Weve had 18 midterms since world war ii oneyear later every single time stocks have been higher, on average by 17 if you look from the yearly low the year earlier, they are up averaging about 32 . Well see what happens today and then over the next 12 months lets look at what happened overnight in asia. The nikkei ended up by 1. 1 . Hang seng was higher shanghai was down by a quarter of a percentage point. If you look at whats happening now in europe, right now red arrows across the board. Mostly fairly modest declines. Italy and spain both down. Spain is down by close to 1 treasury yields, look and youll see the tenyear now is yielding 3. 193 crude oil prices, which settled down barely yesterday, settled at 63. 10, the lowest settlement in seven months. This morning down 22 cents to 62. 88 even as those actions on iran were imposed. Something is happening today, a little thing called the midterms we dont need to introduce him he needs no introduction eamon javers is in the house on the set. Im wearing my jar kcket agan understood. If we talk, you want to ask me a question, can you scream it at me rudely sure. And ill ignore you Midterm Elections, this will be fascinating first Midterm Election of the trump era. Well watch the house and senate races. Look at the house of representatives, the democrats are feeling momentum they think they might have an opportunity to take back the house of representatives they need a net of 23 seats here watch for races all afternoon and into the evening tonight in terms of the suburban area where you get a lot of swing voters, maybe some republicans frustrated with the performance of President Trump, thats where the democrats think their sweet spot is in the house look at the senate, current balance of control, there are two independents in the United States senate. So the democrats need a net pick up of two seats here you think only two seats, thats easier than the house, actually its thought too be to be harder because red state democrats will be the key there if democrats can pick up the senate, thats going to be a bit of an uphill climb ultimately there are expectations built in, but we should start the day with a big dose of humility, where a lot of people thought they knew what was going to happen, they had no idea we have no idea what will happen tonight. We did have the conversation in makeup. You always want to try to Say Something definitive, so you can say you called it. Are you making your call . I dont have a definitive feeling for it i said to you knowing what happened in 2016, if it was just donald trump i would think he could be underestimated. Knowing all politics are local, all of these house races, theres so many local things that go into it when i was a young reporter on capitol hill, all politics are local. Each district is different thats been turned on its head this year. I think all politics are trump the president also said he virtually fools like hes running on the ticket. Look at the governors races in georgia, florida the senate race in texas, in missouri, mccaskill, north dakota. I think the Gubernatorial Races will be important to watch. Republicans control about twothirds of that theyre all compelling. To me the Gubernatorial Races may be different that might be a truly local issue. Its about medicaid absolutely. Gubernatorial for our purposes, following Financial Markets and the fates of companies that i be less important house and senate you will deal with tax policy, trade the governors dont have as much say. In terms of corporate performance youre looking at thehouse and senate here gubernatorial and state houses will be able to determine redistri redistricting after the next census after september 11th, during that midterm, there are cases where a president can do okay in a midterm. After the Monica Lewinsky candle, bill clinton did well in the midterms if the house goes, which everybody seems to think its going to, i dont know how adam schiff can be on tv more than he already is on. I dont see how the magnifying glass on trump can get more powerful but it will. They have the power of subpoena maxine will be head of the finance committee. If theyre looking for things to get better will the democrats be able to get the president s tax returns . Theyll have subpoena power but need a trigger in order to do that will they go for that . Theyll be in court the whole tim time this is like the comment that Newt Gingrich said, whether kavanaugh is worth it or not yeah. If the senate stays, thats where the judges come from and thats where the ultimate decision on any of the if there was an impeachment, if the senate stays, the parties overplay their hands, and if the democrats overplay it in terms of thats all we hear about, if it doesnt do anywhere because of the senate, who knows if it plays into his hand in 2020. Starting this time tomorrow morning the thick ng to watch is the mueller investigation. Theres been a pressure on mueller not to do anything dramatic before the elections. You saw the subpoena story in politico, which i believed until they denied it theyre now saying roger stone, donald junior. You could see indictments of people like roger stone. Thats possible to put into the mix. They have to say no his attorneys have said no. Politico did a fascinating piece laying out the case for it may have already happened. Will you stick around ill be at englewood no, no, for this other story. Youll stick around for that yeah. Joe would like you to read prompter for him for that. Everything. Any way, lets talk about the markets. Chris retzelr joins us now also joining us is Andrea Cramer welcome. Chris, one thing that i mentioned to eamon in makeup was that i guess i figure consensus could be right in this i read your market analysis. Its pretty close to consensus, which means its not going to be right but its certainly what people think Earnings Growth will slow paw of comparisons when it was growing at 23 cant do that. Even 10 is not bad, right a split congress would be gridlock and as becky pointed out year after midterm is almost always positive always. For the last 18 time since world war ii well look for Consumer Confidence impacted. Are they going to roll back a lot of benefits weve gotten in the last two years weve gotten mostly through the earnings season, but we are talking about china and the tariffs. November seasonably and into the new year, its generally a good time for Small Cap Companies weve been watching the high yield market its holding in there. If it continues to deteriorate, that would show a caution. What comes out of this election, they could turn. A resolution comes out of it, which in your view is something. Then uncertainty has been removed. Thats all you need. Its a positive for the markets. We are trying to gauge that. What we know tomorrow is well start the 2020 election all over again and start that Going Forward. Boy again, how does the confidence get impacted. Do they move to subpoenas, cause a headline, change the discussion what is the discussion or what are the changes youre hoping for that you thought would happen in the next two years that somehow arent . We want to continue to see a pro Business Environment people know what they invest in they can get a return on they will not be overly taxed. So they have some certainty to make larger vinvestments in capital equipment, industries or other investments on confidence. But the taxes what are you arguing will happen . I understand the noise factor of all these other pieces to it but i dont understand the actual things you think will happen businesses make investments based upon multiyear plans. Were not talking about the next couple of quarters where they might be worried about taxes if you have a roll back two, three, four years out, that might change how theyre investing. Hes a small cap guy. Lets get to andrea. Youre a vix person. Were in the middle of a range that you think might determine the eventual outcome on the high side, exactly 2515, and on the low side what is it on the low side below 1866, which is half of this years closing high that could determine which way we swing considering the commitments of traders, data indicates that large speculators are long vix futures. This group has been notoriously wrong at extremes. It wouldnt be bad bet to bet on declining volatility in the shortterm so volatility continues but you cant determine whether we made a decent bottom yeah, the jury is out on whether we found a bottom. But seasonality favors the bulls, not only is the november through april period strong for the stock market, but looking at data since 1950, the s park x has been higher 100 of the time six months after midterms which is way stronger than off years or after president ial elections. We have that working for us. Another thing under the radar this week at least with the midterms dominating headlines is the fed meeting. Probably because the fed is not expected to do anything. That also has bp bueen bullish stocks whats the vix telling you about whether its dewine or do you know who is running in ohio . Cordray . Are you going to elect that guy governor he was an ambulance chasing attorney general in ohio are you going to elect that guy . Will ohio do that . I think we learned our lesson in 2016 about not to speculate what does the vix tell you youre in ten ten any way, why am i asking you. Thank you you like small caps, thats the bottom line. Thats what you cover. Good time to be in them thank you. When we come back, fallout from the trade war well take you live to china where eunice yoon spoke to the ceo of starbucks right now a look at premarket winners and losers in the dow. Intel leading the way up by 0. 8 cal we saved our money and now, we get to spend it our way. Valerie but we worry if we have enough to last. Cal ellen, our certified financial planner™ professional, helps us manage our cash flow and plan for the unexpected. Valerie her experience and training gave us the courage to go for it. Its our confident forever plan. Cal . And its all possible with a cfp® professional. Find your certified financial planner™ professional at letsmakeaplan. Org. Welcome back to squawk box. Amazon will reportedly split its new Head Quarters between two cities this time the retail giant is nearing deals with crystal city, virginia, and the Long Island City neighborhood of new york city other reports say splitting the new hq between two cities is appearing more likely but the cities have not been chosen. Now that were down to potentially two and naming names we thought crystal city might be that the crystal city people were giving away more information. The note from an amazon executive yesterday said whoever is taking, you may mick us go away interesting they would do Long Island City and then the question is this really an hq2 or just satellite offices. If you break it up, its no longer that. Im not on the l. I. E. Much, but when i am i wish i wasnt. I cant imagine extra traffic you go out there sometimes, to the hamptons. Helicopter yes. Im thinking that ride wont be pleasant the l. I. E. , when im on it, i wish i wasnt. I can say that about a lot of roads. 495. The weather and the traffic almost cancel each other out almost do not kidding. Watching shares of apple suppliers falling sharply in asia overnight after reports said that apple told them to can s cancel plans for the new apple xr production line a report sparked concerns that the iphone xr is facing weak demand which one is the xr the cheaper version that i thought would have a lot of volume on it multiple colors, but almost as good as the higher end verg of the phone. I would have saved five years of my life in l. A. If i had google hams maps or waze do you know how much that has changed neighborhoods that used to be quiet and how people are flying through there but now with elon musk with the xwoeriboring compan under armour is under fire for new details about its corporate culture. The wall street journal reported that the company stopped letting employees use Corporate Credit cards for paying for visits to stru strip clubs. The journal says several female employees are accusing several top male executives for inviting women to things based on their appearances kevin plank said the story is tough to read and that the company will own its truth he said we can and will do better inappropriate behavior that challenges our values or violates our policies is unacceptable and will not be tolerated. Shares of under armour have been up, they were upgraded they were upgraded by one house in the last week or so right now 24. 30. Whats surprising is not the news this was happening but just that a letter went out this year about ten years two late, maybe 20 years too late. Within the sporting world, we saw this happening with nike nikes culture, they went through their own roller coaster ride not over strip clubs, but over difficult environment for females to be working in still some things around. Whenever i see hooters advertised i cant belief thove those p still exist. Remember entourage . Yeah. And sex and the city. They dont age well. Remember, we had dick parsons on one time talking about how the line moved and moved quickly this goes back to the debate this year about cheerleaders in the nfl. Where is the world moving . Five years from now i imagine there wont be cheerleaders. We have to go to china itshosting a massive import expo hoping to demonstrate to Foreign Companies its open for business despite the trade war eunice yoon is in shanghai an spoke to Kevin Johnson, the ceo of starbucks this is the same starbucks roastery you were at less than a year ago this store sees 8,000 visitors every single day compare that to a typical store in the United States of 400. Its no surprise that the biggest starbucks is here in shanghai this is the market starbucks is focussing on for the future. There is an ongoing trade dispute between the u. S. And china. I asked Kevin Johnson if hes seeing impact on the business here theres always something going on in geopolitical relationships, and the geopolitical situation we learned to navigate those things whats happening now in the geopolitical situation, were not immune to it but were not seeing it impact our business. And were staying focused on things that we do well johnson said despite the trade dispute theres no reassessment of starbucks commitment to this market. Their focus these days is on delivery food delivery is huge in china back in august the company talked about an initiative with alibaba, where customers can now go into a starbucks app and they can have Starbucks Coffee delivered to the home within 30 minutes. We reengineered the packages to separate hot from cold, and we worked to make sure when the customer delivers that food or beverage, it is the same temperature as if the bar rest ta just hand barista just handed it to them about a third of the stores here offer delivery. They plan to increase that to 2,000 by the end of the year johnson also said the innovation hes seeing in china and this technology is so interesting they could leverage that and use it for Digital Strategies in other countries like the United States eunice, any sense from Kevin Johnson in terms of the relationship starbucks always had a remarkable relationship with the Chinese Government. Its one of the few American Country that no longer has a joint venture with a local partner. Given the trade dispute do they have anxiety that the trade relationship could change or that growth plans would be slowed down . Any obstacle coming as a result of this fak aback and forth tha been taking place . Johnson didnt say that to me today there are several government officials who have been coming into this store. Earlier today i saw him Walking Around he was talking to didnt officials from various places. That relationship with the government is important to starbucks. You mentioned the potential risk to starbucks or any company in this trade war the Chinese Government in the past several years that had incidents where they get into a dispute with another country and then theres a business problem with theres a problem with some businesses from that country. Weve seen that with south korea, in japan. Because of that, thats still a tail risk for any Company Operating in china at the same time johnson reiterated that even though this company is not immune to these problems he doesnt think its going to have any effect on their overall business here. Okay. Eunice yoon, thank you by the way, behind you they serve tea. Im in front of the longest coffee bar in the world. Over there, theres a massive tea bar. After this conversation ill have yet another coffee, because i dont have enough energy as it is i also will get some tea then go downstairs and get the pizza. I already ate the pizza i already had two. Okay. Good eli lilly out with quarterly numbers. The drugmaker earning 1. 39 a share. The street was looking for 1. 35. The Company Coming in with revenue better than expected probably more important is that the company is raising its guidance for the fullyear adjusted earnings per share, now looking for 5. 55 to 5. 65 a share. Also looking for slightly higher revenue for the fullyear. Now saying that it sees 24. 3 billion to 24. 5 billion, versus the 24. 39 billion they expected th the sales were up 7 that was on a 12 rise in volume. So theyll make the point its not from li higher prices the oldest mate for the year was 5. 48 now this 5. 55 they raised the lower end of the guidance by 15 cents, the higher end by 10 cents. After beating by 4 cents today. They introduced ten new drugs since 2014 david ricks will join us and talk about the prices on the drugs being down and it being a volume increase. He doesnt like the new proposals. Not many do well see about that. Coming up, mark grant will join us with a closer look at the reactions to the midterm as we head to break, a look at yesterdays s p 500 winners and losers every investor should ask questions. Is our money in the right place . What am i really being charged . And is it eating into my returns . Is my advisor a fiduciary . Is he always a fiduciary . A good place to start is with an independent registered investment advisor. As fiduciaries, they live by a simple rule always act in the best interests of their clients. Thats why Charles Schwab is proud to support more independent Financial Advisors and their clients than anyone else. Visit findyourindependentadvisor. Com i cowe can do theyour screening at her house. Hi. This is the man thats going to check your eyes grandma. Cognizant ai solutions are helping Healthcare Companies advance diagnostics and prevent blindness in patients with diabetes. Everything looks good. You have beautiful eyes. Your company is and the decisions you make have far reaching implications. The right relationship with a Corporate Bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. Pnc brings you the resources of one of the nations largest banks, and a local approach with a focus on customized insights. So you and your company are ready for today. Will it feel like the wheend of a journey . P working, or the beginning of something even better . When you prepare for retirement with pacific life, you can create a lifelong income. So you have the freedom to keep doing whatever is most meaningful to you. A reliable income that lets you retire, without retiring from life. Thats the power of pacific. Ask your financial professional about pacific life today. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Welcome back stocks to watch, toyota raising its fullyear profit forecast. In this case citing a weaker yen. Quarterly earnings rose 11 . Marriott cutting its Current Quarter forecast for rev par, in plain english, revenue per available room theres so many different rooms. If you dont know, it could be one of those tiny rooms. Or a big suite. Like when we go to davos. Your feet hit the at the end of the headboard its not that theyre off the bed, theyre touching the wall im not quite as tall as you. As im watching law order in german. Any way, per available room. Marriott blames weak demand. And mylan its coming again. Davos yeah. And mylan shares are rising after posting better than expected results in the latest quarter. The company telling investors it has no timeline for evaluating Strategic Alternatives in august, mylan set up a committee to look at options citing a tough u. S. Environment for drugmakers you know what yesterday was . November 5th. My son has these crazy metrics. Exactly halfway through trumps first term and yesterday was also i heard this on the way in, ten years to the day since barack obama was elected. Youre through two years andrew yeah. Time flies when youre having fun. Its going fast, right each day from here the second half of things go faster you know how you go on a trip, you drive there, you go were never getting there. You drive back, oh, were back im worried about 2020 for you we havent even made it through the midterms ive moved on to 2020 at least theyll give us a break on the ads have you seen enough of those ads . Yeah. Sometimes they run the one guys, and then right after the other. I like the one in new jersey one guy claiming he was the other guy was with 14yearold prostitutes. The other side says your guy ran a Pharmaceutical Company for a profit people at home dont know which to choose. The ads are nastier than that they say he jacked up prices 1 100 million on the back of cancer 14yearold prostitute or a guy who had a Company Running it for a profit its new jersey oh, joseph. Lets look at the markets which do i choose dows are down by 34 points. Mark grant says it is dangerous to write about politics but he did it any way the managing director at b. Riley fbr discusses the election on the bond and equity markets we discussed its good to be a divided house between democrats controlling the house if the presidency is controlled by the republicans. They figure that is gridlock and nothing will happen. You say in this situation it might be a bad thing why dont you explain. Certainly i dont want emails saying resist grant either. But i will explain this. Theres three potential major risks if the democrats get control of the house or the senate the risks are impeachment of u judge kavanaugh or President Trump, and then rolling back regulations imposed by President Trump, and from a market perspective im hopeful that the republicans take control of the house and senate what we heard from others is that its not a big deal if if the house goes to the democrats. You wont be seeing huge shifts no matter what happens, that the regulatory issues cant got rolled back, they cant overturn taxes, and the democrats may be reluctant to use some of those subpoena powers because it may come back to haunt them in 2020. Theyre reasonable arguments, im just more fearful than those arguments make their case. You know, i think by any metrics you want to put in here, this is an economy comment, by any metrics you use, our economy is doing incredibly well. The stock market and the bond markets have benefited from that i hope that we remain in some kind of status quo and the other thing that i hope will change, which is not with these elections, that the fed will listen to some of our politicians and slow down these rises in rates which i think are totally unnecessary. Mark, sometimes we get you, you actually make predictions. Sometimes you willingly do i wouldnt recommend it this time i dont hear you doing it. You are giving both sides of the slate on what could happen right would you agree if it was trump running its easier to figure out, i think, if it was just him it might be easier to figure out the trum p effect because its only him. To figure out the trump effect on local races, i dont know if you could have a high degree of what it means. If this was trumps election, you could say, yeah, hes getting reelected because of the election, but with this, you have no idea nothing would surprise me tomorrow when we wake up do you feel that way do you have a high degree of confidence of what will happen do you want to share that with us my honest feeling is that the economy ive been on wall street 44 years. The economy continually drives elections. Both the Midterm Elections and president ial elections i think the republicans will maintain control of both houses of congress. The reason is that there are a tremendous amount of people who have been helped by this economy, they have jobs, wages are going up, theyre living better, they dont want to j jeopardize it. That is a call then but you wouldnt bet your life on it, i dont think no, i would not mark, thanks for joining us thank you any time coming up, eli lilly out with earnings. Well show you the stock right now. Its up about 2. 5 well talk to the companys ceo, david ricks, at 7 15 eastern time coming up, we will talk to Thomas Peterffy, the richest lgehi in florida. Wel t s take on the Midterm Election comfort. What we deliver by delivering. Hey, what are you guys doing here . Were voya. We stay with you to and through retirement. So youll still be here to help me make smart choices . Well, with your finances that is. We had nothing to do with that tie. Voya. Helping you to and through retirement. Alibaba says it will help global businesses sell 20 200 billion of goods to china in the next few years the companys ceo said he wants to use globalization to bring the worlds goods to china samsung is hinting at a big change to its Smartphone Technology the company has teased fans for years about the possibility of a smartphone but like a flip phone no, literally the screen folds. So like a flip phone. Sort of we may see the first verg sin of one samsung with a folded image of its logo the idea that you can have a glass screen or a plastic screen that folds in half would be an accomplishment and be a change in what the form factors of these phones look like they get thinner and thinner, then you fold it in half and it fits in your pocket better yeah. Lego won a lawsuit in china a court ruled that the companies around there had copied the Building Blocks and miniature figures. Is this a precursor of a potential deal, china cracking down on ip theft in his country . Saying this gets us back to the bargaining table, heres something we can say were doing. I spoke to someone who does business there, it blows your mind about how it works over there. Its just the way it is. Is that fair you read a somethiignal like, thats important if the chinese are willing to crack down and say you owe lego 6 650 million what was i goes to talk about . We talked right through it. Was it an nfl thing well find it later. Up next, the governors race in connecticut has implications for the hedge fund industry. Thats right. Prominent Hedge Fund Managers have been leaving the state in droves saying the taxethe s er are too high they hope the next governor of Connecticut Offers them a fresh start. At t provides edgetoedge intelligence, covering virtually every part of your finance business. And so if someone tries to breach your firewall in london you start to panic. Dont. Because your cto says weve got allies on the outside. Security algorithms on the inside. That way you can focus on expanding into Eastern Europe. That makes the Branch Managers happy yes, thats the Branch Managers happy. At t provides edgetoedge intelligence. It can do so much for your business, the list goes on and on. Thats the power of. When this happens youll know how to quickly react. Welcome back to squawk box. Our analysis to todays Midterm Elections continues with a look at the Gubernatorial Race in connecticut. Leslie picker is here with the story. Thats right. The polls in connecticut are already open today as voters seek to elect a new governor 750 Hedge Fund Managers call connecticut home but several prominent names have left in recent years amid two bouts of tax hikes which still didnt close the gaping hole in connecticuts budget and thousands of other residents have left taking just over 6 billion with them. Only about half of that has been replenished by people moving into the state now, two businessmen are seeking to reverse that trend, but in different ways democrat ned lamont is focused on trimming Small Business and property taxes while republican Bob Stefanowski wants to eliminate state income tax in the next eight years thats right, eliminate it the president of the Hedge Fund Association Bruce Maguire says the Financial Services industry does not typically vote as one block in connecticut, but most of the hedge funds there are hoping for relief from taxes maybe the new regime will take a closer look at the tax base and a closer look at the personal income tax rates that have been applied here and maybe if were lucky well have an opportunity to start to roll that back i think its unrealistic that well eliminate the state income tax entirely, but hopefully itll start a new conversation about that now the polls suggest the race will be tight next week andrew and i will be back in connecticut speaking with some of the most prominent Hedge Fund Managers and the new governor elect about how to tackle the States Economic issues, guys we got a big list on tap. Were going to talk to ray dalio. Weve got jones. A good lineup up in connecticut. But obviously these issues will be, you know, front and center. What kind of face is that, joseph i just you know thoetz sey got a lot of money hit them where it hurts. Nobody needs that much money boom, itll work. They tried that then people left the state oh, thats right theres somewhere else they can go where they dont do that florida massachusetts. Damn. Why arent you on the campaign trail right now i just watch this to me its you should be behind the podium like another you know what if someone if asked to serve i think even when youre not asked to serve all right so you can move . Man. Coming up, the election effect on the markets youre looking at a live shot of a polling place in wilmington, delaware eli lillys ceo will join us about their recent Earnings Report the new Capital One Savor card. Earn 4 cash back on dining and 4 on entertainment. Now when you go out, you cash in. Whats in your wallet . Now when you go out, you cash in. Whooo want to take your next vacation to new heights . Tripadvisor now lets you book over a hundred thousand tours, attractions, and experiences in destinations around the world like new york from bike tours, to bus tours, to breathtaking adventures, tripadvisor makes it easy to find and book Amazing Things to do. So you can make your next trip. Monumental its election day. I do not want to live in rainbow land and you cant make me live in rainbow land this is america you do not have to live in rainbow land you can go to rainbow land well talk polling predictions and the Market Reaction eli lilly reports. The drug maker ceo joins us to discuss quarterly results, drug pricing, and the state of the industry under President Trump plus getting defensive a look at the sector thats normally a postelection play and the stocks you need to watch. As the second hour of squawk box begins right now. Live from the beating heart of business, new york, this is squawk box. Good morning. Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick along with joe kernen and Andrew Ross Sorkin. Lets look at u. S. Equity futures. This morning you are seeing the futures down but just barely on an election day, nobody wants to get out ahead of this because nobody knows whats going to happen this time tomorrow. S p futures down by four both the dow and s p closed higher yesterday the nasdaq closed down yesterday and its indicated down another 11 points this morning of course we are watching three big stories today. One, the midterms and your money. The polls are opening up across the country as markets take a wait and see mode for the outcome. Well talk political scenarios and what you should be doing with your money. Under armour under pressure. A bombshell report about the sportswear maker and number three is amazon considering an hq2 split multiple reports say the company is planning a Second Headquarters the company has declined to comment. Well have the details in just a bit. Heres whats making other headlines this morning the strong job market will be highlighted once again today with the release of the Labor Department jolt report its expected to show job levels remaining. Take a look at shares of eli lilly. That coming after the latest earnings beat. Also raised its full year earnings forecast. Chairman and Ceo David Ricks is going to join us in just a couple minutes to discuss the latest quarter and outlook and one of wall streets highest stock however, the Company Issued better than expected earnings and revenue guidance for the Current Quarter. All right. A few stocks are on the move as well marriott is reporting and results were above consensus 1. 70. The consensus was 1. 31. However the revenue was below forecast it also cut the Current Quarter metric due to weak demand in north america. And avis budget missed estimates by 21 cents. The car rental companys revenue came in slightly below forecast. Avis budget also narrowed its full year revenue and Earnings Guidance and were just seeing earnings from cvs health. The company beating by 2 cents at 1. 73 helped by a 6. 7 jump in same store sales 37. Want to check on the market right now. Joining us now is brian levitt from oppenheimer mike ryan is also here from ubs. Weve been having a debate about whats going to happen but also what youre supposed to do with your money as it happens. Where do you stand right now so im not shurp youure youe supposed to do anything with your money with the election we are in an elongated bull market they did well under Single Party Rule and barack obama from 09 and 10. We did well with divided government through 2016. To me whats more important is what trade policy looks like this cycle will end when inflation gets too hot and the fed tightens policy. So mark grant was on in the last hour. He made an argument that if the republicans lose the house, that is bad for the markets that is bad for the economy. No, i dont think thats the case look like i said before, this market, this recovery started during Single Party Rule under the democrats. And it did well during a mixed government. It came back from 50 down. It got back to where it was before the financial crisis. I mean, it was didnt make any headway right but a full recory with a divided government so joe jeff immelt brought ge back from 5 to 15 it was down from 60. He got a 200 increase so the point is, look weve had a couple of percent growth, couple Percent Inflation for a number of years. No fed tightening. The markets did just fine. Yeah. Zero on the fed. 10 trillion in debt added and we never got bo 12 growth for a year so joe, what weve done is we accelerated growth here. Youre starting to see the growth moderate. Youre seeing lead indicators peak in the United States. To compare where we are now to Single Party Rule under obama, the economy we have right now is just like youre smoking something. Possibly the reason the deficit is so bad is because it got tripled in eight years, sorkin. Obviously we dont need it to go up more. But now its a spending problem. Thats what youre calling it i think its a more balanced way to think about that. This isnt a political for me it kind of is for you i adhere to the advice of Michael Jordan he asks why he doesnt take up liberal causes, he said because republicans buy sneakers too its not a point of whether youre in favor of the political party. The reality is where are stocks trading . How are Company Earnings doing in my mind with a benign inflation environment, this cycle goes on. And market leadership even in the aftermath of trumps victory was still the high flying growth names in the Technology Sector mike ryan, you believe this i tend to agree with ryan do elections matter . Of course they matter. Theyre not the only thing that matters. But i also say that midterms tend to matter less. Theres a lot at stake in this Midterm Election but when you think about it, what were likely to see is pretty much whats in line with historical norms the republicans are likely to lose control of the house. But theyre likely to maintain control of the senate. Were likely to get this ongoing split. This divided government where you basically have two parties splitting the legislative branch when you go back, how have markets performed during those periods . Theyve done fine. At the end of the day, i think there are things that matter more the earnings cycle is important. What were going to see in terms of the regulatory front. Which ill disagree with what mark said earlier. Mark grant. Yeah. The regulatory momentum will turn back if we see democratic control. Remember a lot of these are controlled through agencies. A lot of this comes through the executive branch so i think it may get slowed a bit. And one place where you could seed a slowing, for example, is efforts to repeal or revise dodd frank that could be an area where you see but both of you are youre both kind of saying as long as its gridlock and none of the positive things that were enacted recently in terms of regulation or deregulation and tax reform, well be fine. What if the senate went . The senate and the house went . Youll say thats going to be fine because elections dont matter youre assuming its an election that doesnt youll argue the president is going to be in the white house and still how do you know hell be in the white house . You could live in another gridlock thats still another gridlocked world. The notion is suppose the senate goes. Remember there are right now 35 seats up if democrats take every single seat i dont think its likely, but im saying to say that elections dont matter because theyre going to turn out with gridlock doesnt mean they dont matter even if they took every seat, what if they have an impeachment from office, you still need another 12 to 13 republican senators to go along its unlikely. And if you think about whats likely to happen in terms of tax reform bill that was passed, even if the house and the senate were to vote, i suspect what youll see is the president would veto any tax reform. What were talking about here is what weve enacted since the trump victory. Does it lead to a new high or sustained level of growth . If it does lead to a new high or sustained level of growth. Then well be in a prolonged period of stronger dollar. Well unlock some value out of the stronger markets what im saying is my expectation is given tightening, given a stronger dollar, the u. S. Economy is likely to come back closer to strong growth to me that continues to be a Growth Market wherever you can find it. I think investors are going to pay up for growth. Are you of the view that theres any chance the fed lightens up. Look, i wouldnt say the recent bout of volatility is going to give the fed pause, but i think its a conditional response theyre not preprogrammed even though theyve been going every quarter in terms of the cycle. I do think they are moderating conditions political question. Do you think its harder for mr. Powell or chairman powell not to continue on because of the political comments made by the president . No. I think the Federal Reserve is going to be independent in all of this. But what im suggesting is that to prove independence, that no, i think that theyre going to go out based on the data and what they think is appropriate given the state of the economy. I tend to agree with brian. If they do pause in december and they do it for good reason, there will be immediately second guessing about why they did it there will be some that say its political pressure and the last thing you want to see a central bank come under pressure on, is the political process. Thank you coming up when we return, the ceo of Eli Lilly David Ricks is going to join us to discuss drug pricing and the state of big pharma then chairman and ceo Thomas Peterffy is going to be our guest. Well talk about what the midterms could mean for the market stay tuned youre watching squawk right he ocn ren bc eli lilly out with Third Quarter earnings the drug maker earned 1. 39 for the quarter. Revenue also beat forecasts. Eli lilly raised the outlook joining us now is david ricks. Lilly chairman and ceo its good to see you good morning, joe the stocks unlike some of your peers is near an alltime high i think it has to do with hearing the elections and the economy. With Drug Companies, its new drugs, new drugs, new drugs. Lilly has bragging right there is in the past three or four years. Thats right. The last three or four years weve launched ten new medicines in the u. S. And around the world. Thats driving our growth this quarter. A enin the past quarters as well, revenue up 7 . Good cost control in the income statements eps growth of 32 . And were excited about the next wave of growth as well were investing in r d we unveiled a midstage study for a drug called trizipitide. Who came up with that cant you hire someone not all the words in the english language are taken thats the generic name well give it a brand that is easier to talk about on tv it works with your body to use glucose and insulin better dramatic weight loss in that midstage study. That is fueling excitement about lilly as well. You had volume growth on the side so you can point to youre not youre trying to do what politically is the right thing to do in terms of pricing. You have some bragging rights there. That thats not how youre getting the increase in revenues from raising prices . Its certainly not. In fact, pricing was a bit of a drag this quarter. A piece of that is u. S. List price. Probably a small piece, but as you know from weve talked before the biggest driver for us is often the use of medicines in lower priced channels. That was the biggest driver for us in the u. S. One of our products was adopted into these Medicare Part d program for seniors. Those prices are lower because the government gets a better deal and we also a saw more free goods to patients to start on products like staltz of course if we had raised prices, that could have offset some of that but overall its a volume growth story. 17 volume growth in the u. S thats a Strong Performance for us so the new initiatives that the administration has put forward, youre not a huge fan weve had the gentleman that, you know, are behind that push we had both of them on we had Scott Gottlieb who made a case for it, i was surprised because he was a big free market guy. And azar also more or less says this is not that outlandish to think there could be some negotiating power to use the heft of how many patients we have maybe you should be subject to more competition i thought importing price controls from abroad doesnt make sense, but they explained it in a different way. Why dont you like it . Well, we dont like it. Just to step back, there are some things we like and some things that we can work with the administration to shape to support free market principles as you say and proinnovation. And at the same time reduce prices for patients. Then theres some ideas we didnt like. And amongst those that we dont like, importing price controls from europe is high on that list is that really what it is though that is what it is. An average list price that is what they announced which is to reference a dozen or so european markets. By the way, including markets like greece and slovakia which have much lower gdp per capita we think thats a race to the bottom here in the u. S. For innovation and could really stifle what are some of the most exciting breakthroughs we see today like cell therapy. All of those products will be directed into the part b program. So we dont like that idea at all. Wed rather see them focus on creating a robust Biosimilar Market a number of those top sellers they reference wanting to save money on are already subjected to biosimilar competition abroad id like to see them step up biosimilar policies in the u. S Scott Gottlieb was here with us talking about these plans hes a republican. Hes been with the fda a long time hes also a doctor he tends to be a pretty straight shooter. He says hes in favor of these rules which surprised me at first until he explained why he also said that the Drug Companies were all in favor of these rules when it locked in higher prices. It was when it locked in lower prices that Drug Companies turned against it. Is there a way it sounds, also, that this is a move to negotiate from the administration what would be a negotiation that you would find appropriate maybe some moves you could give the administration that would be less than this right, well, in late october when they rolled this out there were three ideas two of them we can work with the administration on. Theyve been around before and we have ideas on how to shape them to, again, embrace innovation lower cost for patients but a o also i didnt hear what dr. Gottlieb said on your show, but certainly the idea of foreign reference pricing is a bad one we would be supportive of piloting this competitive acquisition program, looking at models like we have in Medicare Part d thats the pharmacy delivered medicines and using similar mechanisms for physician administered drugs thats something i think the industry certainly lilly would be constructive on as an example. But foreign reference pricing, we dont like. All right the most positive drug you have in phase three trials right now or in advanced trials, what are you most excited about weve been working on some of these chronic diseases for so long a lot of times we get frustrated that, you know, the innovation just doesnt seem to come quickly enough where are you making real headway . I think three new medicines this year which weve advanced into the last stage of testing, one i mentioned. The trizipitide. You lose a dramatic amount of weight, a level we havent seen before and control your glucose. This could break the cycle of progression in diabetes. Were looking at studies to demonstrate that if this works out, this could be an important drug to help with this epidemic. We have another medicine that blocks a protein were studying this in crohns and colitis. Thats an autoimmune disorder in the gi tract that really people dont have Good Solutions for. They need a breakthrough that can really force this disease into remission and this drug is something were studying for that. And finally we acquired armobiosciences which has a product that uses the bodys own immune system to fight cancer in a new way. Were excited to see data next year on that program as well david ricks, chairman and ceo of eli lilly, thank you. Appreciate you coming on after your report. When we come back, we have more on todays Midterm Elections and what it means for your investments and later, a classic postelection play defense stocks well find out how you should position your portfolio straight ahead. Squawk box will be right back. Broke my personal record. Aflac . Nogood break. Gooood break. Im so sorry we cant make your barbecue. Im just sick about it. Aflac . Different kind of sick. If i cant work after surgery, how am i gonna pay my rent . All these bills . Aflac oh, aflac and they pay you cash in just one day. See how aflac helps cover everyday expenses at aflac. Com. Youre still here . Were voya we stay with you to and through retirement. I get that voya is with me through retirement, im just surprised it means in my kitchen. So, that means no breakfast . Voya. Helping you to and through retirement. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. It is perhaps the story of the morning outside of the midterms under armour under fire for some details about corporate culture. The wall street journal reporting company has stopped letting employees use Company Credit cards for visits to strip clubs. You heard me right under armour ceo used to take clients to strip clubs and the company footed the bill. The practice was no longer allowed in this statement. Clearly the practice was allowed before that. The journal said that several female employees are accusing top male executives of inviting women to a Company Event based on their attractiveness. Kevin plavrnk saying inapproprit behavior will not be tolerated he sent out a letter yesterday he called the journal story, quote, tough to read quote, we can and will do better we deserve to work in a respectful and empowering environment. Inappropriate behavior that challenges our values or violates our policies is unacceptable and will not be tolerated. Take a quick look at shares of under armour theyre up marginally this morning. But this is an issue that not necessarily the strip club issue, but the issue of culture inside these firms we were talking about nike earlier. Went through its own gauntlet of sorts earlier this year. Weve watched the tide change pretty rapidly over the last several years. We have, we have. When we come back, more on your money in the midterms you are looking at a live shot of forest grove, pennsylvania, where the polls are open eamon javers joins us after the break. As we head to break, take a look at the u. S. Equity futures right now down across the board. But again, not by much dow futures down by 38 s p down just under five points pple aseoawait what happens in these Midterm Elections. Well be right back. At t provides edgetoedge intelligence, covering virtually every part of your finance business. And so if someone tries to breach your firewall in london you start to panic. Dont. Because your cto says weve got allies on the outside. Security algorithms on the inside. That way you can focus on expanding into Eastern Europe. That makes the Branch Managers happy yes, thats the Branch Managers happy. At t provides edgetoedge intelligence. It can do so much for your business, the list goes on and on. Thats the power of. When this happens youll know how to quickly react. Good morning welcome back to squawk box here on cnbc among the stories front and center tapestry ceo is seeking another opportunity. He will stay until february to ensure a good switch ge is selling their lighting unit known as current. And america automaker toyota is boosting its full year of profit the increase is attributed to a weak eer yen which toyota thinks will boost the bottom line its election day and folks, lets take a look. You are taking a look at a live shot of cleveland, ohio, where the polls are open eamon javers joins us right now with more on how the midterms are going. What can you tell us at this point . Good morning. Big day. House and senate hang in the balance today as we look at that voting place in cleveland. A lot of the people are going to be standing in some seriously long lines today we are expecting monster turnout, enormous interest in this 2018 Midterm Campaign and the old expression is its the economy stupid take a look at this stat from the most recent nbc poll this is as of november 2018 how people feel about their finances personally and these are good numbers if youre the president s party very satisfied with your finances, 28 . Nobody really says that theyre very satisfied but that somewhat satisfied number is a very good number as well 46 of respondents saying they are somewhat satisfied with their finances dissatisfied, 15 . 2 there at the bottom of the list not sure. But that is a good number if youre the president s party of course these Midterm Elections are so difficult traditionally for the president s party. So youve got to think that the economy is a good tail wind here for republicans going into today. But there are a lot of expectations out there, becky, as you guys have been talking about one possible scenario is the democrats do stand a chance of taking over the house of representatives today. Well wait and see how that plays out. I think the thing to start the day with is just a big dose of humility here. I think a lot of the pundits and prognosticators today need to step back and have a sense of uncertainty, i guess, is the way to put it about whats going to happen today we really dont know its up to the voters in places like cleveland as youre seeing there and place ace cross the country. Schools, churches, Public Places everywhere where people are going to be deciding the fate of the house and senate and a lot of governors races today. Its turnout, right if there was a way that in the future when we could read everybodys minds, if we could just poll every Single Person on how they felt about something, that might be a totally different outcome than who actually takes the time to go and vote we can. Its called google thats a scary scenario its all about who gets their people out and midterms in the past havent been the time. This will be when you have this massive turnout were expecting today, it can be a challenge for the pollsters. Youre not talking about likely voters anymore youre talking about people who potentially have never voted before who are caught up in the excitement today and its hard to tell who those people are going to vote for because theyre not polled over the years. Weve talked about this in the last couple of weeks, but i dont know if i believe any poll if youre doing it by landline which was the most effective way of knowing youre getting good results, i dont pick up a landline a lot of people dont even have them we dont have one in my house. Right a lot of people dont have them anymore. Then you get to exit polls when you have so many people who have been voting in advance, its hard to know. Its been tricky for the president. We saw this moment last week when President Trump was out campaigning, been going across the country, from the stage he said how many of you have already voted in early voting . And almost everyone in the stadium raised their hands and the president said what the hell am i doing here because so many people have already voted, its hard for him to find a crowd of undecided or not yet voted people to talk to because so many people are so fired up by this campaign. Theyre ready to go out there and do it early. All right, eamon. Thanks you bet see whos here, eamon we havent taken a shot of him yet. But he needs no introduction hey how you doing . Eamon, how are you . Joining us now sky Bridge Capital founder Anthony Scaramucci hes the author of trump the blue collar president. What immediately comes to mind for me, anthony, and weve been around weve known each other a long time the never trumpers you know who they are. They ran their perfect candidate mitt romney. Had had it all had it all perfect. Businessman. Good looking great speaker. Didnt win ohio or florida much less pennsylvania or you needed to elect a republican with demographics or you needed a blue collar republican there was a rising economy and a sitting incumbent. Its hard to unseat an incumbent in a rising economy. There are plenty of reasons 1. 9 isnt rising. 3 heres the message of my book though he hijacked the Republican Party from the establishment the president did not have a party. Hes less ideologically minded than these guys. Then reached over to the Democratic Party and he moved their blue collar working class over so calling him the blue collar president has nothing to do with his background but it has to do with the gravitational pull that blue collar families around the country particularly in michigan, places like ohio, places like wisconsin where secretary clinton didnt go to one event in wisconsin after the convention and obviously he won pennsylvanias 32year drought for the republicans. He is a human wrecking ball when it comes to knocking out does the trump charm or whatever it is that he has for these people obviously its not charming to aemp everyon everyone. I promised this guy i wouldnt mention his name, but i have an agnostic hedge fund macromanagerer one of my best friends who called me a day before the november election in 2016 and said hes going to win hes going to lose the popular vote, but he will win the presidency because of whats going on in these different states and he won the presidency. This very same person is saying that there are 40 seats right now that are inside the margin of error and wouldnt be but for the president being an nfl impact player meaning they could lose meaning theyre in play they could break either way. And if they do, would the republicans keep the house yeah. Theres an antibradley effect going on with President Trump. The question is and joe is right hes not on the ballot his name is not on the ballot. So will it transfer over weve had a number of guests come on and say if the democrats win the house, its fine for the markets. Its fine for the economy. Weve had a number of people come on and say its terrible for the economy. Whats your honest answer in the apolitical version of it if you can give one i want to be observational and not political. For me, i wouldnt like the fact that the democrats win not because im a republican but because i think theyll start doing things to the president that will be sclerosis for everybody. We need to get an infrastructure deal done. So hopefully if the democrats win, the president will cross the aisle and cut a deal with them and then be able to frame his narrative for 2020 if hes not capable of doing that and they start this nonsense with the impeachment, im not one of these that believe the poll numbers will go up and its fantastic. It isnt its very distracting. Its bad for the nation to go through this sort of polemics, if you will. Im not a big fan of them winning the house because itll be distracting i have a question do you think politics have been forever changed by President Trump in that future candidates, future president s, future politicians are going to have to be much louder, much more dare i say uncouth. Sort of this approach that has been and there are a lot of people, you know, joe said who dont find it charming but do you think that changed the dynamic forever . Or do you think this was a moment in time i think its a moment in personality more than anything else i do not think its changed forever. But i also think that were never going back to what we had where you have these Political Consultants homogenizing and measuring everybodys words saying you cant say this and cant say that i think the American People are t tired of all of that spin. I think they want more authenticity and spin from their candidates but i dont think youre ever going to get a beast like donald trump. The guy is just steam rolling people also, if youre going to play on his playing field, hes going to demolish you hell get you taking dna tests on yourself. And whoever runs against him is going to have an internationally recognized nickname for theres of their lives thats just who he is. Anthony, let me ask you from the position of running money on this, what do you do at this point . If youre taking a step back and calmly, coolly, collected look at all of this, what are you doing . The rates are going up. Theyre probably not going to go up as fast as we thought six months ago because of the sensitive rates of the economy are coming down a touch. They are going to emphasize data dependency but i think once they go towards that rhetoric, they will rally i think the bull market is very much intact. But i am worried about it. About 45 of our portfolio is in adjustable security. As rates are going up, were clicking off incremental cash flow philosophically, does it bother you the president s been as vocal as he has about the fed and what they may or may not do with the optics around that . Again, its personality driven by him. If it was somebody else, i would say yes. But this is a guy thats tweeting about pitching changes in game four of the world series this is a guy thats going to share his opinion. This is a guy that im on bill maher and the next day the white house operator is calling and the media coach and chief is critiquing my performance on bill maher thats who he is i think hes leaving the fed alone as it relates to its independence, but he sees himself as a pundit as much as he sees himself as anything else in the game. So hes going to say what he wants to say whether people like it or not. I dont think its going to have a longterm effect on how the fed is managed, by the way so how many people are gone you know everyone there. What happens after starting next week listen, its a hard job so you cant expect people not to burn and grind out. Thatll be up to the president and attorney general sessions. The president seemed to indicate on the 60 minutes situation that maybe general mattis is leaving. I think hes a very gifted, very accomplished guy i have a lot of respect for the general. I hope he stays, frankly i think hes done a great job. Where if the economy stays basically, lets say it grows at i dont know you watch everyone with the sugar high and the front end loaded and all that. Lets say it stays at 2. 5 it should do that, joe. I agree but no one wants it to thats in opposition does he get reelected in 2020 and how hard or difficult this guy gets resoundingly reelected this guy is a Human Swiss Army knife. Hes now pulling out the next utility piece from the Swiss Army Knife to figure out what the narrative is going to be he indicated last night that hes got to tone it down a little bit you saw that interview whatd you think of that . I think its honest ill say it here on your air theres a 5 to 7 head wind as a result of the bellicosity of that rhetoric. I believe if he tones it down a little bit let me just point it out to you. Three weeks of the kavanaugh justice in the media, the poll went to 47 on the president so the media off the president , his poll numbers rise because of that data you guys are showing people are happy the economys boom ing. When he asks people at rallies if he should tone it down, they say no do you think he has thoughts about that i think those are entertainment speeches those are speeches to rile up that base. Of course theres a group of red meat eating people that dont want him to dial it down but hes got to go after the independents to win the american presidency again so hell find his home the crowds in 2016 were not just base. Thats not enough people to get him elected. And we now know that the excitement really was different in 2016. Does it matter now for local races that he still gets those crowds at his rallies . Is that a reflection of republican excitement . I dont know. Youve got to invite me back tomorrow and then well analyze the thing. Let me say this to you though. I think that was the best strategy like, if you look at options analysis of what the president s doing or a game theory analysis, the strategy of narrow casting to his base to get the voter turnout up, there was no downside for him if he doesnt win the house, he goes out there and says, well, obama didnt win it. Reagan didnt win it bush didnt win it its tough to win it but that was his best strategy what do you think it means to be a republican today . It means Different Things to different people you know, to the establishment republicans, theyre crying in their soup although they got everything they wanted. But they dont like the guy because hes not one of them but their point is what in 2020 the classic conservative republican who looks at this and thinks its a circus does what still votes for it well, i think theyre reticent but i think they still vote for it and they snicker behind his back in these washington salons and they write these nefarious anonymous emails. These very cowardly anonymous things in the new york times. Theyll do nonsense like that. But at the end of the day, he descended on washington with a mission. Half the United States as i write in my book feels like theyve been left out of the globalized system. Theyve been left out of the globalized economy and, you know, as you know, joe, i grew up in an aspirational middle class family. My father is a blue collar laborer. My parents never went to college. B but today they have moved into economic desperation i went on 26 Campaign Stops with the president. I saw that throughout the country. I spent too much time at davos and Goldman Sachs and working with hedge fund people, i didnt see it myself. I was in my own tunnel of confirmed biases so what i write in the book, wake up. If youre a democrat you should buy the book and wake up and understand how he stole your base stop calling the people deplorable and racist and go after them and try to reclaim them for 2020. Do you have a transcript of the peter thiel dealbook yeah. Did you see the peter thiel interview that andrew did . I didnt see it youve got to get it to him because just in terms of calming things down about the lies, about this, about that about all the sort of he was on the talking point i mean i know he was, but hes right. Hes right about a lot of it its just a calm reasoned way of looking at whats happening without the hysteria i mean, there are people im reading it every day this election is about the potential for democracy to end if it doesnt go the right way i think thats a mistake. They dont know what theyre looking at in the country. Theyre looking at the tone of so go back and look at grant or lbj you think hillarys tone you think her character is higher than trumps . Look at the results. Theyre looking at the caravan. Thats what theyre looking at go read one of those new boox and realize theres a divide out there. Get out of that intellectual elitist concentric bias. Its not you but youll understand why hes going to win again give us a couple epithets before you leave like a bad sound bite the good news is i cant get fired again, right i own my own company im like mayhem from the all state commercial with the highest queue rating thats why you invited me back it wasnt my hair. The hair didnt stop you. Hairs not bad though, right . Unbelievable. Its real human hair thanks to Anthony Scaramucci, author of trump the blue collar president. Great to have you on great to be back. Coming up, this mornings top stories and a check on the markets. Later, the United States unleashing sanctions on iran said that couldnt be done either, but he did it. Enterprisegrade cloud to e thats built to handle all your apps. The ibm cloud. The cloud for smarter business. The ibm cloud. Kevin, meet yourkeviner. Kevin Kevin Kevin Kevin Kevin Kevin Kevin kevin kevin trusted advice for life. Kevin, hows your mom . Life well planned. 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But its still well above the levels of 2016 its a cutback but still modest. If the democrats take the house and you have democrats heading up the ways and means committee, all sorts of budget committees, what happens to defense spending the most comparable example is the 2006 midterms where we looked at it and you had a republican president in the administration you had republicans lose seats lose control of the house. Democrats won the following year in 2007. The s p was up 3 to 4 . In 2010 and 2014 midterms, you had a democrat president and the republicans had control of the house. And performed in both. What happens if republicans manage to keep control of the house . I think that will be perceived positively because folks think theyre good for defense spending but if you look at the data the last four or three midterms, it points to a positive direction for defense regardless youve got a buy on most of the names you follow in this sector how much of that is related to this and where valuations are right now . Weve seen a pullback in valuation, 25 on multiples when you look at the defense. The name i like the most is boeing its because it has an amazonesque feature to it 700 billion is a lot of billions, but its not capped at that 700 billion market it has a commercial space element and service element. Sheila, i want to thank you for joining us today appreciate your time thank you when we come back, Thomas Peterffy is a big trump supporter. We will get his take on the midterm eltis. Econ you are watching squawk box right here on cnbc only half the story . At t. Rowe price our experts go beyond the numbers to examine Investment Opportunities firsthand. Like ecommerce spurring cardboard demand. The pursuit of allergyfree peanuts. And mobile payment reaching new markets. This is strategic investing. Because your investments deserve the full story. T. Rowe price. Invest with confidence. It all leads up to this. Its time for america to vote in the midterms what that means for your money and more new this morning, under armour responding to a bombshell report that it let employees expense vits to strip clubs. Athe final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with becky quick and Andrew Ross Sorkin the futures have been in the red for most of the session, but barely down three now on the s p. The dow jones called down about 16 and the nasdaq about 10 treasury yields. We got the worst of it about a month and a half ago, i guess, and were still in the new reality. 3. 19 on the 10year today were watching three big stories this morning one, your money, your vote after a brutal and bruising campaign, americans heading to the polls today. For local, state, and federal elections, we will tell you what each win could mean for the party and what those could mean for your portfolio two, seeing double amazon reportedly planning to split the locations of its Second Headquarters between two cities and three, under armour under fire new reporting that the Company Executives used to take colleagues and athletes to strip clubs and the company often footed the bill. In other corporate stories, eli lilly beating both the top and bottom lines the Ceo David Ricks joined us in the last hour. In the last three or four years, weve launched ten new medicines in the u. S. And around the world. Thats really driving our growth for this quarter and in the past quarters as well revenue up 7 . Good cost control in the income statements eps growth of 32 . And were excited about the next wave of growth as well take a look at lilly shares this morning right now theyre unchanged. Beating on the bottom and top line and raising guidance for the year cvs Health Reporting adjusted earnings 2 cents better than expected. Revenue also better than expected shares up now by 3. 4 . Mallinckrodt saw strength in sales of hospital products and their shares are up by more than 11 polls tell us democrats are expected to capture the house tonight. What does that mean for the markets . Steve liesman joins us now with some ideas and maybe a bit of an asterisk to this thats what the polls say, but well see. Exactly i want to give you one more poll which is the cnbc fed survey Midterm Election edition whoa what we did is we asked a couple election questions on our fed survey that will give you the results on what the expectations are for the fed tomorrow but right now im going to tell you what our panel of 30 economists, Fund Managers and strategists say. 79 say the dems taking the house and the gop the senate pretty much what youve seen but i have prettier graphics than other people have if you look at the split there. The all red congress there, that would be 14 say the gop is expected to keep both houses 79 say the dems the house, gop the senate and 7 say the democrats take both houses. And looking at what issues may be out there, 79 possibility there. Infrastructure almost, you know, about half of our folks mentioned infrastructure gridlock, none and the possibility that maybe the democrats and the president could get together on reforming immigration. All right. Which outcome is better for the stock market a majority saying gop keeping both houses. And nobody says its best for the stock market if the dems take both houses and which is best for the you get zeros we get zeros. Huh joe, this group is always sort of skewed a little bit toward the republican side theyre economists and wall street folks 31 say the split is best. And 10 say the democrats taking both houses. I want to talk about some other polls that you guys have alluded to economic versus political polls. Take a look here weve got the low trump Approval Rating but also this high Consumer Confidence the all america poll is at an alltime high. So are some of the michigan polls. And then theres the history of the midterms which is the republicans taking the sorry, the opposite Opposition Party taking the congress the Unemployment Rate is also a poll, you know its a survey of 60,000 households and theyre reporting a 3. 7 Unemployment Rate and the payroll number is a poll of 149,000 or so establishments. Theyre reporting 250,000 jobs every or in the last month. I think those polls come up against the political polls. Well see how that all shakes out. What this what our poll, our fed survey is telling you is the market is poised for the democrats to take the house. The money to be made is on the other side of that im not sure how it might be an Interest Rate play it could be a stock market play. We thought we knew how the market would react in a trump election and that we dont. Is that panned out for one hour on the evening of election. Whos we . The collective wisdom the collective wisdom all the i got called a jack ass by someone when i called them on their collective wisdom. Who what im pointing out, joe, is that there was a collective wisdom as to how the market would react. I know. I remember it well thats why anything better than minus 10 would be a huge win. And up 30 is just i think thats right. The problem is, look 2016 we were solving for a binary question. Trump or clinton now were solving for i dont know do you know what the exponential number of questions to solve for. All politics are local. I have noidea how to gauge a house race people have all these different concerns all ill say is that you could i can name 20 races im totally interested in. That are so compelling whether its governor, whether its senator. Whether its, you know, Heidi Heitkamp whether its, you know, theres just a lot governor races, im from ohio but then theres florida and georgia. Theres just a lot of things. Theres different ways to get to the solution, right each one of them would be interesting. If you had 20 races decided by a percentage point in one way, that would equate to a sweep. If you had them go the other way, that would be an historic keeping of the house by the Republican Party you mentioned some interesting things earlier which is the early voting how did that skew any of this people say it would change things in the coming weeks up to the election but not if you voted already. They wanted to vote at that moment on that information thats one of the things wrong with the polling before 2016 and with the exit polling after. We dont really know how and why the people voted or the percentages in which they voted. And as a person whos conducted a poll for the last ten years, you can never solve for turnout or enthusiasm. I dont know anyone that hasnt been sort of taken over by it. Whether its not just the election now but just politics over the past couple years its split up families people are eating pancakes and gaining weight from the politics theres a show on npr covering the elections today but only the postelection stress syndrome and what your reaction is whatever the results may be. Its split families it has some people are someone said that they asked this lady, you know, what should we bring for thanksgiving this weekend. She said im not really sure it depends on the turnout. I mean, everybodys talking about i would argue all this goes back to i talked about it two months ago i it all goes back to the financial crisis in terms of looking at the anger in this country and how polarizing it got. It wasnt necessarily trump. I think trump was a function of it can we bring it back real quick to the markets please. Which im wondering how you game this out. One of the things i think were discussing, and i dont know if this is true but knowing the outcomes of elections is more difficult now, perhaps. And i think donald trump introduced this idea that is both on the one hand more polarizing but more engaging so you bring more people back into the process which creates another given uncertainty. This idea that gridlock is good. It may be true if you like the status quo and the markets dont like change. But in a world where there may be real things to legislate. Then gridlock matters in a negative way well, except for that i dont feel like either party really has a plan for tackling any of those issues so even if either party were to sweep and hold all three branches of government, i dont know that youre going to see. I mean donald trump himself said hes not interested in entitlement reform heres a good place to leave it we had two or three ridiculous optimists in our survey say that the result of the election and the democrats taking the house would be more negotiation and compromise and i think thats both ridiculous and optimistic. No party by itself can do anything and the idea that there are real issues to legislate nobody wants to own that. Youre either going to find a bipartisan solution or no solution i think youre right. Lets find out what the markets are expecting today and tomorrow from what we find out from the midterms. Joining us now, jim iuorio of tgm. Hes also a cnbc contributor jim, obviously im not always in the mainstream around here, but i think that when the gridlock would mean maintaining two years of some really positive stuff like deregulation or tax reform, i dont care whether we do that much more at this point. If we arent done that and we had gridlock, i think itd be much different but if we can just hold on and, you know, keep what we have so far, i think its going to end up being better. And thats a fine take. I think thats lets start with from the worst Case Scenario if the democrats take both houses for me to say the markets like this experiment with supply side economics weve tried over the last two years that is defensible i dont think thats going to get anybody on my case here. So if that happens it always does particularly on twitter. I get hate mail all the time so if that happens, i would immediately look for is is there going to be rate expectation adjustments. Stock markets did just fine when we were trying demand side economics as hard as we could for eight years. Most of that was a function over the entire curve its provable that the markets want supply side economics the fact that on the day of the election two years ago, it was trading at 2. 78 thats amazing to me and thats a vote for supply side and i believe this walk down the supply side path is very, very small. And if it surprises and both houses are taken by the current administration, i think the market would like that quite a bit. I dont think conservatives poll well weve seen that a couple times before a lot of the people i talk to keep their politics quiet in this somewhat volatile time. Yeah. You live in new york city. I live in chicago im sorry same thing. Yeah. Thats what i mean and you want to be able to eat in a restaurant without, you know, getting thrown out or something dumped on your head. Amen. I understand. Keep in mind, when i spout these things for you twitter people too, this is presented without judgment im trying to make a buck here on what the markets are going to do im not talking to you about any of the other issues you come after me for this is what i think the market wants. Im actually relatively sure the market wants more supply side. Jimmy, if you were going to say i got a feeling that the republicans are going to hold onto congress, where would you position your portfolio . Whats the play on that . I think its probably banks think about it if it goes the other way, the one thing we know for certain is that people like Elizabeth Warren want to regulate the hell out of banks and thats fine im not even saying that might not be the way we should do it again, i keep couching this. But i think thats probably pretty good. I think the overall market would do better in that situation. The only wild card again is that might embolden the fed to talk about rates. Yeah. Would you shorten the Interest Rate complex probably i would. Particularly id want to short the long end all right i mean, none of us know when were even going to know i guess well have a pretty good idea by tomorrow theres some problem with one of the states not counting the early votes until thursday what . And then dribbling them out over i cant remember which state i heard. Theyve had them for weeks. Right theres a couple of key places where you should be able to i dont know whether thats true either i figure you can have some surprises one way in some places, surprises the other way in other places. All politics is local yeah what state is that you think . I heard it last night on the radio. If its really skewed either blue or red, maybe you would know early i mean, if crazy stuff is going on well, well be on at 5 00 a. M. Tomorrow. I think its possible we will not know a number of states. I want to say arizona that they have some issue theyre going to be counting votes for a long time. Thats why i never wanted to vote early or send in an absentee ballot. Does your vote count your vote counts, becky it counts more if you show up on election day. Thats right. You know, on the new york exchanges, i dont think that ugly jacket would fly. I keep forgetting youre in chicago. This is good jacket remember down here we try to have wild colors lapel should be the same color as the rest of the jacket. Yeah. Some day some day ill move towards you who used to wear the cow jacket scott schelati. Then you can be identified by your jacket. Exactly jim, thank you. Coming up when we return, the u. S. Hitting iran with sanctions but not everyone is barred from buying the countrys oil. Well talk about that. Energy expert dan yergin joins us after the break stay tuned here on cnbc. And seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Welcome back to squawk box this morning want to take a quick check on the reaction and the Energy Markets. Joining us is dan yergin good morning to you, dan good morning. I want to talk about the midterms, what you think that means in terms of lots of things but in particular the situation in iran. The sanctionsand how thats going to affect the Energy Market before we start, whats your take on to the extent that energy you think is connected to politics right now well, i think that the president made it clear yesterday when he said he didnt want to cause a big shock to the oil market and send gasoline prices up and thats part of the reason that were now seeing this kind of compromise with the main importers of iranian oil to give them exemptions that allow them to continue to import some of their oil you can see that in the oil price which is down from around 86 a month ago to the low 70s this is an exemption for eight importers. China, india, south korea, japan, italy, greece, taiwan, turkey what do you think could happen in the next 180 days i think the pressure will continue on them to reduce their supply when i was in india about two weeks ago, they said bluntly were not going to zero. I think the administration is going to push them to do that or to try and get them lower. Right now it still looks like iran will be exporting about 1. 2 Million Barrels a day. It was doing 2. 6 million and they put a lot of oil into storage on tankers but i think this is going to be more of a slow motion rather than a cold turkey a couple weeks ago which was really agitating the market, they were saying we want zero exports from iran. That was not feasible. And will that be feasible after 180 days so 180 days out from today where would you predict wti to be . I think well see some further reductions on imports from those countries i think its hard to see getting down to zero this is part of a Larger Program in terms of banks and all the other sanctions really trying to put this pressure on iran. Whats different about it this time was a unified country working on the Nuclear Program now its really the power of the dollar and the u. S. Government pushing this i think a big question, andrew, is what is the objective here . It changes in terms of what iran does that is on its Missile Program or is it regime change and i think that kind of ambiguity is going to kind of be the Foundation Going forward if you had to handicap it, whats your answer to that Going Forward . Well, i think regime changes are going to happen. I think were looking next year expecting iran to lose about 2. 5 in terms of gdp i think the pressure will be there. The difficulty is, andrew, with north korea, there was one guy to talk to in iran, there are a lot of guys to talk to its a much more sided situation. Its got a rancorous political system so the question is who do you sit down and make a deal with. Thats something well have to see in the next 180 days and beyond that. Youll see the bottle necks in the permian which is restricting the growth of production, you see the infrastructure constraints being lifted and more u. S. Oil coming into the market that probably is something that would strengthen the administrations hand. Okay. So if you are an airline today or fedex today or an investor today an youre thinking about where the price of oil is headed, 180 days from now it will be where . Well, i think, you know, you have to tell me what happens to the chinese economy. But i think sort of figuring in the low 70s into the low 80s is a reasonable range but youre watching closely china and the Global Economy because those will be determinants in these factors. Any chance we go lower from where we are now if you get a slowing economy, yes. Youll get pressure particularly you know, we think next year from september in particular, well see a big surge of oil coming out of the permian basin. At this point demand is holding up as strong but if the kind of predictions from 2020 weakening economy, then that would put renewed pressure on oil. Okay. Dan yergin, we appreciate your time thanks all right. Coming up, the guy whos been called floridas richest man well be joined by the ceo of Interactive Brokers Thomas Peterffy well talk about what happens if republicans hold the line or democrats win the house. Or whahet thinks. Stay tuned youre watching squawk box on cnbc a o o o o o a o ae. Welcome back to squawk box this morning take a look at futures on this midterm voting day go out and vote if you havent already this morning dow jones looks like it would open off about 34 points down. S p 500 off about 4. 5 points and the nasdaq off about 15 points when we come back, shares of apple suppliers under pressure after reports sheds doubt on iphone manufacturing well tell you whats up when squawk box comes right back. Obvious. Sometimes, they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Its my job to protect as a public safety,pg e, keeping the powerlines clear while also protecting the environment. The Natural World is a beautiful thing. The work that we do helps 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 powerlines. We want to keep the power on for our customers. We want to keep our communities 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. Good morning, Everyone Welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Among the stories front and center this morning, earnings out from ralph lauren. 2. 26 a share reported however, same store sales were flat that stock right now down by 3. 4 the Labor Department will be out with its september jolts report at 10 00 eastern time. Similar results are expect eed this time around and under armour will no longer allow employees expense trips to strip clubs. This came from a wall street journal article which characterized it as a long Standing Company practice. The employees received an email this year prohibiting it ceo kevin plank called the story tough to read and said the company can and will do better one thing we should point out, though, is its not sure how widespread this practice actually was the company did send out a letter earlier this year saying it was not allowed when it came to their attention there had been some reports of this. The company also says, though, that the company does not condone use of Adult Entertainment for business mr. Plank has never conducted business nor used Company Funds at such venues he doesnt even have a company card so maybe that clears that up on his behavior i mean, worlds changed its not living in mad men world anymore. No. We havent been living in i know. I know this is 30 years old. Ive had a morality clause in my contract for 25 years so its not something thats been on the radar screen i would say even wall street, look i havent heard stories about this on wall street in a decade. Doesnt mean its not happening. I still would like to know at these places what percentages his it is. I bet theres an amount that is i think the entertainment might be different its not under armour publicly held profile company. There i think you oh, you mean its a business expense at the place. Yeah whatd you think i meant i imagine if it is, its unfortunately fraudulently expensed as Something Else thats the distinction like when you rent that movie that doesnt have a title. It just comes and says movie and you say, no, it was incredibles 2, i swear, honey. Is that what you do im surprised you can still expense drinks there was one recently it was like 100,000. Remember that one . Were watchingshares of apple suppliers falling sharply in asia overnight after a report said that apple told them to cancel plans for additional production lines for its new iphone xr. Apple shares fell nearly 4 yesterday following a report sparking concerns that the iphone xr is actually facing weak demand. And speaking of apple suppliers, a new wall street journal report saying this morning that foxconn considering bringing in personnel from china to help staff a facility in wisconsin. Struggling to find engineers and other workers in the tight market foxconn pledged incentives to help lure local authorities added 764 million foxconn says its wisconsin first commitment remains unchanged it still plans to hire 13,000 people to work at that facility but theres still been a lot of controversy over that decision and whether, frankly, theyll be able to make the money back that has been offered stocks in watch and wait mode ahead of the election results. As investors weigh the odds of a traditional yearend rally mike santoli joins us now with more what are we thinking i think whats important is what the consensus is thinking it seems as if its really become a solid majority view that all these seasonal magical seasonal factors we know about Midterm Elections are about to be freed up here. The s p 500 is up about 5 from last mondays low. In a week youre up 5 from the low but youre in this zone where people arent clear if last week was a bounce or Something Better i dont argue with any of the seasonal factors saying after every one of the Midterm Election years weve had the s p up in the subsequent year. Youre talking the first the next month and a half. Well, the next month and a half to me is a little more clear than not but if you look back to the last two Midterm Election years, okay in 2014 you went up 5. 6 in the top. It isnt as if it unleashes a great renaissance for the market though i read in the averages and this goes back to world war ii. But i read on average the market is up 17 in the next 12 months. And if you just look from the lows, up more than 35 , i think. My problem is 18 years almost random 18 elections. The first year of the president ial election is supposed to be awful dpp that work true. So its not so much you dont want to know about these, but dont feel theyre decisive. Specifically i think the Midterm Election effect, its getting it out of the way and seeing if the market is primed for a rally its not about a policy play were up 5 from last week. How much are we down 7 . For the s p. So it would be a 7 move from here to get back to the september 20th high. Which is not out of the ordinary i think the one thing that makes me uncomfortable, eight months ago i started talking about 2014 as a year to this one. I think everyone is now all over that maybe its been too telegraphed. I dont think it invalidates it but you have to wonder if people are leaning that way the good news is they did get a lot of fear built up in october. Its not as if everybody is taking a lot of risk right now going into the final seven weeks of the year or whatever. Were going to have Thomas Peterffy on with us in a little bit. He says in his exchange Interactive Brokers, hes seen a lot of cash on the sidelines ready to come back in. What do you think of that . I think there has been a buildup in cash. Theres a sense also that dip buying has not worked as well in this year. Theres been studies on that if a week was down during this bull market, it almost always paid to buy it and bet the next week that has not worked this year. If we had a reversion to the mean on election surprises, such a big surprise in 2016 that this could be come out and it wouldnt surprise the if it was exactly what people are thinking. Right a difference if they win by five or ten seats in the house maybe the republicans add two in the senate or Something Like that i think the thing to remember is the first reflex move of the market in response to even as expected like that is not decisive were going to talk to Thomas Peterffy he thinks the market is already down in the last couple of weeks because of the house he thinks when it becomes a fact that it goes down another 2 to 4 but if it was the senate, itd be down another 10 . See, the kind of excess precision on all of this bothers me its one of the richest men exactly brilliant trading guy. Probably shouldnt have opinions only based on money im glad it doesnt work that way. Expect in politics, apparently mike, thank you good to see you. In florida. You see the votes . Hes the richest man in florida. Thomas peterffy joins us with his prediction on whats in store with the markets with what happens tonight. Today. By tomorrow, by some time. Well be right back. If were gonna steal christmas, were gonna need the element of surprise. Go team. [ snow crunching ] [ load crunching ] [ whispers ] this is the loudest snow ever. Welcome back to squawk box. Take a look at the futures on this voting midterm day. Dow looks like it would open off about 21 points. Nasdaq off 10 points s p 500 off about three points the billionaire founder and ceo of Interactive Brokers is worried about a possible blue wave on capitol hill Thomas Peterffy is here to tell us why thinks it would be negative for the markets he joins us now from palm beach, florida. Thank you for being with us today. Thank you for having me weve been teasing you as the richest person in florida. But youre in the top 50 people in the world because of the hard work youve done building the exchange and beyond. Were telling people to listen up to what you have to say lets talk first of all about your overall call on the markets. I know that you went negative on the markets back in june but earlier in october, you said you were closer to going positive on the markets. Have you decided that youre bullish on the markets at this point . Well, i think it all depends on tonight i am waiting to see what happens. I think people should be aware that the futures options are trading all evening long and most electronic brokers such as Interactive Brokers or others enable their customers to trade on their smartphone throughout the evening and night. As the results are starting to trickle in, people who have analyzed the various races and followed the elections closely can take a favorable opposition. So lets get your baseline analysis lets assume the consensus at this point that the republicans lose the house but hold the senate is what happens 37 what would that make you feel about what you how would that make you feel about your call for stocks at this point well, that is probably true, but i think the on the short run that we will have a negative impact on the market i expect it would drop about 2 to 3 if thats the outcome. If the senate also goes democrat, i think we could expect a 10 to 15 drop however, if both houses of congress are retained by the republicans, then i think well go back to the highs and you would be a buyer if either the consensus estimate or the republicans hold both the house or the senate . Or would you be a buyer if the market dropped 10 or 15 if the house was able house and the senate both went to the democrats . I will be a buyer after the market drops either if the house goes democrat by 3 or both houses of congress go democrat by, say, 12 to 14 . Then i would be a buyer. And i would also be a buyer if, of course, if the republicans retain both. Wait a second just to be clear, youd buy essentially in any scenario after the midterms after the market does move as i expect it to okay. Thomas, i wanted to ask you since youre based in florida whether you think that people talk about the Gubernatorial Race in your state as being a referendum or a proxy potentially for 2020 do you see it that way so i do not but this happening here is Andrew Gillam is a declared socialist. If he gets elected as governor, hes going to start instituting income tax in florida which there is no income tax currently. So were looking at socialism if that happens i think its a tragic outcome. Thomas, maybe you can expand your views on socialism a bit for people who dont know your background so, you know, i was born and raised in hungary. I lived there for the first 21 years of my life and i know that most of these people who want socialism basically dont understand what they are talking about i dont know if they have really studied the issue. I think that people are have to be motivated. They have to be incentivized in order to produce more goods and services or better goods and Services Products like an iphone, for example, could never happen in a socialist country. I dont think these people know what the impact could be its a disaster. Thomas, i havent spoken to you since i visited hungary. It was recently. What a great place but still to this day digging itself out of that of what happened and you can see it everywhere you go in budapest and everywhere else. Digging their way out. And an absolute love of western value in america and Everything Else so it opened my eyes to what youve attend before on this show and its not only in hungary. Its all over Eastern Europe countries that used to be controlled by russia theyve really suffered. Thomas, what i wish that all this i wish that all these socialists would take a vacation in venezuela or cuba or north korea. Bernie sanders did take a vacation but it didnt work for him. I dont know thomas, what do you make of the both the personal attacks, the bomb that was sent to his home . He was also born in hungary, george soros yes so i dont think that people should do things like that its a terrible thing. You know, that person should be put in jail or even worse. We should be civil to each other number one number two, we should have a debate instead of screaming and yelling at each other. Why do you think given both of your backgrounds, how would you explain where you ended up in terms of how you think about the world and where perhaps he thinks about the world well, you know, george soros is an enigma hes a very bright man and i absolutely do not understand why he behaves the way he does i think hes basically an anarchist. You think hes an anarchist yes he goes against communism in the 70s and hes against free market capitalism today and i dont know what is in between. So i dont understand it do you think thats a Fair Assessment and the reason i say that is im not so sure a, that hes an anarchist. And the second piece of it is, im not so sure that he doesnt believe in markets at all. I think there might be this might be an extreme version. I mean, the suggestion youre making, of the way he thinks about it id also make the argument that potentially, talk about socialism or socialism in florida even im not so sure thats even what is really on offer so much as its a bit about the pendulum swinging maybe the pendulum has swung too far in one direction. Yeah. Well, look you go to any socialist country. You cant find any country where socialism has been tried and where people are happy and it usually fails after some bloody interlude it swings back to capitalism and starting with the french revolution, that has been all throughout history so ask yourself why is that. Why isnt there a socialist country today where people are happy . It ends in tyranny and its all spelled out. It all spelled out it is clear how it happened. Unfortunately, usually tens of millions people end up dead as well. Capitalism has gone too far we move to a winner take all society. There is no question of that becoming an issue. There is a real question whether capitalism being pursued today is working in your mind. No. Not in my mind not at all we are never going to settle though remarkably uneven sense of how capitalism has worked since 1980 it is not capitalism. Guys, you have the great debate, thank you for including me thomas, thank you, can i ask you a question, thats why you were thinking turning positive at that point. Have you seen the money deploy since the market came down significantly the last several weeks . No, we have not demand have increased slightly and i think it would be ready to come back if both houses of congress remain in the republican hands today the market that i said would go up to recent highs you said that early october was about 50 billion, if it is more now, what are we talking about . 51 and a half. You said thats the highest that we have seen and how long. All right, thomas thats only the amount of money our customers have with us sure, thomas, i want to thank you very much for your time today, we appreciate you being here thank you, thomas peterfyy. The future right now not a lot of movement. A little bit worse than they were before. 41 on the dow. S p down and nasdaq is down. Well be right back. Jim cramer is joining us now. It is not great to talk about politics it is tough to avoid it today. Thats aciddictat dictator s. Thats who our enemy is i dont know how many lives you are talking about there, jim. The prc it is the communist. I like the people, it had nothing to do with the people. I dont know. I get frustrated and tired of talking about our different like there is any questions r reagan says you are only one generation away from not even realizing the capital. It has to be flop but it gets tiring, does it . It is not politics. So what it is just enemy. Do you think you can tell anything from the market the market dont know whats happening either thank you for saying that people are going to come on. It is going to happen like this or that. If they knew, you are hearing someone saying i am going all in or putting all the money in the s p. It is like going to the casino i am going all in red or black the only thing i think republicans take the house, the defense stock goes up because they have been going down and down because of the bleep that the democrats take the house joe, we are guessing lets not forget that the communists run china thats not a democracy over there. All right, jim, thats a good point. Thksan, well see you in a couple of minutes. Okay. Omes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. 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Squawk on the street begins right now. Good tuesday morning, welcome to squawk on the street, i am Carl Quintanilla with jim cramer and david faber. Jim has voted. Europe is uniformly red and the 10y