In the u. S. They were expecting 300,000. So 370 was 20 more. But last year in the same quarter they added 900,000 or 800,000. So wall street journal is making certain points. And then to almost double the bottom line when youre at hundred times earnings thats good but is it still pennies. What was the actual number . Pennies per share. Still pennies per share. Im sort of surprised the international, do they have the content around the world that people will pay for. They havent spent a huge amount of money yet on True International programming in the new languages and what it means is actually that american programming or u. S. Programming with ghienglish is working. They have a benny hill type show ready to go or monti python. Do they know the cultural . What youre finding is narco is working in a lot of places. Its working here and in south america and parts of europe. Its working. What does a billion dollars more spent on content mean in the number of shows and how many, how much new programming youll get out of that . Your show cost a billion, didnt it . Think to your self well look, they are producing one movie by some reports that will cost them 100 million. They are doing two comedy specials with chris rock cost them 40 million. Lets say a comedy or trama series will cost them any from 20 to 50 million a series for like a 10 or 12 part series kind of thing. Thats on the high end. If they are doing a game of thrones kind of thing. You get ten game of thrones possibly. My point is this doesnt settle it. What the girl said yesterday one quarter doesnt settle it. Theres other people that pay for content. Other companies can do what netflix does. Well see. If you become a hit based company its like i just remember ill never forget those guys at ge. Then they had a movie studio. Whats the variation per year that we might have. We spent on how much the writer, the director, the production and didnt make any money . Two pest you have to remember. One it has to be a hit and the portfolio approach matters. The more you do hopefully youll nail one or two. The hit idea doesnt, its a different type of hit. Doesnt hatch to hit ratings wise. All it has to do is keep you from either make you a new subscriber or keep you from turning and leaving. So now they can demo out each show. A certain show that works for your may not work for her thats fine as long as you both stay because theres another show she likes and thats the trick. Youve seen netflix go through ten year brought. Hit based is advertising based, revenue based, ratings based. For netflix it doesnt matter. Youre thinking about fact that you have to have a couple of big shows for each demo. Thats the trick. All you need is just one or two. Once they become obsessed with house of cards, they will keep the subscription for the entire year. Im in a drought right now in content. Its not helping. Americans you like americans. No. Fantastic. Its fantastic. You can get it on netflix. Terrified of Ronald Reagan these russian spies. You would love it. They should be. He ended the cold war and brought down the wall. Thats what its about. 7 Economic Growth. 900,000 jobs per month. You know nothing about this. I heard about it. You think he blew out the deficit. Among the other stocks to watch, ibm shares tumbling. The numbers marked big blues 18th straight Quarterly Sales decline. The firm invested heavily during the quarter. They spent 5. 5 million on acquisitions. Thats compared with a little over 821 million in the same period last year. Unite the health just reporting, quarterly profit of 2. 17. Nine cents above estimates. Health insurer raised its full year forecast. Also due out this morning blackrock, Johnson Johnson, Goldman Sachs. Johnson johnson cfo will join us at the bottom of the hour first on cnbc. No relation that i know of. At 7 00 a. M. Eastern time blackrock chairman larry fink will join us. Parade of top executives doesnt stop there. Well bring you exclusive interviews with the ceos of eli lily, United Airlines and hasbro. Caruso is my father. Cabrera is my mother. Why do you do that latins do that. I got a couple of different. On the economic agenda key inflation data due at 8 30 a. M. Eastern we get the latest Consumer Price index numbers and that should give us some clarity on the feds next rate hike if there ever is one. Checking the markets u. S. Equity futures were sort of piggybacking off of europe this morning and up 84. Got nowhere. Well see. Looks like a pretty friendly session this morning. I dont think netflix is hurting with nasdaq up nearly 40 points. Heres whats happening in europe. Most up 1. 5 . In asia, shanghai 3080 at one point. Good move there too. Thats not hurting. Oil apparently heading down then turned around and gave some strength to the Global Equity markets. For more were joined by phil orlando and jim keerny. Lets focus we spent so much time on the fed. Lets talk earnings. Hasnt been a great beginning to earnings season although after bank of america thinks are not as bleak as the first couple of days. So were only 10 or so. Its very early. But numbers are down about 3 , 3. 5 . They are down again. Yes. The season is supposed to be down 2 , 3 , this is going eighth consecutive negative yearoveryear for quarterly earning. This should be the end of the cycle based on the way the currency and energy rolls off. Fourth quarter should be positive. Were not expecting anything great out of this quarter. Eighth consecutive yearoveryear quarter so thats two years. Correct. The earnings recession continues. Funny how the market has gone nowhere in two years. And the economy almost like i want knew before it happened. Exactly. Were sitting here basically at 1 stall speed rate, gdp the last three quarters. The Third Quarter which is going to get flashed in two weeks we just took our estimate for Third Quarter down last week to 2 . From what . We were 2. 6. Atlanta fed took their number down 1. 9. Not a great Third Quarter. Were at 2 for the fourth quarter. Not expecting anything great. I wonder when the last time anyone actually took a number up because the fed it seems every quarter thats the story. They were 3. 8 terrify beginning two months ago. This last quarter we always say that. A month and a half later wreen 1. 9. Never realized were waiting for this and seem always disappointed. Thats the case. I was at fishers lunch yesterday in new york, and he seems pretty complacent. You know, jobs numbers where they need to be. Sanguine. Meaning we do have to raise or dont have to raise . He didnt come out and say that. He said look were where we need to be on jobs. Inflation. Cpi were there. Pc e we got a little more to go. Well get there. Were fine. Were just moving in the right direction. Jim, you stay long stocks . I think so. Last nights action in netflix and ibm tells you a whole lot. Ibm was good no i dont think ibm was good. You need to be selective pup cant buy everything. You cant tone entire market pup have to find the secular growers. Those looking for the bounce its not coming. Up need to find those companies that have their own morpts. If theres no cyclical bounce why would the fed works they raise because they need to raise . Rates are too low. Theres a moral hazard. Theres bubbles being created. Going up a little bit takes a little bit off the table. You think were in a period of like the ten year will stay below 2 for how long . Below 3. Lowe 3. For a few years. The Economic Growth just isnt there which again is why when it comes back to stock pick being you have to find those companies that have their own growth stories. So when you talk about Interest Rates for the ten year staying below 3 what do you think about the dividend trade thats so popular a move from 2 to 3 could still punish them. Likely punish them. I was looking at a number of names last night that had no Earnings Growth over five years. Yet their stocks are up nicely. If you are banking on that youll be very disappointed over the next two years. Get out of those kind of stocks. I would be underi weight fo those stocks. Any hope . You got the renewal of this brexit overhang that we now know is going to come in i guess march. And then what are the economic ramifications from that. We dont know how well or how poorly those negotiations will go. Do we worry about the uk or the rest of europe. Architect of the euro said this is like a house of cards. Like netflix. Short answer is we dont know. Uk might do better. Uk may have got smart enough to get out of that mess. The good news is with the pound solo that that could become a stimulus for export activity as we get all this worked out, but we dont know how those negotiations will work out. China and japan. China the market was weak last week. Not great there either. Nothing. Theres nothing cranking. Tuesdays are like the day after monday. Not a thursday or a friday. Ive noticed. Right . No. I think were stuck in a world where youre looking at two, maybe three i notice an article. We know well bhart on worldwide exchange. I like that synergy. Must reads. The New York Times could use a little help. On that note are there any sectors you avoid because of the election. When you read about Queen Elizabeth and the wall street journal. Sure. I think well have a whole lot youll have a whole lot of volatility in financials and health care over the next 30 days or so. But i think theres some real opportunity particularly in health care. Health care is down yeartodate. If you can dig through some of that wreckage you can make money in health care. Even if Hillary Clinton wins. Watch the house race and the senate. A clean sweep by Democrats Health care could be one more pressure. If republicans keeps the house or Senate Health care will be just fine. Thats exactly right. The market priced in hillary will win. The question from our perspective whats the check and balance there . The fire wall is the house staying right. If that doesnt happen, if the ds are on the table that to cross potentially an entirely different set of economic and Financial Market underpinnings. We got to watch that whole thing not just who will win the presidency. This is a bigger deal than the top of the ticket. Queen elizabeth, latest poll out, polling millennials about communism. Dont start. And socialism. Half of americans between 16 and 20 would vote for a socialist. 21 would back for a communist. Capitalism viewed favorably by 64 of those over teenage of 30 but capitalism only viewed by 42 of millennials. So you have Bernie Sanders and you got Elizabeth Warren and you got all the rhetoric and you got these young people that some day are actually going in the workforce maybe if they move out of their parents basement and think, have no idea how the world works. Im thinking about halloween, honestly. Thinking about can you get a realistic man bun. Can i get up with of those things and i can get the hipster beard and im thinking about earthquake and some ink and come in like that. Ill come in as a millennial. Come in as a millennial on halloween. With a bong . No. That might have been my generation. Is millennial a good i guess i dont want to make too much fun. We need them, right . God help us. A couple of them. A couple of millennials. What do you think . Would it work for me . It would. I turned my front yard into a graveyard on halloween this past weekend i got a hillary mask and a trump mask. I built these ghouls in the front yard. Ill put two of them out there and see what kind of response i get. Which one is scarier looking. They both are pretty scary. What are the millennial phrases. Netflix chill. I dont like that expression because you know what it means. 16yearolds having sex. Yeah. Netflix and chill, well watch netflix and chill, netflix is on in the background. A lot of these things beyond me. Joe knows this stuff. Some day i was hoping i could do that the. Chances are you. Watched watching netflix. Im in a drought. Americans. The americans. Thank you guys. Coming up netflix shares soaring this morning after the Company Posted staggering international skrier numbers that beat expectations by 50 . The stock is up higher 18 in premarket. Opposite coming up Johnson Johnson about to check in to earnings energy. Dom economic caruso talks about Quarterly Results. And whats next for thaerl giant. Squawk box returns in just a moment. Experience the thrill of the lexus is f sport. Because the ultimate expression of power is control. Get up to 5,000 customer cash on select 2016 models. See your lexus dealer. Welcome back to squawk box. Some stocks to watch today. Visa Ceo Charlie Scharf who oversaw the companys reunion with its european affiliate is stepping down and be replaced by former American Express president and board member alfred kelly. In a letter he said he needs more time to spend with his family. Here he is on the current call yesterday. We need be on the east coast more than were able and, therefore, i dont feel i can spend the time necessary in San Francisco to do this job properly. United airlines Third Quarter profit fell but still beat forecast. Carrier says cheaper air fares and higher wages from new labor contracts will squeeze results this fall and united Ceo Oscar Munoz will join us in an exclusive interview all 8 00 a. M. Can we go back to the Charlie Scharf news. It was authentic and i believe it and picks up and says im done. Taking my ball and going home. There are priorities. I know. To me i thought it was remarkable. Were sure thats the story . Assuming thats the story. Right. I mean it sounded authentic on the call. We all could be wrong. Historically i need to spend time with my family has bean cover for other things. The way he said it seemed so different to me. I think thats right. Well hold judgment. Lets talk netflix because they reported Third Quarter earnings after the bill adding 3. 2 million subscribers. Heres Reed Hastings on the Earnings Call talking about the quarter. Its time for me to apologize for the volatility again. You know, this time its in a good direction. But i think more and more investors, you know, are able to look at the multiyear picture and they see the patterns emerging and so it will be less and less about our guidance. Joining us right now to break it down is managing director at concord. Good morning. What did i say . I called it concord. Kenicord. So help us here. Complicated word with all those letters. Teleprompter can be dangerous all those syllables. Now were wasting time. So, can i ask, on the volatility issue yeah. Should investors care about the volatility with this stock . Absolutely. You own a stock you want it to work for you gradually over time. I think this has been a super volatile stock over the last new years. What we saw last night was a validation of the strategy, right. Which is develop a lot of great original content and use that to gather subscribers. In the u. S. They beat their subscriber numbers and it shows they have some pricing power. What do you think they can raise if price to reasonably . Tough to say. I think in our long term model by 2021 going up to 15 or 14 and contemplate more original content and faster speeds and all that stuff. The other big part of it was internationally where theyve launched in all these countries and just getting are you surprise by that . We were talking earlier about the content itself which is to say they developed some international oriented new language content but a lot of it is just old program snooping they are definitely exporting the hollywood content globally and thats most of the contend international lir but now localized with local language content in 20 countries. How important do you think that is . I think its important. What weve seen in earlier markets like brazil is that those Consumers Want both. They want hollywood and they want local. And thats where they are head. How does pricing work in the rest of the world versus united states. We get fixated what the u. S. Consumer is spending. When it comes to percentage the bulk of the subscribers. You price differently. They have a strategy where they are not necessarily pricing the product for the economics of each country. They are going in with a price thats roughly equivalent to the u. S. Price and their strategy for the foreseeable future is ill take whatever number of subscribers i can get. If you look at the Addressable Market in each of those countries and sort of a penetration curve that goes to a reasonable level in those countries you do get some really big numbers for the next five years and then they might have to start think about lowering the price to go mass market. Its a mass Market Product more or less. 6 billion for content. Does that excite you or worry you in i think its a right move. Number one, that original content is a lot more expensive than licensing content but then they own it and then their Profit Margins go up in the future and they dont have to pay licensing fees. If you think whats driving the subscriber market, think of a cable box. The quality of that content is whats going keep them competitive. Isnt that what leads to volatility. You use the word pattern there. Is there ever a pattern here. To joes original point if this is a hit driven business rather than the original story which was the new way of distribution, volatility is forever, right . We worked at a network that had great thursday nights and then weak thursday nights. Right. Volatility is partially a function of some of the thirdparty data thats out there, sort of midquarter that tries to track what subscribers are doing and they o