50. 99. Of course it was the rise in rates, the rise in the dollar yesterday that really took stocks down. It did. You know, the fed tell you what im looking up right now. Are you on facebook . No, looking up a quick nate silver. Theres different places to look. You can look at the betting markets on the election. But the now cast nate silver is almost 90 for a Hillary Clinton win. Above 80 in the polls. That whole narrative that the market goes up when it looks like Hillary Clinton is going to win. Weve done it here on cnbc. People saying theyve seen this trend. I dont know what happened yesterday. I think it also, if you start to believe the senate and the house could both go because of the rifts in the gop, im not sure any of this has to do with the 200 points. I didnt think it does. If youre looking to tie anything to the election, theres something in it for everyone. You could say now if it was undivided government, you had a Hillary Clinton presidency in both houses of congress, the market theoretically, if you believe that those policies are good, it should be soaring. Should be. You can see the reaction in healthcare. Healthcare, a huge downturn yesterday. Banks. Banks. Any sector with a risk of increased regulation. That was perceived strongly. Or as simple as alcoa and honeywell. The strong dollar. The dollar index, it wasnt supposed to do this. A 1 move week to date is unheard of. If oil goes up, the market is supposed to go up. What happened to that correlation. This is a dollar correlation now. Dollar rates. Thats why when we say the fed is at 60 for december, one day can get me thinking theyre not going to do it how many days until december . That one day may be today with the fomc minutes. In terms of market fluctuations, Dollar Strengthening, bad outlooks for multinationals, all those things could throw these guys off track again. Absolutely. Theres going to be a kitchen sink quarter for a lot of companies. Now if the market is supposed to rally if the fed puts off the december rate increase. One day it will be based on having an economy Strong Enough to withstand another quarter point. One day. I think that was oh. It is todays top story. We just kind of talked about it. It wasnt in the teleprompter. Big currency move. Sterling staged a rally overnight. It hit a threemonth high against the dollar. This after the british Prime Minister theresa may made a concession to Parliament Offering to bet lawmakers really . The pound is at a threemonth high now . Or at a threemonth i thought the pound was getting weaker. Lawmakers will vote on the brexit plan. That wont stop britains withdrawal. It gives lawmakers who want to stay close to the eu more power. Chinas central bank guided the yuan lower today for the sixth straight session. It sits at its lowest level against the dollar since 2010. Minutes of the latest fomc meet be will be replaced this afternoon. And two fed president s are speaking today. Just one notable Earnings Report today. Railroad operator csx will report after the close. In corporate news, shares of m samsu samsung, slashing profits bay third following the galaxy note 7 recall. They are cutting the target for the year. Other stocks to watch today, ericsson taking a hit after the firm issued a profit warning, this coming a week after the Telecom Equipment firm announced plans to slash 20 of its Domestic Work force. Shares of Barracuda Networks reporting a rise if profits. Its ceo will join us at 8 40 a. M. Eastern time. And sames of fortinet slashing its outlook. Preliminary results for the q3, revenue well below the streets target. The stock falling 13. 5 in extended hours. Amazon is launching a paid Music Service today that will cost 8 a month for prime members or 80 for the year if you buy an annual subscription. Nonprime members will pay 10 a month, owners of the echo device will pay 4 a month for a version of that service that only works on that device. Amazon already launched prime music, that only has about 2 million songs. The new service will have tens of millions of tunes. They want to get bigger into the grocery business. Its interesting because you look at all the grocery operators, you look at what target said about the grocery business, you wonder is that a Good Business right now to be in with with food deflation . I always liked looking at yearly revenue for a Supermarket Chain and yearly profits. If you want to see the slimmest margins in the world, sometimes less than 1 , you have to sell so much stuff. Then you think, amazon is already in position to distribute all this stuff. To have it, distribute it, and it wouldnt take much to stick it there. Already a logistics company. Exactly. It would add to revenue, anybody that prices a stock priced to revenue would like it. It makes sense because theyre in position to do it. Doesnt seem like a Good Business. We touted apples ecosystem for so long, they get you in. Its so easy. Everything is linked. Now with echo. You say alexa, send me paper towels and lettuce. Im scared of alexa. Im scared of alexa too. Why are you sarcared of alex . Hot mike. I have alexa you have one. We got it, we havent set it up. Im worried that we havent even set it up that its listening. Thats paranoia. How do you know . Its not plugged in, joseph. I dont talk around it. Up in the attic, im worried. Markets seeing red. Investors will get a sense of fed sentiment with the release of the fomc minutes later today. Joining guys, great to have you with us. Steven, starting off with you. The fed meeting was the most dissent at a fed meeting in about five years. Is anything in the release going to change our expectations for a fed hike in december . Its doubtful it will change for december, but three dissents is hard to keep this going without taking action. There was no mention of this around the fomc meeting, but we had weak data in august. Things looked marginally better in september. Rates have been moving up around the world. Correlations between equities and rates up near 80 . Were getting hit badly in sectors like utilities, everything that is bond equivalent. Where it is with this exhausts bond market trend is lots of anxiety about rates. Moves into the Exchange Rate as well. Weve seen the rotation in technology, strongly in the Third Quarter, does that continue . Are we getting to a point where valuations are a concern . What weve seen is earnings are not as good as people think. The industrials, a few healthcare companies. I would be surprised if were looking at a rate rise ahead of an election. We didnt do it before brexit, why would we do it here . Maybe we do it in december. I think the global Interest Rate markets are selfcorrecting, helping us selfcorrect. That mechanism has been in place all year. Selfcorrect in terms of were already seeing the move in stocks and bonds and Asset Classes in anticipation of that hike now. Youre seeing the german yields going up, ours are moving up. Weve been where we are in the market because of the global Interest Rates. Its put pressure down on volatility which allowed expansion and pes. If that reverses we could be in for correction which is good. Have cash on the sidelines. If you have the ability to short, good time to have that out there. Lower Interest Rates, lower return expectations, just stability alone has been enough for the market. When i had Interest Rates get to ever lower levels outside the United States and very little spillover to domestic Interest Rates, not getting to new lows on Interest Rates, those sectors dependentshgs it, utilities a prime example. Look at the price of gold, dollar, all the exact same trade. People point to evaluations being high across the board. The s p 500 is varied. A stat put out yesterday saying forward pes on the s p 500 are back at bubble levels. Try bonds. Theyre among the highest yielding government bonds around the world. So the point is that unless you get a catalyst, unless you get a breakdown in the economy, if earnings may be looking bad for a couple of companies so far, i think with whats happened to petroleum, we are about to see a resumption of broad, if moderate gains in the market. Thats where we stand on Third Quarter and beyond. Even though weve gotten to chriss yoinpoint, we got negative reports, reads on the broader economy, right . Its early in the reporting quarter. We had upside surprises for the quarter past every single quarter since the Third Quarter of 2009. We see the potential for some resumption of earnings growth. You said its a good time to short. Where . We like broad market shorts with some companies that we think have bad management. So we have those positions on. To your question earlier on growth. I agree on energy. I think that is a bright spot. What were watching in the small cap world is the high yield markets. Those have not collapsed. Last year that was pressure. Thats a relative trade for small cap companies, the high yield market. Thats been holding up. We think theres value in the small cap universe. Multiples at the s p 500 are probably more stretched. Small cap has been an ignored area. Volumes have dried up because of doddfrank. There has not been as much so theres value to the upside in small caps but short on the broader markets . For any sort of dislocation we could be coming into. We have the election season. Probably a higher probability for greater volatility coming. Guys, thank you. Yum china splitting off from yum brands at the end of this month. China about to get its first taco bell. God, i love taco bell. Do you . Which kooind ind of what you order . As much as i can you can order the whole menu for 495 495 . You never seriously, you can get six tacos, a burrito, you get the bill, its like 5. Oh. Does it come with tums . I dont want negative the worst mexican food is great. All right, susan. Hi. How are you . Good to see you. Yum is end of this month they should get done doing this split. We have the ceo. Yes. You knew that . Yes. You were up to speed. We had yum chinas ceo on power lunch yesterday. Looks like they convinced the markets that the split is a good idea. So taco bell will have a soft opening at the end of this year, and lets see what they mentioned at investor analyst day. They are splitting off the China Division. In a down market, they have outperformance. When i say assetlight, they dont want to own the restaurants anymore. They want to be a steward of the core brands, kfc, taco bell and pizza hut. That means moving to a 98 franchising model, less than burger king and duncan brands and more than mcdonalds. When you own less assets, you dont need to spend as much. As a result theyre slashing Capital Spending by 80 . Reducing general administrative costs and that comes with job losses. 600 corporate jobs will go by the end of this year. 1500 additional by the end of 2018. As a result of freeing up this cash with the cost cuts, yum is returning it back to shareholders, doubling capital returns to 13. 5 billion by 2019, and targeting total returns in the mid teens over the next three years. Analysts remain bullish on the stock. A lot of noted s say they consir yum one of the top picks in the restaurant space and that those numbers may be conservative and they may exceed that over the next few years. Did they talk about kip chipotles woes . No, they were focused about their own financials and their own strategy going forward. Taco bell has been doing well in the u. S. The 1 burrito Breakfast Menu la been working. Thanks to joe and the like. Then they come up with things like covered with fritos. I dont think its a good idea to gloat too much about chipotle, because taco bell at one point had some similar things, similar food safety issues. Also there was some hedge fund that said they werent using meat or something. Yeah. So the yum china ceo said bringing taco bell to china wont be easy, especially in a country with fresh quality issues. All you need is one taste. One taste and youre hooked. I got hooked in college. I never had mexican food. Mexican food. That was your First Experience . Yes. In colorado. Almost reminds me of apple. Shouldnt gloat too much about the samsung 7 either. Think if Something Like that were to happen with the number of phones out there. Theres no reason to think it would with apple. But you do need to power these things. Stuff happens. I dont think they should gloat. Especially using other peoples parts in your phones. And you have that many out there. Thats frightening to me. Sorry. The notion of opening a taco bell in china. You asked the question yesterday, who in china wants to eat taco bell. Theyll start with two in shanghai. I dont see why once you try it why everyone wouldnt love it . Its such a universally delicious taste . Is. Pizza. Things go around the world. Thats true. Good point. I bet they have good chinese restaurants in mexico. Perhaps. Perhaps. Im open to that. Question mark. See how i think . Cant get that anywhere. Thank you, susan li. As we said, greg creed will join us at 8 00 a. M. Eastern. He has some answers on why taco bell will work in china. If he doesnt, you have me. You are the brand ambassador. If you had to rank the brands . Taco bell number one. Taco bell number three. Taco bell, repeating number one and two. All three. I like them all. I do. Havent been to pizza hut in a while. Love pizza. In other fast food news, the creepy clown craze in america is taking its tool on a familiar mascot. We thought about this before we heard about it. Ronald mcdonald is limiting public appearance of the spokes clown. The move comes after a series of sinister clown sightings across america. We used to have some fun with it. Its not fun right now. We used to show some video of ronald, and we would put it on a green scene behind us. Right. And you would look around at him and go, wow, thats creepy. Now it really is creepy. I thought it was creepy before. You did. You look at most of these mascots, theyre creepy in general. How about that burger king guy. Hes creepy. You have to wonder if hamburgaler and grimace if its their time to shine. Lean on the other characters. I was off clowns after the movie it. I cant. Its like chucky 2 a dom but not a clown. Especially with the melting makeup. Not good up close. Combing up, politics in poe cus focus. Well get a live report from greene county, pennsylvania after this break. Welcome back to squawk box. To politics, with 27 days left until voters go to the polls, Hillary Clinton is pulling ahead in one key swing state and that is the one thats did i know its right its south of here or west. Pennsylvania in. Its right there. A neighboring state. Thats what i was thats a quick way of saying it. Right there . A fast way of describing where it is. Contessa brewer joins us now. She knew that, i bet, from greene county, pennsylvania. An area that could be critical for the swing states. I know its in the same vicinity of new jersey, contessa. I knew that. You were close, joe. Greene county is home to half of all the Coal Production in the state of pennsylvania. And yet the emerald mine behind me shut down last year, roughly 300 workers laid off. Many of those are registered democrats, but theyre fed up and theyre voting for trump. In fact, in little waynesburg, a tiny town here, the shops along main street depend on the income from these coal miners. They support four jobs with their earnings from the mines. For every miner. When the miner suffer everything from the sale of steel toe boots to new car sales suffers. Hillary clinton is saying i dont want to leave coal workers behind. Ill put 30 billion towards retraining them and moving them to new jobs in clean energy industries. Do you buy that . No, i dont. Why not . I dont buy that . Youre talking political b l bull. If Hillary Clinton was standing here, i would stand up and turn my back to her. But youre a democrat. I know im a democrat, but shes a liar. Well, the miners really like that trump digs coal. Thats a simple slogan. You see it posted on Campaign Buttons and tshirts around town. In fact, the local businesses pump trump. You can see the support in the yards around town. You would be hard pressed to find a Hillary ClintonCampaign Poster around here or any boost in newly registered democrats. I think its been its a little more challenges some of those areas. Weve seen a big influx in more of our urban areas, more of the densely Populated Areas where we have more millennials moving in here to work at the hightech indi industries of google, uber and lyft. Clinton is counting on turnout in philadelphia and pittsburgh in the urban areas, but not counting out the coal counties. Shes trying to reassure folks with her promises of job retraining and pointing out that trump talks big on steel, too, yet he imported steel from china. I talked to a lot of laid off miners yesterday, none of the Trump Supporters i spoke to were convinced by Hillary Clintons arguments. Wow, thats interesting. You know, pittsburgh and philly probably dictate which way that state goes. Dont you think, contessa . Well, the thing is that they have a growth of population. So if the young people, if these millenniums that theyre counting on do turn out and vote. Its probably going to be a big win for Hillary Clinton. Right now the most recent polling done in pennsylvania, this was before the release of that tape, but it shows clinton with a sizable lead. 8. 6 over donald trump. I was looki