Transcripts For CNBC Squawk Box 20151119

Nasdaq up by 16. You have earnings, Economic Data and more fed speak. You have best buy, smuckers and gap all set to report erngs today. Weekly jobless claims hitting the tape at 8 30 avm eastern time and the philly fed survey and leading indicators. After yesterdays market moving fomc minutes well hear from Stanley Fisher today. Here on squawk box well hear from Loretta Mester. Shes the cleveland fed president and she will be joining us at 8 30 eastern time. The bank of Japan Holding its Monetary Policy steady. This despite data that showed the economy there slipped into recession. Also the nikkei closing at a three month high today. Square pricing its ipo at 9 a share. Its not great news because its below the range of 11 to 13 and well short of the stock in the private funding round. Giving them a market cap of about 2. 9 billion. Thats half of the private market valuation just a year ago and could have a huge impact on other private market valuations which of course public funds also hold so there will be a lot of discussion and debate about that. Now on to match group, Parent Company of the dating Services Including tinder and okay cupid raising its ipo. Pricing it at 12 a share. Match group owned by barry diller and kayla will join us in about 20 minutes. Greg blatt will join us first on cnbc at 8 40 eastern time. Is square a unicorn . Square was. Yes. Unicorns go bust. What do they call them now . Unicorpses. Thats half of what it was. People in on the private market it was a slam dunk for a couple of years. Anybody that could get in action like aston kutcher. Whats his name . Kutcher. But also looking at how mutual funds like black rock and others that had bought into some of these in the private market are valuing these things whether theyre holding them on the books at the private valuation or whether they can do Everything Else. Well get to United Health care which warned the dow component. United health care is a dow component because they change them so quickly. Who writes these things . Do you think its like one person. One person. U. S. Stocks rally on signs that the fed now thinks the economy is Strong Enough for a rate increase. Now that is, okay good news is good news. But we look for a reason every time to explain something that we dont understand. Thats a new one. Have to say that watching the Market Action yesterday i was doing the same thing. Wait a second. As if the fed would know. The confusion has been all along that the fed is saying we dont know and the market is saying what do they know that we dont know. They have now because they were worried that they didnt telegraph it enough last time, they have now telegraphed it enough. So it would read on signs that the fed has now justified tell grafg it enough in terms of saying the economy is Strong Enough. They have been doing it so they have to say were right. They faced a lot of criticism for not being clear and concise. This time theyre going to sweep all of that away and say this is what were doing folks. Listen to us. Theres someone and i saw it once again. I think it was southwest. This guy is a double point or whatever it is . A person that says that Economic Conditions right now are probably worse than they were a couple of years ago when the fed ended qe. When the fed ended qe that were probably in a worst position. So relative, really, the fed at this point decide we got to go and im not sure no, someone at that firm i think. Ill find it called i dont know, but ill get it for you in a second. Lets get the United Health shares. I cant tell where they are going to open necessarily. Its been all over the place but right now its down about 4 . The dow component cutting its earnings guidance. The change reflects a continuing deterioration in individual exchange compliant Product Performance and also making some other comments about the coops that have been shutdown, their claims experience. Not as good as they had hoped and also for next year theyre trying to realize some of this below par performance already in what theyre talking about now but its 425 million in adjustment in the earnings 26 cents a share. 26 cents a share. So theyre bringing their full year guidance down from 6. 31 the street was expecting. The exact quote from the ceo lays this out perfectly clearly. In recent weeks growth expectations have tempered industry wide. So he is saying this just isnt United Health. This is everyone. Cooperatives have failed and market data signalled higher risk and more difficulties while our own claims experience has deteriorated so were taking this proactive sptep. The price rise challenges appeal the health law because across the board rates are rising for a lot of the products but its making people wonder if its going to bring. As the rates go up fewer people will sign up for these things. Thats what theyre seeing. Higher premiums, fewer doctors and skimpier coverage which threatens the appeal that you need to balance out all the other people that have listen i already deleted that thing. Ill try and search for it. Elsewhere share of Green Mountain jumping. The companys Quarterly Results topping expectations as a strong dollar weighed on sales of the br revenue coming in later than expected. Decliens as demand in the core storage business fell and as far as pharma watch the shares of allergen. Pfizer is discussing an offer between 370 and 380 a share for the company. Discussions are said to have picked up amid talk of another new antiinversion push. And the Treasury Department announced it would seek to tighten the rules on the corporate inversion. Now lets get to this mornings developing story. Police carrying out raids in brussels today related to last weeks terror attacks. Julia joins us from brussels with the latest. Julia. Thanks so much, becky. The news here this morning is that we have seen seven raids. Six of which are tied to the par gatt paris attacks on friday. A known associate of the suicide bomber believed to be part of those attacks. He was believed to be resident until february. His family lived here for many years but thats not the only association between the terror attacks and belgium. If we narrow it down to the man thats believed to be the chief architect of those attacks hes believed to be aresident of an area called mullenbeek. So very much the target and its where one of the raids this morning was targeted. The authorities are criticized for not doing enough to clamp down on the radicalization particularly in this area where many refugees from the middle east are living. This morning theyre very much on the front foot trying to get further information about those paris attacks. Now over the paris and michelle for the latest there. Michelle. Thank you julia. Theres one dominant question here in france today. Is he dead . The alleged architect and organizer of friday nights attacks. Did he die in yesterdays massive watt raid in northern france. Were told by the prosecutors that he was the target of the raid and the prosecutor will say only he was not arrested yesterday so he was not taken alive but today the Washington Post reports he did die in that raid. Almost no french media reported that at this point but thats why its such a key question here because of that report from the Washington Post. Now the leader of the s. W. A. T. Team raid has spoken with the french newspaper this morning and given more details of how the raid went down. They to bomb it open and it fell back on the police and made it more difficult for them to get into the apartment. When the female suicide bomber detonated her vest that lead to complications and the police used drones, robots and cameras on poles pushed through the floor to monitor the suspects as the raid progressed. Five police were injured. The other big event is parliament is debating whether or not to extend the state of emergency from 12 days to three months and its not just duration. Its also giving more power to the state. The way the french media describes it is this. It gives the state the power to arrest syringes and put them under house arrest for having a dangerous attitude. And by all accounts this will pass without a peep of concern about whether or not this is going to impinge on several liberties. Thats how devastated the country is in response to what happened on friday night. Desperate measures for desperate times. Were a long way from where they are right now. But the shoe was on the other foot. This should be enough for us to put ourselves in that same position. But there before the grace of god go us michelle and hopefully well get a little more involved than some people think we are right now. Im going to play for you a sound bite in the next hour, joe, from a member of the green party about how he feels about boots on the ground. Even if you dont want boots on the ground, you remember 9 11 and afghanistan seemed to be a place where the people that did this to us were residing and we were looking for a target where we could hit them and try to stop another one from happening. Then iraq came along and thats what you hear now, they werent responsible for 9 11 so maybe that was not thats the wrap at this point but right now we know geographically where these people are. Theyre all selected right in that little area. And it just seems like if it hadnt been for the iraq war we would absolutely have the sort of will and fortitude to do that. So just shock and awe. Instead of we would have never thought of containment in september 2000 alone. We would have gone in and done we had the wherewithal to do it. If theyre collected there in a Geographic Area where are we not talking about that . They are the people that perpetrated this. Not like in iraq. The American People though i think are exhausted of war and frightened of it. Well see if whats happened here has changed it. Remember there was a shift in the Public Attitude in the United States when they began be heading americans but its a worthy discussion to have. Is it better or worse to begin some kind of full on war against isis right within syria . Isis just put out a video too targeting times square in new york city. Yeah. I dont know. All right. Thank you michelle. Quickly here, double line capital. One of the leading Portfolio Managers fears a fed rate hike could cause an accident in the markets and she points out that we are in worst shape. The economy is in worst shape than it was three years ago when they ended quantitative easing in terms of Commodity Prices and Industrial Production and it would be like putting your foot on the break when the car is out of gas. It would create the problems. Not just coming at a bad time. Theres a high probability of an accident in the marketplace and also said the chance of not having to come down and go back down in rates. Its not to criticize no matter what it does at this point. Rightly so, maybe. Well see. Lets talk more about all of this. We showed you the futures. Theyre pointing to a strong open after yesterdays big rally. The dow, the nasdaq and the s p are posting the best day in a month and in fact all the gains put all the major averages in position to be positive for the month of november. Joining us to talk about why the markets are shruging off the threats. He is for the private wealth and Investment Group at Merrill Lynch wealth management. Why do you think the people are cheering the fed raising rates at this point . One is 215 is mostly over. They are looking at 2016. The signs of a little bit of growth is there and thats one. The fed being unclear reduces uncertainty if markets. If its 25 basis points that sets us off on a path. They made it clear the slope is not like this. Its actually quite low so thats encouraging and the third thing is you have looked at i think the geo political events global mri and theres discussion earlier markets have held up well. The high Profit Margins and the like are still intact so investors are looking through the issues there right now and saying ill take it. Lets talk about the concern that the fed raising rates could contain a market accident. Things were so much weaker than they were six months ago. I was just in china last week and i think that whats really key to the market is the balance between the fact that china is slowing and needs to ease and the u. S. Is heading into rate cycle and wants to tighten and they cant have a Monetary Policy and fixed Exchange Rate at the same time so china is tightening when it needs to ease because its economy is slowing against a 6. 5 growth mandated by the government and this is why we had the accident in the market in august and september and the fed backed off and now were in the same situation today where the market is signing off on it right now. The probability of a hike is now 66 in the feds funds market so the market is signing off but the fed needs to be careful because if they go too fast it might put china into play with another devaluations. Do you think that balance would be offset by a 25 basis point hike . It depends on financial conditions. The chinese yuan is to the dollar. Credit spreads, inflation expectations, Commodity Prices. So we need to sort of carefully monitor and yeah you would think a quarter point hike shouldnt matter but the markets are delicately positioned right now and the fed needs to Pay Attention to what the market is telling it. So far theyre doing that. That almost brings us back to the point. Is there a right move for the fed . If as we get closer to the December Fomc and financial conditions are denine and the market is sort of blessing the rate hike they can get away with it but they need to be careful to watch those signals. That sounds like a temper tantrum could completely throw things off balance. Do you think that, chris . I dont. I feel like a lot of it is if then. If they raise, that will happen. If they dont, this will happen. I think the reality is one the fed is on the path of tightening and there will be some response from china. They have room for more physical stimulus. Theres opportunity in 2016 so change the way that we look at growth. Its all been monetary lead. It could be fiscally lead. It does get to the point, how fragile the markets are. The perception if that theyre fragile but the fundamentals arent good. Cash flow is good. Where did the m a come from . Theyd have to do 12 straight quarter point increases. 12 straight. Will that happen in our lifetime . To get to 3 which years ago, if we would have had 3 , we would have thought stock markets would go up forever on 3 money so there has to be 12 of those before we get to three. Once you get over that were not on zero anymore, Market Participants have to look and say wow this is a positive environment for stocks. The point youre making is simple or is very good which is its a Second Derivative market. Is it accelerating buy it if not sell it. Were into that so what the fed is signaling if rates are going to be rising and people worry about whether or not theres a enough growth to sustain it. Were looking at the euro at 107 and youre saying that could be a key thing to be watching. A lot of people said 107 mean wes raised a quarter basis point. Whats the big deal about 0. 25 hike and why does it matter . Then august and september happened and we had to back off. Were in a Global Economy now and if china is facing devaluations and needs to span down its Foreign Exchange reserves to defend that whole process then it does have an impact on the Global Economy. Youre saying the markets are fragile. Its very powerful and maybe more power than the fed and economists would concede so it is a big deal and the euro at 107. I look at the broad dollar. Its making new highs and thats a form of tightening around the world. So youre not committing money to the market right now . I think the market needs to prove itself here and until it does 2015 is a year where price follows earnings and earnings are going nowhere and therefore price is going nor and we need to get out of the tension until another major up cycle. If the market had to consolidate the move from 2009 its more than doubled since then and if it needed a year to consolidate and take off we have done it. Weve done our time now. We have felt it but we have gotten nowhere in over a year now in the market to go to 21,000 on the dow. At fair valuations which i think we are at price follows earnings and earnings are being depressed by energy, mining youre giving the consensus view that probably we have nowhere to go. No, were in a Holding Pattern and earnings are held by energy and industrial minings which is a china play and we need earnings to get back on track which means commodities have to start falling and we go back to 6 or 7 00 Earnings Growth and you van 8 or 9 market so its certainly not a bearish view but were in this Holding Pattern until china and the u. S. Get on the same page in terms of their economic cycles and that puts tensions on the dollar and creates tension in the market. Its kind of their five year fiscal plan so well watch for that. So its going to be a market crash when we go up a quarter point or were headed to 21,000 near term . Im somewhere in between this. I argue both sides today. Small Earnings Growth is there for 2016. Good on a debate team. I have no strong convictions i guess. I dont think the market is going to crash but we will see but a quarter point. This certain says it could set people are set up it could set up a Chain Reaction of china, what its going to do and china has to thread the needle. Theyre trying to reform its inefficiencies while growing at a very steep rate and the way out of that is to devalue your currency. Thank you for coming in today. Thank you. Coming up when we return yahoo under pressure from an activist investor again. Well tell you why this time. Plus disappointing knighnights square and match and well tell you why match felt the need to disclose a very personal interview that the tinder ceo did with a naews organization. Take a look at this date in history. The future belongs to the fast. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. This is a major change in its position from last year when the activist investor urged yahoo to separate from the ecommerce giant. They say alibaba carries too much risk. It follows the decision on not to rule on whether a spin off would draw billions in taxes. Now pushing for yahoo to sell its Internet Business. In other tech news, two high profile ipos this morning. Kayla joins us with the stories on square and on match. We have two new data points of how the ipo market is going. Match pricing at the low end of the range, 12 to 14 a share. Theyre raising 400 million. Those proceeds will go to iac which is the Parent Company and will maintain majority control once it goes public. Square priced at 9 a share which is below the range of 11 to 14 a share. It will raise 240 million for the company and value the company if you use the toetdtal shares outstanding number. Thats a cut in half of its private market valuations. Its an understatement there but its a humbling move for a quarter and a pretty volatile ipo market. Youre taking less proceeds for the company and for investors to set a floor where the stock would hopefully go up from here and create upside for investors. The word on the street is some of the long only investors needed to buy into the company because they have been burned not only on ipos but private Market Investments. What does this do are people actually going to mark these down. Theres the article too about how the start ups dont like the fact that the mutual funds are marking the shares down that they felt caught flat footed by the fact that the funds were even doing that but it come with the territory. With youll be a lot of People Holding stocks and some people need to mark on a more frequent basis thats going to happen. Its going to do more to cool the private Market Investments than perhaps this ipo itself does although theres a headline that says that square takes a bullet for all the unicorns meaning its going to show that its okay to be honest about your valuation when you go public. Well see how the market treats it. We have to switch targets just to get into the real gutter this morning. I know where youre going with this. Speaking of match this is tidner ceo. Spent only a little time discussing the company and much more time boasting about his own sexual accomplishments. Apparently the Parent Company match decided that this was so news worthy that they needed to disclose it. In an sec filing it said the stats in the article are incorrect and noted that he is not a director or executive officer of the company and was not authorized to make statements on behalf of the company. He gave the age he lost his virginity, the number number of sexual partners. Yeah. So you want my thoughts on this. What age. 17. How many. 20. By how old is he now . I would think mid 30s. My question is going to be, you know austin powers, theres 80 million millennials now, why would these godless selfabsorbed millennials have anything to do with match when theres tinder. Im not looking at you because youre a millennial and youre married and everything now. Match would go out of business compared to tinder. Well, match owns tinder. Match is tinder. Never mind. I thought you were going to say youd think the number would be higher. Higher than 20. He uses tinder as any ceo of any company would hopefully use the product that they run. He said that he falls in love every single week on tinder. He also said he turned down a super model that really wanted him. Wow. Normally they call it a quite period because youre not supposed to be marketing your share. Did he say anything that was important about the companys statistic though . Was there anything really inherent ordinary reason the match ipo . I read crazy headlines on this stuff . I dont think there was anything necessarily material for the ipo. The article itself did quote some statistics about the company. Unclear if those came from rad or if they got those. There was a vanity fair piece that trashed tinder and he said something about looking into that reporter which were very similar to the uber comments. 29 years old. So in 12 years, 20 youre not impressed . Just had someone recently that will remain nameless talking about 5,000 career and like 200 in the last six months or something. I mean, this is this is jv stuff, do you think . Dont use the word jv anymore. The last person that used that, the jv is up 4400 since he used that term. According to the cia director. Im married. I know nothing about this. Before you were married you knew nothing about this. It didnt exist before. And thankfully none of us do. Thank you. When we come back, the World Economic forum out with its annual report on the Global Gender Gap this morning. We have the details on pay differences and what companies are doing about it right after this. Is that you can create wealth through capital appreciation, and this has been denied to many South Africans for generations. This is an opportunity to right that wrong. The idea was to bring capital into the Affordable Housing space in south africa, with a fund that offers families of modest income safe and good accommodation. Citi got involved very early on and showed an enormous commitment. And that gave other investors confidence. Citis really unique, because they bring deep understanding of whats happening in africa. I really believe we only live once, and so you need to take an idea that you have and go for it. You have the opportunity to say, ive been part of the creation of over 27,000 units of housing, and to replicate this across the entire african continent. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back. A quarter of a billion women entered the work force in the past decade but theyre only earning what men earned in 2006. The latest results from the annual Global Gender Gap this morning and joining us now is the head of employment and gender initiatives at the World Economic forum. Good morning. Good morning. So tell us the gap is closing but so marginally and im assuming that well, i wont assume anything. Where is it closing and where isnt it closing. Overall the world as a whole, only about 3 of that economic gender gap has been closed and only about 4 of it overall. Thats about 109 countries but thats happening in the pockets. Thats where the interesting stories are. Most countries a little bit of progress but stalled in the last five years or so. The u. S. Is at 28. It moved forward by 3 in the last ten years but at the top of the rankings theres some hope and at the bottom theres hope as well. Countries like iceland actually moving forward a lot. They closed by about 10 . Saw day rab i cant all the way at the bottom but made a lot of progress. You attribute it to what . What did they do differently . They managed to find ways to create policies that make it easier for parents not just women to combine work and family. They put in place the right kind of enabling environment. Child care policies, the ability to benefit child care. They made it possible to find the right kind of benefits as well to ensure that both sets of parents are able to work. Saudi arabia started out near the bottom but managed to move up a little bit. Quite a few places in the rankings and its the country that made the most progress relative to where it started out on economic participation of women now they have a long way to go but they made the investment in education and made a serious effort to ensure that women are part of the work force. Is that the biggest thing is education . One would hope that Everything Else would move along naturally but it doesnt. It takes specific policies from companies and countries and governments and most organizational structures and Government Policies are designed for a family model that used to exist maybe 30 or 40 years ago. Today you actually have dual income households and it isnt possible to make it work. Can they drive to work . They cant. They cant drive to work . No but the government is trying to create policies that will allow businesses to have incentives to create the right driving systems for women to get to work. Driverless cars. Maybe driverless cars. Are you going to go this year to the World Economic forum. Yeah. Ill be in davos. Belvidere . No definitely not. I got the confirm yesterday. There it is. Its cozy. This converted tb sanitarium. Its cozy and i looked at a picture that i took last year and it brought me right back. If you try to get out of bed youll hit your head on the wall. Crammed in a small space for a week. Its nice. And they have that nice little breakfast. Yeah. And the pizza place too. Did you hear what she said . Are you at the apartments way down by the train station. Way, way down. The head has like six rooms there. Hes like drinking champagne. Thank you. Ill get you out of this. Thanks. We look forward to it. Coming up, a live report from london on early european trading. Stay tuned. Squawk box will be right back. [ girl ] my mom, she makes underwater fans that are powered by the moon. [ birds squawking ] my mom makes airplane engines that can talk. [ birds squawking ] my mom makes hospitals you can hold in your hand. My mom can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] my mom makes trains that are friends with trees. [ train whistle blows ] my mom works at ge. Welcome back. Time for the squawk planner. We will be getting Quarterly Results from best buy, j jm smuckers and gap and you better Pay Attention to the jobless claims. Also plenty of fed speak to keep us busy today. Also cleveland fed president Loretta Mester will join us at 8 30 a. M. Eastern time. Now to london, wilfred frost joins us with with the early european trading. Good morning. Hey, becky. Very good morning to you and as you can see a sea of green behind me. We have the broader stocks 600 in europe up over 1 today. Lets get to the individual markets. It feels like wall street is taking the global lead this week. On monday we had a wall street surge that carried through to us on tuesday and yesterday we had a wall street surge which carried through to europe today. We can ee about 1. 5 for germany. A descent return for the ftse 100 as well. Europe leading the charge. Minor developments on the paris story today. Some stories too but in general were following the u. S. Lead. I want to point to the bond market as well. Interesting moves there. The spread between the u. S. And german 10 year now 175 basis points. The ten year in germany below 1 plt 5 . Let were in negative territory not just for the 2 and 5 year but the 6 year also in negative territory. It highlights how much people are expecting more easing in december almost as strongly as expecting tightening from the fed following the releasing yesterday. December promises to be very exciting on the Central Bank Front on both sides at the atlantic and on that note back to you. Andrew. Thank you, wilfred. Great to talk to you. When we come back, u. S. Stocks getting a boost from the latest fomc minutes. Richard fisher will join us on the set when squawk returns in just a moment. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. Thats where at t can help. At t has the tools and the network you need, to make working as one easier than ever. Virtually anywhere. Leaving you free to focus on what matters most. August is i assented then, yes, there were potential concerns you might have for Downside Risk going to Global Economic developments, but weve overreacted to those in the past, and i didnt see an immediate connection to economic fundamentals in the United States, and i think that assessments been born out. That was richman fed president here on squawk box yesterday telling us why hes pushing for a while now for the fed to start hiking rates. Next guest on board with similar thinking, richard fisher, former president of the bank of fed in dallas, Senior Adviser at barclays, a cnbc cricketer, and thank you, great to see you, always great. Richard, the fed has now telegraphed its intentions to the point they feel comfortable that the markets prepares. Right. Thats the difference i see in the last few meetings where they didnt do it and where they are today. I feel like im played. Im not really sure that the economy is that much different than its been when they have not done it in the past, and the only difference is something to them. They feel like theyve now telegraphed intentions so now they are able to do it under the pretense that, finally, everything aligned to where we know now its possible to do it. Am i wrong in that in. I think things were aligned for september. Right. I think why didnt they do it . Well, i dont know. Theres remorse they probably should have done it. They had the opportunity. I dont care where the market was trading, now trading at twice the level it was then, so i was not part of the discussion. Im not a part of the committee, but they realized september was a missed opportunity. Nothing changed. Numbers are slightly better on unemployment, housing numbers not as good. Consumers, Retail Stocks down 3040 . As you know, and you talked about it, fair it out with cyberspace. True. Stan fisher making the point, no matter what they do, its still accommodative. You know, janet put herself out there and the committee put themselves out there in terms of buy the year and buy the year end, and september, hate to use this analogy, but it was like lucy pulling the football away as Charlie Brown was about to kick it. I do expect them to move in december. They should move in december. If they dont, i think they will send a terrible signal to the marketplace. Especially after what incured yesterday with the minutes. And then we are i want to talk about this because this is horrific, but we are the beneficiary from the standpoint of capital flows and investment in this country of the hof risk things taking place in europe right now. Other than the dollar, and we have to export to someone, and they are potentially weaker. Joe, were the biggest importer, consumers in the world, and 82 of the jobs are created by small and medium sized businesses in this country, mostly services, not by large corporations im on the board on, pepsico, for example, brilliantly operated, successful, youll like the price of the stock as it keeps going on up, but like any other company, you get a ding in terms of foreign exposure. Im talking about the guts of america, and we are consumers. Strong dollar, and i expect that dollar to continue to strengthen because people are afraid, even in europe right now. The refugee issue is whether we take them in 31 states, whatever the heck it is, this is the safest place in the world for capital to go, and i think well be the beneficiary. Thats going to help keep the lid on things, but, still, Monetary Policys massively accommodative. Janets job, as i said, her destiny is to determine her legacy, and bens legacy is determined by how do you engineer the exit . We dont know the program worked until its over. Back to the what was a loser feeling of safety because of the ocean prior to 9 11, back to that mind set now, and that makes me a little bit nervous that we think the oceans protecting us. They are sending out tapes of times square. I know that. This is god bless new york, this is a vast country with enormous power and wealth, and i dont care what people say, the bus bushcheney administration, and this administration continued it, our Intelligence Services are first rate. I feel safer here than elsewhere in the world. Right. Its a question of how people with capital are going to allocate that capital, and set aside the terrorism issue. The refugee issue, look at what its doing to germany, tearing it apart politically. She has her most important number two, the finance minister, who really is an incredibly harsh operator, strong, brilliant man, openly challenging her. Right. We have not seen this in a long time. Showing if germany gets political turmoil, again, just at the margin margins all of europe. Exactly. You understand this stuff. Actually, you dont, but [ laughter ] excuse me . Excuse me . Hes a little under the weather today. We got to im even giving him a break too. One of the big Portfolio Managers, his firm says that three years ago the economy the commodities were in better shape, the industrial side of the economy was in better shape, and at this point, its, like, tapping your brake on a car that is out of gas, and there could be a market. I argue the other way. I say three years ago was enough to go up a quarter, and a quarter didnt hurt three years ago or now. Youre worried now . Not really worried. You would have been me on the committee. I lost that argument big time. We were moving in the right direction. You want to anticipate and do things ahead of time, but we waited and waited and waited, and that was the group decision. I admire and accepted the decision. The question is, what do you do now . The tank is full, by the way, of all the liquidity, meaning the gasoline you can imagine. Right. Theres Something Else going on. Lacquer yesterday said it was not malinvestment that he was worried about from all the, you know, the feds balance sheet, but the classical view we dont want to get behind the curve on inflation, on regular im less worried about inflation, even though im the hawk. Youre worried about malinvestment . Destroys capital markets. Destroys capital marketed . Distorted. Distorted. Youre angry because i said that. I love you, youre a great guy who terribly misunderstands the world. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Theand to help you accelerate,. Weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Breaking overnight, new details in the fight against isis, live reports from paris and brussels where they are conducting raids on suspects linked to last weeks deadly attacks. Stocks posting the best gains in a month, saying a fed rate hike is on track. The ceo of Morgan Stanley international will join us to talk about global stocks and the appetite for m a. All revved up, auto sales at a record pace. Asking ford whats driving suv sales with an inside look at the redesigned escape. The second hour of the squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box, everyone. First in business worldwide. A story from belgium today, authorities carrying out seven raids targeting people connected to the paris attackers. Officials have not released details of the raids, but the raids in france wednesday rotedly foiled a terrorist plot in the financial center. Its not clear whether the attackers died in the assault. Well get an update in a moment. Separately, isis released a new propaganda video yesterday making threats against new york. The video shows several scenes in manhattan like times square and herald square. They said the video reaforms new york city, obviously, remains a top terrorist target. The major said theres no specific and credible threat against new york city, and he urged new yorkers to go about business as normal while remaining watchful. We are on ipo watch this morning. Square, pricing the offering at 9 a share, below the range, even on the low end. It was 1113. They got nine, well short of the price in which they sold stock in the previous funding round. This is the mobile Payments Company 2. 9 billion, half the private evaluation more than a year ago. That came home to roost. Match group, the Parent Company of dating Services Including okcupid, was priced at 12 a share, the low end of its expected range. Match group is owned by Barry Dillers iac interactive, and successfully got us to make us stop calling it yockey. How in. He said, stop it. Okay. I take it back. Match group chairman, greg blatt joining us at 8 40 eastern. A few other stories were watching at this hour. The markets, dow, s p, and nasdaq coming off the best day in four weeks. Futures indicated higher again this morning. Dow up 24 points, although, we have seen that come down from where we were an hour ago. Part of that because of the United Health care and warning its issued, but you see the s p 500 up by six points, and nasdaq up by 15. On todays economic calendar, well get the fed survey and november leading indicators. Plenty of fed speak still to come today after the minutes yesterday that moved the markets. Dennis lockhart and Stanley Fischer giving speeches this afternoon. The fed president is joining us on set at 8 30 eastern time. Earnings from best buy, earni earning 41 cents a share, revenue in line with forecasts. 8 increase in same store sales, only half of what analysts expected, obviously, the next quarter is the big one for best buy, but look at that, another retailer all the way back to the lows for the year. Right now, let us get back to paris. Michelle carusocabrera joining us with the latest on the raids against the terrorist suspects, and a lot of people, michelle, asking how long does it take to identify a guy to know whether its the guy . When you realize 5,000 rounds and one dead from a bomb and the other person tough to eye, 5,000 rounds, not that they all hit him, but it makes it tough. Reporter yeah. Youre referring to the burning question right now, is the terrorist dead, the alleged architect, the target of the massive swat team that happened yesterday. The french prosecutor said he was not among those arrested. The dead bodies found inside were so disfigured its difficult to identify them. Were raising the question repeatedly because the Washington Post reports, since one of the few of only said that, indeed, he was killed in the raid, but the french government has not confirmed it at this point. Thats what we are waiting for. Maybe theres clarity today. The other big event is we are watching the French Parliament today. They are debating the extension of the state of emergency for france. They agreed to vote yes to the extended to three months, but now they are voting whether to extend the Police Powers within it, that the president would like to happen. I can tell you that the french Political Class in the wake of friday night has become incredibly hawkish. First, we are going to play for you a sound from a gentleman from the right, mp from the right, i asked specifically about one of the new clauses within this, one of the new roles that the police could have as they could put people under house arrest for having a dangerous attitude. He had zero concerns about peoples civil liberties. There shouldnt be freedom for the enemy of liberty. When you take the human rights and citizen degradation, which is back to 1789, it says very clearly that means you can walk on the street without being killed by anybody, and we need to take preventative measure to avoid that by adopting this law. We are just protecting public liberties. Reporter it is not the right only thats hawkish. We spoke to a member of the green party as well. He wants boots on the ground, american beoots on the ground, russian boots on the ground, and french boots on the ground. We have to go on the ground with french soldiers, with soldiers, american, with russian. The world is not a war on another country, but a war on another idea of life. Reporter a member of the green party advocating war is startling. We want to show you the latest issue of charlie hebdo, the weekly satiremagazine. They were the target of attacks in january. The cover is so what if they have guns, screw them, we have champagne, they are always running covers that are borderline offensive, which is why they were targeted last time in january. Guys, back to you. Right. Boy, watching john kerry do back flips yesterday, michelle. People shouldnt think out loud. You know what i mean . You think out loud, and then we know what they are thinking, and thats pretty scary. Reporter Walter Issacson was on, i played the gentleman from the green party, i played that thought, and walter was in the afternoon with kelly, and it was we played that next to john kerry, and he said, are you kidding me . The green party is more hawk ir than the u. S. Secretary of state that thats the situation were in now. Its amazing. The people suffered this horrendous attack, similar attitude that we saw after 9 11 in the United States. It feels like a very steady drum beat towards war in the country. All right. To come out and said, you know, there is no justification for a horrific terrorist attack on innocent civilians. Theres no justifications for that. Its, like, who was thinking there was, secretary kerry. Yeah, i heard that. That was unfortunate. Other than you, no one else would have ever considered that. Anyway, thank you, Michelle Carusocabrera. We are joined this morning by one of europes top financial figures, at the helm of Morgan Stanley International Since 2009 and led the firm to be ranked number one in equity trading by revenue globally this year. Our guest host, Morgan Stanley ceo, president of Morgan Stanley institutional securities based in london too. And you believe its been ten years since the here its been since the two been 14 years for us since 9 11, but here we are. Youre in a good position to gauge the Economic Impact likely to come from this. Is it im i seem more worried of another imminent problem somewhere than in some of the previous its madrid, m mumbai or london. Seems isis is different in that way. Isis is different. We had a history of terrorism in new york, as you know, the ira, the red brigade, a number of other extreme left factions. We had bombs and spain as well as madrid. The real issue in europe, mainland europe, is that you have open borders, which is part of the e. U. Agreement and Free Movement of labor and so on. That juxtaposed with this whole issue of migration at the moment is causing a very political issue. The u. K. s slightly different. U. K. s probably the most cctd country in the world. They have, to my knowledge, 28 aborted attempts already this year. They are in the state of what they call severe mourning. 28 . 28. Terrorist attacks . Probably more now. They have good intentilligence. The problem in france as you saw, the give ups were moved across the border from belgium, people came in that way, and the french dont have the amount of surveil lap surveillance that the u. K. Does. They put temporary border controls in place, in certain countries, as you know, because of the migration issue. Whats that do to the economy if the agreement falls apart . Twofold. You knowly, migration is good for economy, more labor, governments borrow more to support the immigrants, feeding through the economy, classic. After that, these people get work, and, in fact, the u. K. Had the economic recovery to the large extent because of the immigration policies, but its saturated now. The issue here is that the migration debate is totally confused with the terrorism debate. They came through allegedly on syria passports as refugees came through. There are ghettos which are acting as breeding groupds and so on, and its a big problem. I dont think its easily solvable. We have children. You just cancelled their not cancel, but you are irish, and ireland ice looking good. Scot lands looking good. Having said that, nowhere is safer at the moment. Not headed to rome any time soon. I heard thats high on the list, some of the most popular spots, and, obviously, paris is on the radar. Yeah. To the economic prospects, europe has a fragile recovery. I dont think 1 recovery is strong, especially after the sheer amount of qe boosted into the system. To a large degree, and economists are upset with me, a lot of the growth came from a weakening euro and weaker oil, right . So whats happening next . The worst signs of green shoots coming through, you know, in italy, particularly, and so on, but, clearly, if the consumer is not coming out and shop or feel secure around the streets, that is a threat to economic recovery to what is already a fragile recovery in europe. I have not thought of that. Maybe were in a position to be okay with Dollar Strength because europe needs the euro now more than we need a weak currency at this point. Globally, i mean, japans back in official recession at this point, has to do with demographics, not what abe can or cant do. Its both. Its following through the speed of structural reform. Started well, we are optimistic. The target recovered reasonably well, but now were in a technical recession after two negative growth quarters. Around the world, we think china stabilized, which is good, its not acting a a drag, but not a pickup in growth particularly. Really, its the u. S. Growing, and europe, as i said, is threatened. Global growth is sub 3 , low as its been. Youre not going to get in the respite from the emerging markets here and wont for some time yet. Maybe it was hyperbolic, but these attacks drove a stake through liberal europe, might be a mistake, but look whats happening now. The french suddenly moved so it seems like mr. 75 income tax is so hawkish all the sudden. You wonder what happens to merkel with the immigration. The rights going to make gains on all of europe, arent they . Yes. By the way, the last european elections, right gained as well. There was a low turnout for elections. The elections coming up in 2017 will be critical to see what the turnout is rather than the sub 30 that happened. Europe is the migration issue without a doubt. That will test the European Union. What chanwhat the chancellor dis what was the worst demographic in the world, the ageing population, but that was good, and she was clever to skim off the top, if you want. Its much bigger now, the whole issue. Youre right. I mean, its not inconceivable. People talk about exit. Its not inconceivable to talk about the french exit. That means disillusion of the union. I dont think that happens, but theres strains now on theupon because of this, and, you know, meetings in brussels are, im told, are going on 24, 25 hours m i dont know how productive a 25 hour meeting can be, but shows how concerned they are. Your brothers irish ambassador to the e. U. My big brother, yeah. Maybe you didnt expect that you would be a diplomat. That was a good conversation we had, but its like youre an expert on ive been accused of many things, but never that. Well talk more well get down into the m a and, you know, andrews questions, you know, andrews sick. He had to leave, but well get into all of that, but thank you. Its very interesting. Its happened. We have to talk about these things. Again, hes here the rest of the hour. When we come back, though, paris attacks complicating the refugee crisis in europe. An expert from the group against the fight against isis and border security. Then, the Auto Industry boosted from record suv sales. Fords president to the americas joining us with a new look at the ford escape. 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 . Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. Welcome back to squawk box, everyone. The shares of best buy were up 4 , but fell sharply after reporting same store sales that were half of what analysts predicted. Earnings came in at an adjusted level of 41 cents a share, six cents better than expected. Revenue in line, but same store sales created some concern. When we come back this morning, the ford escape got a makeov makeover. We have an inside look at the second best selling vehicle. Thats coming up in a moment. Joe hinrichs joining us, the fords president to the americas. Squawk box will be right back. 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] 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 . Theand to help you accelerate,. Weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. The market. Redict. But at t. Rowe price, we can help guide your investments through good times and bad. For over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions. You can feel confident. In our experience. Call a t. Rowe price retirement specialist or your advisor. To see how we can help make the most of your retirement savings. T. Rowe price. Invest with confidence. Authorities conducts raids on terrorist suspects overnight. We are joined now from brussels with more on that story. Julia. Reporter thank you so much, becky. What we saw this mornings was seven raids here in brussels and surrounding areas. One man we believe has been taken into custody, but the vast majority of the raids are targeted known associates of one of the suicide bombers involved in the attacks in paris on friday. A man called hadfi so targets there, but drilling down further to why the focus is shifted to belgium. That man was believed to be residing here until earlier this year, but the man focused, the chief architect of the attacks resided here in belgium in an area known behind me, an an analyst here called this the Political Capital of jihadism. Its a hot bed for radical is m islamis islamists. They are accused of not clamping down on the political activity in the region. What we got this morning is the belgiums stepping up, trying to get more information about the pare attacks, and targeting the radical islamist activities behind me. Seven raids, expecting further di tails later on today. Back to you. Julia, thank you very much. That is our julia chatterly. Joining us now is euroasias group, having a conversation about what it means and if europe is going to close borders, tighter borders, and end the agreement over this. What do you think . I mean i think theres a move to secure the European Unions external borders, and i think youre going to see significant policy action on that front. Regarding e. U. Borders, mostly, they will remain open. Germany and france recognize there is tremendous symbolic value in keeping borders open fundamentally. They speak to the essence of the European Union itself. You may see more ad hoc spot checks, especially among routes that are vulnerable between france and belgium. Theres no systematic reconstitution of border controls within europe. Do you think that that would be in jeopardy if there was another attack . I mean, certain leaders is certainly under pressure of what happened in paris. Angela merkel most explicitly, under tremendous pressure in her party from her own public, but also from the rest of europe, and there are leaders that have made a direct connection in refugees and terrorism and Hungarian Prime Minister the most notable so americales policy regarding refugees becomes harder to implement in light of what happened in paris, and the borders speaks to the pressure. Sure. Part of what you are talking about, though, assumes leaders there right now remain in power. That could come into question as well, that political winds still difficult to try and determine, just a few days after these attacks, but it does seem to have changed sentiment on the ground rapidly. Well, certainly, in france, i think hes more vulnerable post attacks in paris. The governments been trying to get people focused on the economy and the economic narrative. The economys actually doing better than people think, but the government cant get people focused on it. In light of paris, i think, theres a fair amount of government confidence called into question. Along the vulnerable elections in december, and, of course, president ial ones in 2017. In germany, i think, look, there is a lot to say about merkel and how vulnerable she is or is not given the refugee crisis. This is a challenge for her, but the numbers are still fairly prosperous delivering her party north of 35 , between 3538 depending on the poll, personal ratings above 50 . Theres no doubt this is a challenge. There is no doubt that shes losing Political Capital trying to move the policy forward, but she has political space, i think, to remain intact through the first part of 2016. Our guest host is Morgan Stanleys international ceo, and, we talked a little bit about the economic implications that are very difficult to figure out, but for so long, despite the fact that europe was an economy that was not growing as quickly as the United States, weve had analysts and Market Players telling us they think european stocks are really a better place to be. Does any of this change that narrative, or this is a place to be because of valuations . Well, the european stock market is big cross border, cross nationals, exporting, depressed valuation, and i think they are recovering. That more or less stays the same. Clearly, if the economy takes another nose dive, confidence goes away for whats happening. Theres a threat to that. The biggest problem in europe is that the vast majority of Corporate Activities are in the sector that accounts for sme . Small to medium enterprises. They by and large depend on credit from the Banking System. The Banking System is stressed in europe. They have to solve that. I think thats a much bigger issue than valuations of the multinationals and indexes and so on that go their own way up to a point. How does that problem get solved though . Talking about recapitalization thats necessary in the many european banks well, you need clarity of what the banks Balance Sheets are. The difference in the u. S. And europe is in 2009, the u. S. Had the stress test forcing capital into the banks whether they liked it or not at that point in time, giving clarity to invest. In europe, there was five attempts to recapitalize the banks. Look at the valuations, nobody believes them, but more importantly, they are not really lending, right . If youre not lending into an economy, particularly an economy thats dependent on small enterprises, by definition, you cant get the growth. Again, our guest host this hour, and we thank you for joining us too. All right. Coming up, a new look at fords second best selling vehicle. Well get an inside look at the ford escape from the fords president of the americas. Squawk box will be right back. Time now for todays aflac trivia question. What was the duration of the new car warranty approved by the National Association of automobile manufacturers in 1902 . The answer when cnbcs squawk box continues. Wants to try . Before earning enough cash back from bank of america to stir up the holidays, before earning 1 cash back everywhere, every time and 2 back at the grocery store, even before they got 3 back on gas, all with no hoops to jump through, daniel, vandi, and sarah decided to use their Bank Americard cash rewards credit card to sweeten the holiday season. Thats the spirit of rewarding connections. Apply online or at a bank of america near you. Now the answer to todays aflac trivia question. What was the duration of the new car warranty approved by the National Association of automobile manufacturers in 1902 . The answer . 60 days. Welcome back to squawk box on cnbc, first in business worldwide, among the stories front and center, full year Health Department cut, evaluating the extent to which it continues to serve the Public Exchange markets in 2017, thats a dow component, premarket down 8. Claims were not as good as the company thought, and the individual Exchange Market is a big piece in the wall street journal, fewer doctors, skimpier plans, and higher prices. This is directly related to the macroissues that some of obamacare is witnessing right now, and, you know, the guys went into their deal anyway to get the new client, and, you know, stocks have responded, so, you know, maybe not a complete surprise theres this at some point. James smucker. You put an s on it. Smucker. Smuckers. I think the company is smucker. I say smuckers, youre right. Smucker posted better than expected. They bought a Peanut Butter company at one time, right . One merger you could see the synergies there. Right . Thats a one understood. No rationalization, Peanut Butter and jelly. Do you do that in the u. K. . Not the Peanut Butter. You dont do Peanut Butter and jell ri . Have you tried it . I have tried it. I like it. Bring it back there, youd be a genius. Activist investor, starboard calling on yahoo to drop the alibaba sale, and now they suggest that they sell its struggling Internet Business. We are just getting wires reporting that the supposed master mind behind those isis attacks in paris was killed. This is coming from dow jones and from the french prosecutor there. The paris prosecutor talking about some of this. Again, abaaoud is the suspect, and questions whether the attacks killed him, and at this point, it seems the french prosecutor is saying they did, indeed, kill abaaoud. Heres the Washington Post. This was yesterday, midday, and Washington Post right here, take a shot of this. Washington post, leaders dead, leaders dead, and daily news, smile in hell, not saying the rest, but saying the master mind was dead. Two papers in new york had it. Its weird how that works. Some people trust sources and others do not trust sources, right . Lets get back to Michelle Carusocabrera who is standing by in paris and has more on this latest word that we are just receiving. Michelle . Reporter yeah, and its not just dow jones. The Associated Press quoting the french prosecutor saying that abaaoud is dud at this point. That was the great burning question here this morning because of the report you guys were talking about about the Washington Post. They seem to be the only ones who had that particular detail, and it was what the the reason it was a key question, that was the whole purpose of the attack. Thats the guy that they were looking for with that raid. They had followed a woman, and listened to her on her cell phone as well with a wiretap, leading them to the particular apartment, thinking they would find him there based on what they heard her saying. Again, abaaoud is dead at this point, and that has been the key question for the last 24 hours. Im certain that theres a question as to whether it was better to get him alive instead through interrogation processes and to go through the procedure of justice and the courts, et cetera, but right now, the key mystery that we have wondered in 24 hours is answered at this point. Michelle, thank you. Again, thats Michelle Carusocabrera, continuing to follow this and bringing updates as they occur. In the meantime, back to Business News here. Fords suv got a facelift. The escape has a new look, new features, and software allowing drivers to unlock, start, and lock their car with the smart phone. This is coming as suvs drive demand. Sales alltime high, 34 of the u. S. Auto industry. Joining us now to take us behind the wheel is the fords president of the americas, and, joe, thank you so much for coming into studio and being here with us. Goodorning, thank you for having me. Before we get to the new suv, i want to talk about the news of the day. Ford has a tentative deal, but with three quarters of the vote recorded, 52 majority of the uaw workers voted against this deal. What happens in the scenario . What can you say about this . Votes to be cast today and tomorrow, especially the reduce site, a large site for ourselves. We had a good deal with uaw, competitive with what our oem competitors reached. Going back to the table if we need to, but theres no more money to be had. Customers will not pay more for the vehicle because the contract is more expensive. Work together to figure it out, but right now, wait for the votes to be cast, and if we have to, we go back to the table. Whats interesting is we saw this already with Fiat Chrysler and the deal they had, but the union leadership, itself, took to a very unusual step yesterday of calling a press conference and telling its members that, by the way, this is a deal thats significantly better than the deal that was offered at chrysler. Its talking about significant raises for workers and 9 billion in plant investments r more at gm and chrysler combine. What do you think about this . Do you think the leadership is already thinking the workers are not informed about this, or they are really upset about not getting more . What we heard from the uaw, and they are in favor of the deal, theres misinformation spread around, and in the case of uaw, theres no ramification the first time around. People say, vote no and get more, the uaw said, hey, theres not more. We reached a good deal. More to be had in the negotiations, but, again, we Work Together, and well figure it out and find a solution that works for ford and uaw as we do, but its important to remain competitive in the industry because its a competitive industry. Talk about the escape. Sure. And the new vehicles. All the new vehicles we see have amazing Electronic Components built into it. What are some of the new features you feel like you have to offer and are offered in this . Best selling suv, excited about offering this new one in the spring of next year. Theres Adaptive Cruise control and slows down and speeds back up on the highway when youre in Cruise Control mode. What do you mean . Recognizing a car . Rez nerecognizes cars in fro of it. Sensors recognize vehicles and slowing down the vehicle and speeding up when on Cruise Control. It segconnects, lock it, start check the fuel, all kinds of things remotely. Inside, warm it up in the winter. Its a great feature. Theres lane Departure Warning and keep assist. If it senses the lanes, keeps you in it. How does it sense the lane . Sensors that pick up the white lines and orange lines, and then if you go off it, the wheel vibrates, telling you to get back, and if you are too far, it adjusts. I feel like the selfdriving car is a long way off, but from the details you talk about, the features, sounds like its here faster. These are the steps leading us to that. Is it a ford, gm, a Fiat Chrysler that builds that or an app the or google that comes with the selfdriving car. Weve been around 112 years, we expect to build them. Were excited about it. Its inflection in the country, new interest and technologies. We want to continue to build great vehicles like the escape, but offer services leading us down to the path of receivering customers better with new technology, and we, of course, want to use our smart ability ideas and innovation to get us there. Part of what youve done, ford, i think, is the first of the big awe to makers to actually open up an generallying design team in sill cop valley. Hows it going . Well, actually. In palo alto, new Engineering Center there, hiring a lot of people, and theres a lot of creative ideas. No history tied to whats been done before. Its challenging custom, look what weve done in the past, and thinking how to serve the customer in new and different way. The Customer Experience side of things, what you can do with your vehicle in the future is a focus in palo alto. We are concerned about the consumer, and i know auto sales are stealing some of those sales, thats what we here from people like macys, but there are issue again, are they questions about the consumer . I wonder what your goals are for 2016 . We expect the industry to be strong again in 2016. The things you want to be low, Interest Rates, fuel price, Commodity Prices are low, and the things you want to see getting better, housing, gdp growth, unemployment better, are getting better. The industrys been remarkably strong, 18 million in the last four months. The average age of the fleet is still 11. 5 years, highest its been in a long time. Theres pinned up demand, and all the new technology, new great vehicles, like the new escape, bring people into the market. Is that something you expect the same sort of 18 million pace to be kept up in 2016 . See how the year finishes, but we are expecting it in the high 17s this year with room for growth next year begin what we talk about. Interest rates rise slowly, enabling sales strong in the industry. Okay. Joe, thank you for coming in, and thank you for the escape too. Thank you for having us. More from our guest hose, ceo of Morgan Stanley, and headed to break, another look at shares of best buy, trading lower after posting same store sales that were just half of analysts estimates. Welcome back. We are getting confirmation this morning that the alleged master mind alleged kingpin alleged plotter. Alleged plotter, everyone else changed from master mind. The other networks. Yeah. You get two people willing to die with ak47s, you dont have to be that smart, probably, but hes dead. Fridays terrorist attack in paris, hes dead, french Prosecutor Says abaaoud was killed in yesterdays raid, and then, finally, identified by fingerprints, which tells you something about probably the state of the body after there was a bomb and 5,000 rounds of ammunition fired in seven hours. Right. They couldnt identify the guy. The suicide explosion the vest, the bomb that went off in the apartment caused the roof to collapse. Yeah. Third floor fell to the second floor and also people said it was almost like a fireworks show. 5,000 rounds to be there. Yeah. Like a big fireworks show. Scary. In the end, they got what they were after. Yes. Our guest host runs m a businesses among other things for Morgan Stanley. Lets get his take on where the markets head as we are nearing the end of the year and looking ahead what driving deals to get done in 2016. We have seen this pace of m a activity. What do you thinks driving it . Well, low Interest Rates more than anything, a built up inability to expend money, expendtures in the past, and assets are cheap and comparative returns are very attractive in the space, and we already outsized the 2007 m a activity in the pipeline looking healthy Going Forward. The fed is raising rates here in december, but a quarter point rate hike is not changing the narrative you laid out. Well, the markets assumes theres a rate hike in december, its assumed theres 2. 7 rate hikes next year. Youre looking at an e quill lib yum of 87 basis points. That does not change strategic decision making. I feel the market is healthy for the foreseeable future. The pipeline is good and will continue. We heard noise in the United States, just yesterday, talking bouc about how they need to do things to prevent more inversions from taking place. European companies or companies elsewhere in the world buying u. S. Assets because the tax differential. Does that affect your business at all . Is that something, when you hear from ceos they are thinking about as they come up with some of these bids . Corporations are rational app malls or bodies. They have a duty to their sha shareholde shareholders. By definition, they try to look at optimizing returns. If tax policy is skewed, thats the duty of regulators to change the skew, in my opinion, so i dont think its a major driver of activity, high profile trades done that way, but, broadly, every area of the market, expect Financial Institutions space, we see continued hike and activity in m a. One of the things we talked about this morning is whether the u. S. Stock market is fragile. Weve seen these new highs that have been put in. Weve seep things run up after a year where the market went basically nowhere here in the United States. When you think about stocks, start with the u. S. Stock market first, but when you think about stocks, do you think markets are fragile, or they put in their time . They treaded water for a year. Well, its interesting. You you go to look at each stock market, each index, and its right. I think the u. S. Stock market is pretty well underpinned. Cheap money is underpinning it. Earnings are expanding. You know, i dont think the growth rates you see will be exceptionally high. We are coming out of the 25year engagement of fixed income back in the equity markets. The economys growing, and stock markets are a good proxy for economic growth. You know, im cautiously optimistic on the u. S. Stock market. Looking internationally, though. Which of the markets do you think stand the best chance of seeing the best gains in 2016 . Well, i still believe that japan could, and it really depends on its coming from such an undervalued space historically and depends on Structural Reforms that they are putting through. Clearly, we had a hiccup with growth over two years, but the central bank is doing everything they can to move on central policy. Structural reform matters. China stabilized, and to talk about the china stock market is an index of many different underlying levels. It was clearly flux pricing in the market, but the broad big stocks now are fairly underpinned. Theres been recent data, looking at Consumer Spending in china, and things are under pressure, seeing t likhings alcohol sales down 710 , and across the board, what doesnt that concern you that the consumer its a luxury market, clearly, theres pressure. Theres evidence of large chains Closing Stores in china, having recently expanded. The corruption drive puts a lid on expenditure. That seems to be tailing off a bit now. No. I think that even if the consumer is not as strong in china as it could be, there are so many other things in china that drives growth. Only 18 chinese cities have an effective transit infrastructure. They can infrastructure spend and so on. That feeds through into the broader index. All right, thank you. Again, youll be with us the rest of the hour. When we come back, more stocks to watch ahead of the opening bell, and in the next hour, isis is worth hundreds of millions of dollars, but where is the cash coming from, and can the flow be cut off . Well talk about that at the top of the hour. Later, the chairman of bt group on the future of media, Gavin Patterson talks telecom talk. Stick around, squawk box will be right back. Stocks to watch this morning, shares of keurig Green Mountain growing, up 17 . Beating the streak, results higher demand nor wfor web base sales and marketing software. We thank our guest host this morning, the ceo of Morgan Stanley, its been a pleasure. Thank you. Come back soon. When we return today, the fed appears to be on track for a december rate hike. Well ask cleveland fed president Loretta Mester. Squawk box will be right back the future belongs to the fast. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Cutting off the cash flow, a closer look how isis gets their money and what can be done to stop the dollars of death. Plus, latest on the overnight raid in brussels in connection with the deadly attacks in paris. A live report coming up. Ready for liftoff, the fed signaling a december rate hike is coming. Cleveland fed president joins us for a cnbc exclusive interview, a mustsee news maker straight ahead. Match dating wall street. The dating company twiend tindr trying to hick up with investors after pricing the low end of the range. The chairman joins us first on cnbc as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwi worldwide. Im joe, becky quick, andrew was here for a while. Hes under the weather. We dont want him sick while on vacation. We want him to sleep and rest. Right. Yeah. He said, you know, everybody was home, so i dont know. I would have stayed here. Barricade himself. Get sleep. He needs to rest. Wife is at home. Stay here. Less than 90 minutes from the opening bell on wall street. Futures wouldnt be me, i would want to go, obviously. Futures up five points, up more earlier. They were. United health care is not helping. Check out the markets in europe. Its a dow component. It is. They are responding to the nice gain from yesterday, just slowly, like so many sessions, melted up, no matter what happened in the day. The more we heard about the fed minutes, the more its up. Now on the notion they are going to raise. Go figure. Good news is good news again. Lets catch up on the other stories investors are talking about today. Square pricing its epo at 9, below expected range. Giving the mobile Payments Company a market capitalization of 2. 9 billion, half of the private market valuation a year ago. Jack dorsey is joining squawk on the street to talk about it. Match group going public today. Owner of dating sites raising 400 million in the ipo, pricing the offering at 12 a share, at the low end of the expected range. Matchs chairman is joining us first on cnbc at 8 40 eastern time. Weekly jobless claims hit the tape at 8 30 eastern time and fed phillie survey and economic lead indicators. Stocks on the move this morning, best buy getting hit hard in premarket trading, profit of 41 cents a share, six above estimates. Revenue in line. Same store sales increased. 8 was only half of what they were looking for. Dow component, United Health, cut earnings forecast for the year, blaming lower activity at Health Care Exchanges set up by the Affordable Care act. The company said its evaluating the extent to which the Public Exchanges markets, what it does not future, mentioned the coops, half of which are closed at this point. Claims are higher than expected, and its a big piece in the wall street journal highlighting concerns. Strange on the same day that unh came out with the bad news. Breaking just in the last 30 minutes, the suspected ring leader of the terrorist attack among the dead in the police raid. Michelle carusocabrera has more on that. Michelle . Reporter becky, abaaoud is dead. We learned that as you said, 30 minutes ago, press released from the french prosecutor. The 28yearold belgium militant killed in yesterdays raid in the area in saint denis. They thought he was in syria, but they found his body in the rubble in the building, bullet ridden, identifying him by finger prints, and we got another email clarifying they are not sure if he was wearing a suicide vest. How did he die . The bullets or blow himself up . Thats not the only news this morning. The search goes on with a series of raids going on in belgium. Thats the country to the northeast of here, the countrys federal prosecutor telling nbc news that six operations are ongoing there. Not just in the neighborhood that you heard about in the last several days as investigations unfold, but throughout brussels. One person arrested directly linked to friday nights terrorist attacks here in paris. The raids are in connection to a specific individual, the 20yearold suicide bomber who attacked friday night. They are searching homes and families, of families and friends of the individual, that suicide bomber. As we get details, well bring them to you. Again, the alleged organizers, master mind, stop using that word so much, but is dead according to the french prosecutor in yesterdays raid. Ring leader. Ring leader. Thats better, isnt it . Reporter ring leader. There was a story on nbc news yesterday said the attack cost less than 10 million because its simple bombs, ak47s. Those are the most expensive when bought on the black market. Michelle, we talked about that when you have someone that does not care whether they get out alive, that its hard to protect people, but thats that was in, i remember, pacino and god father two. When i saw that, you cant stop people. I think that, you know, with secret service and president kennedy might have said that, theres no way, if someones willing to die themselves, its difficult, and, again, youre seeing you dont need to be a master mind that the people w k working for you and you are willing to, you know, to go to paradise or whatever, in their sick minds of thinking, but so i dont yeah, i dont theres a lot of words that do not imply genius or that im sure he wants to be called master mind, you know, so lets not do it. Ring leader. Giving him the credit, doesnt it . Yes. Thats the point, i think. Thank you, michelle. Isis has many means of bankrolling its terror network, rans ransom, oil, and kidnapping, and here to break down the financial footprint of the terrorist group, thomas sanderson, ceo of the transnational threats project at the center of Strategic International studies of life, and director of research and analysis for the middle east and north americas. That simple . Is it oil revenue . I think thats a big part of it, but we have to look at, you know, every other single revenue stream they are getting. You mentioned kidnappings. Isis got millions of dollars from ransoms they got from a number of European Countries in exchange for the hostages. Also, you have to look at the grand picture here. Besides oil, they are taxing people. There are 3 to 5 Million People under isis rule, taxed, most of the people pay. 10 earnings including tithing. And so on, and, also, they are taxes nonmuslims. Big christian population there pays, you know, something to the effect of one golden denar a year, amounts to 4. 25 grams of gold, or equivalent of that, and these are just two Revenue Streams that are bringing them millions of dollars. We are seeing a lot of isis supporters online trying to fund raise for the group, essentially in a grassroots campaign, and some of the campaigns use bitcobi bitcoin, using Digital Currency cards, and so its a multifaceted revenue stream, and so, you know, the oil business is extremely important because they are able to not only sell it back to the locals, but also bring it between iraq and syria as they have captured part of that border so its extremely important that, you know, the oil revenue itself is halted and, you know, that they no longer can actually have access to that. That is not possible today. Hopefully its possible later. Charities too . Pardon . Charity . Is there charity involved . If you give to a charity, can you be sure youre not things do not end up in a terrorist group in. Theres been a number of reports that suggested that some charities are acting to fundraise isis or for various terrorist groups. We have seen it happen with al qaeda, and a number of campaign go through syria claiming they would not specify which group, but its extremely important to know that those guys were using actual Bank Accounts like in kuwa kuwait for terrorist funding. Theres a variety of ways and charities might be one of them. I think, thomas, you can comment on that, cant you . The way that it is hard to separate syrias population and humanitarian needs from isis . Yes, absolutely. I think what isis has done is tie their Funding Sources to humanitarian needs. When they supply diesel to schools, to idp camps, hospitals, then they are effectively shielding themselves from some of the air strikes because we know that devastation itll incur on local folks that itll be tremendously damaging. You have a good way to separate the two so that one could be cut off without hurting the people that shouldnt be hurt . Well, its difficult. Youd have to provide diesel fuel for all these civilian needs, and its very difficult to get in there and see what isis is doing. Is there a way, thomas, to, i mean, could you in the words of one of our president ial candidates, is there a way you could knock out all the Oil Generating revenue of isis with if you had smart bombs . Well, we have those capabilities in terms of targeting precisely, but wed have to hit all the well heads, nowhere they are, and thats not easy to do. You have to have intelligence on the ground, and we dont have enough feet on the ground in order to do that or enough sources, individuals, locals who can do that for us. Leith, how much better financed is isis versus, you know, terrorist organizations of the past . Al qaeda or others. Oh, isis, essentially revolutionized how terror groups are funded, and, essentially, all the fundraising schemes. We have not seen before any kind of resources like oil or even black markets used by al qaeda efficiently. Al qaeda relies on rich donors from the dcc countries, but, you know, we can even mention more that isis runs a black market effectively, essentially for oil and weapons. The weapons is seizes are from Security Forces in syria and in iraq and in addition to rival factions in syria its fighting today, seizing territory, taking weapons, and what it does actually a lot of times is that it sells weapons to a lot of different factions, and then taxes factions to take weapons back and continue the cycle. We have not seen any kind of terrorist groups and entities or militias for that matter, any groups carry out this keep of Sophisticated Fund raising campaign. Thomas, i dont know if its true, but 10,000 for the reports for what the if they raise through oil revenue, thats a frightening number because you can divide a couple million by 10,000, and its, like, hundreds of attacks. Fund all sorts of attacks around the world with that kind of money. Dont forget the attack on the uss cole cost 10,000 and killed 17 sailors, causing 250 million worth of damage. Youre right. If 10,000 is all it takes, thats troublesome. Theres other things to do to pull it off, secure communications, but those are cheaper and cheaper these days. Yao rig youre right. Its a problem. Cant bomb isis strongholds because they are hiding behind civilians or bomb oil heads because you need people on the ground with the intelligence of where to go. It comes back to boots on the ground. Which americans are hesitant to do. Yes, it does not require a hundred thousand troops. Thats a false narrative from the Obama Administration to stick with this strategy. People on that side are even questioning the strategy. Thom thomas, thank you. Thank you. Youre welcome. When we return today, the ceo of British Telecom on building up Cyber Defense systems to combat those who want to take down the telecom industry. In october, the company suffered a data breach at the broadband provider, tough talk, serving some 4 million customers. Talk about the plans to help keep the worlds data safe after the break. Later, a cnbc exclusive with Loretta Mester. Well be right back tucson. Blew an amp. But good nights. Sure,musics why we do this,but its still our business. We spend days booking gigs, then weve gotta put in the miles to get there. But its not without its perks. Like seeing our album sales go through the roof enough to finally start paying megs little brother i mean,our new tour managerwith real,actual money. We run on quickbooks. Thats how we own it. Welcome back to squawk box, everyone. The futures this morning have been higher through much of the morning, but take a look at things because they have given up ground from where we are earlier this morning. We came in, there was quite a bit more strength than this, and right now, dow futures are indicated by four points. This is partly because of what we heard from United Health coming out that dow component with a warning earlier this morning, but there are a lot of other issues that are taking place too. You can see the s p futures up by only about four points right now, and nasdaq up by 11, and the dow just went negative. Were watching shares of yahoo . Activist investor, starboard, issued a copy of the letter sent to yahoo s board calling for the company to keep the alibaba stake and sell Internet Business instead. Thats up 1 . All right. U. K. Is taking the fight against isis online. Chance lore George Osborne announced a plan to double spending on Cyber Security saying they could launch attacks on the National Grid and hospitals and joining us now, Gavin Patterson, ceo of bt, thats a lot of money to spend. Only thing that scares me, gav ir, were vulnerable so that needs to be spent . The degree of complication is changing, adoption of new technology. We all need to step up the game. How long, if there was a successful hack of a power grid, whats the maximum time that that could be down if it was is there a way to destroy the software that runs it . It could be down for months, or there have been instapnces o this. How long . Over the years. People get desperate in a short period of time without power. Should be top of everyones risk recommendation steer, something thats talked about in the board room. The ceo needs to be on top of it. The krrgscio needs to be on top it. Things break down quickly. We had instances on the east coast, storms, you know, and people wait in line for gasoline to put in the generators. People were pulling guns at gas stations. Thats severe. We think we have it down pat for a civilized society. You know, isis taught us otherwise. Right . So how much so right now, youre completely vulnerable. Is it enough to make bp not vulnerable . Its not just about bt, but every company. We need to look at our own infrastructure. Weve been doubling our efforts over the last couple weeks, checking everything is properly prepared, but every Single Company in the not just in the u. K. , but around the world, look at psych cyber, look at t s defenses, and ensure nay are properly prepared. Needs more cooperation between corporations and governments and other sectors. There was a guest earlier this week from the telecom businesses saying its illegal for companies very reluctant to share information with each other because you could be looking at unfair practices, if you deal with that. From where you stand, are governments doing enough to ensure cooperation . Well, i can probably best speak for whats going on in the u. K. , the market i know the best, of course, i think they are. The government is taking a proactive stance ensuring that all the Telecom Companies Work Together and prepare their Cyber Defenses as one unit and ensure that the whole of the countrys producte protected, and that information is shared when insights found in one company, and its used to protect another. Any money spent on cyber offense for the good guys . What do you mean, joe . Lets say, so we dont like hackers, now theres anonymous. They know what they are doing. They are closing down isis sites, and, like, cheering on hackers that could do something. We heard we get attacked by china i dont know how many times a day, big companies. Can you do that . Can you earmark money for that . Is it done now . One of the things said in the speech that offensive cyber was much more part of the plan Going Forward. How do you do that with isis . Its i guess you do it anonymous. Close down anonymous sites. And i mean, weve seen this on the show this morning already. How do you cut the cash flow and strangle them in terms of the cash flow . Uniti iusing bit coin . We talk about defense on cyber attacks. Well, it needs to be a mix of offense and defense. Proactively go after where the problems are, and, as i said, georges speech a couple days ago, i think, was an example of how the british governments are going to do that. A find line between regulators and asking companies to not encrypt smart phones beyond there are phones now that the manufacturers cant get into the information thats on them. A way the government can say, stop doing that . Give us the key if we really, really need it to protect lives . Well, the security and privacy are two sides to the same coin. I know that in the u. K. People accept that they are going to have to concede privacy for security. The issue is its different here from what i can tell. Attacks in paris and threats against the United States and other locations may have a rapid change. Yeah. So its people accept it. They recognize that it needs to be lawful. The legislation needs to be in place, needs to be properly monitored, et cetera, but if thats the case, my sense is people accept it. Where are we on what do you think about Net Neutrality . What we did here . Do you think that is permanent or another president changes it here . Well, in europe, we landed in a better place where Net Neutrality is fundmeamentals wa enshrined, so access for all, but it allowed different Business Models to be established, which prioritized traffic. Thats very important, to make sure the internet works efficiently. I think thats thats a good place to end up in the u. S. , but thats not where you are at the moment. Yeah. We have elections. Well see. They do there too. Yeah, but its, like, 15 parties running. You got to put a coalition together. We dont understand how that works. Every countrys different, right . We have european elections as well. We have to worry about germany, france. Yeah, the e. U. With the unelected bureaucrats in brussels. Very careful, arent you . Some people say, like, bt and others are monopolies again. Didnt vodafone say that . He did. We disagree. Oh, you do . Are you mad . Any names for him . Hes a customer of ours. Thank you. Appreciate it. Coming up, call in uber and get a flu shot. What . Does the driver give it to you . I dont know. Heading to the busiest travel season of the year, sure, got a needle . Go ahead. [ laughter ] could be trouble at the airports. Pile that on top of travel fear rs and you could have a recipe for delays. Squawk box will be right back. Still to come, jobless claims data, and the chairman of match group on the companys pricing and first day of trading. First, though, is the fed rate liftoff coming . Cleveland fed president , Loretta Mester with an exclusive interview. Right now, the u. S. Equity futures, flat now, dow up by 8. 5 points, s p up 3, and nasdaq up 12. 5. Stick around, squawk box will be right back. Welcome back to squawk box. Shave 5,000 off of last weeks numbers, and you have 10,000. Thats what happened, we are in the neighborhood of early 70s with regards to claims. Fed, fresh look, november up 1. 9 following a minus expectation. Thats good. The read last time stands at minus 4. 5. This is really a nice reversal. Now, 1. 9, well, back to the last time we had positive numbers was august at 8. 3. We had two minus numbers, a rare occurrence, prior to two minus numbers back to february of 14 to find a minus number. We know that philly fed is volatile index. Traders in chicago have a special affinity for it, actually, but, today, does not seem to be moving much. Here we are at 226 and 10s, settling in a tight range the last four trading days, and if you go back to the five before that, a tight range, now in the high 220s. Yesterday, a lot action deem the fed, and upward action in equities called for because the fed has confidence in raising rates. I dont know. Take a step back, people. Look at returns of stocks in 2011, 12, 13, and 14. Look now. Thats the real metric as to the year of normalization. Joe and the gang, back to you all right, rick, thank you. Were going to continue that conversation, just alluding to the fed minutes showing signs that a december rate hike is coming. Futures indicating that too as long as job growth and inflation remain in check. Steve leisman is here, our special guest. Oh, no, youre here because we have a special guest. Youre special. Nice of you to say, joe, but an awesome guest on set, youre excited about, were all excited about. Cleveland fed president , Loretta Mester, a little more than a year in the job, a right of passage of the fed to sit on the set at some point in time when youre ready. You called. I feel ready. Cool here, isnt it . Its great. Fantastic. Very appreciative. You get all these of your coming in, and subjecting yourself and, i mean, to answer questions. Starts with the minutes yesterday, loretta. Most participants anticipate liftoff conditions met at the december meeting. Intended to give a sense in the minutes that a hike could be appropriate in december. It looks like its telegraphed in here, and one of the questions was, you did this to get the optionalty to hike, but now do you feel youre boxed . No. I think we are trying to be transparent about where the thinking of the committee is, right . The committee basically said, look, our forecast is that we expect labor markets to continue to improve, growth will be sufficient to get further improvements in labor markets, and our forecast is that inflation moves back up to the target of 2 . We wanted to make sure people understood that, you know, we look at all the data, all the Business Contact information we get between that meeting and december meeting and make a judgment at that meeting, but that this was our view is that things were on track. You know, you could see that would c could say optionalty, but we always look at incoming information. I gather a lot of information from Business Contacts in my region, reserve Bank President s do as well, bring it to the meeting and have a good discussion there. My take has been that the economy doesnt have to do very much at this point in order to satisfy the december criteria. 2 growth. What about job growth . What would the november job payroll be like . Something that would satisfy your criteria . Were at nearly maximum employment, meaning that goal, and ive been happy with some of the developments in labor markets in term of the whole pan of statistics we look at, long term unemployment rates down considerably, and, you know, its cut in half from the peak of 10 that we had, and so, you know, fulltime versus parttime workers. Jobs created this year was fulltime jobs, measures of underemployment all moving in the right direction. Of course, theres long term issues in the labor market, but from the point of view of whats the maximum employment criteria of the fed, we have met that or very nearly met the goal. You have to remember that in the Monetary Policy has to be moving before we meet the goals, right . Thats a long standard view of how Monetary Policy works. It works with a lag. The long and variable lags people talk about. You know, thats how we have to think about it. A chance were behind the curve though . I dont think so. Look at the inflation. Im reasonably confident inflation moves up to 2 over, you know, gradually. Look at core inflation measures, theres Research Done at the cleveland fed and elsewhere shows that core inflation measures are pretty good predictors of, you know, total inflation, and those have moved up. Other underlying measures of inflation, the cleveland feds immediate yap cpi measure at 2. A 5 . Those moved. That dynamic of inflation basically confirmed what the fomc thought would happen, right . As we saw oil prices temper, changes in oil prices temper, changes in the value of the dollar temper, you got inflation measures, underlying inflation measures move up. Thats the dynamic. Again, thats win of the pieces that give me more confidence in the inflation forecast. I think the average up employment rate for the second bush and for the first clinton, and for president bill clinton, i think it was, like, 5. 3. Thats as good as it gets. Opportunity seem propound to say 5 might be full employment unless there is some type of new normal for the parttime stuff you talk about or the participation rate. If you believe it, unless the number is crazy, you are already giving yourself 30 base points below where full employment was in the past. We are there. Do it already. So if you look at the seps, the summary of economic participations that the Federal Reserve puts out, all participants put out, summarizing that, look at a long run of up employment rate. Youre right. Theres a span there, right . Those estimates, long run unemployment and what people call the natural rate youre talking about, theres a wide area around there. Different people have different views of that. My long run up employment rate is 5. 25. Think of you have a four handle, go up a quarter, you can see why people say, what the heck is going on . How did this happen . How did we get to the point we are raising, getting to the goalposts moved from 6 to 5, to a. 5 and i dont know. Seems subjective. Its not. Look at different estimates of sort of the natural rate of up employment, right, they have come down because theres structural change going on in the labor market, right, labor force participation, ageing of the population. So youd expect some movement down of the things, but, again, theres bands around there. You have to take the pan of data we have. Even now. Just told me we have a minute left. No. If you have the authority to ignore that of course i do. I have the questions. You should go. Go, joe. You had lacquer saying hes worried about the classic view of staying at 0 for too long, which is that he may be behind the curve in inflation. Richard fisher was in, who im sure you met. He said he wores about the malinvestment side of getting this wrong in that its distorted the capital markets. Do you worry about either behind the curve on inflation . Okay, so when you come to a meeting, you know, you come in with a view. I theres a lot of considerations that go into setting appropriate policy. My own view is that you have to look at both sides, right . I can see that, you know, eventually, right, we could get behind takeoff. I think the path after liftoff is more important than liftoff per se. Theres a lot of reasons to think thats going to be a gradual path, and fomc said that in a statement, i have concerns with that. The longer we delay, the more theres a chance of financial stability, inbalances, search for yield taking on a long time. Really hasnt happened yet . A chance for it . Well, i mean, i think thats the longer you delay. Were not that miscalibrate right now. Maybe not. Right. Can you put number around what you said . You talked about the gradual path, and what the market is going to do, if it has not already, okay, lets accept you do a quarter in december. Now its time to start to freak out about what comes next. Should they be freaking out about what comes next . Put numbers on what 16 look like to you. I think weve been pretty transparent. I think the best indication of where, you know, the current thinking of the committee will be was look at the december sp. Again, right, we put out where we think path of Interest Rates will be, and if you remember, we had the last one, right, not getting back up to the long run policy rate or, you know, fed funds rate, right, until, like, 2018, again, right, thats the best, i think, indicator on where the current thinking of the committee will be. I point you to december. What about what happened in paris and terrorist attacks, and is that something that changes the view about what appropriate policy should be . Okay. First, its a human tragedy. You have to acknowledge that. Think about the economics of those kinds of attacks that weve had in the pasting right, usually, you see a sharp, you know, change in markets, but typically, that does not, you know, be sustained, and, again, thats what we saw in the markets herement thats one of the things that can happen. The other thing you look at is the relevant time horizon for Monetary Policy is will it cause so much up certainty that people will pull back, you know, nod lower activity, how does that affect the outlook . Right now, my assessment is it does not change the outlook that much in my point of view of growth for the u. S. Economy. Right. We asked if youre a hawk or dove, and you say owl . Aspire to be an owl. Nobody else came up with this . No one on the fed came up with owl . I think other people might have. Oh, they did . Im sure. Whats it mean . I thought it was yours. Too obvious. People cant come up maybe phoenix. No, then you burn up. But you rise from the ashes. You burn up. There were phoenixs in the past. Thank you for coming in, and in the words of john lenon, you passed the audition. I dont know. That name is cool. Its coming back. Youre a patriot. Its coming back. Good to know. Steves out. Im out. Apparently, it was joan, youre right, steve. Imagine that. Online dating company raising 400 million, but will investors be please and swipe right . Well be joined by the chairman on a first on cnbc interview. Were back after the quick break. Welcome back, everybody. Match Group Pricing its ipo at 12 a share, at the low end of the expected range. The parent of Online Dating companies, companies owned by media mogul Barry Dillers corporation, and popular among busy Young Professionals highly coveted by advertisers. Joining us is greg blatt, chairman of match group, and, greg, thank you so much for coming in. Thank you for having me. A couple ipos, or several, at the low end of the range or below it in the case of another one that priced overnight too, square. What happened right now . Are investors nervous about things that are coming to market . Are they nervous about valuations in the secondary market . Yes, i think, first, you know, i learned through the process theres theater in setting the range to begin with and strategy into it, and you are based on the market trying to just set up in a way that gets you the best valuation. I look at the valuations themselves opposed to where it is in or outside the range. Of course, you know, its been a choppy market, and not as frothy as it was when we set outsito ds awhile back, and the events in the last few weeks made everybody nervous so the price to get liquidity is higher than its been, but i think that, you know, weve, obviously, have a company with 15 years of earnings sort of history, and solly cad lid cash flow. We are well received and optimistic outlook in the long and neumber of term. Companies pulled ipos to wait for different timing, did you consider that . No, we did not. We felt the time was now. Were, obviously, price sensitive, but not so much so that we thought going out and getting this independence from ic was a good thing for us operationally and strategically Going Forward so the waitfu was not an option. Talk about the demographic you have. It is a young urban professional across many of the sites and it is one highly desired by advertisers. What do you see right now in te terms of the Advertising Market and what people are willing to pay to reach the people . You know, traditionally, the business makes money from subscription revenue. Advertising is not the big focus, but as we evolve over time, growing the paying users a lot, we grew the audience of nonpaying users so theres 55 Million People a month not paying us, but we have highly targeted demographic information, age, geography, gender, a great audience for us. We did tests on the ad side, exciting for people, a big business. What ads . What companies are trying to reach these people . So, you know, its pretty wide, you know, its an audience, the under 35 audience that is not watching tv, et cetera, you look at entertainment, fashion, food, beverage, et cetera, very wide. I think probably not necessarily your standard packaged goods, but its an exciting ad demo and categories for us. We have to ask about the ceo of tinder making comments in an interview publicized last night. Said some things that caught a lot of peoples attention. You know, what jumped out at me the most is the idea that he had the author of a vanity fair piece that he thought was unfavorable, talked about how we might follow the person around, suggesting he had inside information that would not reflect kindly on that author. Thats not my understanding of what he meant. That article, overall, frankly, theres a lot of inaccuracies in there and things taken out of context. I think theres corrections being made. What he met saying that was that he googled actual articling the person written before not having somebody following her. Right. Thinking there was interesting things in the articling before. He had no one follow or investigate them. Thinking about the uber comments. I think there was a lot taken out of context in that interview. It was a late bloomer, number one, and then he didnt have luck from there on out between thats what i gathered. I felt good about myself. I cannot speak intelligently on the personal history. Fine, but i felt bad for him. [ laughter ] not his finest moment. I didnt i didnt think thats not how i saw it. I just felt i would have doubled a couple of those numbers. Tinder is one of the fastest growing. Yes. I have to say, its tough for us who are a little older, married at this point to follow along and see whats happening there, but what is is happening . It was interesting going around talking to investors, people saying, with tinder. People were saying, god, i really missed out. The way she asked the question wasnt completely honest. Really, there was a fair amount of its like, wow, what did i miss here . Tinder has been great for us. Our category has been around for a long time and contintinder population put them out of business. Its dinner and talking and all of that stuff. Look, tinder is a great dating product. Lets cut to the chase. 85 of users are under 35 and it does get a rap sometimes. It reflects the dating habits of people in their 20s. Tinder is a great dating product. Its got great growth. Free user growth and a big advertising business to grow. Its been really exciting and a big part of the growth story for the business that we layer on top of auto very high margin cash flow. Really quickly, what is the match. Com demographic if tinder is 20 and under. Its pretty even decade to decade. They offer different things. Match definitely gives you more information about a person before you go out with them. More often you go out with a coffee and before all of that beforehand and before you meet in person. Nobody in their 60s is looking to we have you said in the 50s. Well, i said evenly distributed to that. We have our time which is a product directly for people over 50. We have people on tinder in their 70s . Maybe one or two. Are you glad you came in today . I couldnt be having a better time. Look, were excited. Were in this business. Absolutely. Especially with tinder. Were excited. Its a great business and changing peoples lives. My brother met his wife on tinder. Were watching tinder. Thank you for coming. Thanks. Congratulations. Glad we could hook up. When we return, jim cramer from the new york stock exchange. Here are the futures right now. Well be right back. The future belongs to the fast. And to help you accelerate, weve created a new company. One totally focused on whats next for your business. The True Partnership where people,technology and ideas push everyone forward. Accelerating innovation. Accelerating transformation. Accelerating next. Hewlett packard enterprise. Jim cramer is joining us now. People say i like health care, i like health care. They have been saying that for five years for things like united held care and obamacare. Is something happening here that we should be taking seriously . Yeah. I think its huge. I mean, remember, this company got it up in july. This is a very big change and its very clear that right now its the system is uneconomic. The companies that have to be involved in. United health is biting the bull ahead of everyone else. Everyone else is going to have to take the same action. You cant make money. It was meant to be something that could make money but im looking at the various aspects but they are way ahead of that. I dont know who is going to write this stuff. I dont know what is going to happen here. The exchanges are, i think they are not working. They are not working. And one of the things that was interesting is they talked about literally the deteriorating change of claims experience, its happening right now. Literally, they are saying that individual industrywide in recent weeks, i mean, in recent week this is is happening. Its amazing. Its like lightning. If i were one of the candidates of running for president , i would immediately make this this would be exhibit a. A good squawk on the street. If you know a lot more about this. It wasnt capitalism. Thanks, jim. Well see you in a couple of minutes. Well be right back after a quick break. They come into this iworld ugly and messy. Ideas are frightening because they threaten what is known. They are the natural born enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Is this a publicity stunt . Uber will give flu shots today. It comes with a 10 wellness package that includes tissues, hand sanitizers, a lollipop. Goodbye, everybody. Well see you tomorrow. Right now its time for squawk on the street. An important day for tech as a Company Goes Public at the billboard. Square will ring the opening bell. Jack dorsey will join us. Good thursday morning. Welcome to