morning. Im like you. Ive got a 72 cadillac. Gets five miles to the gallon. Its a thing of beauty. You dont want to go to the future . Heck no. But the one thing is you get older in tennis, you know, you got to move. And movement is you dont even notice a movement and hes there. You know what . About fed, he doesnt even sweat. He plays on clay. Hes the only guy on clay that his socks dont get dirty. We have something we have to do every september 11th. Thats why i have to cut you off. I cant even get my stock picks today . No, we cant. Because its the moment of silence. But thank you for being here. It was awesome. Ive got a lot to do today. Tennis. A lot to watch. Thanks, brad. Coming up, its been a huge week for market moving news and news maker interviews here on squawk box. Were going to bring you the highlights. Plus send us your opinion. What was your Favorite Movement . Tweet us using keepsquawking. Surprise we heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . The internet of things. What were recommending as your consultants. The new consultants are here. Its not just big data, its bigger data. Were beta testing the new wearable interface. Xerox believes finding the right solution shouldnt be so much work. By engineering a better way for people, process and technology to Work Together. Work can work better. With xerox. Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. [ silence ] [ bell tolling ] [ silence ] [ taps playing ] [ silence ] can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is, can your business deliver . Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Hard to believe 14 years now. Today america remembers the 9 11 terrorist attacks. Dignitaries are answering phones on the Trading Floor today as they raise money and honor their colleagues lost in the attacks. Remember, canor, sandler, ayon. It doesnt seem like 14 years. Mary thompson is there and has more. Good morning. As we all know, the 9 11 terrorist attacks killed over 2700 people here in the United States 14 years ago. No firm was harder hit than canto fitzgerald. They lost a third of the work force at the time. Instead of folding, the firm rebuilt, and part of that rebuilding was fulfilling a financial promise to the families of the employees that it lost on that day. Now that financial promise has been kept. The company has turned us attention to honoring the former employees memories with its annual charity day. It has raised over 110 million for charities, including the 50 participating today. A Company Gives up all the profits on the trades it executes today, and donates those to charities. It has become an annual event for the new york mayor, giuliani, and today hell be joined by others, whoopi goldberg, 0. 50 and a number of sports greats. Well be trying to interview them throughout the day. Coming up at 9 15, well speak with a man who rebuilt cantor fitzgerald, and that will be coming up around 9 15 on squawk on the street. It has been a busy week this week. From beginning to end, heres a quick rewind to some of the highlights. Stocks are still the most attractive house in the financial asset neighborhood, but theyre not cheap. I think the market is priced to give you return in growth and earnings. Were looking for the next three to five years. It takes that long to learn about a company if its now, and if its outside of your core competency, you have to learn it all. Down days i like because we buy them cheaper, and we dont try to really figure out whats going on in markets. Never been any good at it. The chinese economy has been going down 2 a year. The model is broken. Were not talking Systematic Risk in ends of days. Were talking about the market has to come to certain new realities and adjust to the new realities. While they are, there will be volatility. Im a disrupter. Thats what i did as governor of florida. We cut taxes every year, and we didnt have an income tax to cut. We balanced state budgets. When i left there were 9 million of surplus. I whacked the budget all over the place. Been an interesting week. And i think there are even more moments than the ones we were able to show. It gives you a good feel about what weve been talking about. Looking back at 20 years but also trying to look ahead to the next 20 years. A lot of different views. Think about bill ackman versus ch whi chinos. And they each have their own thoughts. You have to have people on the other side too. Kiss the ground every day that were here speculating, and it doesnt matter. We can speculate think if you were one of the guys who had it all on the line. You spend your weekends in a different way if youre someone like that and then any news flash that you can see that could mean tens of millions of dollars for you and your clients. So were lucky. We get to talk about it and watch it. The other day, he said the news that their golden boy left this week to go to united. That changes the game. Theyre watching everything all the time. Thats true, and we have to reach out. I want to get him on. We should reach out to michael ward at csx. Hes a friend of the show. The other thing, our pro momos. I havent watched them run. I still get surprised. Because i forget who was on. Theres been a huge team of people putting that together for us. We want to thank them for that. Its obviously a huge crowd that takes to keep a show like this on the air for 20 years. And hopefully youre not sick of this, because were going to milk this. The party is not over yet. We might need to go further. Yeah. Were ringing it every day. Its going to just yeah. Okay. Speaking of that. Speaking of squawking. We have to doing . Our squawk viewers have been reacting to our celebration as well. James tweets out david tenner makes good tv. I feel like im being schooled. Great tv. And patrick sweets i like jim and his comments about china slowing. Weve seen a lot of comments coming from you. We appreciate most of them. David tepper said he learned aless a lesson about china. He didnt take it as a loss. He said it was an educational loss meaning that having a toe in that water helped him you said what was about to happen and helped him, perhaps, even save more money. And part of the conversation, i think he was talking at a kmes commercial break, but he said sometimes you have to lose money to make money and figure out how to do it. Take a look. Dow futures down 82 points below fair value. S p futures off by 10. 5. We got the ppi numbers that were hotter than expected. And obviously people are watching every single data point to figure out what it means in the feds big black box. Inflation. The claim you said pp. Producer prices which indication prices are very childish. I didnt catch it that time. Theyre trying to figure out what to do with it, and this is one more input that goes in. Next week a twoday meeting. Look at oil prices. Theyve been under pressure. This comes after what weve seen all week long, down about 2. 7 . Is it a fourday week . Back on monday. Ill be here. See you monday. Right now its time for squawk on the street. 14 years ago on this day, the 9 11 attacks, the day the nation remembers today and will never forget. Good friday morning. Im Carl Quintanilla with sara eisen and david faber. Jim cramer is off today. In addition to the moment of silence here, in about 20 minutes well watch the market. A quiet end of the week in