hearing from ibm among others. one economic report the october national association of home builders survey this will give us a snapshot of construction heading into the winter after a strong summer for the industry. >> all the big stories we're watching. a top u.s. security firm reporting that china actually tried to hack at least seven american companies in the three weeks since that key meeting you'll remember between washington and beijing leaders from the two countries which it agreed not to spy on each other for commercial reasons. security firm crowd strike said its software detected and rebuffed these attacks. also, high profile of bribery allegations against walmart's mexican operation found little in the way of new major offenses. "the wall street journal" says the three-year on u.s. investigation likely to hand in a smaller case than expected. investors did say they found evidence of bribery in india as part of that same program. the retailer is said to likely face u.s. foreign bribery charges under foreign -- >> following on this one that we're going to -- >> that they're worth more? >> widespread. horrific bribery down in mexico. >> there was horrific bribery down in mexico. there weren't additional bribery. >> they didn't find nearly a big a risk as you made it out to be. maybe the india thing will blow up. those are very small potatoes. >> i don't want it to blow up. >> andrew was reporting it. >> the numbers. >> i'm more concerned. >> you do? >> just one. >> really just one. >> i'm going to tell you one. >> that's not you, that's you telling us what someone else thinks we should tell. go ahead. see how they do that. >> humana going to vote on the deal today. there are major challenges ahead. we'll watch that as well. >> a big wave of megadeals. >> yes. >> you have your -- that thing that you love, hh -- >> i don't know, hoffman hirfdol. >> the hirfendol -- hhi. the antiquated 1930 based looking at whether market cap has gotten to a certain point. >> based on the market. the fed going from if you go from 3 to 2. >> market -- >> market share. that's what i meant. >> whether it passes anti -- >> it's like looking at sirius xm. who's controlling satellite radio and looking at the market share of satellite radio. >> it's about how you define the denominator. that's the issue. >> exactly. in today's disruptive -- you talk about unicorns all the time. in all the things that are happening, to look at the way things used to be done and measure market share based on that doesn't make any sense. >> they were measuring inflation properly. >> humana. >> humana? >> i need to move down the street. >> but not in every industry. >> right. >> the beer industry. >> well, this one, yoobama cares causing this. >> as long as you look at it properly. >> they ruined you. you want to operate in a new world or not? >> maybe. deutsche bank announcing a major restructuring plan submitting the bank in two. carolin roth joins us in london with the details. good morning. >> reporter: good morning to you, joe. big news coming out of germany. better control, lower cost and more focused bank. this is what deutsche bank ceo john cryan wants to achieve. he split the firm's investment banking business in two, a global markets unit which will look after sales and trading activities and another for corporate bank and transaction banking operations. there will also be a new independent digital banking unit. guys, the overhaul doesn't stop there. a host of new executives have been brought in by john cryan to run the new businesses as he's really trying to distance the bank from the faces associated with the past demeanors, misdemeanors and poor performance. colin fan, he co-headed the investment bank and he is one of the biggest casualties of that call. stefan krause will also leave. jeff irwin is coming in to run the global markets unit. also, a woman will join for the first time as part of the shakeup to the management board. sylvie matherat. back over to you guys. >> carolin, thank you very much. eunice young joins us from beijing. she has the details. eunice? >> reporter: thanks so much, becky. third quarter gdp for china came in at 6.9%. this is the weakest since 2009 since the depths of the financial crisis, but the message here from the chinese leadership is that the economy is stable. over the weekend the chinese premiere said that it wouldn't be easy for the country to reach its economic growth target for the year of about 7%. he suggested though that the employment as well as wages are still holding up. also the chinese president who's on his way to the u.k. said that he understood there were concerns about the chinese economy but he did believe the country would be able to weather through the downturn. now the problem is that there's an increasingly wide array of economists who are very skeptical about the integrity of the data. there's always been questions about the quality of the gdp data as well as other data but more recently it is becoming more difficult for economists to really believe that the gdp is really where it's supposed to be. they say it's being overstated for political reasons and mainly because the government is being measured by its economic growth. so there's been plenty of focus today on the industrial numbers. everyone's been talking about how china is in an industrial slump. the fai or fixed investment as well as manufacturing numbers, industrial output just weren't there. there's concern that the services industry, though it did expand, is just not expanding fast enough to really offset that slump. guys? >> they're starting to write the articles now, eunice, about we took a concerted effort back when japan was taking over the world to complain about their exports and their currency and ever since then, i mean, a lot of other stuff has happened, but the yen got much stronger, much tougher for japan to operate and, you know, we still are complaining in this latest trade deal. we're saying there's currency manipulations as if china is keeping things under valued in terms of their currency when a lot of people think it's over -- it's too over valued at this point. >> right. >> so they're starting to write the articles. are we seeing the beginning of -- i guess that's not the first time someone wrote that, but that would be disconcerting for the entire world if there was a japan scenario setting up, eunice, don't you think? >> i think -- yeah, no, i think absolutely there would be, and there's a lot of debate here as to whether or not china is in for a hard landing, but what's interesting is that when people talk about china, they're complaining a lot about how the headline number is skewed, that the gdp figure has been manipulated. actually, most people here still think that the economic activity is relatively robust. they're pointing at property saying there's a bit of a recovery there. they're saying, yes, there's an industrial slump. we are seeing expansion in services in i.t. might not be exactly the amount that we need in order to support, say, 7% growth for the long term, but it's still there. s so there's been a lot of questions as to why is it really that the leadership feels the need to skew the numbers so much? because all they're doing, at least from the economist's perspective, is undermining their own credibility at a time when investors outside are looking to china's leadership to shore up the credibility and show that it is actually in control and understands how to maneuver the entire economy. >> eunice, thank you very much. we're going to continue talking about this quite a bit today. in the meantime, why don't we get a check on the markets. as we showed you right now it looks like the futures are a little mixed. nasdaq barely hanging on. indicated up by 3 points. dow futures down by 28. s&p down by just over 2 points. if you check out the early trading in europe you'll see that the dax is up by .8 of a percent. the cac is up .3%. the ftse is up and in italy up by half a percent. overnight in asia you see the nikkei was down by .9%. the hang seng was flat and oil prices which gave back just over $2 last week over the course of the week, they are down by another 1% this morning. that's a decline of 53 cents to 46.73 for wti. check out what's been happening with the ten-year note. last year it closed at 2.026%. this morning it looks like it's sitting at 2.04%. the dollar is up against the euro at 1.1318. the dollar is down against the yen. finally, gold prices this morning down by about $10. $1.173 an ounce. >> not that i'm not hip. i don't like pop, that's all i'm saying. >> adele? we're back to adele? >> i don't like pop. >> she's not like that. >> you know courtney -- >> i don't like that. >> florence welch. florence and the machine? >> she's not the typical pop. >> how about fka twig. hyne. >> you like different music. i'm not the typical pop. >> hyne opened for taylor swift. >> you don't even know any of the adele stuff. >> no, i don't. i'm proud. i don't know any lady gaga stuff. >> i don't like lady gaga. >> this is pop. >> i'm not proud -- >> you heard it. >> i haven't heard oh, oh, oh. >> i don't listen to the alternative stuff you like. >> oh, my god, let's bring in -- >> you don't noah dell. >> i'm pointing out that it's not that i'm not hip. i don't like pop. >> i don't think you should knock her because she's different. i don't like a lot of pop stuff. she's different. >> dena, your girl from "frozen." >> yeah. god bless her. >> you don't know her? >> i do. >> you're looking at me like -- >> what did alec baldwin -- >> john travolta. >> called her some -- >> jumbled the word. >> speaking of pc, jumbled letters. it fits on the prompter though. >> we had a guest last week who did not. >> boris schlossberg, head of investment strategy at pro shares advisors. you were listening to eunice, boris? >> yes, i was listening to eunice. i think there is one mistake i think that she's making. if you read overnight comments from all of the crisis strategists, one of them that was bad was the real estate investment. it was down by 3% fixed income. that is troubling people even more than any of the other data. even if you assume the gdp data is doctored, the underlying data is troubling. the crisis, some are predicting you're going to have a cut for the pboc, a rate cut which, you know, if you believe that it creates an interesting situation. how is the fed going raise rates? that's an interesting question as we move forward. >> so the shanghai market's done better? >> yes. >> people are thinking they have that under control. i thought we were starting to assume that the worst was over in terms of the chinese economy. we need to know whether this is like the mid -- like a stopping point where it goes lower or whether it's making a bottom and going -- >> well, it feels like -- it doesn't feel like they're crashing but it definitely looks like they are just in a sort of mild slope. certainly the industrial depression or recession and the services component of it is just not going up. the real estate issue i think is very interesting because that is a danger point. there's been a mass amount of ma malinvestment. if the bubble bursts that's the danger point. >> how about dudley? not dudley do right, how about bill dudley. did you see that, sorkin? >> too early to raise rates. >> too early. >> that's why we're at 17. by the way, i am imagining the economy is going to be lousy in '17 so i'm imagining '18. >> is he still on goldman's payroll? obviously those guys want rates to stay low. >> expressing a very key point. basically we talked about this earlier. no central bank has been able to come back from qe as far as we know in our history right now. the fed is going to have to be the first one to actually be able -- >> we never -- >> i don't know. >> the world needs to end? >> you still have an asymmetric trade. in the 11% down draft in the s&p 500 in august you made 1% on bonds at 10 basis point pull back in the ten year. you know, the natural rate of the ten year even if inflation is off has a three handle on it. i still say maybe you make a percentage bond but you can lose 10% this year and next year even if the fed doesn't move. so i think bond market complacency is a little misplaced even if the fed has to hold off. >> what about stock market complacency? are we out of the woods here? >> i think if you exclude the energy and materials sector, yes. the realist thing that we know from china, there will be continued pressure on commodity prices. saudi arabia is deferring payments to contractors for six months so even if oil prices don't -- even if they rise a little bit, they're still at a level that's putting pressure on those sectors. but the rest of the sectors of the economy don't look so bad and the rest of the sectors of the stock market don't look so bad. >> it's a time now to ask it maybe. the lows are fairly far away from where we are right now. those lows that we needed to retest. do we hit -- do we go back above 18,000 on the dow and test new highs before we retest those lows? >> well, you know, everyone who comes on here will remind you -- will remind you that if rates are rising slowly from a low level that has been a bullish sign for the stock market for a long, long time. >> the market's been acting and it starts low every morning and last week was -- even though it was quiet, it was a big week again. >> it was like 130 points. >> the market likes the fact that the fed isn't moving. >> that's it? >> that's it. >> that's where we stand. we're in a jerry maguire economy. show me the money. >> for the week. >> for the week. >> we haven't had -- we just have not had income growth. that's really the determinant factor. job growth has been to keep us alive and keep the economy slowly moving. until we see income growth, wage growth, the fed is not going to move on rates. that's keeping the bid under the equity market and keeping everything quiet. as far as the bond market goes, that's been the smartest market so far. it's sort of -- it's the first one to -- as soon as you saw the fmc minutes the yields on the bond market start to go down. they were the ones to properly react for the idea that the fed is not going to hike rates. maybe their complacency is justified for the time being. >> also, you're trying to keep the dollar in check. the pound is probably going to be a reasonably safe place to be. the euro probably not a bad place to be. u.k. and european equities are not a bad place to be over the next 6 to 12 months. >> euro is kind of an interesting story this week because we have the ecb coming up. i think a lot of the market is expecting for draghi to come out. they want to guide it lower. they don't want to see the euro at 115 pause they're slowing down. they think draghi will come down -- >> that's the only game in town is everybody trying to jostle with the currency? >> yes. what's happening in the global economy is the only people participating are the central banks. the fiscal component of policy has been completely abdel gated by the gdp. monetary stimulus is all that's left. that's the only game in town. >> last week was kind of flat but it was the previous week because on -- >> definitely build. >> on october 2nd -- what's today, the 19th. >> 19th. >> 17 days ago we were right at 16 even. 16,012. we've made 200 points. >> part of that was the bad jobs report and the -- >> the jobs report, that's right. it was right around-yeah, that's when we started taking off again. okay. >> but, again, back to boris' point, the central banks are the only ones that are around. as long as the fed stays easy, that keeps us in the game. >> sentiment is not bad. >> but they need to see -- that's why the wage growth is going to be the very key component everybody will be looking at in the next couple of months and the job report. >> next couple of years? >> years probably, yeah. >> dell ray, you love her? you heard of her? >> yeah. >> i'm good with adele. >> i know you are. my point. >> they're playing it. listen to adele right now. >> i'm going to get some for you. the xs and os. >> i'm sure i have. >> we're going to play that. >> sing it. >> i did. ♪ ♪ >> how does him spell their name? >> h-i-m. they are amazing. >> that's like a hebrew letter. >> it is. >> is that jewish? >> from l.a. . i don't have a super pac. i don't even have a backpack. i carry my stuff around loose in my arms like a professor between classes. i own one pair of underwear, that's it. some of these billionaires, they've got three, four pairs. i don't have a dryer. i have to put my clothes on the radiator. so who do you want as president? one of these washington insiders or a guy who has one pair of clean underwear that he dries on a radiator? >> that was larry david on "saturday night live" portraying democratic presidential candidate bernie sanders doing a pretty good job at it. the skit getting a lot of buzz on social media. >> he was doing larry sanders. >> larry david was -- >> bernie sanders. >> you kind of -- similar like that. playing himself. >> yeah. >> guy in the "god father." >> all right. >> harwood did another speaking -- >> he did. he did. >> got to ask him about biden. >> we're going to get the chance for that. right. as we mentioned, we are now just more than a week away from the next gop debate. you can catch that, of course, right here on cnbc. ahead of the big event john harwood has been catching up with the candidates chatting about some of the biggest issues on the table. in the latest edition of john's speak easy series, here is rand paul. >> bernanke has said that he was a republican, of course appointed by george w. bush, but he no longer is because republicans have been taken over or have given in to no nothingism and he was talking about people like you who want to audit the fed. >> well, he should also self-examine and look back at how he's been part of the problem and he should make the answer how is it a good thing to have price controls over the price of money. see, this is the real contradiction that they don't quite get and they're unwilling to get. if you ask ben bernanke or any of the other so-called free market economists whether or not they're for price control of eggs, potatoes bacon. oh, no, it leads to abundance, food rotting on the shelves. you ask them about money, they say we should control the price of money. that's a fallacy. if price controls are bad for the market they're bad for the money as well. >> you reject the charge of know nothingism. >> let's have the debate. ben bernanke, come on. let's have a debate about what's best for the economy whether fixing the price of money and fixing it below the market price is a good idea. he's going to have to defend the policy that led to the extension of the home building and then led to a precipitous crash. these are all the same people, too. look at all of their interviews leading up to 2007 and they'll say, there's no way home prices can go down. home prices have always gone up. they'll go up 10 perfection percent again ne-- 10% again ne year. they were wrong. no, they need to answer that. and i think it should be illegal for them to lobby against my auditing bill. why would we let a monopoly come back to congress and lobby us against looking at their books? >> guys, rand paul told me that he thinks ben bernanke and alan greenspan as the same person, same philosophy. he's challenging it. both of those gentlemen were appointed to the fed by republican presidents. >> john, one of the things joe just mentioned was the talk about what happens with biden. obama bundler still missing from hillary clinton's donors. they are waiting to see what happens with biden. any other conclusions? any other thoughts? when is it too late to actually get in? >> it's probably too late already, but, yes, i think some people are holding back out of deference to joe biden who continues to think about it. it's difficult to make that decision for the last time, but i kind of think with joe biden we're seeing the decision made, just not uttered out loud. the longer you don't get in the race, the more sure it is that you're not likely to run or not going to run. you know, hillary clinton is in a -- for all the troubles that she's had with e-mail and everything else is in a dominant position in the democratic primary, extremely difficult for joe biden, even under the best of circumstances to get in the race and challenge her. so i kind of think we know the answer already. you know, life's full of surprises like a box of chocolates so i can be proven wrong at any moment, but that's my gutt feeling. >> because they're writing articles, again, john, politico, i don't know where it was, that to assume because of what the developments of the past week that he was going to shy away from it that that just emboldened him to try harder. i'll tell you the problem, john. since their policy positions are so similar, he would have to go after honesty, corruption, e-mails. he would have to base his alternative candidacy on being more honest or being more trustworthy. you can see that that would be -- i just don't see a break in the ranks in the democratic party. you saw the debate. the biggest gift given to hillary was by one of her supposed rivals, bernie sanders. >> joe biden and hillary clinton have a good relationship. >> i know. i would not expect that. >> by definition if he were to enter and challenge her he would be offering an alternative to her. that relationship would end quickly. you wonder about the scuttlebutt of whether the obama administration really thinks their legacy would be better served with biden rather than someone who's already -- i think they understand politics and the tpp. you know, they probably aren't that mad that she's doing that because they know she's currying favor. they curried favor, too, with unions and everything else. they might prefer biden to hillary clinton. there's no love lost, i don't think. >> well, look, the thing that matters most to president obama for his legacy, having a democrat like the president. >> it's a third term. biden would be a third term. hillary would be different. that's what everybody is saying. >> that's immaterial. their policies are basically the same. >> right. >> tpp, that's a campaign thing for hillary clinton just like -- >> yeah. >> you remember they talked about renegotiating nafta. >> we know she doesn't believe that. she's just saying that, no, she doesn't believe that. no, she'll be fine with wall street. she's just -- it's all an act. it's all an act. elect them. anyway, thanks, harwood. coming up, squawk sports news including a big win for the mets. murphy's law. guys, unbelievable. new york gets a two-game lead. a lot of people want the cubs. my daughter's like, come on. we live in new york. our newsmaker of the morning, treasury secretary jack lew will join us on set at 7:00 eastern. the internet of things. what we're recommending as your consultants... the new consultants are here. it's not just big data, its bigger data. we're beta testing the new wearable interface... ♪ xerox believes finding the right solution shouldn't be so much work. by engineering a better way for people, process and technology to work together. work can work better. with xerox. it's more than a nit's reliable uptime. and multi-layered security. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. welcome back to "squawk box." to torture joe this morning, adele teasing a bit of a comeback. >> does she have a last name? >> she doesn't need one. british media is her voice singing over a black screen in a u.k. reality show x factor. adele's new album set to be released in late november. that would be the first -- >> she's not a one-hit wonder. >> no, she already has several things that are out, several albums. she shuns the media. she doesn't like to talk about t. makes its way building up the -- but, honestly, i think she -- >> i listen to her long enough you dig her. >> i was kidding. my kids like her, too. the sports. >> god almighty. >> there was a personal embarrassment riches. >> there was. went to the jets game. you probably are like this already. the jets are suddenly good. >> is that why you're wearing green? >> that's one of the reasons. when your son or daughter does anything, you cry. i cry. >> of course. >> in new jersey, center of the field, all the players all around him, he's coming up. coming up. right -- after that red head. there he is. >> i see him! >> anyway -- >> let me -- ♪ ♪ >> that is amazing. >> that's great. >> and i don't know right in the middle of the field. it did, it was like -- sounded like -- >> is this halftime, before the game? >> before the game. it was awesome. >> way to go, scottie! >> yeah, whenever your kid does anything that's great. on top of everything else, mets, murphy, unbelievable. 2-0. a lot of people want the cubs. what is it, the cincinnati -- never mind. patriots end up winning after andrew luck waltz down the field. and people are talking about deflategate. did you see michigan? harbaugh had michigan going. >> i did not. i saw it after the fact. >> they had the game won and all the guy had to do, he was trying to punt. all he had to do was fall on it when he bobbled the punt. they picked it up. they were absolutely shocked. there's a guy who's a michigan fan who had a heart attack. >> oh, my gosh. >> your crappy team won, right? >> beat indiana. yeah, which is amazing. rutgers came back. scarlet knights came back. >> they only lost to michigan state by 7. >> yes. they were leading at halftime. >> this is going to continue. this is going to continue. and what if -- if the mets -- either the mets or cubs will get into the world series. >> i have figured that out. >> for the mets -- >> can we that i can to the bank. >> i think so. >> the last thing i want to talk about, a-rod, who your guy -- i heard great things. he's supposedly smart. >> he's brilliant in business. one time when i interviewed him years ago his goal was to be on the cover of -- >> did you see what he did? >> wow. a little too far. >> he's got an arm. he's got an arm. anyway, he totally shattered the monitor. >> way to go. >> but i think you know who they're going to pair him with? >> who. >> pete rose. a-rod -- is that not fox? a-rod and pete rose. >> wow. >> which is fox all the way. >> way to go. >> all right. i want to show you guys something about a currency story. we were talking about how currency is the only game in town. central banks are worried that currencies don't get too strong. normally we look for data points. this was anecdotal evidence that i've ever seen. there was a story that in venezuela even the thieves prefer dollars. i figure you're going to take it to the bank. >> take it to the show. stash dollars. it turns out that about a year ago $1 bought about 100 boulivars. today it because 7. they're worth next to nothing. even the thieves are saying, forget it, don't pay us with the lousy currency. >> don't worry about inflags. not a big deal. >> not here yet. >> much worse. can you imagine from 100 to 7 in a year? >> in a year. in a year. >> a lot. >> do you ever read the comments? >> never. >> the stars? >> i bought an adele album. >> apparently people are paid -- it's not even apparent, people are being paid to write those reviews. >> the reviews? >> now amazon is going to sue them. >> being paid by, who, the shop keepers? >> there are companies doing this. it's funny. on friday i went on to a website to see how easy it was to sign up. there's a company called buzz agent. they send you free product and the goal is that what they want you to do is they'll send you the free product and they want you to then review it, i imagine favorably, and expands the whole business. >> amazon is suing the guys who are paying the false reviewers? >> in this instance amazon is going to sue 1114 unnamed defendants specifically by name and then i assume there's also companies, larger. i don't have the buzz agent. >> are any of them real? >> i don't know. >> i never really trust any of the reviews that i see. >> there's great ones. >> i tend to buy from amazon. >> i went onto the website friday. all have you to do is put in your e-mail address. tell them a couple of things about yourself. the idea is they're supposed to send you a lot of stuff. the good reviews you write they send you stuff. >> they're buying you with stuff? >> basically. >> wow. this new economy is hard to control. >> little dangerous. >> they haven't sent me any stuff yet. i haven't reviewed anything. >> did you sign up? >> you have to put your e-mail address in so, you know, you have to put -- >> did you see notre dame? >> i didn't see anything. >> that was bad. >> yeah. >> for you. >> "sportscenter" this morning. >> utah next week. >> and cnbc. >> yes. coming up, former -- >> a little more adele right now. >> former ambassador -- is that what it is. i'm going play a lot of stuff in the greco hour. >> i put in xs and os. >> dennis ross on the tension in the middle east. then an hour-long conversation on the consumer. we'll be joined by the ceos of macy's, diks sporting goods and gilt groupe. and drive forward with broader possibilities. cme group: how the world advances. ♪ ♪ (charge music) you wouldn't hire an organist without hearing them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. pubut to get from theand yoold way to the new,d. you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that is still to come. welcome back to "squawk box." israeli palestinian conflict escalating. our next guest examines the relationship between the u.s. and israel in his new book. ambassador dennis roos is here. the author of "doomed to succeed." he joins us this morning. >> good morning. >> so put it in context. where is the relationship right now besides bad? >> well, it's not -- obviously it's not great. i try to put it in some perspective. the fact is we've seen a lot of these kinds of tensions before. the title is "doomed to succeed" which is ironic. meaning you've had ups and downs and at the end of the day israel is the only democracy ithe region. not characterized by democracy. characterized by enormous turmoil and conflict which will characterize the region for the next 10 to 20 years. >> are you arguing ultimately we will succeed? >> well, look, the relationship between the united states and israel will continue to be rooted in something based on shared values, shared interest and even shared threats. the question is on the issue of peace can we eventually succeed. that's a harder question right now. part of that is caught up in a region that is characterized by deep struggle. >> right. >> palestinians themselves are alienated from their own leadership. there's a lot of anger that palestinians feel and to the arabs and to the israelis themselves. you can't make peace where there's complete disbelief. that's where we are. >> you say there's a misunderstanding. a relationship with the arabs depends on a relationship with israel. >> if you go through every administration you'll find there was a tendency to believe if we distance ourselves from the israelis that that would gain something with the arabs. the arabs define their interests and their priorities in terms of security and survival. the threats to them typically don't come from the israelis. the threats from them come from others in the region. today you look at the saudis. the saudi reaction was they weren't thrilled. they saw sanctions relief as benefitting the iranians and they would use that additional money to threaten them and others in the region. >> where do you stand personally on the iran deal? >> i was undecided on it because i saw that there were positive elements in it. it buys you 15 years. i didn't think after the other members of the five plus one had negotiated they would come back and renegotiate it. i was concerned after 15 years iran is treated as if they're japan or the netherlands and they're not. >> i'm not sure what it results from. mainstream media has a strange take a lot of times, i think, on what's happening over there. a tendency to not necessarily blame israel but maybe not look at the situation exactly as it happened. with iran it's listening to certain leaders there talk about the great satin, continually say israel won't exist in 25 years and we deal with these people. in this case i'm talking about abbas. the plo president. we welcome every drop of blood spilled in jerusalem. pure blood, clean blood, blood brought to alla. with the blood every martyr will be in heaven and they will get their reward. i question it. i watch it on mainstream media. who's behind the violence happening in israel? i see israel held up as the cause for the problems. why? how is this happening with mainstream media? what's the deal? >> look, i think this whole issue of incitement generally is ignored. you see the results frequently of terror. israelis are being stabbed -- this is a very intimate form of violence. not like bombings, this is an intimate form of violence. there's incitement. when you hear language like that, basically -- and you look at what's happening in social media right now, which is encouraging this and creating mythologies, a mythology that the israelis are changing the status quo on what's known as the temple mount, and you actually have kids. i mean, most of those who carry out the attacks are between the ages of 15 and 25. they're not connected to any organization or group. there is no structure for this which separates it from the first and second antifattah and they think they're going up there and saying we're protecting it. the point here is unless you pay attention to what's feeding the anger, now there's a lot of things feeding the anger. i said it before. they're angry at their own leadership which they think is corrupt and ineffectual. they're seeing an ongoing occupation with a little mention of change. it's ignoring incitement. it's embedded in the political culture. unless you change that it's hard to make peace. how do you succeed at peace? you have to educate for peace if you are going to succeed. >> ambassador, thank you. congratulations on the book. we appreciate you coming in. >> at least we're past the nobel peace prize. i was thinking abbas. arafat won one. >> he did. >> there's still time. >> thank you. >> "doomed to succeed." when we come back this morning, did you get your flu shot yet? more than 150 americans are expected to get vaccinated this year. that means big business for pharma companies. we'll have the details next. at the top of the hour, treasury secretary jack lew will be talking about the global economy, the fiscal cliff and more. stay tuned, you are watching "squawk box" on cnbc. first in business worldwide. my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? 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'tis the season. more than 150 million americans are expected to get vaccinated for the flu shot this year. boo tech pharma reporter joins us with more. hopefully this season will be better and more effective than last season's? >> it is tracking better this year so keep your fingers crossed. people think flu might not affect them but it has a huge impact. between 5 and 20% of americans get the flu. it causes 200,000 hospitalizations. thousands of deaths in the united states. and a big economic impact. $10 million in direct medical costs not to mention lost productivity and days of work. >> a lot of people say oh, dwell flu, i get the flu it's not a problem. think probably don't have the flu. when you have influenza it could be a serious disease particularly vulnerable people are infant, pregnant women, the elderly greater than 65 years old and people who have underlying conditions like chronic lung disease or heart disease or diabetes. >> now flu vaccination rates have been going up in reason years along with the public health push for vaccinations. five years ago cdc recommended everybody over six months get vaccinated. so then we looked at what the business of the flu is. about 179 million doses of the vaccine are expected to be distributed in the united states this year. the biggest distributor is sanofi followed by gsk. the entire market for u.s. flu vaccines is about $1.6 billion last year according to industry researcher. sanofi the biggest with more than half the market. gfk at 12%. people think i'll get the flu shot and it will be the same shot. there's several different shots available. there's one that just has three strains of the virus. more recently they started adding a fourth strain that many manufacturers can make, it's quadrivalent. then also a mist so nasal spray you can get and high does version of the trivalent. >> in terms of the flu mist, in the past, the most recent thing i heard that's more effective than the shot. is that still the case or an annualized depends on the year >> depends on the person. the manufacturer, astrazeneca said for kids it's more effective. good news right now we're tracking pretty well this season, these strains that are include in the vaccine are the ones in heavy circulation unlike last year. >> last year was only 20% effective. >> you got to get a shot. can't get the mist. >> what's the timing? >> they suggest you get it before the flu season begins. >> when does it begin. november 1st? >> they typically say october. you can get it as late as winter and still get protection but earlier is better. >> get it now. >> then people get sick sometimes. >> i was like you. >> get the shot. >> there's some evidence. >> i got the shot. i got the shot for that exact same reason. >> get the shot. we got to go. thank you we appreciate it. coming up today's top stories and then our news maker of the morning treasury secretary jack lew will join us right here in studio. stay tuned you're watching "squawk box" on cnbc, first in business worldwide. it's more than the cloud. it's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions from a trusted it partner. including cloud and hosting services - all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next. the treasury department warning it will run out of cash to fund the government unless congress acts soon. our squawk news maker of the hour, treasury secretary jack lew. earnings alert. more than a third of the dow and 20% of the s&p 500 set to report this week. we'll kick off the party with results from morgan stanley expected this hour. and an iconic car brand set to go public. phil lebeau has an inside look at the ferrari ipo. the second hour of "squawk box" begins right now. ♪ opposite live from the beating heart of business, new york city, this is "squawk box". o welcome back to box here on cnbc first in business worldwide. i'm joe kernen with becky quick and andrew ross sorkin. here's the morgan stanley party. they missed by, not much of a party, kind of a downer, they missed by 20 cents on the earnings per share xdva and x legal so 42 cents. 20 cents below expectations of 62 cents. revenue number of 7.3 billion was below the estimate, that's xbda, that was 4.8 billion. equity was off 100 million from estimates, 1.8 billion versus 1.9 billion. fixed income which has been a fly in the interest. ment, 583 million versus an estimate of almost a billion. 954 million. >> the volatility in global markets in the third quarter which we know all these guys were dealing with this and it likes it hit morgan stanley particularly hard said it toledo a difficult environment. our fixed income business and asia measure chant banking business. they say the firm benefitted from the stability of growth management but you're talking about pretty severe miss. >> investment banking was above as well. 100 million above it. 1.2 billion versus 1.1. investment management, crappie, 274 versus an estimate of 621 million. so that went down almost 3% at this point and as trading picks up early on a monday and we'll see where morgan stanley casts any kind of pall. >> goldman had issues with fixed income too. >> breaking overnight, china reported economic growth of 6.9% for the most recent quarter. that was a .10% higher than expected but lowest gdp level since 2009. asian markets closed mixed over night. the hang seng was flat and shanghai composite was flat. this morning the market is mixed. s&p futures down by three points below fair value and nasdaq superby three points. new york fed president william dudley making headlines in an italian newspaper. he said it's too early to think about raising interest rates. he said concerns about global economic growth. aetna and humana shareholders will vote on a merger today. this deal is supported but even after investor approval there's major regulatory challenges ahead. >> let's talk about the u.s. debt limit. congress needs to act to raise the debt ceiling from the current $18 trillion. jack lew is the secretary of the treasury and joins us this morning right here on the set. great to see you. why is this -- we know how this movie ends. we've seen this movie. there's this cliffhanger. it's not a cliffhanger because things come together. are we wrong this time? >> i certainly hope you're not wrong but it's very important to remember only congress can act to raise the debt limit. i will have used all the tools that i have as of november 3rd and then we're operating on cash. think about it. we have a government of the united states, $400 trillion enterprise where swings of a few billion dollars whether you have enough cash to pay your bills. one thing people needs to remember the debt limit is not a spending commitment. it's a measure that gives us the ability to pay bills that congress authorized us to undertake. so congress has to do it. every other congress has done it. i worry every time we hit this that sometime there could be an accident and that would be terrible. >> take us behind-the-scenes. we think, the conventional wisdom with boehner where he is this will get signed up than will to be done. can you tell us what's happening behind the scene? >> i believe all the congressional leaders understand they need to do this. i think they are in a very uncertain environment right now in congress. they don't have a lot of time from now until november 3rd is just a couple of weeks. congress has to act. they have to act as quickly as possible. any time you wait until the last minute you're inviting a risk. this is not a last minute we can know with certainty. i wrote a letter last week to congress telling them the date is november 3rd. few weeks ago we thought it was november 5th. little shifts -- >> somebody said the date is october 29th. >> no. >> because of the timing to get to november 3rd? >> our best estimate and obviously it's subject to change our best estimate is november 3rd is when we exhaust our measures, things we can do to manage things, i'll run out of things i can manage on november 3rd. will that have $30 millibillion or less. the right amount of cash to have on hand is $150 billion. that would give us the ability to run a week. so, we came below 150 quite sometime ago. we were back up on september 15th. since then it's dropped from 150 to 75 and it's falling every day. we're going to get to 30 million, we believe, on the 3rd of november. >> october 31st would be best for us because in the media we can do all kinds of tricks and treats and halloweens and spooky stuff. the 3rd or the 29th can't you do 31st for us? >> joe, there are people who think we have the ability to choose what day this is. we do our very best to count the numbers. september 15th was a big day. quarterly tax payment. one very large transaction of a pension fund, military fund that to be funded. after that tat that -- tabulate where we were. >> one of the things i saw is zero interest rates, the line item for how much we spend servicing our debt is a positive thing for us. do you hope they never raise rates again? >> joe, i continue comment on fed policy. if i was smiling i sit with a smile on my face. >> i wasn't trying to out you. i hear it now. we're locked in this -- >> let me say a word about our projections. we have conservative projections in our budget if you look over the last few years we predicted higher interest rates not lower because that's the conservative things to do to make sure you're not getting surprised. our budget projections are sound. >> what's your problem with this idea of a prioritization bill. >> i don't believe the government can pick and choose what bills it will pay. you'll be in default if you don't pay all your bills. people who support priority zais they say some things are more important than others. you have to pay social security, veterans, keep the lights on in hospitals. what do you choose not to pay. >> it goes the trustworthiness of the creditors. >> once you no longer consider all of your obligations rock solid you're no longer the full faith and credit of the united states. it's not possible to pick and choose. we have about 80 million transactions a month. our system was not set up not to pay. our system was to pay. so even if there were some things that you could technically put in front of others you don't have the ability. >> we talked about this three years ago. freedom coalition, blah, blah. the administration -- is china manipulating the currency right now? it's too high. not too low. are we still arguing their currency is too low? >> i'll issue a report later today, our regular currency report, and, you know, our view is that, you know, as you look to the future there's still room to appreciate right now, downward pressure. it's as a result of policies they made and the way they announced them over the summer. i think we have to make sure that china understands that it's very important they keep their commitment to let the r and b go up as well as down and that's something we'll see in the medium term, the snapshot today is not the test. >> what was the criticism of the tpp it's too easy on currency manipulation? >> we haven't actually yet released the content of what -- >> clinton liked tpp before she doesn't like the new one. >> when you see the provisions that we have negotiated on currency as part of the conversation on tpp it will be a side piece. it is the toughest currency agreement that we've ever had in this regard. high standards, it's transparency and a mechanism to engage to make sure countries in tpp keep their word. finishing the negotiation of all the last words and language is ready, i think it's a very powerful set of tools. >> if it's a third obama term that secretary clinton is running for, is there a disappointment -- within the administration or sort of a wink that we understand exactly why she came out against it. >> joerks one of the things about being treasury secretary you stay clear of politics. >> you do support a strong dollar, i imagine? >> i don't think you'll get me to say anything different on the dollar i haven't said before. >> at the beginning of the show in the 6:00 hour we talked about a sovereign security company that said since the big meeting, the meeting with chinese leaders just a couple of weeks ago there's been six or seven hacking attacks on u.s. companies by china. have you completely missed? >> i can't comment onion goi on investigations. there were conversations about the need to have standards and for standards to be met. >> let me ask it differently, do you trust them? >> i think that as the president indicated at the time of the leaders meeting we reached agreements and now we have to make sure those agreements are lived up to just as i said on the currency matter. they made agreements on not driving down their currency. we have to make sure they keep that. in my conversations with my counterparts, i am relentless in making clear we're watching everything, and i think that's important because they care about the relationship, and they are going to have to meet their agreements in order for to it get stronger and stronger. it's not that we just put our hands up and watch afterwards. we're very, very focused on making sure that agreements that are reached are kept. >> that sound like a no to andrew's question. >> we have to make sure when they make an agreement they keep it. >> let's talk a little bit about what you mentioned the interest rates. you say you were very conservative when you're looking at the budget expecting a higher servicing cost for interest rates being higher. what is that level? >> you know, the 30 year rate is just around 4%. i don't remember if it's a tenth above or a tenth below. it's considerably higher than what you're seeing in the markets right now. i think that, you know, historically it's turned out to be very important to have budget assumptions that are conservative because it's a good thing when you're surprised by good news, not so good when you're surprised by bad news. >> going back to the fed issue. do you think that the fed should look at wage growth? how big of an issue should that be relative to employment or unemployment in the country as a factor? >> i won't comment on the fed. we look at wage growth every month when we see the numbers. it is a great thing that we've created 13 million jobs, great thing we have unemployment down to 5%. we need to see wages going up a bit if we see middle class incomes improving. there's room for some wage growth in our economy right now. i think it will be a good thing if we saw wage growth. >> what do you think, for example, last week you saw $25 million get wiped off the valuation of walmart for investing in their business, for increasing the wages of their people. how do you think about that? >> i won't comment on any single firm quarterly report, but i think there were a lot of things going on in that walmart report. that wasn't the only thing. >> mr. secretary, i got a $10 bill here. can you sign it for me. when you sign it k-you promise -- have you seen hamilton? >> i read the book first. >> it's like better than fiction. >> can you not take him -- promise me you won't do this. what about jackson? who cares about the 20? what about the 20? can't you do the 20? get rid of him. >> i'm not making any news on what we're doing. i'll repeat two things i said. first i made clear when i announced we were redesigning the currency in june we would continue to honor alexander hamilton. there's a lot of things that we're going to be changing. >> don't change it. >> there's a lot of things going on. >> whose signature is on that one? >> who is that? >> joe, let me tell you the sequence of how we pick which bills to redesign. we want to make sure our someone southern and can't be counterfeited. the $10 bill is the next one that has to go through those improvements. we'll make changes in the series it's part of. if you look at the bill and turn it over you can see there's more than one square inch of the bill to work with. >> you're treasury secretary. please. >> i think you're going to see that i keep my word. >> you will. >> let's remember, what we announced was, more than 100 years since we had a woman on our currency. >> i'm good with that. >> we're way overdo. i don't think we should wait. >> a lot of people became president. >> he was one of the builders of our democracy, builders of our economy. >> not only that. we would not have a "new york post," not a page 6 if it wasn't for -- >> how could you get up in the morning, joe? >> before you go -- >> don't push that button. >> antonio wise wrote a piece about fannie and freddie and keeping them in conservatorship. i thought we were going to push them back out in the private market. is that not the right answer? >> the right answer is to get real reform, housing finance reform where we get to a new system where we defined the risk that's being taken, not have this open ended risk that we have with fannie and freddie which we have today. $250 billion of contingent risk because we the taxpayers stand behind fannie and freddie. let's just remember that fannie and freddie failed at enormous investment of public money was made. huge damage to our economy. we continued to have $250 billion contingent liability. this notion the slate is clean is not correct. >> what's the long term solution? >> the long term solution is to have, than is something we've worked with congress on in terms of trying design housing finance legislation is to have a clearly articulated exposure of risk so that you know who is taking the first risk, you know who comes behind it an it's not this open ended risk. it's overdo. i wish we can work through the congressal process to get legislation. we're doing what we can administratively in the meantime but the right answer is not to recap and release as some say. that will not have the effect of increasing funding for infomerci affordable housing. it will increase it. the pressure of shareholders is to take less risk not more risk. >> secretary lew thanks for joining us. >> he's the only person allowed to sign money. >> see if we have one with my name on it. >> i got one signed by one of your predecessors, i think. he was a legitimate alexander hamilton. >> an american hero. there's a tendency to assume what a decision is before -- >> i'll try to sway you pure and simple. i think i've succeed. >> i'm excited about the things we're working on. we'll announce them by the end of the year. we'll honor alexander hamilton, a woman will be on our currency and we're going to have some kiting news. >> come on back on that big day. thank you. >> thanks. when we come back this morning ferrari preparing for an ipo. phil lebeau will tell us how it fits in clielhrysler-fiat's gra staj. and we'll ask john barrasso about the looming debt ceiling. stick around, "squawk box" will be right back. box". futures right now indicated down about 30 points or so. interesting not piggybacking off some gains we saw earlier in europe but maybe europe is responding to friday and morgan stanley, probably didn't help. we'll get to that in a second. among other earnings this morning, valiant pharmaceutical beat estimates by four cents. revenue is in line. drugmaker raised its full year for sales. hasbro earned $1.58. revenue was in line with forecasts, results were helped by sales of "star wars" and jurassic movie franchises. lean in equal pay ceo barbie. >> good idea. sorkin, i know you're with me on this. >> i love it. i don't understand why you haven't been in touch -- >> three even. >> let me tell you about some other news. oprah winfrey is take 10% stake in weight watchers and joining the company's board. winfrey said she believes in the program and wanted to be a partner in the company's evolution. shares of the company has fallen more than 40%. you wonder if oprah still has got it. oprah effect. good forea 38% gain in the stock. stock trading at $9.39 after closing at colors $6.39. >> is she buying in or getting some of these things? >> i guess she's taking the 10% sake meaning she's getting it. >> she's not buying it. >> i can't say specifically but that's my guess. >> ecology up we'll talk more about that. an iconic car brand going public. phil lebeau talks about ferrari and what it means for chrysler. and then the looming debt ceiling, proposal for oil exports. 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(interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? iconic car brand set to go public this week. phil lebeau joins us from chicago with the details of ferrari's ipo and then i have some questions, phil. i have some questions about this because everybody would like one some day, i think. >> i think so. you're a porsche guy. we just got the most updated s1 coming from fiat-chrysler regarding the ferrari ipo. pricing between 48 and 52. final pricing tomorrow. trade is expected on wednesday. i know a lot of people want to talk about ferrari but you have to look at this from sergio's standpoint. this is part of a bigger plan when it comes to fiat chrisser and growing fiat chrysler. this ipo will raise $5 billion that will go directly to iffia fiat-chrysler that will go to pay down some debt. fiat-chrysler will be more of a global automaker targeting 7 million in annual sales. they are at 4.8 million last year. in order to get up to 7 million. it's all about jeep. look at the growth under sergio of the jeep brand. 276,000 when the auto market was bottoming you want in 2009. it gross to 1.02 million last year. by adding factories in brazil and china, 1.9 million in global sales by 2018. folks in the auto industry, that's astronomy cal growth. jeep is one of those woorld wide brands. the jeep sales in north america, about 73, 74% of where they sell their vehicles. they got tons of growth opportunities elsewhere. take a look at shares of fiat-chrysler out paced ford, general motors in terms of share growth and percentage of growth for those shares. now the sque whether or not this ipo, guys, can kick start fiat chrysler as an automaker to the amount of volume it needs by 2018 because they are leveraged to the hilt. >> that's amazing, phil. jeep is iconic. you know, it's an suv and you got fuel prices. can you just -- my question about ferrari, what's the range? it's ridiculous to call it a starter ferrari. there is one that appeals to people that couldn't own them before. what is that like 200? how much is that one? >> what the both base model? >> i don't have the exact price tongue most base model but you got to go lower than 200. >> how about one of those red ones that you see in beverly hills go by -- >> now you're going up there. you're going into that area of above 100,000. it gets very thin very quickly for cars above $100,000. sergio thinks they can get that up to 9,000 or 10,000 in terms ofal producti of production. you add production you'll dilute the brand. sergio says wait a second there's plenty of room for growth here. you can expand up to 10,000. >> so you don't have the exact numbers, you can get them maybe for the next time but one ferrari that's a starter ferrari and it's nice, amazing, loud, beautiful. then there's, there's the other ones you think of as ferraris and those are like -- those got to be like three or 400? >> no. you're getting -- the collector ones get there. >> no. ferraris that, not the one -- >> the top of the line? joe i'll get the price on the very top of the line. >> up might be surprised. >> just how high it goes. >> i think it's over 300. i'm almost sure. thank you, phil. >> you bet. we told you earlier that oprah is take 10% stake in weight watchers. we were trying to figure out if she was given that stake or bought it. she bought that 10% stake. she's getting options to buy another 5% to acquire an additional 5% of the shares on top of that. she will be a member. she's joined the program as part of all this. she will also be a board member and adviser and, again, an owner with this stake that she's taking today. >> among the other stories front and center mcdonald's added to the global focus. the firm is removing dunkin' brand. analysts call this most important pipeline drug for shire. >> choppy trade in asia after china reported its worse read on gdp. we'll talk with chris wolf right after the break. >> right now take a look at the u.s. equity futures. slightly lower looking at a mixed picture. dow futures down by 32 points. "squawk" will be right back. ♪ welcome back to "squawk box". today is a significant day for all-star wars fans. movies to the new movie "the force awakens" goes on sale tonight. >> let's talk about growth in china. slowing to its worse level since the financial crisis. they came in with gdp of 6.9%. believe it or not still a lot better than economists expected. markets in asia closed mix after a choppy session. back here in the u.s. we're kicking off a busy week of earnings including 12 dow components and a fifth of the s&p 500. joining us now is chris wolf. chris, we had a lot of people who have come in and say things are looking better but you think the markets are pricing in too much recovery when it comes to earnings. >> they are pricing in a lot of growth pup have some big events coming up. you have the fifth plenary session of the 18th people's congress in china at the end of october. number one as the secretary indicated you have budget issues. you have the debt ceiling issues. i want seems to me a lot of things need to go right in the very near term. after a big rally we had and where we are in earnings season, we're looking at an earnings recession and markets look a little bit ebullient. >> you've been unhappy where stock prices have been. >> where we are today, the guidance hasn't improved. we're going into 2016 with weaker energy, materials and we don't have a lot of clarity on china's fiscal situation. i think there's room to be cause shourks thoughtful for clients going into year end how they rebalance portfolios. you have big moves in places that affected portfolios. to rush back into them. etf trends have been pre-mature. >> what we've heard consumer still doing well here not our economy that we're worried about just yet. are there areas within our market you like, or broadly speaking you're looking every where? >> the story i think is go domestic. domestic not just u.s. but domestic in country. you see consumers around the world, u.s., germany, to some extent japan in good shape. china different story. the reality is the consumer take globally is in a pretty good place. the corporate take not such a good place. so that split is happening globally. our sense is that picking up on those trend, health care story, some part of the consumer story, telecoms around that, a little expensive. but waiting it out until tend of the year. >> when you say that the market is pricing in too much growth is the market pricing in growth or pricing in the idea the fed will be here and be very easy for a very long time? >> that would require a failure of fiscal policy in washington, and some kind of failure in china that october period to not announce a new five year plan. for the market to price that in it's expecting washington to do nothing. >> that doesn't sound good. >> you're stretching valuations here. you have year-over-year growth that's negative. guidance coming out of companies is weak. the time for caution and just thoughtful year end potioning is the right one. >> does that mean keep things in cash. >> where we are today we're not big overweights in allocation. equities. not big underweights on balance. we like dividends, income, margins in the united states are very good. we see that starting to pick up in japan. we've been upgrading portfolios through the volatility. >> what's your worse case scenario for texts markets in the u.s.? should be down what, in your view of the world. >> talking to our technical guys say somewhere in the 1800 range and if things get bad in washington could be in 1600 in s&p 500. that's dire. the reality is fundamentals and not a lot of alternatives. fundamentals mean good margin story people pushed on against equities. >> did you like stocks when they were down 10% from where they are now. >> we haven't changed our potion a lot. so from our perspective we tend to look out at least 12 to 18 months and our longer term view is much more modest returns. single digits around ikts. >> do merrill lynch clients or financial consultants have more ferraris? hopefully the clients? >> our clients. >> you swear? >> where are all the customers. >> we try to do a good job for our clients. >> in this day and age not too many financial consultants. starter, got to go over. robert frank. starter ferrari are over 200 and then there's one for 379. but if you want seats, then it's over 400. that's what he said. yeah. >> probably are very nice leather. >> you do sit pretty low. >> you got to be asked to be in that club. it's a pretty exclusive group. >> andrew, what's that great quote? >> we can't use that. >> if you can spend $400,000 on a car you have that kind of money. >> you have more money than you can probably use. >> you need a lot of money to spend that much on a vehicle i would think when you can get what's a zipcar. yeah. thrifty does pretty well too. >> chris, thank you. >> coming up, john aboutbarrassl join us. is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most. everywhere you look, it strategy is now business strategy.? and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now... to what it needs to become. it's more than a nit's reliable uptime. and multi-layered security. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. our next guest is pushing for congress to thrift ban on energy exports among other things. wyoming senator john barrasso joins us now to talk oil, the debt ceiling drama and more and a member on senate committee on foreign relations. you have friends in the house, maybe you can tell us about what's going to happen in that chamber. but let's start with what you came on for, you're from wyoming. you fully think this is something we need to do but wouldn't it be vetoed? >> the president has threatened to veto. energy is a master resource. we have such amounts of it in the united states. we ought to be using this to help our any and undermine vladimir putin. it's fascinating the president of the united states is allowing iran to export their crude oil, it's going to be up to a million barrels a day but blocking the united states from doing that. >> what is he being told by people that sort of are running that party right now? >> they don't want any energy that has any carbon base to it to be used anywhere in the world. that's really what's behind it. it has to do with carbon based fuel. that's the democratic purist approach and this president and others are being held hostage. >> we use to it fly planes. we use to it fly air force one which parental he likes it. >> president's favorite perk and going away but in spite of all that -- >> becky what's your reasoning? you want to keep it here? hoard it here. >> he wants to use everybody else's and be the only ones left it. >> we have an abundance here. we ought to use to it stimulate our economy. we're not allowed to export. when the president off towers veto threat and he says it needs we need to get to solar and wind, the bottom line is that they don't like to use any kind of carbon based fuels. >> the prices around the globe are low. because you were exporting it wouldn't bring the prices back up to bring the jobs back. >> there's a disconnect between the like sweet crude oil and refineries in this country that aren't prepared to use it. across the board it looks like gasoline prices in the united states could drop if we could export because that would lower prices. >> okay. you saw secretary lew. how will this play out. you hear things from the other chamber. boehner will be there long enough to get around this, right? republicans didn't have a great experience with it the last time when the threat of the government shutdown was used against them. >> i'm committed we do not shut down the government. the united states doesn't default on our debts. take a look at what's coming up, and you saw this -- it's all about the spending. we're spending too much. tax revenue generation coming in all time high. record high. >> you're going to use the threat of that to make significant changes. >> debt ceiling times are a time to hit the pause button and say how did we get here. we got here by spending too much. the president added $7 trillion to the debt since he's been in office. we have a debt of $18 trillion. becky you're right to ask about interest rates because if interest rates go up you know what that's going to do to what additional money we have available. you heard the democrats talk at their debate about spending more. you heard it from hillary clinton, from bernie sanders. his proposal $17 trillion additional spending in ten years. when you deal with the debate next wednesday night that's a hot topic for your discussion from colorado. how do we cut the spending. things that worked have been the budget caps, the sequester that limited spending yet the president wants to bust through those. he's threatened to veto the national defense act that's come in at his number. the problem is he wants additional money to go for the irs and epa. these folks are addicted to spending. >> okay. do you have any insight into where paul ryan is right now? what do you hear today about that? >> no more than what you've been reporting. there's nothing more on that. >> you couldn't know as little as i've been reporting on this. just knowing -- we haven't reported anything. the latest is that -- >> the latest he's considering it. but he would not make any promises to the freedom caucus ahead of time. he's not going to work with one arm tied behind his back. >> he needs to get commitments there will be cooperation from members of the house otherwise he'll find himself or any speaker fine themselves in the same situation. the house doesn't need to hear from the senate how to run their own business and they will make their own decisions. they are all coming back today. >> let's say the last republican president, would the freedom caucus still prevent things from happening, do you think? in washington? >> you win elections by uniting people not dividing. we need to actually get the country moving again, get rid of the regulations. that's what we ought to be doing opinion that's how you get people back network. that's how you make america strong to be the strongest and most respected nation in the country. there's so many things going on around the world where we ought to be focusing our attention. what we've seen the world a lot less safe and much more dangerous with this president and where we've gone under the democrats. we need to change direction. >> do you think ideological purists in the freedom or wherever, whatever group you want to call it, do you think that they consider the general election and whether they could play spoiler and does that matter if their ideological purity is so important that trumps who the next president is even if it's a democrat then damn the tore period dose itped. >> i go back to the bill clinton approach, if you can't get the whole loaf take it a slice at a time. i'm from wyoming and very conservative. people in wyoming know we want to make incremental progress heading in the right direction. >> you need be elected governor. is that true? >> you want to run so you can govern so you can put your policies into practice. >> you do need thereabout to do things. >> that's what the majority is about, being able to put your policies into place. >> sounds like a rino. god, look where we are. >> you really sound like a rino. >> thank you. senator, thank you. >> when we come back details on this morning's big movers including morgan stanley. also coming up at the top of the hour in depth conversation with the ceos of macy's, dick sporting goods and gilt groupe. gilt groupe who says families have to share data? these guys, that's who but at t-mobile you can get four lines with up to 10 gigs of 4g lte data, each no sharing and just $30 bucks a line 10 gigs for each and every one of you we'll even pay your family's switching fees up to $650 bucks per line so you can get 10gigs for all, today and it's only from t-mobile . welcome back to "squawk box". facebook launch agnew weapon in the war against hackers. the social network will notify users if they suspect their account has been a targeted by an attacker or nation state. it's focusing on state sponsored attacks because they are more advanced and dangerous than other. company wouldn't say how it can distinguish between a state sponsored attack and smaller scale attacks. but something to watch. >> i looked around and haven't seen it yet. when we come back this morning a read on retail from the ceos of macy's, dick sport goods gilt groupe. it's a special in depth conversation and it starts next. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you. we heard you got a job as a developer!!!!! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake. so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is? ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ the future of retail. a special "squawk box" conversation with three leaders who have paved the way for the industry. macy's chairman anne ceo is here. we'll hear his take on the push for brick-and-mortar stores. they have a bigger online presence as they look to take on the likes ever amazon. dick sporting goods ceo on who is winning the battle in the locker room. nike or under armor. >> plus ceo of gilt joins us to talk about the drive to make shopping on month bail breeze from technology to the consumer, we cover it all as the final hour of "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box". welcome back to "squawk box" right here on cnbc first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. we're 90 minutes away from the opening bell on wall street. take a look at the futures. the dow looking like it will open down about 50 points. nasdaq down by four woints and sapp sapp off by five points. let's check the markets in europe. you're looking at a mixed picture. dax up marginally and ftse 100 down just a bit. >> morgan stanley's earnings and revenue falling far short of what the street was expecting. they cite ad number of reasons including lower trading activity, volatility that was happening in the third quarter. that was a huge impact on fixed income and that's what the company talked about when they came in with those numbers. you can see right now that that stock is down by about .7%. it's added some pressure to stocks this morning. ferrari is getting ready to go public. i want sees its ipo pricing at $48 to $52. fiat-chrysler will offer 72 million shares. global news, china's gdp expanding 6.9% in the third quarter. slowest rate of growth since the financial crisis. however it was a little better than the street had expected. earlier this morning we were joined on set by treasury secretary jack lew. among the topics we talked about, china's handling of it currency. >> i think we have to make sure that china understands that it's very important they keep their commit pentagon to let r and b go up as well as go down, and that's something we'll see in the medium term. the snapshot today is not the test. >> talked about a lot of stuff. did he say he'll keep alexander hamilton -- >> no he said they would honor stand hamilton. he gave us a hint. remember there's a back side of the bill too. >> compromise. >> maybe they keep both. >> up path woman and a man on. >> keep measure on the front. >> on the 20s, aren't they -- i know with you they are more common than 10s. >> they have to do the 10 next is for counterfeiting. you have to protect the currency. he said he'll honor -- >> before the play they were going to do it. >> he read the book he said. >> i'm reading it too. amazing guy. few stocks more influential than a lot of presidents. i won't mention any names. few stocks on the move today. let's start with this one, toys tied to star warriors and jurassic movies helped hasbro. they are six cents above estimates. valeant raised its full year outlook benefiting from organic growth and a series of recent acquisitions. today "squawk" conversation for the next 20 years the future of retail and the consumer. terry luify -- we have the ceo dick's sporting goods, macy's and gilt. where do we stand currently? i know there's been a lot of questions about the health of the u.s. consumer. terry, the last time you were here you talked about southeast issues hitting consumers. how are things transition since then? >> as i said last time and i'll say it again one of the biggest issues for companies like ours who are based in all the major cities where tourists travel to the strength of the dollar is good in some ways but not so good to america when tourists are not coming to america. the ones who are here not spending in a significant way. the strength of the dollar has some negative ramifications to retailers. >> does it help at all on the margins if the dollar goes further? >> over time. we're in a business we don't buy things today and sell it to you tomorrow. there's a window of time that takes place. over time that should benefit. largely the manufacturers will benefit the most because they are the one who selling to the retailer. >> what about you folks? what your seeing so far in terms of the u.s. consumer? >> we're all waiting to see how the holiday shapes up. i think she has been trained to seek a great deal, apartment great deal, experience a great deal. she's been conservative. holding back a little bit. holiday, we saw october some pretty good numbers. let's see. >> you sound hesitant. >> you know, i think anyone always right before holidays holding their breath a little bit. that's the nature of the retail cycle. we've been seeing positive trends in october. but watching closely. >> what kind of positive trends? >> when we launched fall, of course in september, october, we saw some nice seasonal line and she's ramping up her spending so we'll see growth in october. hopefully that's a harbinger how the holiday will shape up. we have a physical storeroom where we're inviting her to come in and try things on. that's working quite nicely, dining relaunch of the brand. a few new things in store. >> how representative of your customer versus your customer, both looking for discounts to some degree. i imagine everyone want as deal. value. how district attorney you think about that? you guys are both on the same set together. >> terry's consumers cover the world from me to many other customers. our customers tends to be more urban. a bit younger. affluent. more of an aspirational brand. i don't know anybody who doesn't shop at terry's. >> we're broad base who we attract. we're the seventh largest internet company in the country. we have the physical and strong growth in the online business as well. to me that's how the consumer is shopping not just one channel, it's really a combination. i'll start with my phone but then i want to touch the goods. it's the combination of experiences. >> how much do you hate when i go to your store, touch the goods and then go to her website? >> i hate it very much. but over time, you know, i believe that if you touch us enough and you touch our people in our stores you'll come back. >> let's talk about the -- >> you go to jail if you touch the people in the store -- don't say that. even if you don't buy you're in there handling all their merchandise. >> that's okay. >> occasionally you see something in the store that you want aspirationally and see it on sale. >> i should be buying it at a discount. >> over time we'll get you. >> there's a moral issue about whether you're supposed to do that. >> ed, why don't we talk- >> i'm there all the time. >> i appreciate that. >> i would think that what you see in your stores is a clear reflection of the economy. when things are doing well people feel this is something they can spend on. >> there are parts of our business that are like that. our economy driven and then other parts that are just kind of what's happening with your kids. and we've also talked, there's big parts of our business that will be good probably most of the time because kids grow, they are playing sports, always a game on friday night, always a basketball game in the winter on saturdays, and, you know, we talked if your 6-year-old daughter or 8-year-old daughter played soccer last year and she needs to play in soccer again she wore a size 4 last year, she wear as size 5 this year you don't put your arm around her and say business is tough curl up your shoes. >> i'm on my way to dick's for that reason. >> the biggest apparel is nike. under armor is trying to close the gap. stores weren't apparel retailers. i go into dick's you have everything else. but most of it now i see is wow i would like that. i see all kinds of under armor competing with nike, competing with adidadidas. >> yoga pants. >> you have this weird system there's ten cash registers and a line of people trying to get out the door. dick's changed the way sporting fwoods are sold. >> we think so. we had some when nike and under armor. the business has transitioned from just equipment to apparel and footwear. >> it's sweet spot because as you know in terms of content there's nothing like aggregating eyeballs. everything is back. hockey is back. how about these mlb playoffs. unbelievable. >> cubs and mets. >> people arrange their life around march madness. >> nobody has mets products for cubs playoffs for a long, long time. this is all new business. >> hadn't you ordered up stuff for the very end of the season stuff you didn't have in the stores before. >> around cubs and mets. yes. the playoff merchandise is important. we got these models we can take a look at during the year and if the cubs get in it will be this much business. we think we'll do this much business in each of these categories. >> you probably print up a bunch of bengal/tigers. >> joe, remember i'm from pittsburgh. >> yeah. no love lost. great rivalry, obviously. >> both terry and michele have talked about how consumers are looking for a bargain, value. i've gotten at least three coupons in my e-mail from dick's in the last week. why is that? if you have a store where you know people are coming in for a certain amount why do you have to offer discount? >> it's still a competitive environment. astery said they are looking for value. we want to provide our customers with the best value that we can. we know it's a competitive market out there. we're not the only place you can shop. people think that they got loyal customers. we got a loyalty program which obviously you're on and we do believe that loyalty is define in retail as the best alternative. >> i'm on my way. >> bring that coupon. >> i am. it's in the phone. >> we're all trying to figure out how to make sure he's excited or he's excited on a regular basis. you can do that by innovating the product. dick's has done a great job of innovating the experience, making her want to come in. providing exceptional service. making sure the service experience is such that she wants to come back. i think that becomes -- doing that in an authentic way is more and more critical for that younger customer. making those authentic connections, showing her there's a reason to come back. our top 20% customers come back 22 times a month. all across all of our customers they come on an average of eight times a month. >> they are not buying something necessarily. >> some of it is entertainment. some of it is the entertainment value of shopping which has always been about fun, sornl, entertaining. >> fashion question. you can participate in this too. there's been an argument made that over the past couple of years we haven't seen new fashion and that the new fashion accessories the phone and all the money is going towards this as opposed to this and except maybe sports. sports stuff -- do you buy that? is that real? do you think somehow the designers are not doing enough to somehow come up with whatever the next great, you know, bell bottom jean is or whatever it's supposed to be. >> he's so on top because the flared jean is going to be here for the spring season. >> but not for guys just to be clear. >> they are back. therefore buy it. >> what i think, we've always been in this cyclical business. there's trends and people say people aren't wearing suits any more. they are not wearing this any more. over time you'll constantly see this reversion back to what people are feeling most comfortable in. suit business, by the way, men's dress up suits has never been better. that business has been very strong. for a while suits are dead. going to casualization. at the same time as ed was saying the athletic apparel not just for athletes, but spectators as well. this is just a business that's cyclical. fashion will continue to change which is an important part of our business. you'll see the emergence of different fashions particularly in the first quarter of next year. >> i agree. i came from the shows here in new york. there's always something new. always something cutting-edge and how things are combine and wearing a prada dress with nike high top wedges. fashion is how you put it together, how you wear it and confidence to put it together. the digital environment has been great in inspiring people to have their own sense of style. >> the other thing i'm excited about one of the best things about you guys being in manhattan besides it's on my way to new york i'm looking out these windows and looking at all these coats people are wearing. that's very exciting to me. i get excited about coats. >> cold weather. >> these guys are waving at you. they are wearing coats. that's my sweet spot. we'll sell a lot of coats, a lot of sweaters. >> the weekend was unbelievable. good cold weather. i love it. i also have stores in california where it's 90 degrees. but it's got to be -- when the weather does break, our business, you know, changes like that. people shop for this moment when the weather -- as if they don't think it will get cold this year until it actually does. >> not supposed to get cold any more. >> terry, what do you think about the holiday season coming up? >> i'm with michele. we're in an unfair business. we work really hard 12 months a year. it all comes down to the final countdown from early november through christmas so i'll sit back and reserve and say we put in place a very strong presentation and offer to our customers. you got some great marketing we'll surprise with you. it will be fantastic. pull your heart strings a little bit and be more brand driven. >> you should have a parade. >> we'll do a parade this year. >> do you think -- >> i thought about it. 88 years ago i thought about it. yeah. >> we'll continue this conversation. >> good idea. >> i got to help you with other stuff too. coming up, much more from our special retail guests including a look at technology for a better shopping experience and how they are keeping your personal information secure from cyber attacks. here's some of the top retailers in term of sales. walmart tops list of more than $500 billion last year but only made a million on that. "squawk box" will be right back. . we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton. sometimes they just drop in. always obvious. 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. welcome back to box. futures right now are still indicating lower and worse than before. morgan stanley's results were below expectations and market started out a little bit weak right at the very beginning of the pre-market trading and actually europe was pretty good. i don't know if it still is. microsemi offers $2.2 billion for pmc-sierra. >> they talked about this in the earnings call friday. not a huge surprise but today is the actual day. >> hasn't been above 29 in i don't know how long. but it's been quite a while. >> halliburton earnings beating the street. company dealing with slumping demand for its equipment amid lower oil prices. >> still to come this morning the week ahead for investors and we'll take a look how technology is driving the retail business into future. "squawk box" will be right back. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. welcome back. another busy week ahead on wall street. booim is reporting today after the bell. analysts say current sip headwinds, pricing pressures and declines in software sales will weigh on overall top line growth. make sure you watch for it. check out some of the oerngs we'll be getting this week. there are 101 s&p 500 companies reporting this week and 12 dow industrials all set to release their quarterly numbers. general motors, coca-cola, mcdonald's, google's new alphabet, amazon and microsoft those are just a few of the names. a very busy week. >> the 2015 world wind suit league concluded in central china yet. eight contestants who paired up to jump off a 4600-foot high cliff. my application came in too late. they only had room for eight contestants and finish a one mile of gliding in the mountains of central china. a man from the u.s. claimed the championship by surviving. no. that's not going to happen here. terry, for us it's like big yawning bunkers or -- right? no, sir are dangerous. >> to look into -- >> that's plenty of extreme sports for me because you can't -- you get up against the edge, play it out backwards. >> absolutely. >> i want to return, not that you're any good because you're a great ceo, you probably haven't played in a couple of decades. check on morgan stanley, stock is down sharply after reports of a big business on earnings and revenue. macy's ceo, dick's sporting goods ceo and gilt ceo on keeping your information safe, mobile shopping and how technology is making its way into stores around the world. "squawk box" will be right back. (vo) what does the world run on? it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... ...in this big, bold, beautiful world. it's more than tit's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions from a trusted it partner. including cloud and hosting services - all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next. >> too much energy. >> welcome back to "squawk box," everybody. let's get a look at what's in the headlines this morning. we'll get the latest reading on home builder sentiment in 90 minutes. national association of home builders is expected to report moitsly index was unchanged from a month ago. also oprah winfrey is buying 10% stake in weight watchers and also going to become a board member. good for a big gain in weight watchers shares. that stock was up the last i looked by, wow, up even more than that now, up 34%, up by 74%. she's buying 10% of the shares. she gets options for another 5% of the shares outstanding. we're going to point out that stock was under $400 million. she's a board member, a member of the club and zwroing change some of their programs based on what she does and what they say her ability to reach out the people. >> nice. socially responsible. nice she's doing that, i think, right? >> she says she wants to become a member. still no word on the medical condition of united continental ceo oscar munoz. he had been hospitalized but didn't say why. various reports said he suffered a heart attack but there were no details on how serious it might have been. >> yeah. this is where you start talking about what is the board's responsibility to shareholders. >> i don't know. >> how do you balance that with privacy concerns. >> my guess is that we'll hear more in the next week or so and hear more about it. yeah. >> big miss from morgan stanley this morning. mary thomas just getting off a conference call with the company's ceo. i didn't see walking dead last night. don't say anything that happe d happened. >> just because you think i look like one of the zombies. yes, it's true. i want the show to bring up the pumpkinstein next to your face because i think they modelled that off of you. >> let's keep that off the air. >> becky, he started it. >> you started it with the pumpkin thing. >> go with morgan stanley. >> the company had a tough quart missing earnings by 20 cents a share. i just spoke with the ceo. just a couple of headlines from the conversation i had with him. the third quarter was marked by volatility, decline in asset prices as well as he said a decline engagement because of the uncertainty in the markets. he said the company didn't see any kind of pick up in september as you typically do in the third quarter. he focused on thick. they are going to continue to do or control what they can meaning balance sheet and expenses in that area which was a very, very weak performer for morgan stanley during the third quarter. also just mentioning a couple of other things people watched the comp ratio for the institutional group or investment bank was 38%. that was unchanged from the second quarter while wealth management was 56% slightly above those levels even though the company brought overall expenses down in the third quarter from last year's third quarter. i should note he said retail client activity keep in mind this is important because wealth management is almost 50% of the company's revenue. in the third quarter was muted. institutional client activity a number of things that reigned back activity remain in face. again the conference call with analysts is beginning right now. we'll have headlines on that later in the day. joseph, back to you. >> mary, thank you. appreciate it. you're doing this all day. >> i am. >> this is the worst that we've seen, i think. i don't understand why. >> well, the thick was very bad. they had weakness in their merchant bank as well. they had a private equity funding china. they saw declines there. kind of a broad based private equity fund and so they had to do a reverse of the carry so that hurt as well. they got hurt because of the equity underwriting or excuse me underwriting activity decline as well overall in the third quarter and the company took a hit on that. m and a was good. >> after the crisis this really was kind of a zombie company too. >> after a post-crisis, yes. they reworked it again with that big part of their business in wealth management trying from provide stability but certainly wasn't enough to offset the weakness in their investment bank. >> want to get in that zombie. mary, thank you. see you later. this me? >> yes. >> oh, look at that. that's what i was waiting for. we're back with our special "squawk" conversation for the next 20 years focusing on retail, addressing the needs, services, delivery expectations of the millennial shopper. ceo of macy's, you love millennials. >> we want to. >> okay. >> ceo of gilt group and chairman anne ceo of dick's sporting goods. there's time. they can come around. they won't be millennials forever. self-absorbed. living at home. >> they are a different customer. they have grown-up with a different set of experiences, different technology, sercht expectation of service, delivery, that they can get online at any time. they can price compare. talk to their friends. if we're completely wrong to expect her or want her to change our job is to innovate to meet their needs. they are growing up. i was just out with apple looking at the apple tv and talking about the apple tv. they want to upload this dress on phone, have it on half a screen and cycle through a variety of shoes on the other side of the screen to see what i think will match. so much innovation, so much power in the data and her expectations are higher. we got to meet them. >> millennials leave their electronics to do any sports? do they come into the buy sneakers. >> they do. >> not in the basement on facebook or something? >> the millennials do so many different things. they have such a broad range of interests whether it's technology, sports. we're selling an awful lot of baseball product, athletic apparel, running shoes. these young men and women do everything. >> the issue have with them is that they are way cooler than us. >> they are. youth is wasted on the young. you can tell. just jealousy. >> part of the problem with millennial from a retail perspective they like experiences more than stuff. >> why is that a problem? i think it's a good thing. it's good thing unless i'm somebody trying sell them stuff. >> particularly if you have a physical presence. more and more you'll see young people, you know, shopping together, shopping as an experience and i think the retailers are providing that entertainment and experience as well as just selling them product. >> they need stuff for the experiences. they love experiences. my son is hiking killimanjaro and to go do those things he needs stuff. he has to buy jackets and boots and all that and these experiences they need things in toward complete those experiences. we're in a pretty good spot for that. >> let's keep broadening the definition of experiences. if we introduce a brand from europe that that customer hasn't seen before and we tell the back story or even traditional briends like martin greenfield here in brooklyn who hand sews all of his suits here that's a story, right. when you put on a martin greenfield suit and you know there's a back story to that, that's authentic, it means something. >> technology is connected to clothing. more than ever. we just opened the lower level of macy's herald square. taken us four years to renovate, this largest renovation in the history of retailing. i'm proud to say. but $400 million, it's basically done. we finished the lower level. it's all about millennials and technology and all about that whole youth experience, you know. and everything from -- >> how so >> everything from 3-d printing machines down below to products like fit bit which all of us are using today to monitor our health and monitor our fitness and exercise and the like. but it's so much technology driven into the experience today, virtual mannequins. it's changing the dynamic. frankly as i said the experience of shopping. >> what we'll be doing is we have our mobile app tying into these open architecture, map my run, fit bit and our mobile app is part of our ability to connect with these customers. we'll give you reward points for every mile run, every activity you do. so you can get these rewards not only just from spending money in the store but also from going out and doing those activities which we think will being a great. >> walmart had that awful forecast and you saw it. we're trying to decide whether the consumer macro concerns about that were justified. do you see anything -- then i was going to -- >> walmart story was one of investment. >> true. >> the challenge for walmart right now, how do you change that ship? how do you move the ship in a new direction. >> on flat sales. >> on a scale of one to ten, i was going to tie this back to interest rates too. when you can't save any money, you know, when you can't get paid when it's people that own assets and we've talked about, you know, all the asset people have gotten rich and luxury good makers when there's nothing left over for anybody else do you see it? would they do better? if interest rates go up at some point and people can save again or not? >> it's hard to say. because the truth is that lots of companies like walmart or the off price guys in particular should benefit from the low gas prices. start with that. that's gigantic raise if you will for consumers. where did that go? part of it, the good news, part of it is it went to savings. consumers are saving more today than they have been in the past. so they have the ability to spend if they choose to do so this holiday season. i'm counting on them letting go a little bit of that savings. >> so they are not -- the jobs picture for young people isn't great either and there's a lot of things to want. a lot of apps to want. a lot of things that i want a decent job to able to fund my experimental lifestyle. >> i think the job picture is getting better. the consumer went through 2008, 2009, got burned badly, pulled back a little bit especially in housing and that burned. pulled back. saving more. sway good thing, frankly. you know, letting go of those reigns a little bit. the job picture has gotten better. >> is it above 5m in terms of the consumer? >> i'm not sure. one thing that does puzzle me is that while productivity is solo and unemployment is solo -- >> that's what ben bernanke said. >> me and ben chat about these things. that's puzzling to me. there should be unanimous verse relationship if productivity is going down doesn't that mean there's a need for less jobs. so that's the one statistic that i still do worry about. but, you've seen consumption grow but you've seen it grow in certain categories. you mentioned, joe, technology. certainly people are downloading and taking on apps and netflix and the like. that's new from five years ago but you also see them buying housing, cars, other things. those purchases are going to be done. at some point in i'm you don't need another house or another car. when those purchases are done it will open up for us. >> people will only buy what they need. if you don't need it you aren't going to buy it. they got burned and haven't forgotten. you have to really compete for them as much as you did before just because they got more money in the pocket. >> try on a wing suit. >> i'll let you know. we get you one will you try it. >> i'll jump off the highest building here. >> we will have more from our special guests in just a little bit. up next, those more banking news this time from deutsch bank. s&p futures up by nine. nasdaq down by 11. "squawk box" will be right back. n tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. the great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families of modest income safe and good accommodation. citi got involved very early on and showed an enormous commitment. and that gave other investors confidence. citi's really unique, because they bring deep understanding of what's happening in africa. i really believe we only live once, and so you need to take an idea that you have and go for it. you have the opportunity to say, "i've been part of the creation of over 27,000 units of housing," and to replicate this across the entire african continent. welcome back to "squawk box," everybody. we got some stocks to watch. deutsche bank announcing a restructuring that will split it's investment bank in two. the company removing some of its top executives. mcdonald's added to the global focus list at credit suisse. keep an eye on shire. company won't approve the medicine for dry eye disease. analysts call this shire the most important pipeline drug. nbc news is reporting that the government will announce plans to require drone own towers register with the department of transportation. this is a response to rise in close calls between unmanned drones and commercial aircraft. i think it's a pretty good idea. when we come back this morning, jim cramer from the new york stock exchange. check out the futures. they have been lower all morning. dow future up by 67. s&p off by eight. "squawk box" will be right back. take zzzquil and sleep like... you haven't seen your bed in days. no, like you haven't seen a bed in weeks! zzzquil. the non habit-forming sleep aid that helps you sleep easily, and wake refreshed. because sleep is a beautiful thing. when a moment turns romantic why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. get down to the new york stock exchange, jim cramer joins us now. part of the weakness is morgan stanley. jim, can you point to the real problems there? >> it's many. wealth management not that good. gee, their business model was very good when it came to the justice department looking at banks. but not in this marketplace. i'm surprised. i know that mr. gorman is talking about he'll address the areas of underperformance. he didn't say area of underperformance he said he'll the areas, not area. and remember last thursday goldman reported not great quarter, but this is like i hate to say it, but this is like not not great versus goldman. and i'd love to hear what they have to say because i can't understand for the life of me how they could be this bad. >> where is the game tonight? >> it's in philly. >> are you going? >> yeah. never miss games. >> that will be interesting to watch. it will be a good one. i wish i could stay up. >>le it be real good. as long as there is no fake punts, no onside kick. no gadgetry. i don't know what that was last night. geez, it was the colts' to win. >> you are super human. joe is complaining that we can't stay up late enough to watch it on tv. >> you should be watching cincinnati. you got the panther, cincinnati, green bay. >> they're doing worse because joe is off the bandwagon. >> well, perfect. they look like the miami dolphins. >> did you see michigan? >> oh, i watched it over and over. couldn't believe it. >> did you see san diego yesterday? >> yes, i did. how many yard he did he throw and that is not the ticket. >> that guy was so open. >> it killed me. to see that kind of -- i mean rivers, you know -- >> nothing against green bay. i don't know why we -- because they're undefeated. >> they're befnching lacy? i'll take him. >> thanks, jim p. when we return, what shoppers and investors have to look forward to this holiday season pd. and the three big mutual fund powerhouses. ceo oppenheimer funds, put in that put in that investments all here for conversation. you, my friend, recognize when a trend has reached critical mass. that's what a type e* does. with e*trade's investing insights center, you can spot trends before they become trendy. let's get back to our panel. we have to go back to break. anyway -- no. we were just talking off camera about something i had no idea. what is happening with sports and schools and extracurriculars? it costs money. >> and with budget cuts across the country, primarily public schools and a lot of innercity schools are eliminating sports programs, consolidating schools, eliminating other programs. and it's a real tragedy for our kids that they don't have these ext extracurricular activities to go to after school, all the things that they're exposed to today. >> other extake contaracurricul activities. >> we produced a movie last year about so many schools were closed or consolidated. and different programs were eliminated. and kind of talked about how important sports are to these kids in these innercity schools. and we filmed it documentary style, we filmed them at practice, at games, in class, in the streets, at home. and if you watch this movie and look at these young men, the other things that they can be exposed to, they're not at football practice or playing football or -- you can't get to a good place. so many said the only reason they go to school is to play sports, to play football. >> is it a state thing, is it a private, i mean we spend a lot of money already on things. how do we make up for the shortfall? >> we have to find a way to fund these programs. we've committed to funding $25 million to help these programs. and we've got a program with donor donors.choose.org and what we've decided to do, if the teams raise half of what they need, we'll pay the other half. >> and terry, i know you've done -- you've worked with mayor de blasio on a sports program, an education program? >> it was an after school program for the summer for high school kids and we were just trying to give them a career option. we got 30 ceos together and said let's guarantee that we'll give these high school kid s a job fr the summer and teach them the skills they need to be productive members of society. when you get a kid 17, 18 who is learning a skill, again, it's taking away from the alternative. they get excited about that and they want to go to work. they want to have these skills. so just a matter of us -- not trying to boil the ocean, but picking apart opportunities to make a difference. lots of programs are going on right now and companies are leading them. >> and we're here to talk about the future of retail. so teamwork, participation, competition is critical skillset in tomorrow he's workforc's wor. seeing what you want to be and knowing how to get there is critical. and the third leg is science, technology and math. a bunch of great things are popping up around the country to teach kids to code and girls to stick with science and technology and math. and there is not a job in our company at gilt that doesn't require good analytical skills. they still review the day before sales and understand, you know, we shot this that way, could we have done it differently, what produced the best sales, when did we get higher return code because the product didn't look the way it was shot on camera. so it's not possible to be in the future of retail and have strong sort of analytical skills. as we continue to develop those jobs for the future, it's about the consumer, but also making sure our workforce is ready for what comes next. >> you have to keep these kids in school. they talk about if they don't have a reason to go to school, then they're not going to school 37 and we did this thing with the harlem lacrosse and leadership right here in new york. and we did a story about this one young man who lost his dad, lost his mother last year, and how this harlem lacrosse has really saved this kid's life. and he talks about how he wishes that his mom and dad could see him now. they would like to see him play lacrosse and know that he's going to school and staying out of trouble and going to college. and it just melts your heart. >> thank you all for joining us today. talking about this and so many other issues. it's been a pleasure to have all three of you here today. >> it's nice to be here. >> can i write it down, does it hold -- >> absolutely. no problem. >> that does it for us. right now time for "squawk on the street." good monday morning. welcome to "squawk on the street." i'm carl quintanilla with scrim cramer. a fifth of the earning, half a dozen fed speakers, frpre-marke is lower and a miss on morgan stanley's numbers. we'll get to that. oil is below 47 toda

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