Transcripts For CNBC Squawk Box 20161025

Landing at 50. 79. Visa reporting a better than expected increase in earnings. Higher payments and the acquisition of visa europe helping results. Trading was choppy after the bell. Visas full year Growth Outlook was light of estimates. Stock lower by a quarter of a percent. Twitter planning job cuts that could be announced this week. The social network could terminate about 300 people. Thats the same percentage it cut last year when cofounder jack dorsey took over as choef. The news comes amidquestions about whats next for twitter. Bill miller was on Halftime Report yesterday. What twitters needs is an activist. I think an activist could make a difference there with respect to being on the board. That kind of thing. You have done a lot in your career. Maybe its time for that. No, not me. Twitter announcing it will change the release time of results to before the market opens on thursday. Originally it was scheduled to report after the bell on thursday. It wants to avoid conflicting with announcements by other internet companies. What do employees do at twitter now . They code. It seems like its there. They are changing the interface. That would be the idea. I always say they have a bunch of stuff i dont want to see. Do you want to see more of this . No. Then they still do it again. Heres some people you may know. I looked at who they had. I go, no, i dont want to e see that either. Just give me the neews feed. They just need a custodian to lock up. How many employees do they have . They give live feeds of certain football games. Thats new. Thats good. The election. In the vein of watching tv on your phone. Then you can tweet at the same time. So theres still code being written. Dupont is out. They need a lot. 21 cents was the estimate. And like last quarter, the quarter before that up 1. 26. This is a a quarter where they typically dont have the same type of earnings powers in the other quarters. 34 cents is what the company earns. Its well above those expectations. And Third Quarter sales was 4. 92 billion, which was above the estimate that people were looking for. Third quarter volume rose 3 . Look at how many different eps numbers there are. You got without the adjusted earnings they would break even. From continuing operations, it was 1 cent. Then earnings per share, you can compare to expectations. U. S. And canada sales, 1. 6 billion. Ema sales, 1. 13. And they see 2016 earnings of 2. 71. So they are talking by earning 34, that seems louk they are coming down. I dont think thats adjusted. Because the streak is looking for 3. 19. I dont know if you can compare that. Because if it is, its a big miss. I dont think. All these things, you got to know so many things before you say anything. I would say thats not the adjusted number because they are almost there already by a 13 cents. Thats just the beginning. A lot more to come. Busy earnings season just getting started. Five more set to report before the opening bell this morning. Heres the list. United technologies, Proctor Gamble, 334 and caterpillar. The ceo of Proctor Gamble is going to join us. The earnings dont stop there. Were going to hear from Pharmaceutical Company ceo eli lilly and talk to the ceo and results from General Motors and talk to the cfo. You got to keep watching for up to the minute earnings news and analysis all morning. Kicking off the week with a a strong showing in keeping with jeffreys model, which he now says is turning bullets. The chief investment strategist at raymond james. I feel bad for david. This big introof what hes thinking. We also have this other guy. David, well have you on together next time. Im going to start with you and have a long list of things you think and then just interest out. You were have i got that right . Yeah, the model turned negative look iing for a a smal window of vulnerability between midseptember and late september. We said it was probably going to be nothing more than a 3 to 6 pullback. We had a 3. 7 pullback. The models now saying that the window is closing this week. It has raised its 2016 view to an adjusted 325 and the street is at 319. They raised. They earned an additional 13 cents this quarter. So they are only going 6 cents higher on the full year. So i u dont e know if that means the 48 cents in the Fourth Quarter. They already just got 13 extra cents. Always crazy to figure this out. So david, you made me feel like its really simple in looking at some of your comments. Earnings have been better than the previous five quarters. And the fed in all likelihood wants to raise rates and will. Maybe worry about Interest Rate sensitive stuff, but stay with cyclicals and it might be a a good market. I think thats right. The economy is getting better. We had a lult bit of a soft patch in august. But the economy has rebounded in september. Were also seeing some improvement economically overseas. The one area they would say keep an eye on that might be a problem thats a . Its been getting stronger. But the fed is going to raise probably in december. Maybe just one time for awhile. So i dont think the dollar is going to run away from us here. So if you get better earnings, you get better top line growth, which is also a big story. We havent had Revenue Growth in a long time as well. I think thats enough to at least support valuation where is they are. To the point where i think the market brought forward some of these gains in the Third Quarter. And we need this Earnings Growth to come through simply to support these levels. I think we can move a little higher, but i dont think were off to the races here. It was baked into a large extent. Part of the dollar index is the pound. Thats why its breaking out. But its kind of back where it was with the euro when we were really worried about the head winds. But like you, if its a quarter point in december and it finally happens and its like pulling teeth with these guys, i wouldnt be surprised if the dollar weakened after they did that because its already discounted anything the fed is going to do. Do you think thats what youre saying . You think u it stays where it is . I think a lot of it also depends on what the European Central bank does. Thats it the far more important meeting coming up in early december. They need to do something about their program. It runs out of bonds. They are going to extend it. If they do, i think that probably lends a little bit of strength to the dollar here as well. Not in a huge way, but the tendency is far the dollar to continue to strengthen at least a little bit here. Neither one of you gentlemen have mentioned the other e. The election is two weeks from today. Do you care what happens there . I think ill get to what david said because i dont know if 1. 1 is a selloff. Were going sbo that s it going to affect the market . I think there will be winners and losers by industry basis. Information over the past 100 years, primary elections and president ial elections are not primary to portfolio. What david said is really key. I think the markets are transitioning from an Interest Rate market to an earnings driven bull market. I think its going to become evident of that and this is the first shot across the ballot with the Third Quarter earnings. Theres this guy that depends on what side of the aisle youre on. I see it on conservative websites. Hes some guy thats looked at the election and says trump is going to win. I think it has to do with how solid you were in the primary or something. But you say that if the market is down between july and october, the opposition candidate wins. I guess you mean the opposition in terms of the party thats in power. So its only down 1. 1 . So thats small. We have never had an opposition candidate like donald trump either. Im not saying that in a bad way. We have never had an opposition candidate like him. Hes not your typical republican or democrat. Thats right. Thats part of the point i was trying to make. This election season seems to be defying history a a little bit. Those data comes from s p. They say that the threemonth performance is indicative. But this time its not happening. The other thing thats not happening this time is market volumety uty is not moving. Youre all the zero. Nothing works. Thats why no Hedge Fund Guys can make any money. Everything is sort of massaged to be where it is. Its much more difficult. I also think part of it is the market is looking at the polls and at least saying were probably not going to have dramatic change in washington. No dramatic change. That makes me feel much better. Thats a joyless. Thank you. I miss the mustache. Any thought about having that come back . I have a side bar for it. I dont know if you saw peggys comments this morning. A sane donald trump could have won but hes a nut. That was yesterday or over the weekend. I saw that. This election is over. He said that person doesnt exist. That was the last line of her column. Well see. Well see. Br brexit, we were definitely staying. Wont mention any names. All of them . Thats what everybody said. People in this room. Thank you. That guy over there. When we return, the big report after the bell today. Its going to be apple. Were going to tell you which products are helping or hurting apples bottom line, well talk about it next. 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 . Welcome back to squawk box. The big story of the week, a trt and t buying time warner for 85 billion. You see the cover of the the wall street journal. Its almost the same exact story. The deal faces a barrage of criticism from regulators. Weighing in netflix ceo shared his thoughts on the deal. E he sat down yesterday at the conference. We didnt know anything about it. Were just sorting through it. For sure we want to make it so we want to require for at t customers that hbo and flix are treated the same. Now that they are going to own hbo, we think any special treatment would be inappropriate. But i think thats pretty basic. Hastings was also asked if he might consider going after time warner himself to which he responded, next question. Later he said that was not a no. Hastings said one reason netflix has been successful is because of his stayed out and they dont do banker meetings. Stock is up 27 in the last year. More of that interview throughout the morning. 54 billion company. Its a reverse pacman. That would be hard to do. If youre going to take it at that kind of premium. That would have been interesting. The new talk is whether if youre disney and you have to figure out what you u do next. Do you buy u next flit . Theres a great strategic rational. All of a sudden you could pipe through all the disney stuff, all of the espn stuff, create premium tiers of netflix. You could do a lot with that. If you believe Net Neutrality is real, that randall has to take your stuff any way, you dont need it. But you do need the direct relationship. With the consumer. Acquisition for this. It would be a massive acquisition. Based on their market capital. People were talking about that yesterday. That would be a big deal. Would it ever happen . Day two and the font page is the same exact story. I think its possible they get the deal done. But i tis its so difficult to make the strategic rational of it actually work very well that it becomes challenging. Meaning it could just live in its own silo. It could produce some cash and be a nice business. The question is what you can do after. They would have some cost savings. I dont know if its a billion. I was surprised at it. I understand why he wants to do it. The strategic merits i think the government is going to really chain the l hands. I u imagine will try to chain the hands to the point where the sort of national synergistic. Im just shocked at how everybody in washington is talking about how this is standard oil all over again. Big is bad. The notion that somehow they went easy on comcast, have we seen comcast do so well with these things they are able to do now . Has that happened . They werent tough enough on restrictions . Its been a great asset for comcast. The regulators went soft and didnt get the gauarantees they needed and they are going to do it this time around. If they allow it to happen at all. Buyers remorse they let it go through because the restrictions werent tough enough. I dont see it. These guys are straight shooters. Nothing happening in that regard. Just want to be on the record saying that. Do you agree with me or not . I always agree with you. Apple out with Fourth Quarter fiscal results after the bell today. The companys annual revenue expected to drop for the First Time Since 2001. Thats according to the wall street journal. Lets talk apple and expectations. I was off camera. Its very reasonable. I remember there was a big temper tantrum in the morning. And the stock was in the midu 90s. Its up 22 . First time you did it had a 750 billion market cap. I was saying its going to double from there. Then it went to 90 from 130. So lets remember that on the way down you didnt look so smart. So it had a down tick. The key here is tim cook make apple grow again. Thats what people want to e see. They want to see this Company Return to growth. The profit the sales cycle bottomed out in the june quarter. Mauk America Great again . You can run in 2020. Thats what were looking for. Again if we take a step back here, what was the big surprise . The iphone 6 in september 2014 was too big of an upgrade. You had 37 unit growth. The market grew at 12. Fiscal 16 units come down 9 . Over that twoyear period, iphone grew 14 . This is why china grew 84 in first call 15 but its going to fall 18 ending in september. This is all comps. Were going to start to return. Apple had no answer for that. And finally with the the iphone 6, that drove the camp. Were getting caught up in that company doesnt innovate. Its absolutely ridiculous. I hear it all the time from competing analysts, portfolio managers. You heard this in the summer of 2013. So i think you and i had a little bashing session in april 2013. The stock bolted out and doubled within 20 months. I feel like that bloom and doom that we saw in that summer is very similar to this summer. My argument has always been about numbers. Bomber was in this week. It was going to be worth 1. 2 trillion. It gets harder and harder. You know so much about it. Youre looking at the trees like this. Then the forest is the law of large numbers. Its hard to double from 750 billion. I agree. The big difference is microsoft had 90 share. Any company, they have all been to 600 billion. They go back down. Microsoft has clawed its way back. What about the reports that apple looked at time warner . Do you believe those . I believe it. Because i think i dont think they should make a bid, but apple has a fiduciary responsibility to look at everything. Especially when they they have ambitions in the media tv world. If they do that i dont think they are going to. They lost their way with what they know how to do. They are disciplined. Is there anything on the horizon . Were getting a a mac book pro. What we have in the future wearables, i hope one day a car. And i see which is not out in the press robotics. This is a big opportunity in personal robots. Cant wait. Hope youre right about the robots. Coming up, prepare iing think of it in this context. Preparing for the risk of Cyber Attacks. Well take a closer look at the Ways Companies secure your data and protect against hackers. Squawk box will be right back. Still to come, a flood of Quarterly Results. All set to report in the next hour. Well bring you the numbers and reaction from wall street. Keep watching squawk box for up to the minute earnings news and analysis, right here on cnbc. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back to squawk box on cnbc. Futures are adding to some of the gains that we saw yesterday. Although they are muted 23 points on the dow as indicated so far. That was 8 cents short of estimates and revenue was also just below. Well talk about the quarter. This will be the last time as the ceo. The Obama Administration says premiums for plans under the Affordable Care act will go up sharply next year. And many people will be down to just one insurer. The department of health and Human Services says the average premium for a midlevel plan will go up 25 . Officials do note that about 85 of obamacare customers qualify for Financial Aid, which can cut their costs. However, republicans including donald trump are jumping on the numbers as a warning that the Insurance Markets created by the law are petering towards a death spiral. Its over for obama care. They it want to make it more expensive and its not going to work. I called it when it first came out. Its only getting worse. A kocountry cant afford it. You cant afford it. Were going to have Great Health Care at a fraction of the cost. You watch. It will happen. Insurers have pulled out of most state exchanges for 2017. As a result, customers will have fewer plans to choose from. In five states there will be offerings from only one insurance company. And a normal election year, this would probably be a big deal. We might be. Talking about this. But you wont see this on the big three nets. Tonight cnbc hosting the first ever net net summit. It looks at the ways the Top Companies and executives are promoting and managing innovation and using technology to accelerate growth. One of the topics thats going to be covered is how to deal with risk. Risk with Cyber Attacks, global unstability and the risk of terrorism. Joining us is one of tonights speakers on those topics, a a former cia Deputy Director of intelligence and contributor to the Global Security website. We welcome her this morning. Thank you. So help us with this. You think about Cyber Attacks as being the most dangerous right now or traditional physical attacks. What are you worried about more these days . I think were probably less prepared for Cyber Attacks in the events of last week. What makes Cyber Attacks dangerous is the fact that just about anybody with a decent Computer Literacy can pull something off like that. Attacks last week were still trying to figure out who carried them out. It could be disaffected gamers that used the code. Whats the worst thing that you could imagine . The worst thing i could imagine in terms of cyber . Lets just for a moment. I think that you could have a series of Cyber Attacks that lets say on Election Night denial of Service Attacks on state election boards. And major news outlets that would make it impossible for people to access returns. Would cast this sort of uncertainty, distrust about the election process. So i think immediately thats something that maybe i shouldnt have asked this question. If i were a state election board or major news outlet having seen what happened with the denial of attacks last week, Service Attacks last week, i would be looking at how do i u protect myself from Something Like that on Election Night. But the question is can you . Is there a way to meaningful protect yourself . It means that a computer is sending just millions of messages. Theres a benefit to age actually u. But i think its very difficult. Its very difficult to protect yourself against distributed denial. What about the power grid . That is more likely to be an intrusive attack. The attacks last week were bombarding a company so that they could not process their normal business u. Thats what could happen to a content provider. To bring down the power grid, you actually need to drop some kind of malicious code through an open portal into the Software System of the utility. How would you do that again . Drop it in . It is possible. Hes not telling them anything they dont already know. Is it just a guy with a laptop in a basement . It could be a gal. Then you go and do that. It can be individuals. What happened last week as i understand it is some malicious individual or groups of individuals actually publicize the code that the people who launched the nooul of Service Attack used. Thats a clever way. So youre the bad guy. You put out for anyone to use this code that you have developed and then its very difficult to track down who used it. It can be individuals. I think they are thinking about last weeks attack is it was not state sponsored. We know from what people have publically declared about the effects on the National Committee that it can also be Groups Associated with governments if not governments themselves. Final question for you. One of the issues youre going to talk about tonight is just the idea of how you tell this information, describe this information to ceos and other executives that you brief. So my experience is when we brief senior officials at cia two things i would tell you. First, you have to understand how that person absorbs information. If that personal is e emotional, you have to brief with emotion. That person is facts and figures, you have to go that way. The second is bad news, you got to deliver bad news early and often. I think a lot of people when they are briefing their superior try to sugar coat and in todays world thats a a mistake. Gooded ed advice. We appreciate that. You gave us all the news. Good luck tonight. We look forward to seeing you. The net summit is at the new york stock exchange. Im going down there for cocktails. Were you invited . I think we could probably go. Wed get you a ticket. Wed get you in this. They dont give you a bill. Hence the cocktails. Speaking of cnbc proprietary content, cnbc is unveiling a new index today. How it works, show you how it stacks up to the broader s p 500, right after the break. Lets get a a quick check on whats happening in european markets. Higher across the board. But not a super strong session. Squawk box will be right back. P today cnbc is unveiling a new index. Its our own iq 100. Its powered by our new Partner Research firm. Dominic joins with us a first lock at this new index. So fundamentally the cnbc is an index of what were calling innovation leaders. Everyone has got their own definition of what innovation is and what leadership is there in that context, but were defining that index as companies that derive a central part of their sales. Thaer trademarks and brand equities. They are doing it across a wide range of businesses. They are challenging conventional classifications in single business lines. E we look at Consumer Staples or energy as a sector. Unlike many other indexes, theres no human bias. Selections are made by a system. Its a screen that screens all public documents from companies within the russell 1,000. Tr those nerds and geeks out there, the complete methodology is on cnbc. Com. Within this index, youll see Many Companies youd expect and some you might not. We didnt make the cut overall for some of these company pchs were going to show you some of those that made the cut and didnt make the cut later on today. The best spriesz of all. Though it wasnt it does correlate to it. You can see it tracking there. It outperforms the s p. So michelle, wait for this to kind of roll out. Youll see a lot of the companies we talk about are innovation leaders and well see whether or not some of these e rebalancings that happen from time to time move some companies in and kick a a lot of them out. Were going to dig deeper into that index with david martin, founder and chairman of mcr mcam. This is about intellectual property. You focus in on that. Anything thats part of that general intangible universe. Patent, trademarks, brands, anything thats a right granted by a government that gives you market advantage. So i think people will be surprised to see that facebook and google are not in this index. Whereas Johnson Johnson are. But facebook and google to me seem very innovative. Just because you use technology, doesnt mean you make it. And the fact of the matter is if you look at the financial segments of both of those companies, they are 90 advertisers. Its an old human phenomenon. Thats not innovation. And just having a shiny gimmick at the front end doesnt make it innovation. It has to be something where across multiple laterals you can control price and cost and those things are what makes innovation work in a company. The fact that you have a bunch of eyeballs that go to your site does not make you innovative. Thats the big, big distinction. Were looking for companies that are driving their profitability based on their creativity. Yahoo is in this index. Why is yahoo . You say that with such conviction. The funny thing is yahoo the company measured by its assets is innovative. Yahoo measured by its management, not so much. But thats a very important point to make. A lot of companies because of their previous activity have a ton of intellectual property. They have things like analysis, social media, things that yahoo was first in market many times to develop the core technology. The fact that they didnt use it and the fact that they didnt deploy it effectively doesnt mean they dont have it. And by the way, when yahoo needs to make up earnings traction, what do they do . They throw their intellectual property out. Its the gift that keeps on giving. Is that being that company is remarkably undervalued . No question. Gap accounting doesnt have any treatment for internally developed ip. If you have patents or copyrights and developed inhouse and cannot give you treatment for that. So a company very infrequently is really understood if you look at the gap statement. The only treatment we get is for acquisitions. Even then, its dodgy to say we have good gap treatment. Verizon trying to buy that company s that a great deal. Its phenomenal because what they dont know is whats free inside. I think of Tim Armstrong and aol. No question. If you think about it, one of the points that i love to make is if e we look at a company that is a total sleeper and have never even understood it or really a company like bla blackberry. There were people that knew how to deal with pay at the pump technologies. They could take a phone and allow it to be used as a pay at the pump technology. They had a technology thats critic critical. That would be more valuable to someone who sells gas pumps than push email servers would have been. So all the conversation is about blackberry denied looking at the ideas that are inside of that company. So what were looking for in the index is getting inside the company and saying what price control do you have on a market that matters. How should this perform over time . You think its going to perform better over time . We have been trading around the strategy for a long time. We have run a fund and been trading around the strategy for a a long time. What e we find is that as you look over time, companies that have robust innovation that they deploy effectively typically bounce back faster than the companies that are largely commodity players. So we should see over time a secular outperform. Great to have you on. Great to be here. We look forward to use iing s it index. You can go to our website and check out all the companies in it that. Based on what he just said, its going to make a lot more sense where we see old Line Companies within this index who have a lot of innovation. Thank you. Looking at merck. The stock is going to trade higher. We had to go through all that again because the gap number was 78. It was 8 cents above estimates of 99 cents. The revenue estimate was 10. 17 billion. The Company Managed 10. 54. And we also have an adjusted earnings per share full year forecast from the company. Company. Now 371 to 378. Its almost identical to what we were talking about with dupont. The number for the year is 375 and they say 371 to 378. Already beat it by eight. What they do would be speculation. It would be above it. If you ad add 8 cents on, it would be 383. But a lot of times theyre conservative. Gross margin 75 . Full year revenue of 3. 97 to 40. 2 billion which thats not bad. 39. 7 billion is what people are looking at. And one of the interesting things i saw was that remicade sales down. Most of the other like vitorin was down 7 . Then you got one glaringly down 30. It has something to do with exclusivity. All right. So theres merck. Coming up, how new numbers show a construction boom in new york city is occurring. Well tell you whats behind the recordspending levels. Thats coming up next. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Is it a professor who never stops being a student . Is it a caregiver determined to take care of her own . Or is it a lifetime of work that blazes the path to your passions . Your personal success takes a Financial Partner who values it as much as you do. Learn more at tiaa. Org Construction Spending in new york city is on track to surpass the record set just before the financial crisis. An alltime high for city jobs is driving a need for construction space. A 26 increase from last year. Check this out. An anheuserbusch delivery truck in colorado made the first autonomous drive commercial shipment ever in the u. S. Last week. The beer company worked with oto, an uber subsidiary. The company said it was a onetime demonstration from the brewery in ft. Collins, colorado, to another location in the state. And uber bought selfdriving trucks, startup otto back in august. I would have liked i think they should have done coors. I dont get it. Golden, colorado, you know. But they did anheuserbusch. And i know my way around are you going to have a beer tonight . The good news is no drinking and driving. Right. You think your truck guys are, like, because theyre delivering beer . Its association. Just going back to their cargo. Its free associating. Is this a vertical association or horizontal . In colorado nobodys going to be like stoned out of their mind driving a truck. When we come back, home depots ken langone. His take on the election, the economy, the climate for business and much, much more. Squawk return bs in a moment. Tell me, how do you like to learn . Songs are my favorite ooh elmo likes songs puzzles me love puzzles. Well. Puzzles are a great memorization too dinosaurs yess puppies ooh i love puppies so do, i. Actually. Pets can teach important lessons abou dancing elmo loves to dance. Okay then, lets dance. everybody cheers yeah baby a big morning for investors. Earnings are in focus with dupont, merck, caterpillar, United Technologies all out with Quarterly Results this morning. A rundown of the numbers and what you can expect straight ahead. Plus the ceo of eli lilly and the cfo of General Motors joins us in first on cnbc interviews. Two weeks from today, america elects a new president. Youve got to get out and vote. This is our last chance. Both candidates are in mustwin florida today. New numbers showing just how close or not this race actually is. Guest host ken langone is here to talk about the race for the white house and what it means for your money. Plus what netflix Ceo Reed Hastings thinks of the at t time warner deal. His comments straight ahead as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc. Im joe kernen along with Andrew Ross Sorkin and michelle carusocabrera. Ken langone is here. Ken langone alert, alert, hes here. Futures at this hour, this has nothing to do with ken but they were up over 20 earlier. Now up only eight on the dow. Actually down now on the s p. Up five now on the nasdaq. Merck was okay. Im not sure its 20 points. So who knows. Its come about 16 points or so. We never know. The regular session is much more important than what happens in the morning. Anyway, we just get an idea where things might open. Well talk to ken after we get through some of this other stuff. As soon as we get through the headlines at this hour. Were about two hours away from fresh housing industry data. Were going to get the k. Sh sh p shiller report. Expected to show a rise in august home prices compared to a year ago. How the new iphone 7 may or may not have helped the bottom line. Earnings out from United Technologies. The industrial conglomerate earning 1. 76 per share. That was 10 cents above estimates. Revenues also beat forecasts. We see 8 cents higher in extended hours trading in the premarket. And visa reporting better than expected results after the bell. Higher payments in visa europe helping the firm. Full year Revenue Growth, the results come just a week after its Ceo Charlie Scharf said he would step down. Speculation he would reports say twitter could terminate about 8 of its workforce or about 300 people. Thats the same percentage it cut last year when jack dorsey took over as chief. The news comes amid questions about whats next for twitter. Bill miller was on cnbcs Halftime Report yesterday. He said what he thinks twitter needs is an activist. I do. I think an activist, somebody like carl icahn could make a difference there. Youve done a lot in your career. Maybe its time for that. No, not me. To be an activist youve got to have a certain makeup. Bill miller doesnt want to be one. Its just not in him. Twitter will also change the release time of its Third Quarter results to before the markets open on thursday. Twitter says it wants to avoid conflicting with andings announcements by other companies. Procter gamble is reporting earnings right now. Were going to talk to the cfo first. Number one, its First Quarter. So its not like all these other things. Where you got three quarters under your belt. And the Company Reported 1. 03 adjusted which is 5 cents ahead of expectations. The sales number was 16. 52 billion. And that is above the 16. 486 billion. Then were going to talk to john muller about this. Whats important is our sales growth as one of the metrics that people decide whether the company is making progress or not. Joining us to break down the quarter, john muller cfo of procter gamble. More importantly than that, member of the cnbc global council. If youre going to try and brag on yourself, thats what you say usually, john, right . You got it. Yeah. You got it. Heres the thing. Are you doing anything with organic sales growth that was different from before . Its still seeing about 2 . Is that where you were . Are you guiding up . Guiding down . Are things good or bad . So the First Quarter was very good from an organic sales growth standpoint. Fueled by reductions in costs. We grew organic sales 3 on volume growth of 3 . We grew in every segment in ten out of our ten categories in every region. Then on the bottom line carried through with m currency shares per growth. All right. You still got some head winds. So for the year youre not going to do as well. For the year were weve got tougher comps ahead of us. Were managing a lot of geopolitical issues with argentina. Even now the philippines. And of course our competition doesnt stand still. But 2 will be a significant improvement versus last year. We hope by the end of the year will be improving beyond that. So 3 negative impact on First Quarter sales. The dollars probably gotten stronger as the quarter has gone on, hasnt it . Will that go up from 3 in the Second Quarter . The comp should actually get easier as we start lapping some of the big moves that occurred last year. But it still is a head wind. On the innovation front, i always like that how many products does p g have globally . I like when you tell me that. We market 65 brands. We significantly focus our portfolio over the last two years into ten categories where were market leaders globally. These are categories that are used frequently by consumers. And most times daily. Theyre categories where weve historically grown faster and have had higher margins. So were a little bit smaller from a number of product standpoint. But were much stronger. We Just Launched a new Innovation Index at cnbc. And i dont know youd think that p g is in there. It is. You go in a lab and try to is that your idea for pods of detergent . They keep me far away from the labs but theres a lot going on in the labs. We are the innovation leader in our industry and most of our categories. And thats very important at this time of relatively slow market growth. Innovation drives market. We need to keep leading in that area. At this point as you said, youve got rid of some stuff. You dont even have pringles. Just the shape of the pringles is cool. Its like a physicist would take awhile you dont have those. Is the products that you have now, john, is this the final deal . Are you still selling stuff . Would you you have made big acquisitions in the past. Think gillette in the past or Something Like that. But is this the company you want for the future, the way it looks right now . This is a company we want for the future. We spent two years undertaking the most significant transformation of this companys portfolio. And were happy where we stand. Having said that, we are very active managers of our portfolio. We look to grow both organically when the right opportunities present themselves. Yeah. You . I was just going to say you see this no Makeup Movement . Maybe they got rid of cover girl at just the right time. What no makeup . Hasnt come to this place. Hasnt come to this set. Im in makeup as we speak. Theres a no Makeup Movement. Yeah. Kim kardashian blah blah blah. I listened to john say about the economy. Yeah. Growth. He didnt sound very excited. Globally. Well, were part of the globe. Yes, we are. I think thats true, john. And thats just where we are. Market growth has been slowing. Thats the bad news. Theres still Significant Growth 3 to 4 per year. Also in some of the developing markets, consumers with moving up the price ladder. So there is still significant opportunities. If we think longer term, were going to see more population growth, more middle income household formation in the next five, tenyear periods than weve seen in our 177year history as our company. While im cautious about todays rate of market growth. Im bullish on the longer term. Okay, jon. Other than the musketeers. Anything else good you see . You didnt see a. J. Greens catches this weekend. I heard. Remember that odell catch . I was there. I think it was against the cowboys. No. I got to see the a. J. It wasnt on tv here. The one game they put on tv here, it was i was watching andy dalton just going, why, why. Wheres a. J. . A. J. Mccarron. Theres still hope, joe. No, theres not. Theres never been hope not since the 70s. Theres never, ever been hope. Thank you. Thanks. I say that hopefully because if i distance myself, theyll do better. Youve got to like cleveland though. No. Oh, the indians. Of course. I dont like the browns. Bengals just beat the browns. Most exciting world series in history of baseball. Did you see the tickets . Only guys like you can. I cant afford the tickets. I just gave away all my land. Weve got to talk about this. I dont want to get on a rant, youll call me a reactionary. You are. Im not a reactionary. But in a loving way. All right. Then im not going to do the rant. What is he . Hes a communist. And it starts. And it starts. I told andy yesterday im going to go see that group of sell people over there that call themselves capitalists. Jon left is jon gone . Jon who . From procter gamble. Yeah. Because i dont know what people are seeing about prosperity in e the world. I dont see it. I dont see it. I think we got real problems. Speaking of which this is the thing. I think weve become very divided in this nation and people dont believe this but a lot had to do with the way obamacare was rammed down our throats. Okay . And then you lost two midterms. You saw what happened there. Now were looking back on this eight years which is supposedly great. And the thing that poisoned the wealth is imploding. The Obama Administration says that premiums for plans under the Affordable Care act will go up sharply next year and many people will be down to just one insurer. It took two years to pass this thing by bribing even democrats to vote for it. Now, the department then im just going to let you go until all the way to 8 00. The department of health and Human Services says the average premium for a midlevel plan is going to go up 25 . Officials do note that the majority of obamacare customers qualify for Financial Aid that can cut costs. However, a lot of republicans including donald trump are jumping on the numbers as a warning that the Insurance Markets created by the law is teetering towards a death spiral. Heres mr. Trump. Its over for obamacare. And Hillary Clinton wants to double down and make it more expensive and its not going to work. I called it when it first came out. Its only getting worse. And not only for you, for the country. Because our country cant afford it. You cant afford it. Were going to have Great Health Care at a fraction of the cost. And you watch. Itll happen. About 85 of current obamacare customers qualify for Financial Aid. 85 in the form of federal tax credits. Now, andrew lets get to ken langone. The floor is yours, sir. I wish we could take partisan politics out of all this just for a reasonable, objective discussion on where we are and what we need to do. Okay. Weve had low Interest Rates for how long . Ten years . Whatever . Coming up on it, yeah. Whenever in the past the economy slowed up or you slipped into a recession, one of the primary ways the fed got involved was lowering Interest Rates. The simple logic being people borrow more money, they hire more people, we get the economy going. Theres nothing more we can do with Interest Rates. And to bump them up a quarter of a point. And a quarter of a point is done. Itll go up a quarter of a point in december. Were still in terms of Interest Rates weve got not much left in the magazine. We do not have a strong economy. The world does not have a strong economy. Were barely moving along and as time goes on, youre going to see more and more innovation. By the way, this Innovation Index, its over my head. I dont know what the hell it means. Low bar. Whatever. To me. Oh you mean for me. Oh thats fine. I was kidding. Youre a kazillionaire. In your lifetime you created a 150 billion company. And we gave back 100 billion on top of that. And all your employees pay taxes and they all they pay taxes and own stock and many of them youre my idol. Go ahead. The fact is we have Serious Problems that are not being addressed in this country. They will only get worse. They wont get better. As we take 10,000 more people into the age of 65 and over every day, these people need health care. These people need food. They need heat to live. These people have great needs. Theyre being forced to now eat into their principal because the returns on what money they put aside are going down. The economy i dont care what any of these geniuses say is not strong. Used truck prices. Down. Daily rental of our Truck Leasing company. Down. Truck manufacturers you get a truck next week if you want one. No waiting list. No backup. No backlog. Where is all this robust economy . Weve got to get away from arguing from political side to political side and look at it objectively. Obamacare, whatever it was whether it was good or bad, we know now that its like the guy that eats like too much and keeps telling his friends hes on a diet and every time he gets on the scale, the number goes up. Okay . This is what we are right now with obamacare. Uhhuh. The guys on the scale. Its going in the opposite direction. Were heading to a single payer. Which, by the way, is exactly what they want. I cant say they want. Which they may want. I dont know what they want. They being the other side. You have any doubt . Of course thats what they want. We know that from her first run at it. Please. Because i cant prove it i believe they want it, but i cant prove it. I can tell you right now this does not have a happy ending. Thats in next weeks emails that get released. But again, weve got issues that need to be dealt with in america. And as long as were screaming at each other from political ends, were not going to address the problems. The economy is at best tepid and as time goes on, technology is going to take more entrylevel jobs out. Ill give you a for instance. Your truck jobs. Every once in awhile i go and get the miracle grow and see my Great Research firm in cleveland. I want to see jimmy who i consider to be a visionary. Hes nuts like i am, but hes also a visionary. They have a grass there developing that doesnt need to be cut but once every six weeks. Wow. Think of the number of immigrants prayfully all legal that wont have a job cutting lawns because the grass only needs to be cut onethird of the time it used to be needed before. The grass is spectacular. Its beautiful. Can i ask you a question. If thats true and thats directionally where were going and ive been very anxious about sort of what technology will ultimately do to jobs. What do you do about it . And we could say education. We all agree that education is important. But at some point, theres always going to be a little bit of a curve, i hate to say it. And then what do you do to protect those people . Theres got to be a curve. But right now im in new york. If i want to go to california and im going to walk to california, unless i take the first step i aint going nowhere. I cant theres no way were going to solve these problems overnight. But if we dont get started on that journey, theyre only going to get worse. We can sidestep education. The fact of the matter is obamas been president for eight years. Why am i partisan . Public education has gotten worse in eight years, not better. If i if eight years ago i was in grand park and he was president elect, id say i want to be remembered for one thing. That im the president that started education in the right direction. Okay . Fair enough. Kens going to be sticking around for the rest of the show. Were going to continue this conversation in a bit. Up next, the earnings parade. Eli lillys johnli likchlichtli joins up. Eli lilly out with Quarterly Results. The drug maker earned 88 cents a share missing by 8 cents. Revenue also short of estimates. Joining us john lechleiter. This is his last Earnings Report before retiring. The wires services, everybody analyzing and we have talked about it again and again when youve come on. Youve dealt with patent operations guiding the company through these. And it looked like that was mostly finished. Maybe thats one of the reasons you feel comfortable retiring. But in this most recent quarter i dont know whether you call it a little bump in the road. But it was sales of certain drugs abroad that were below, i guess, analyst expectations. Whyd that happen . Well, joe, i think for the quarter first of all we stopped giving quarterly guidance some time ago. I think whats important is we kept our Guidance Range intact 250 to 360 for the year. We increased guidance revenue for the year. Ous sales were down. Thats pretty much the residue of the impact of some patents. I think the key story is volume growth of our newly launched products. Weve had seven approvaled since 2014. Were up 7 . That midsingle digit or highsingle digit growth is consistent with the growth rate for the products. We continue to improve to sales ratio. We continue to progress our pipeline. When i look at the fundamentals of the business, they havent changed. I think quart tore quarter you see some fluctuation. Sim ball ta you lost in europe. Then in japan. And theres a cancer drug that you lost. What i dont understand, is why analysts are these surprises to these guys . The analyst hs a Different Number for sales and a different earnings per share number. So youre saying nothings going on but the analysts are wrong and then the stock goes down almost 3 on this. So who doesnt understand the company or whats going on . I think the analysts had slightly higher sales for certain products. They had slightly lower expense numbers. But i dont think fundamentally theres some significant difference between the way we see the world and the way they see the world. They had a higher number for eps in the Third Quarter than in the Fourth Quarter. And, you know, in terms of our internal plans, obviously when you do the math the numbers go the other way. So again, were managing and running the company for the year and for the longterm. And the fundamentals are still intact. Langone is here. You own some lilly. I own some lilly. You want to whats there to say . Ken is saying that just in general, not just here but around the world that, its just were all used to it now. Were used to slower growth. And theres scary things in terms of demographics and aging and technology and all these things that make it a slowgrowth world. You know, we should be making more progress for people that need it. Right, john . Do you see it that way in terms of the tepid growth globally . Well, i think that i would agree with that ken said earlier. I dont think were sitting right now in the middle of a strong economy. Clearly, you know, wed all like to see that growth rate edge up a couple of Percentage Points when that growth rate is higher obviously it gives consumers and government payers obviously outside the u. S. , most of the people outside the product or governments the wherewithal to provide the health care that our company presents. We indirectly feel that. Ken looks like he lost some money or something. Itll come back. A little bit. Its okay. Ill survive. John, thank you. We appreciate it. Ive never seen him at a loss for words. Anyway, thanks, john. Coming up, much more from ken langone i have no doubt. Plus netflix could be looking at a new behemoth of a rival if the at t time warner deal is allowed to go through. Julia boorstin spoke to Ceo Reed Hastings about it. His comments straight ahead. Squawk box will be right back. Among the stories front and center, were watching shares of under armour in premarket trading. Revenue above estimates although profit estimates were slightly short of forecast. Premarket shows lower by 3 . Heres something to keep in mind with apple. Reports the worldwide smartwatch market fell 51. 6 in the Third Quarter from a year ago. Apple introduced a new version of its watch even though it was only available for the last two weeks of the quarter. Ipm has issued an apology to the government which shut down a national census. The government is blaming two domestic Internet Service providers for the lapse in the security. Breaking news from General Motors. The Quarterly Results just hitting the wires. Phil lebeau joins us with the numbers. A beat and a big beat by General Motors in the Third Quarter. Listen to these numbers. This was a record quarter for General Motors on the earnings gm beat the strit earning 1. 72 a share above expectations which were 1. 45. Revenue also up coming in at 42. 8 billion. The estimate was for 39 39. 2 billi billion. The pretext profit with total margins of 8. 3 and in north america the margins coming in at 11. 2 . Guys, that is four out of the last five quarters where they have had margins north of 10 which was the target. And you can thank the strategy thats been working for them which is trucks, suvs, crossovers. Theyre red hot and theyre sticking it on the retail side with average transaction price coming in at 36,000 almost 36,000. Thats about 5,000 above the industry estimate. Or the industry average, i should point out. When you break down the regions, north america 3. 5 billion is what they made. They made 500 million in china. 200 million from financial. And quickly, guys, no change in the guidance from General Motors. But whats interesting is when you look at this stock, guys. Generally speaking, gm and ford trade in tandem. Ford was out with comments not too long ago saying were going to be guiding back a little bit in terms of expectations for 2017. And when you look at General Motors, starting to split and move away from ford because were not seeing that with gm. No change in guidance and these are really strong numbers for the Third Quarters. Dont forget. The cfo will be talking with us first on cnbc coming up in about 20 minutes. Guys, back to you. All right, phil. This is going to play right into what youre saying. Thats caterpillar. Reported 85 cents a share down from a year ago. That was above expectations of 76 cents but the stock is down because the revenue number was quite a bit lower than expectations. 9. 1 im sorry. 9. 2 billion and expectations were almost 10 billion i think. 9. 867 billion. And doug, his his last quarter. Right. And i think he did a hell of a job. Economic weakness throughout much of the world persists. As a result most of our end markets remain challenges. In north america the market has an abundance of used construction equipment. They have idle locomotives and idle mining trucks. A few bright spots. Construction industry and Machine Market position improved in china. But they didnt say anything about here. And Commodity Prices have stabilized. But heres an example of technology. Last monday i had a great day. I operated a backhoe out there. You know its a big machine. Uhhuh. They now have the technology that literally, for example, if you need a trench two feet deep, a bucket cant go below that. Gps. The technology thats coming, they have mining trucks that are driverless. By the way, i learned something. Woman operators of those big operating trucks are better respected than men because theyre not as aggressive. Isnt that interesting . Careful, all those comparisons get you in trouble. Dude. If you ever ran for president , youd make trump look like an altar boy. What did i just say bad . I dont think its bad. But certain parts of the political spectrum hate to acknowledge there are differences between men and women. You know what . They have dirty minds. Okay . No, no. Youre stereotyping. No, im not. You are. And i dont appreciate it at all. I expect that from my c orkc buddy. Not you. I could not operate a backhoe. What im saying to you is the technology being driven through the companies and what theyre doing is spectacular. But over the longterm weve got to your point was with that big thing so you dont want to go too deep. So it goes exactly two feet down. Thats kind of cool. G gps. Thats amazing. Your productivity goes up because you get it right the first time. Theres so many wonderful things going on. Were going to have to they let you in a backhoe though . I got pictures of it. I operated a d11. Alone . No. They had a guy up there. All right. God is your copilot. I would have someone in there with you. Here is the reason you want to be excited in america. See a company like caterpillar. You just said things are terrible. Why would i because in the next 25 years when im not here, america owns the world. Its ours. No matter how much our politicians screw up, they cant stop the inevitability of where were going to be. Okay . And look at to a globalist, this is very threatening. Andrew, is this good or bad . You go out for example i want everybody equal. The simplicity of operating these behemoths is unbelievable. No more steering wheels. You got a digital pad right . You got a tv camera there and all these things. And all im saying is these people are spending serious money on improving what they do. And its going to innert the growth. We have to get through this insanity of government regulation. Being partisan. And youre very nationalistic. By now you should know it takes a village. Big village. I want my village to be in america, okay . Oh, boy. Okay. When we return, more from the great ken langone from the economy to education to the race for the white house. We have not really touched on politics though. Sort of in a subtle way. We got more. Plus home depots big power deal. Squawk returns in a moment. Before taking his team to state for the first time. Gilman go get it, marcus. Go get it. Coach gilman used his cash rewards credit card from bank of america to earn 1 cash back everywhere, every time. At places like the batting cages. [ crowd cheers ] 2 back at Grocery Stores and now at wholesale clubs. And 3 back on gas. Which helped him give his players something extra. The cash rewards credit card from bank of america. More cash back for the things you buy most. Big telecom and media deal of the week. At t buying time warner for 85 billion. Netflixs Ceo Reed Hastings shares his thoughts with our Julia Boorstin yesterday. Its hard to tell. Its very early. We didnt know anything about it. Were just sorting through it. You know, for sure we want to make it so that we want to require for at t customers that hbo and netflix are treated the same. Now, that theyre going to own hbo we think that any special treatment for hbo data would be inappropriate. But i think thats pretty basic. Besides those concerns, hastings says hes not bothered by the deal as long as hbo and netflix are treat ed the same. But later he said, quote, that was not a no. I dont know what we should take away from that. Meantime, coming up when we return, a power deal that would help home depot keep its lights on. Southern company deploying to home depot stores. As we head to break, take a look at 3m. It lowered the top end of its fullyear forecast. And youre seeing that stock down a little over 1. 5 in premarket. Back in a moment. Lets get host ken langone. And cofounder of home depot. We might as well have had the cameras rolling for the break. Its not like you havent been on before talking about education. But i guess just to summarize in your view, we need to fix this and its going to be a longterm endeavor. It isnt going to be fixed overnight. But that in your view this is something youve always been passionate about. This is education. And youre going to say i dont want to get partisan, but then youre going to say until we break the teachers unions, until we understand you need Charter Schools. Then youre going to get partisan. But do we spend more money . Do we throw more money at it . No. What do we do . The department of education was founded by jimmy carter 78. The chart showing the money thats spent goes like that. The chart showing the results goes in the opposite direction. Right. Now, we are theres 30 developed nations in the world. We spend more money per student of all those 30 countries. We rank 28 out of 30 in results. Were spending the money. We are spending the money. I have the governor of massachusetts in my office last night. By the way and i gave him a check because i believe in this. Theres a referendum on the ballot this time, more Charter Schools. Jeff was at the meeting last night. We know one thing. If we dont improve the quality of education in america, were not going to solve our longterm Economic Needs and challenges. Not. Why am i passionate . Im simple. My mother went to the seventh grade. My father went to the eighth grade. My mother was a cafeteria worker. My father was a plumber. Here i am today. What was the difference . I got a fabulous education in a wonderful Public School system out in alolong island. Where they have tax dollars and money. I didnt know if they had money or not. All i know is i got a great education. And i went off to i know im only here this morning because of the benefit of a good education. But you didnt go to a charter school. The reason they worry about Charter Schools is because there were no Charter Schools then. I know. But you got the Public School education. Thats why people against Charter Schools say we got to fix that takes your eye off fixing Public Education. But the Public Education is getting worse, not better. What do we need to do there if its not money . We need to get more aggressive and more by the way, Charter Schools are publicly funded. What about the unions . Dont you have to break the unions to make this happen . Yeah, you got to break the unions. Of course you got to break them. Not break them. My mike is off. Where the hell does it go . I got it. Thats just your ear piece. Youre fine. Thats where it becomes political low pressu political. The schools are for the adults not the children. Thats the tragedy of america. If i was obama, if i was president obama id say eight years ago im going to be remembered as the guy that went to the white house that turned education around in america. And im going to help the poor kids many of them minorities but theres also poor white kids. You go to the south, go down to north carolina. There are schools down there that it was supposed to. Remember . Arnie duncan was the one guy in the cabinet that i thought after his experience in new orleans, his belief in Charter Schools that this was going to happen. And gone. Gone. Look at whats happened. These poor kids deserve better. We need kids today that are in the first grade that one day are going to found a home depot. How would you do it, ken . The teachers unions elect the democrats. Then they know they need the unions again to get elected. You cant break the cycle. The if you cant do that how do you break it . If youve got financial resources, put them in a catholic school, hebrew school, wherever you want but get them the hell out of the Public Schools because theyre not going to get an education. Wealthy people many manhattan do not send their children to Public Schools. Thats the proof of the pudding. These kids deserve to be helped. I dont want to make it political. I dont want to blame this one or that one. I say lets fix it. Trying to fix something without getting political about it. Its impossible. I know you dont want to do that. I know this much. Id rather be on the side of not defending the teachers right now because theyre indefensible in my opinion. Teachers union. Not teachers. Believe me, theres wonderful dedicated teachers out there. Talk to a qualified and dedicated Public School teachers, one of their problems is discipline. Why . You cant discipline kids. Im not talking about smacking the kid. Im talking about doing something to the kid so you dont disrupt the classroom for the other kids. Our Charter Schools, we will not tolerate a behavioral pattern thats a pattern. If a kids disruptive say were trying to help your kid, we cant risk the other kids education. Youre cherry picking then. Youre only allowing the good kids in. So all the bad kids go back to Public School. Well, guess what. Well defend that position every day of the week. Let me ask you a different question. The teachers and the teachers unions, lets just put it on the unions. Like we said theres great teachers. But the argument they would make is this ultimately starts at home. You need a parent who wants their kid to succeed. Okay. So and that there are parents unfortunately that are either not in a position to help their kids the way you would want them to or frankly dont have the wherewithal to do it. All right. The teachers say our problem is not us. These kids, we have no support at home. I turn that around. Because they have no support at home, we expect more from you. Youve got to do more. And if you dont okay . These poor kids, they didnt they grow up to be better parents. Thats the thing. The parents are thats not going to work. We got to help these kids. I wont debate this one because i actually am a big fan of Charter Schools. You basically refuted the idea that since not everyone theres not enough Charter Schools around so to fix this we need to fix the Public Schools. Youre saying take kids out of the Public Schools and go to charter school. Youre doing it to force the issue. No. Im doing it to educate the kid. The kid should not be a token. We should do everything we can for that poor kid. If we can get them started in education. Charter schools are Public Schools. They are paid for by public funds. You know what the problem is . We are much more aggressive in evaluating our instructional staff. If somebody doesnt cut it, theyre gone. Public funds with metrics opposed to what happens in regular Public Schools. Let me tell you what you want to do one day in school. Get jeff cantor on. Hes been on. I think stan brought him on, right . Either way, a the guys there, if were going to move the needle on education its going to be stanley and jeff. We have got to help these kids. Dan is big too. This is the thing that irks me. People take shots at the hedge funds. Think of the good that the hedge funds have done in this city. Look at robin hood. Look at promise academy. Theyre just doing it to make up for all the terrible things they do in society. You know how that goes. Thats what they say. You know thats what they say. You just do that because you feel bad about all the other stuff. Im not a hedge fund, number one. Id like to consider myself a good investor. At the peak season, home depot will have over 450,000 employees. During the regular season we have 360,000 people. We have over 3,000 kids who started in the parking lot barely out of high school that are multimillionaires today. Now, if thats not capitalism, i dont know what it is. Thats fantastic. And go talk to these people. We dont pay minimum wage. We give them benefits. They have a bonus plan. The point im making is it all begins by giving the kids the basic tools they need to at least get into the cycle. I agree. We all do. But here we are. Eight years later, nothing. Right . Yes. Youre right. And on that basis, i think hes a failed presidency. Okay . But obamacare. Much more from ken throughout the show. Coming up gm cfo Chuck Stevens talks Quarterly Results and the state of the auto industry. Check out the stock ahead. Its up 41 cents. Squawk box will be right back. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Coming up, former fcc chairman reed hunt on this weeks merger. Going to talk to us. Also a wrapup of this weeks Earnings Reports. And also more with ken langone. The futures right now, take a quick look. S p 500 up marginally about a point. Squawk back in a moment. friends gasp the app where you put fruit hats on animals . I love that guys, ill be writing code that helps machines communicate. interrupting i just zazzied you. phone vibrates look at it friends giggle i can do dogs, hamsters, guinea pigs. You name it. Im going to transform the way the world works. proudly i programmed that hat. And i can do casaba melons. Ill be helping turbines power cities. I put a turbine on a cat. friends ooh and ahh i can make hospitals run more efficiently. This isnt a competition yeah. Well, we gotta hand it thto fedex. Glasses. Theyve helped make our ecommerce so easy, and now were getting all kinds of new customers. I know. Can you believe were getting orders from canada, ireland. This ones going to new zealand. New zealand . Psst. Ah, false alarm. Hey you guys are gonna scare away the deer idiots. Providing Global Access for Small Business. Fedex. Earningspalooza. Six dow components rolling out results this morning. We have a rundown of the numbers and the market reaction. A cnbc exclusive. Netflix Ceo Reed Hastings gives a nod of approval to the at at t time warner merger. And a modern day beer run. The final hour of squawk box begins right now. Live from the most pufrl ci powerful city in the world, is new york city, this is squawk box. Welcome back to squawk box here on cnbc. Im joe kernen along with Andrew Ross Sorkin and michelle carusocabrera. The line in that song is funny. What is it . When i drink by myself, i like to drink alone. Anyway. Up that could mean that you could be by yourself in a bar or have other people around. Or if youre drinking about yourself, you could be totally alone. What you dont want to do is drink and drive ever. Which gets us to General Motors. Wow. That was good. That was a stretch. Thats a segue. Phil lebeau is back and has a special guest. Phil . Thank you, michelle. Lets bring in Chuck Stevens from the headquarters at General Motors in detroit. Chuck is the cfo for General Motors. You guys beat the streak by a wide margin on the top and bottom line. This is much, much higher than expected. When i look at our performance versus consensus, pretty broad based. We had good performance in all of the automotive segments. But obviously the biggest driver was north america and another record quarter here. At the same time and i dont expect you to answer for ford. But in the past couple of weeks ford said were going to trim our protection. Were seeing headwinds in the market. Were bringing down our guidance for 2017. Were not seeing any of that from you. So why the split here . Why is it that youre seeing continued strength in this market particularly with trucks and suvs . Well, im going to speak for General Motors, obviously. And were running a different play. Were very, very focused on driving retail business. Focused on improving on north america. Grown our calendar year to date by half a percentage point. Our transaction prices continue to improve on the strength of our products. And actually were quite excited about our launch cadence when you think over the next 12 to 18 months and fundamentally refreshing our entire crassover portfolio. Were very optimistic about continuing to drive Strong Performance here in north america. Even in a plateaued environment. And that brings up my last quick. Are you noticing any slowdown at all in terms of the retail buyer . The guy going out to the dealerships . Do you expect this to stay at the level its at for the industry overall . Yeah. Our view right now from a Light Industry perspective, phil, is well finish this year somewhere in the low to mid17 million range and we expect to see that for the foreseeable future from the fundamentals of the industry perspective. For october our expectations are the industry from a light standpoint is going to run in the high 17 million range. So we continue to see strength as expected. And were going to take advantage of that with our great products and launch cadence. Chuck stevens joining us from gm in detroit on a day they beat the street by a wide margin. Ive been reporting earnings for years and i dont remember the last time i saw this by 20 cents per share. Usually analysts have a better sense of things. Great Historical Context for us there, phil. Appreciate it. Beyond General Motors, there are six dow components out with earnings this morning. Caterpillar stock is off by more than 2 in premarket trading. 3m earnings topping wall street consensus by a penny. Revenues were in line but the company on the top end. Stock lower by 1 in the premarket. Procter gamble beating the streets. Cfo jon moeller joining us this morning. Weve got some tougher comps ahead of us. Were managing through a lot of geopolitical and economic die kna dynamics. Of course our competition doesnt stand still. But 2 will be up versus last year. We hope by the end of the year will be improving beyond that. And p g is higher. Of the dow components out with Quarterly Results this morning, merck results topping consensus. The drug company also raising its 2016 outlook with cancer drug with i dont know. Contributing to success. And then beating estimates by 10 cents. Conglomerate raising organic sales outlook. And dupont coming in better than expected. The chemical maker raising full year forecast. Doing some job here. Whos that . Ed. And the companys results were helped by expanding sales and Profit Margins. Over and over again. Over and over. Talk about a great operator. Right. One more thought. We talk about education. And im biased about jpmorgan. Im a big investor. What jamie has done with pay voluntarily, weve got to address income inequality in america. If the government does it. Redistribution or evolution. Weve got to recognize that people cant live on 300 a week in this country. They cant. Thats why you fix education. Yeah. But also until you fix education, they got to pay their rent, got to eat. You try to get growth. You also need confidence and a Management Team that what i was impressed with last week. I walked through the whole plan. My heart break was i found out five years ago this kid worked for home depot. Hes now walking me through this huge plant. Im thinking to myself, look at the and by the way, cat, i think they pay them at least 14 bucks an hour. So theyre there. But you cant price yourself out of theyre not pricing out. Okay dpop 50 an hour then. Theres an upper limit on what they can do. But the best way to do it is to have demand for Skilled Labor caused by the growth in the economy where everythings percolating. I tell my kids youre not saying that. Youre saying Something Else. I got a headache with this guy. Usually its with me. I like it. Look. The thing i wish for is the kids in our Charter Schools dont need affirmative action. That therell be people waiting in line to hire them because theyre going to contribute to the prosperity and success of the businesses. But you understand what a nationwide 15 an hour minimum wage you know how that would be to everything were trying to do. Sounds good to the liberals on the front end. They never connect the dots to they are effects of joe, i didnt say 50 but i know you didnt. We move towards it over a period of time. Whats the federal minimum wage . Federal minimum wage is zero when you price people out of the job market. We agree. We agree. But enlightened management look at this. I dont have to say anything. You know what . Can we heres what communists do. They get us going at each other. Im enjoying all this. Cool as a cucumber. We got to talk politics and business right now about a deal maybe youll have a comment about how you feel about this deal. Now to the intersection of politics and business. Planning a hearing to discuss the pros and cons of that big at t and time warner merger. Donald trump said if elected president , he wont allow the deal to go through. At t Randall Stevenson addressed governments decisions about the deal on squawk yesterday. This has none of that. There are no competitors being taken out of the marketplace. Nowhere. Were not changing how the content is made available to other customers and distributors. This is a pure vertical integration. While regulators will often time have concerns with vertical integrations, those are always remedied by conditions imposed on the merger. Thats how we envisioned this to play out. Exactly what are the laws in place right now and how does that work in all this . Lets turn now to the former fcc chairman reed hunt. Good morning to you. Good morning to you. Help us understand how you think the government is going to approach this both from the fcc perspective to the degree you think theyre going to have any authority over this. And maybe doj or ftc. I think doj and fcc. But two weeks from today we have to decide whos president. Donald trump said he would stop the merger if he was the president. Can he do that single happen handedly . One of the bills of impeachment from mix son was from the office he interfered with emergenciers. This is donald trump having a unique vee about how our system works. If he is not elected, Hillary Clinton has also said she would do whats normal and that she would have the regulators take a tough look at it. And that would mean the fcc well, it would mean the fcc and the department of justice. But im making you the regulatory king for the day. What is your position on this transaction . Well, the fcc chairman gets to be a coking or coqueen because the role here is shared with the department of justice. The deal has to get through both of those agencies. I assume that the way they would look at it is the way they looked at comcast and nbc universal. Right . Which is the similar structure. That was a deal that was of course approved with an awful lot of conditions. So you expect this deal to go through with conditions. And is that what youre saying . Im saying thats the way they would look at it. The interesting question here is to me what the is Net Neutrality . Its a new principle that goes to those that dont exist. The previous deal, the comcast deal. And Net Neutrality, whether its the broadband Cable Company or wireless company, is supposed to treat all content in a nondiscriminatory fashion. Not give advantage to one body of content opposed to another. Handicap this for us. Investors in at t and time warner yesterday were calling their lawyers and consultants saying can this transaction be approved . If they called you, you would say what . It depends on what conditions the parties are willing to embrace. Yesterday maybe this morning i read i saw on your show that Reed Hastings of netflix said that the deal was okay with him as long as he was treated fairly. This is like donald trump saying ill abide by the results of the election if i think theyre fair. So it depends on what Reed Hastings and netflix thinks are the fair conditions. Hard to know. Youve heard people in washington say that they look at the comcast nbc transaction not necessarily regretfully, but that there seems to be a newfound concern after the fact. Is that right . I dont know that people think that. Depends on who were talking about. I will say this. The two top people in the antitrust division at the department of justice are very, very experienced in all of the recent mergers approved and disapproved that have involved at t and the wireless companies. If they stay if hillary is elected and they stay in the office, you will see people following the precedence that were set in the previous reviews. One of them was the approval of comcast and nbc. But with a lot of tough conditions. So you think they should follow that. Okay. Can you go back to the nixon thing . I didnt quite get it. How is this related to the current topic . There were many charges in the articles that came out of the house. But one of them was that he had improperly interfered with a merger review. Im just saying president s arent supposed to do that. So it could be grounds for impeachment if donald trump were to win and first we have to imagine that hes elected. Second we have to imagine that he meant what he said. Nixon was charged. That didnt mean he did it. Thats a different point altogether, right . I understand. But this is how things get oh, he did that. He did stop it. I think hes making the point if donald trump did it if if if. Thats me point im making. If we look at the stock market now, investors are betting this transaction did no better than a 50 50. Youre saying you believe this goes through with conditions . It depends on what conditions the parties are willing to accept and what conditions but if theres no exclusivity on the content, no zero caps meaning data caps related to the content. Those are the obvious ones. Is there Something Else were not thinking about . Heres a question for you. Suppose at t wanted to use whats called zero rating. Meaning had you buy the at t Wireless Phone and have all the data that includes hbo that you want. Something distinctive about an at t wireless service. Will the regulators think that a with Net Neutrality . Thats an unresolved question. And i note here that the breakup fee is not very large. So if at t doesnt like it, they can walk away without paying an arm and a leg. You mind telling the s. E. C. Chairman on was to do was ground for any type of action . No and thats an interesting point you make. Because as long as the statements from the executive branch are public and filed, that is perfectly consistent with our practice. Its picking up the phone and ordering the department of justice to file a lawsuit, thats inappropriate. Reed, can you help us with one last thing . Maybe you havent seen it. When you think about the comcast nbc deal, is there anything that people in washington look at and say that there was something they want to apply from that lesson from that they would want to apply to this . Is there Something Else there were not talking about . One of the essential aspects of that deal is what i would call the precursor of Net Neutrality. It was to make sure comcast treated content in a nondiscriminatory manner. This general principal that we now call Net Neutrality. The comcast deal expeers i think in 2018. But the Net Neutrality principle. At least it would under a clinton presidency. Coming up, we are just two weeks away from election. An unlikely candidate is surging in utah, a state thats voted republican for the last many years. Evan mcmullin will join us after the break. As a supervisor at pg e, its my job to protect public safety, keeping the power lines clear, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Two weeks until election day, Hillary Clinton is moving ahead of donald trump in the polls. And in the reliably republican state of utah, another candidate has emerged as a favorite. Lets bring in evan mcmullin, an independent for president and native of utah. He joins us now from jackson hole, wyoming. Good to have you here. Were having you on not because we think you can eventually win the presidency but because you are rising in the polls enough in utah that theres a threat that some of those electoral votes dont go to the republican but go to you. Good morning. Good morning. Thanks for having me. Yes. Were excited about the traction that weve been able to generate in utah. Were seeing that spill over into other Mountain West states. Im in wyoming now. We spent some time in idaho recently. Were just going to push as hard as we can for the next couple of weeks. But were excited about what we have seen. Its going to be a really tough electoral race, obviously. Donald trump is behind on that front. What do you say to republicans who might be watching right now saying really . For all his plflaws, if his vot dont go to him its that much harder for him to beat Hillary Clinton. Hes not going to beat Hillary Clinton unless something dramatic and incredible happens. Hes down in all of the Electoral College projections. Thats why i and my running mate said not to choose donald trump he had no chance against Hillary Clinton. And thats the reality. God bless you, but hey, if you want to ignore the polls. If you want to ignore the polls, thats fine. But theyre pretty clear. Then lets not have the election. Thats just absurd. At brexit it was 5248. When it came out, it was 5248 the other way. Its likely youre right, but okay go ahead. Interrupt me. Youre talking about a popular vote. Im not talking about a popular vote. Im talking about the projections in the Electoral College. You can deny that all you want like the trump supporters. Look, youre taking votes away from the republican and youre making it harder to stop Hillary Clinton. Just you know, you can say what you are. You dont have to make up that the election is over. Im taking votes away from donald trump . He might be the republican. Hes no conservative. This guy wants to grow the size of the federal government. He wants Single Payer Health care. East always been in favor of late term abortions. He doesnt support the second amendment. He wants to increase the size of the national debt. Evan, this is ken langone here. I commend you for getting into the process. I think the more people we have involved, the better we are over the longterm. That said, all the things you said about trump which i may agree or not agree with, doesnt matter theyre true. Its a fact. Hold it. The message to me is donald trump said so. Whatever his percentage is, say its 45 of the vote. If we dont understand what the meaning of that vote is, not trump but the American People. Because if hes as bad as you said he is and that many people vote for him, you have to ask yourself the question what do we need to do for the American People to become united again . Because youre making the point thats most important of all. The American People are angry. Theyre fed up. Theyve been disappointed. Theyve been misled. All those things. Forget about whether the democrats or republicans did it. The big issue is what do we read into the results of this election . If hillary wins 5545, i contend america lost. We didnt win. We lost. Well, i would certainly agree with you. Look, i think the kind of leadership we need in this country is leadership that will return power to the states. Theres too much power concentrated in washington, d. C. That ends up meaning that the 330 million of us fight over the decisions that are made there. Big Corporation Dollars fight over the decisions, chase those decisions there. It breeds corruption. Weve got a government that believes its unaccountable to the American People. Weve got to return power to the states. Thats how our founders envisioned this. They understood we would have a diverse country. And weve got to return power to the states. Thatll solve a lot of our problems. Mainly Government Accountability how do you feel about term limits, evan . I support them. But what office are you talking about . But in general, i support them. For the house. We have it for the presidency now. For the house and senate. I support them. You can throw all the rocks you want at trump, but the remarks he made about limiting lobbying in washington and restrictions on who can lobby and when, thats all part of the whole package. We need to fix this. Well, thats certainly true. And i support term limits, but im sorry. Youre talking about thats hardly an excuse for Donald Trumps candidacy which has been a bigoting misogynistic zeno onphobic race. Hes not president and hes still divided this country. Hes done enormous harm to our country even as a candidate. Hes not somebody who respects our system. He doesnt understand the division of powers. He visited us in congress and he claimed his support for parts of the constitution that dont even exist. This is the kind of guy he is. Evan, thanks for joining us this morning. We appreciate it. See you later. He doesnt get it. Coming up, netflix Ceo Reed Hastings is speaking out on that at t and time warner merger. Well bring you his thoughts on the deal and what he said about t the speculation of an apple takeover. Julia boorstin interviewed with him. What is your favorite show on netflix . The crown. Its just amazing. The scenes between churchill and Queen Elizabeth is amazing. Shows not on netflix . Silicon valley. Is my favorite not on netflix. Who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Busy morning for corporate earnings. Eli lil i missing forecasts. We did talk to the companys ceo john lechleiter. He joins us in the last hour. I think the key story is volume growth of our new products, our newly launched products. Weve had seven approvals since 2014. Were up 7 . When i look at the fundamentals of the business, they havent changed. I think quarter to quarter you see some fluctuation, but were confident for the year. Under armour earnings beating estimates. However, Profit Margins did fall from a year ago and the shares are now down 12 , 13 on the session. Kevin plank, young guy. Like it even more right now. Take on nike. Yeah. Visa revenue tops estimates. Seeing notable contributions from its acquisition of visa europe as well as increased spending by its customers. However, 2017 earnings revenue and guidance was somewhat shy of forecasts. Stock down marginally. Check this out. A hightechnology beer run. An anheuserbusch delivery truck in colorado made the first autonomous drive shipment in the u. S. Last week. The beer company worked with otto, an uber subsidiary working on selfdriving delivery trucks. Colorado to another location in the state. Uber bought selfdriving truck startup otto back in august. We were saying talking about jobs, this is where these are high paying jobs too. They are. But did you watch the video there . Just watching from here was disconcerting. The guy gets up out of the drivers seat and walks to the back of the truck. If you were riding in the truck i felt weird just watching it happen right there. I feel less weird in a car. That thing therell be fewer car accidents, more regulation. Thats so weird. Get back there. Sorry. But youre right. Theres a lot of right now theres a shortage of drivers. And these are high paying jobs. Different story very soon. Well, depends on the run, of course. Or a husband and wife team. They can make 120,000 a year. A lot of money. Back to the big story of the morning. Were talking a bit about the time warner transaction. Netflix may have blown away wall street with better than expected earnings but a streaming video giant could be faced with competition. Julia boorstin joins us. Reporter well, hastings has managed to keep up netflixs growth despite a wave of competitors including amazon ramping up expanding in the space. But with giant at t teaming up with time warner with netflixs longtime rival time warner with hbo, i asked hastings what this means for netflix. Its hard to tell. Its very early. Were just sorting through it. For sure we want to make it that with ept to require that for at t customers that hbo and netflix are treated the same. Now that theyre going to own hbo, we think any special treatment for hbo data would be inappropriate. But i think thats pretty basic. Are there any other requirements conditions that youd advocate for with regulators . Were just starting to look. Well give it a couple of months and sort through it. But is this going to be a negative for netflix in terms of more competition having more ammunition for its over the top services . Could be a lot of that. Has a lot of at t investment and content. That could make things tougher. On the other hand, its probably going to get easier to recruit time warner executives which are a talented bunch. Youve got some puts and calls. Youve been the subject of m a yourself. At what rice would you sell netflix to apple . Thats a question i wouldnt want to speculate on. But do you think something is going on in terms of Technology Companies wanting meeting assets. I dont see a lot happening, but you can never know. Weve been public for 14 years. Our stocks up almost a hundred fold in that 14 years. Weve done pretty well for shareholders. And were pretty invested and trying to keep that going. What about disney . All we do a focus on how we do great shows, how we grow our business. Again, thats what made us successful for the we dont do bankers meetings. Were old school in that way. Lets just bald Great Service and its done well for our shareholders. Reporter well have more from hastings including why hes not scared of competition and why he doesnt think netflix is overpaying on content. More coming up on squawk alley. Before you go, hold on. There was one comment i did see in writing was that you asked about time warner whether hed want to make a bid for time warner. And he said skip the question. That was not a no. Reporter that was a comment he made on stage with the wall street journal. He made it clear to me theyre not taking m a deals. To me that was more of a joke about the fact thattime warner and netflix have been these longtime rivals. We have to remember that ceo of time warner had called Reed Hastings a 300 pound chimp compared to their 800 pound gorilla. Hastings has always been very flattering and very complimentary to what time warner does. And what hbo does in content. One more question. If you remember on the comcast transaction with Time Warner Cable, originally it looked like remember, there was like a brief deal where netflix looked like they were going to be friends with the deal. Then turned the thorn in the side of that transaction. What do you think the chances are that hes acting sort of nice about this now. But later hes going to turn on them . Reporter well the deal he really took issue with was the Time Warner Cable reaction list. Look. He made it very clear that this is going to be a months long process of evaluating the deal for netflix. Hes going to demand that neutrality and being treated equally. Hes trying to start off nice because he doesnt want to come out guns blazing so early in the process. But i think its possible if he gets what he wants. In terms of being treated fairly and being treated equally. That hes not going to shut it down. Thanks, julia. Coming up with , a new powe. Bloom energy that has customers like home depot. Well talk to ceos of both companies plus the cfo of home depot. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. Were not passive aggressive. Hey, hey, hey, there are no bad suggestions here. No matter how lame they are. Well said, ann. Ive always admired how you just say whats in your head, without thinking. Very brave. Good point ted. Youre living proof that looks arent everything. Thank you. Welcome. So, fedex helped simplify our ecommerce business and this is not a passive aggressive environment. I just wanted to say, you guys are doing a great job. Whats that supposed to mean . Fedex. Helping Small Business simplify ecommerce. Southern company and bloom guys, were doing a show here. Southern company and bloom energy announcing today a Strategic Alliance to expand distributed Power Generation through fuel cell technology. The Alliance Hopes to draw in some more large scale commercial and industrial customers like home depot whos been working with bloom energy since 2014. And joining us now on set, Southern Company chairman president and ceo tom fanning. Bloom Energy Founder chairman and ceokadar stredar. Who can explain b this best first . Ill taic the first shot. Okay. You take the first shot. It is absolutely clear that the model is changing. Because technology is enabling it, customers are requiring it. Especially for high resistancy. And what were doing is linking up with one of the Technology Leaders in the field combining that technology with our broader set of infrastructure. I think it has tremendous potential. Carol, i was afraid to call you marisa tomei because it has an i. But it is tomae. Were thrilled with our relationship with bloom energy. We have powered cells as well as powering our forklifts in two of our distribution centers. We look at the value of these fuel cells in different ways. First br we have them installed we see our electricity costs are 15 to 20 less than they would be if we bought off the grid. Then sustainability. Because the fuel cells take natural gas and convert it to electricity without combustion, we see lower levels of Carbon Dioxide emissions. Forecast, since 2014 our Carbon Dioxide emissions have been reduced. Thats 4800 cars removed off the road. So were thrilled. Can i go to something basic here . Yes. You sell a product that home depot puts in its stores physically somewhere. Youve connected with it to help do this. This is all about customer requirement. It doesnt take a Rocket Scientist to do this, but youre a Rocket Scientist. So it might help. It is Rocket Science in the box. What it is for the customer is very good. Very simply just Like Computers after a point customized for business. How telecom customize for businesses. For the first time were bringing customization. Look for the need of a particular business. For electricity. So what we do is not only do we put our box and provide electricity to home depot where for the next 15 years their predictability on cost, lower Carbon Footprint not just because of co2 but because we dont burn natural gas. I hear predictability of cost, lower costs . Yes. Heres the other big thing. We talked about Big Technology drivers in this industry. Never been able to store electricity. Were combining for a storage device. That gives you reliability that is just crazy. Its working right now . Absolutely. I guess were going to go 60 with home depot. Were going 60 with home depot. But we have 30 megawatts for a large hospital customer. You didnt know that . They didnt clear that with you . Well, id like them to come up to nyu and talk to us. You charge by megawatt . Is that how it works . Yeah. We just charge them for what they buy. It is a per power purchase agreement. We charge them less than the grid. And our escalator year over year is less. I dont know what that means. Decrease in cost year over year. The customers procure their own fuel. This to me has other meaning and thats the home depot management. By the way, in the spirit of full disclosure, im a major, major stoke hockholder. This Management Team at home depot today is the best this company has ever had. Frank was the best. Frank former board member. Was he the best or this guy . You say this all the time. It always gets better. And all i can but thats the testimony to the early management these people have been put in place. Darryl, you let everything know if you can hear me for the first four years im kidding. Im kidding. Go back to the question. It was a joke. Go back to carol. Carol and this team here, everybody, this is the best this companys ever been run in its entire time. I have an Energy Question for you. We talk all the time here about elon musk and the idea of what hes doing with batteries. I just want to understand whether you think that what your view is of what hes doing. Look. They serve a completely different segment than what we serve. So look at what we do. A large home depot store, a hospital. You know, Headquarters Building of morgan stanley. You cannot put solar on the roof and enough batteries to be able to power those buildings. Right. So thats what we do. Unlike what we did in the past i have a tesla power wall in my office. You have a what . Hes trying to get into the storage business. I have a tesla wall in my home. But what makes this unique is the storage device isnt so much about the lithium ion battery. The better angle is the switching equipment around it so there is instantaneous pickup when you have a problem on the generation. Its really the switching technology. You talk about this fluidness of delivery. You think about this is here is what happens. During the night youre not going to be using as much power. You can bank that seamlessly into a Battery Technology thats smart that power secure brings to the table. During the day when the ac is running and the lights are on and everybodys coming in and out, you can shave that power off, using the power that you banked in the night. Use it during the day. And you can smooth that out. Peak versus nonpeak. You do this all with combined architecture of what bloom brings to the platform and an infrastructure they bring as power savings put together. Very, very different play than a home situation where youll have a solar panel. Got it. But you run the batteries at night. Would you be long or short solar city . Short. You dont like that business . No. You like it . Im going to stay out of that. We had first solar here. Solar and scale makes sense much more. Thanks. Thanks, carol. Thank you. Coming up when we return, todays top stories and check out shares of under armour down sharply after the Sports Apparel Company Reported earnings. Profit margins down from a year ago. We love kevin plank. He will be on the Halftime Report tomorrow. Squawk returns in just one moem moment. No one speed. No one way of driving on each and every road. But there is one car that can conquer them all, the mercedesbenz cclass. Five driving modes let you customize the steering, shift points, and suspension to fit the mood youre in. And the road youre on. The 2016 cclass. Lease the c300 for 369 a month at your local mercedesbenz dealer. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley coming up next, were going to head down to the new york stock exchange. Jim cramer will weigh in on all the news of today and the big earnings parade. Dont move, because thats next. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive lets get down to the new york stock exchange. Jim cramer joins us now. Jim, you know whats reported today, so i figure somethings got you fired up. Which of the 20 or 30 that youve seen . Tremendous, tremendous turn by ed breen at dupont. Fabulous growth from proctor. The organic growth of both these places really kind of stunning in light of how weak so many other companies are. Under armour talking about unplanned investments to keep their growth up. Certainly dont want to hear that. Unplanned investments. We want planned investments that dont require that to keep the growth up. I think gm is probably being sold down more than it should be, but then again i think the stock has outperformed ford so maybe people just taking some profits. I like this proctor, i like this dupont. These are remarkable quarters from old Line Companies with very energized managements. So that was it, huh . Ken, we were looking at ua. So unplanned what does that even mean . Unplanned investments to maintain the growth which they cut from 22 to 20 . I love ken. I love blake so much, i just feel bad for blake because you know that he put this Team Together and thats one of the better guys. Look, frank was fabulous and frank did a hell of a job, but id have to be totally objective in saying what i see happening in this company right now. Theyre the very best. The best they have ever had. I guess i love frank so much i do too. I have a statue of frank in my backyard, thats how much i love frank. Ill send you a copy, okay . All right, thank you very much. Good to see you, jimmy. Not one of those greektype statues. No. I was just wondering how deep this man love all right. I dont know. Im serious, with that team down there now, theyre unbelievable, they really are unbelievable. Coming up on squawk on the street a first on cnbc interview with sprints ceo. Thats at 10 00 a. M. Eastern. I am benedict arnold, the infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound i wont. The strikinglydesigned lexus nx turbo and hybrid. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Our guest host this morning has been the one and only ken langone. Weve never asked you straight up what youre actually thinking given where we are. What are you going to do when you go into the voting booth . Im going to vote for trump. You are . Absolutely. None of your views have changed over the past couple of weeks . Not that my views have changed. I have moments of disappointment when he does and says things i wish he didnt say, okay. But thats being a human being, frankly. All of us do things that we wish we hadnt done or say things we wish we hadnt said. This situation in virginia yesterday with 500,000 going to a guy thats a mucketymuck but this is the flavor of the day. Related to Hillary Clinton and the fbi. How about the donald duck. The video says she said do it. What about all the women who have come out and said hes assaulted them. Thats assuming what theyre saying is true, right . Im not saying its not true. Put that aside of the i know youre a spiritual person. It doesnt upset you to hear the way he talked on that tape . The other night at the al smith dinner, i was so disappointed at the both of them. This is a dinner to have fun and raise money for kids to get a good education. And the whole evening was demeaned by some of the things both of them said. Its usually a night of joy and of fun and of needling each other a little bit. Straight up on character, you say pocks on both houses . Let me tell you what i think. Ill give you the bottom line. I think the things that we need in this country Going Forward were more apt to get with trump than we are with her. Lets forget about politics, lets forget about philosophy, girls, boys. Im saying to you weve got serious issues in america and my bet is that hell give us more of what we need than she will. When you say character issues i recognize people have questions on both sides. I know theyre different. They are different. The get out of jail free card, weve got to go. Great to see you. Are you going to be here tomorrow . Make sure you join us tomorrow, someone will be here. Squawk on the street is next. Good tuesday morning, welcome to squawk on the street. It is an earnings parade this