Transcripts For CNBC Squawk On The Street 20161007 : compare

matthew is pounding florida. our morgan brennan is live in daytona beach this morning. good morning, morgan. >> good morning, guys. i'll tell you it's picking up strength here. we've had some pieces of the building, this hotel we're staying in as well as tiles from the roof have been detached and flying off in the wind just a short while ago, we've got a downed lamp post on the ground behind me and water starting to pool on the ground as well. so this is becoming more and more severe. now, in terms of we've also seen 67-mile-per-hour gusts of wind, i should note. in terms of where hurricane matthew is, it is about 45 miles east-southeast of daytona beach. it's moving about 13 miles per hour, and that means we're going to see the worst of the storm begin to play out some time between 10:30 and 11:30 a.m. eastern here. meantime, the space coast, which is further south of us, has really been getting the brunt this morning. you've got cape canaveral reporting wind gust of 107 miles per hour. and in nearby cocoa beach exploding power lines there. so in total we've got more than half a million power outages reported in the state of florida. and here i will tell you we've seen lights flickering on and off all morning both in this building and along the strip here against the beach. but in terms of this hotel, i should note that in addition to us, we are staying here with a power company workers, florida power and light has about 15,000 workers that are on standby or getting deployed right now to deal with these outages throughout the region. meantime no one here is really going anywhere because daytona is under a mandatory curfew until 7:00 a.m. tomorrow morning. guys, back to you. >> morgan brennan, we're going to be coming back to you throughout the day. it is going to be a very long day for some 500 miles of the southeastern coast. thank you so much. guys, we should point out south florida really dodging a bullet here. and even, jim, estimates of how many people were going to be out of power originally thought to be somewhere in the 2.5 million range, looks like it might be below 1 million. >> yeah, it's interesting out here at dream force in san francisco meeting with companies very good company last night private company was saying how is it possible that we are still in a situation where a storm can wipe out a huge part of the electric grid? people are trying to solve that. because the idea that you should have a million people out of power because of rain is something that many people are working on out here. does seem like it's a little like 1950 to still think that this is what happened, but dodging a bullet let's talk real life it does seem pretty lucky. >> yeah, of course we've talked about all the flight cancellations, 3,000 and counting. cruise lines redirecting ships, obviously hotels, walt disney world closing i think for the fifth time in history. almost every closure has been because of weather. >> yeah. you know, i've been developing a new model on disney that talks a little more about the throughput on people who come through. i've got some information on that on tonight's show. and also about the movie franchise. but the theme parks are going great guns. can this affect the quarter? well, i think we'll asterisk it. i think there's going to be growing attention away from espn and more about technology. again, but i do understand completely that the closing of the park is very meaningful for those who are doing a model that's trying to figure out exactly what pennies to put in that. >> yeah, we're going to keep our eye especially now on the georgia coast as some of those outer banks face evacuations for the first time since floyd back in '99. they're going to get a lot of rain today. we'll update you on that. 1,000 nonfarm jobs were added last month. we were looking for closer to 170. unemployment rate ticks up to 5%, that increase being driven by a rise in the labor participation rate. average hourly earnings up 0.2. david, year on year it's 2.6, but that tick up in labor force getting some people's attention. >> it is. as is what appears to be private sector gains, more a bit above what had been estimated. and that could be something at least people are also focused on as they try to interpret what the move will be of course from the federal reserve whether this in some way either enhances or perhaps detracts from the idea that they're going to raise before the end of the year so that private sector gains more in line with the estimate 167,000 versus forecast. but, again, a bit below the ultimate forecast here for what was 175, carl. but i don't think it changes the picture much at all, one would think. >> yeah. jim, big discussion in the last half hour on squawk talking to mester whether or not this really does move any needles going into the november meeting. >> more of the same. i look at some of the professional job growth that seems good. a lot of the growth that's in retail restaurant is very low skilled and not going to be able to raise the -- unless you use minimum wage, not going to raise what people might be thinking about for wages. so i think this is a number that perhaps if there was not an election someone may say, you know what, things are pretty good, let's raise rates. but there's still a lot of turmoil overseas. we haven't gotten to the pound yet. it's one of these things it's breathtaking. this is a country with a real currency. and overnight it can drop to a level that makes them feel like the employment number's less of a worry than actually what's going on in flow funds in currencies. >> yeah, let's get to that pound. what a story last night. volatile moves. if you missed it, the currency plunges 6% against the dollar in two minutes before recovering most losses. traders are citing everything from thin volume to algos to high frequency. so far no evidence of fat fingered trade or wrongly entered order. pound has been falling all week after prime minister theresa may announced brexit talks will begin end of march. the suggestion that these hard brexit talks that somehow they're going to make the uk pay with this. >> right. there doesn't appear, to your point, carl, to be a fat finger here. i'm reading from research this morning from j.p. morgan looking at trying to understand exactly what that move was about and they point out it was more a one-way market where selling was exacerbated by a cascade of stop loss activity including from option market makers. we don't think it's particularly informative to try to attribute the move to any specific overnight news catalyst, but they also point out that the slide, jim, was on high volume. so hard to justify certainly a fat finger, just a mistake in other words that somebody may have made, but it certainly rattled a lot of players in what is an enormous market let's not forget, that trades all day long and all night long, typically, with some lulls in between. >> yeah. look, these are number cutting events. whenever a number cutting event overnight, the market can't adjust. so you'll see a diagio, a company doing quite well, the pound goes down, the stock goes down. but a week, a month or even three months from now we'll be looking saying they have just been killing it worldwide because their scotch is cheaper than everybody else's scotch. there's a lot of good that comes from a lower pound. but these british banks, we talk a lot about deutsche bank, these british banks these stocks have been horrendous. i think they'll be horrendous again. >> a lot of discussion this morning about longer term, jim, how the pound trades. it's not trading anymore on retail sales and factory output. it's going to be more of a structural political proxy, market structure proxy. much different from how it's traded in the past years. >> yeah. i mean, look, i stopped focusing on the pound a long time ago because it just didn't seem significant. now it's suddenly in the mix of something you have to talk at the top. by the way the dollar's been strong. and we're about to go into earnings season. many of the ceos who are looking at these numbers they're going to reference the pound in their numbers. and they're going to give it another reason to be able to say slower growth, numbers have to come down. we haven't even gotten to honeywell yet, which is kind of like take your breath away. but this is kind of a reason to lower numbers. we have to keep that in mind because when the dollar was stable for awhile, we stopped thinking about it. it's going to be back on the griddle. >> yeah, again, there's also concern over time you're just going to have repatriation, guys. central banks owe about 20% of what is the gdp so to speak. and there's a thought at least that you could have repatriation flows that continue to pressure the pound, jim. you bring up honeywell, we should probably get to that. that stock is going to be looking fairly weak ahead of -- excuse me, it's in the next block. it's in the next block. >> honeywell in the next block. sounds good. we'll watch that. of course a lot to come. >> hard to tell out here. >> it is. >> i was thinking maybe honeywell comes up, maybe it doesn't, you solved that problem. >> we have a long day ahead. we're going to get fisher at 10:30. we heard from mester, she speaks again at 12:45, then george at 3:00 and brainard at 4:00, jim. we're going to bounce this jobs number around quite a bit. >> oh, geez. you know, sometimes there should be nothing to say, but they feel compelled to tell. they feel compelled. it is incredible that the same pieces of data just keep being mulled over by people and it doesn't change anybody's mind. but they do love to talk. what a job. when you're a fed person, you're on tv immediately. i don't know many people that get that luxury. >> when we come back, a look at this morning's movers including why honeywell is in fact slumping this morning. later on jim's exclusive with br brian moynihan of bank of america. we'll talk to jason furman, the chairman of the president's council on economic advisors about the jobs number. we'll keep our eye on break even levels for the week as the three major indices still stand a chance of going positive for the week. we're back in a minute. honeywell's down sharply in the premarket. the industrial conglomerate lowering year end forecast, they cite a business slowdown and delays. margin apparently going to take a hit as well. david, you're watching this one. >> yeah, i mean, certainly also as a proxy for the industrial economy. it's an important one. what does it say about whether there's been delays or referrals in capital projects and if so what is the reason behind that. and, jim, you know, they may say they lowered the high end, but a lot of people tell me they lowered the whole thing. >> oh, you're dead right. they did lower the whole thing. they were talking about organic growth what we look for for these industrials, flat to minus 1 now goes to minus 3. the sales numbers appreciably lower. don't forget they had an analyst day earlier this year where they made guidance and i think they've ripped up that guidance. we've had a huge run in these industrials in the last couple weeks. based on, well, i don't know after i read this, maybe nothing, and i think that that's going to be something that's going to resonate. aerospace has been one of the drivers of this united states economy, this makes me feel perhaps we've been too bullish on aerospace which means there are a lot of companies about to report that are not going to say good things about a line item very important for the u.s. economy. >> jim, i've talked to a couple investors who checked with the company as little as two weeks ago they tell me, maybe they're exaggerating a bit, who indicated no change in guidance at that point. which begs the question, i don't have the answer, what changed? >> no. look, you're spot-on. the reason why this stock is down so much is the reaffirmation was so positive, we thought there goes honeywell again this company is hitting on all cylinders, and it's not. don't forget dave coty retires next year. maybe it will be clarified by the end of the day, but people are shooting first and asking questions late sgler what other stocks should we keep an eye on as a result? clearly utx comes into focus, but there are other industrials as well. >> well, boeing started moving up after the initial article last week about dream moderate accounting. by the way that kind of accounting has been something used for years. i didn't find that to be that rev la toir, but boeing has been very strong, and you mentioned united technologies, united technologies have said they have their own problems making that new fantastic turbine engine. this group goes lower. the question is will defense stocks go lower? they've been a strong sector because of the election. both candidates seeming to want to spend more on it. but the line item about defense spending seems shockingly weak. we need to know more here or this is going to reverberate through a lot of different companies. >> moving onto some retail here, jim. we got a couple of upgrades, one for gap as they post comps. goldman adding ralph lauren to their conviction buy list. deutsche's point on gap is that after spending their money mostly on big ticket items, they see potential for the consumer to fall in love with apparel once again. >> geez, well look, i've said fashion is a winner. the only companies that have really had some fashion comebacks, l brands, they had a very good number, you aurban outfitters had a good number, i thought it was interesting about gap they're talking inflection point. analysts are liking the fact there seems to be a bottom at gap but old navy is coming back. gap has tantalized us so many times but i like what i see in terms of valuation. the ralph lauren is a restructuring quarter and i think that's terrific news. we've had bad news -- vf corp. we saw eric weissman going to be retiring not so good. lululemon which i like very much has been a continual decliner since they reported. so this apparel and retail group is very much influx. >> and when it comes back to gap, jim, you mentioned that you think the valuation is compelling, why? where are we right now on that given of course this move up this morning we're seeing? >> i think that people just kind of felt that gap stores is going away. it's got a going away valuation and this calls into question the notion that it is disappearing. remember, this whole mall and death mall spiral, when you see gap you immediately look at amazon and see how amazon's doing. any time the mall is doing better people feel amazon is doing worse. out here there's just a sense that amazon will continue to take money away from the mall. but maybe if you have the right selection, your stock can go up. david, by the way, that's gap accounting. that's not nongap accounting. i know you care about that. >> understood. i do. that's true. okay. so no adjustments, or at least maybe fewer adjustments. >> banana republic -- >> well, yeah, gps kind. >> we'll get cramer's mad dash. we'll countdown to the opening bell in a moment and take another look at the premarket on this friday. "squawk on the street" continues after a break. your business is on ld. that's why comcast business doesn't ave you the. when you cl, a sml business expert will answerou in abou30 seconds. no annoying hold music. whenen youeeem. so yr business can get back to business. coming back from break early to listen to florida governor rick scott. >> if you remember the jacksonville area has a lot of low lying area, especially nassau county. we're very focused on jacksonville. there's potential for significant flooding there. damage assessments are just coming in from south florida. they will continue as the storm passes each county. i've been reaching out to people in each county as it passes. fish and wildlife has 90 officers now performing search and rescue operations and another 70 on standby. what we're doing is as the storm passes, we're sending them in to do assessments both property and people. we did the same thing after hermine. they have not reported any issues as of yet. highway patrol has 150 troopers and public safety patrol right now, and another 100 on standby. they have not reported any issues yet. we have over 145 shelters open. we have over 22,000 people in our shelters. i checked all night and we don't have any major traffic or road issues at this time. we have been checking and that's one thing i think that worked with our evacuation so far is we kept our roads open. all major roads and interstates in florida are open. in miami and west palm where the storm has already passed, department of transportation is out investigating the roads and there are no issues to report at this time. all toll suspensions remain in effect. tolls will remain suspended for at least 24 hours after the storm passes each county. we denied mdx's request to reinstate tolls this morning. department of transportation will continue to review this on a county by county basis. some individual gas stations are reporting shortages, fuel shortages. but these stations are quickly being refueled and fuel is readily available across the state. we don't have fuel issues. the current fuel supply in the state is at least five days, that's if even all ports are temporarily closed. so right now we have plenty of fuel in the state. about 600,000 homes are without power. the number's going to fluctuate, but some utility companies have already told me they are already restoring power in miami and palm beach counties. about half the power's out in martin county, about a third in st. lucie county. as of now florida power and light has restored about 27% of initial outages which was over 580,000. right now they have about 500,000 homes without power. look, we're only halfway through. we're going to have more outages. more outages are going to come. i will be speaking with the utility companies this morning to talk about their plans to start restoring power. it's really important that we get power restored as quickly as we can. last night began setting up housing for utility crews in strategic areas around the state just to make sure as we get all these individuals in that we can get them housed and they can get to work. they don't have to worry about where they're staying. we already have camp blan di in northeast florida up and running can house over 1,000 utility workers and their trucks. we have three other locations that are being prepared to the utility companies needed. we're going to do everything we can to make sure utility companies get power back on as quickly as possible. these resources will be available to any utility. >> governor rick scott who was careful to warn people about the storm's danger ahead of time updating us primarily on power outages. 600,000 he says florida power and light restoring about a quarter, 27% of the initial outages. that will remain a story as the storm makes its way north into georgia, hopefully not as far as the carolinas. it is expected to turn back out to the ocean, but got to wait and see. >> we do, especially given the fact that forecasts had previously had it going in somewhat different directions. so these things can change quickly. all right. let's get back to business here and the week with our last mad dash as we count you down to the opening bell. call it six and a half minutes or so. jim, where do you want to head in the mad dash this morning? >> i want to head to old economy and new economy. old economy, we've got an upgrade today, deutsche bank tech resources, i mentioned this, david, because you and i in our delivering alpha best idea panel we had mr. bishop talking about how tech resources is cheap. this is a coal company often affiliated with the idea that china is getting stronger. i liked the call. and then new economy, there's a company called acacia, this is a company preannounced unbelievable numbers. i think it's important to know 4.5 million shares priced this morning at 100. david, it went out at 109. let's watch to see if this company can rally because there has been a move for these high end growth companies including coup software, they opened trading yesterday and went up big. watch acacia, new economy, if they can price that deal at 100 and it rallies, it shows you there's still demand for the highest growth stocks out there. >> yeah, that ipo you mentioned yesterday was quite a very strong performer. what'd you make of it, jim? >> well, you know what, everyone's buzzing about it here, david. because they're saying this is the sign that there is a window that is open. this deal, i know it's a small deal, it came up by companies saying you know what if they like coup, they will like our stock. it is something that reignited a lot of talk that maybe the next few months going to be very good for ipos for technology companies. >> got it. we got the opening bell of course about five minutes away. marcus lemonis, we'll be speaking to marcus who does a show that we love in the faber family. back after this. pg&e, this is jerris, how may i help you today? i help customers with their bills. there's different rates to fit different needs, so listening is a huge part of my job. because customers want to know that you hear them. they have kids, they have families, they have priorities. i definitely understand that. i have three children, i was a stay at home mom, i didn't have money to pay the bills, and so i put myself in their shoes. and i'm going to do all that i can to lower their bills and to help their situation. to choose the rate plan that works best for your family, visit pge.com/rates. together, we're building a better california. pool builds aappliance, they put everything they know into it. but once it's ld, there usually isn'a y to keep improving that product. today, whipool can analyze iosensor data from connect applices on the ibm cloud. so they can continuouslyearn hocustoms are using their products. anhow the machines respond. harnessing data to make grt products better - that's wh the clouis built f. harnessing data to make g imy retirement.er - tiring retired tires.. harnessing data to make and i never get tired of it. are you entilypreparedo r? plan your never tiring retiring retired tires retirement with e*ade. i'm inests a aa vested invesinests i invest with e*trade, where vestors can investigate and invest in vests... or not in ves. sign up at etrade.com and get upsihundredollars. where vestors can investigate and invest in vests... you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just over 90 seconds on this friday. three major stories to watch. the flash crash in the british pound overnight, hurricane matthew of course making landfall in central florida, the jobs number at 156 just slightly below estimates at 175. we're going to talk to jason furman of the council of economic advisors in a moment, ask about how sustainable some of this wage growth is, jim and david, and whether or not this labor force is truly changing after watching people increasingly not look for a job. >> i guess the idea of the growth of the gig economy, right, carl, certainly something that underlies these numbers? overall doesn't seem to be something that changes, jim, when it comes to the big question about interest rates. >> we're talking out here about machine intelligence and learning, artificial intelligence talking about the digitization of the economy. what we're really talking about is the need to be able to have fewer people to be able to get the job done, which matters so much in the slow growth environment. so i think that structurally the economy is changing so quickly it's producing a lot of -- starting to produce a lot of lower end jobs. but i got to tell you, it's also reducing jobs at the high end. >> yep. definitely entering the age of machine learning, driverless cars, you name it. it's going to change the nature of labor probably for the rest of our lives. >> yes. >> let's get a look at the s&p at the bottom of your screen. and at the big board it is camping world celebrating its ipo today. when the stock opens we will talk to marcus lemonis who of course also is "the profit" on cnbc primetime. lang lang international music foundation providing music education at to children at the nasdaq. we have to work our way as we said fed speak and then next week is where earnings season really kicks off. alcoa, csx, j.p. morgan, citi, wells, i assume your playbook's going to be tonight if not next week. >> well, i've got bank of america later. now, obviously they can't speak to the quarter, but look at that list of companies you're talking about. all those stocks have been going higher. they better be backed up with earnings or you're going to get a honeywell. honeywell really is chasing because that's a consistent industrial. all those companies both the financials and industrials have been riding kind of on ether. some stocks are going to come down. >> yeah. i mean, i'm looking at ge's really not down very much, but to your point honeywell of course getting crushed. utx down a little over 1%. boeing, which we also spoke about earlier though, jim, not really showing any weakness. in fact, it is in the green by about two cents or so so far at least in trading. >> why is that? i mean honestly, that will be -- that stock's going to get hit a couple bucks. >> jim, wanted to get to netsuite and oracle because there's some news out this morning. remember we talked about this a couple weeks back the fact that the tender offer that was out there by oracle to buy netsuite at 109 a share, recall larry ellison, of course oracle's founder, controls a good amount of netsuite stock. he is an affiliated shareholder, so you needed a majority of the unaffiliated shareholders to tender or roughly what would amount to 20.4 million shares out of 40.8 million total unaffiliated shares. what did they get? they got 4.568 million shares, about 11.2% of the total unaffiliated shares. they didn't come anywhere close. the reason the stock is down is because oracle extended the tender and said if we don't get there by november 4th, we are going to terminate our proposed acquisition. so nothing on the part of oracle that would seem to say we're going to raise and therefore try to get t. rowe in and everybody else in. we're simply going to walk away, jim, perhaps something somewhat surprising the language pretty straightforward in the release does have the stock down as you see a few bucks below now the 109 level that had it been above for some time given the fact people thought they wouldn't get anywhere near it which they didn't on the tender and the idea oracle would therefore raise to own this company. >> i'm shocked at this. i mean, if you go up -- the quarter they did not talk a lot on the conference call about netsuite, but this is about their cloud strategy and how quickly they have yet to become a much larger cloud company. for the idea that they might walk away, that's astonishing to me. this small and mid size -- this is a company that's small and mid size, cloud business is incredibly strong. i find this baffling. this is a very important part of oracle's strategy to be able to what they would say leapfrog a lot of other companies whether it be salesforce, workday. i don't get this. >> yeah. and the numbers still are going to be very tough in terms of them getting there for the tender if t. rowe and another large shareholder brown continue to hold out, they represent about 42 plus percent of the unaffiliated shares already. so the math is difficult but very interesting choice by oracle, jim, not to say -- or wait until monday even or today and say raise tender stick with 109 despite their own advisor came out with fair value calculations that had their worth far above that at 28% top line grower buying for about 7.1 times as we pointed out enterprise value over revenues even though some other deals that you could argue are comparable when if higher multiples. >> david, we don't talk enough about t. rowe. i mean, here's t. rowe price, this is a major mutual fund with a lot of growth stocks. they are intransigent here. by the way, i am told by multiple sources that t. rowe was the one most vocal about salesforce not buying twitter. i don't think we're used to arrestive mutual fund. that seems to be what we have, particularly after the debacle that is dell emc and t. rowe. >> quite right. interesting you point out on salesforce. by the way twitter shares are up about 1% after that shellacking yesterday on the thought by market participants that the exit potentially of google as reported by recode would mean there is not going to be a robust auction. the only thing i can add on twitter at this point of course is i am told by people familiar with the situation that certainly salesforce is still engaged but that there are multiple parties, multiple parties, although i'm not getting the names of who are interested still and discussing with twitter a bid for the entire company. and so that's where we stand right now. there is a hope certainly that they can get something done or not done, but figure out the process by let's call it before the end of the month is the hope though that doesn't necessarily mean that will be met. and, jim, remain with salesforce being seen as the potential bidder here of most well known but that others are still there, i'm told. been trying to figure out exactly what those -- or who those companies might be and not bothering going to speculate on names at this point. >> well, this $29 price that we keep hearing that the board wants, that is really just way too much. you used the bridge too far term yesterday. i'm just not getting a lot of companies who want to pay $29. i do think that if a salesforce can find somebody else to be involved, salesforce wants the data. they really don't want to necessarily manage the trash talk, but they want the data and be able too mine it. if there's somebody else who feels they can do another kind of job or if they can lay off some of twitter international, i think salesforce will be interesting. i don't think they want to pay $29 because the t. rowe of the world wants to sell salesforce. >> 29, that's the number you've been reporting, that's the number you told us about, right? >> well, it's right. >> by the way, i don't doubt it's right. and i'm told it's a meaningful number, but i'm trying to figure out why. it is where -- sort of break even. i'm not sure if that matters at all. >> look, it's above where the -- look, it's above where the deal came. but what i do the reporting on this, i keep thinking, well, wait a second, how about a 24, how about a 25? they have apparently not come off that price. that would be today's business if we could do some work on it. >> guys, really quickly before we get to jason furman, gap up almost 10%, kohl's, nordstrom, urban, best buy, jim, i wonder if you think this is going to be sustained into what we call black friday as holiday season -- shopping season kicks off. >> well, you know, i've got to tell you i go over the gap release. i mean, it may have been even better if it didn't have a fire. they talk about it several times. a fire at one of their distribution centers. i mean, this makes it seem like maybe gap was much better than expected. and if that's the case, there are a lot of companies whose stock should probably be interested in buying. this says maybe the consumer got stronger again. i've watched ralph lauren, i think that stock can run on this. but i'm kind of amazed at how well gap did. >> yeah. >> didn't see it coming. >> we're going to watch that one today for sure. let's get back to the jobs number this morning. labor department reporting 156,000 jobs were added in september. unemployment ticks back up to 5%, that's the highest since april. joining us first on cnbc with reaction from the white house is jason furman, the chairman of president obama's council of economic advisors. jason, welcome back. good to see you. >> good to see you. >> should we get right to laborforce and ask whether or not this is some kind of turn, a turn we've been waiting for for a long time? >> look, i think the labor force has been one of the best news in the economic data for the last three years. i would have thought that our labor force participation rate should be falling because our population is getting older and people are retiring. instead, it's stabilized and actually started to rise. and that's a real vote in the strength of this economy on the part of the people that are returning to the labor force, returning to the job market. >> theories as to why they would be returning? is it wages? >> you know, exactly. wages are up at a 2.8% annual rate so far this year. we've seen more wage growth since 2012 than we did in the entire period from 1980 to 2007. so we're seeing exactly what we want to see in the economy which is continued steady job growth. it brings people back. that's driving up wages. and that's a good thing. >> better private sector job gain perhaps than some might have anticipated although the overall number was a bit below the forecasts out there, jason. what in the private sector are you focused on, do you think, as a sort of good sign for the future? >> we saw broad based job growth. we did see manufacturing, we did lose jobs, and we continue to face headwinds from around the world where global trade has been growing more slowly, and that does underscore the importance of for example congress passing tpp. but other than that, you do see broad base job growth in the private sector. >> you know, you look at the wage growth. i think on nonfarm last year's average was 229. we're doing 178 so far this year, leading a lot of people to believe we are in what we generally call late cycle. you agree with that? >> look, well, first of all, you know, our analysis says you need 80,000 a month to stay stable with the unemployment rate and the participation rate. and the fact that we're well above that is why we've continued to see our labor market improve. i don't really believe in late cycle. i think the u.s. economy has, you know, potential it can continue to grow going forward. you see consumers that are confidence that have wage gains. you see high levels of consumer spending that's 70% of the economy. so i don't think you're sort of late cycle. i think it's a matter of the choices we make and we can keep going. >> those are the reasons you cite for why you don't believe it's late cycle? >> i don't believe in the concept of late cycle. >> why not? >> i think if you look at business cycles historically the evidence is they don't die of old age, there's not an increased probability that an expansion comes to an end as it gets older. it just could happen at any point in time, but right now with consumers confident and optimistic the way they are and see wage gains, i feel good about where we are. >> implications -- we're going to get an important jobs number, one more jobs number before the election. would you expect matthew and it's still early days i know, to affect that number? >> you know, our focus on matthew right now is exactly, it's early days, too early to talk about its impact on the economy. we're focused on getting all the resources we can, the president's been in regular touch with everyone down there to help prepare and to help them recover as quickly as they can. >> finally, you know, some traders down here with were drawing our attention to the ongoing shift to part-time work. that seems to be sort of an irreversible trend given the efficiency with which machines now work. is that to you the largest dynamic in the medium to long term? >> well, you know, a lot of this is a cyclical thing. in the recession you saw a really big increase in part-time work. that wasn't because of, you know, computers or robots or machines or anything. that was because of a weak economy. since the economy's been recoveri recovering, all the jobs we've added have been full-time jobs. this month again we saw part-time for economic reasons go down. so i think there may be some shifts in the economy, but i think they're small and slow compared to the way this number gets moved around quite a lot in recessions and in recoveries. >> and in five or eight years from now when some guy's standing on the lawn talking to us about a number and we've got the rise of the autonomous car putting a lot of people out of work who drive for a living, or the rise of artificial intelligence allowing machines to do what people can do, you think that person's going to be able to defend a jobs number at that point? >> look, people have been predicting for over 100 years now that machines are going to replace people, leave them out of work and there won't be new things for people to do. and we as a country have consistently found new jobs, higher incomes and i think productivity growth is good for our economy. and i'd like to see more of it. >> jason, look forward to talking to you in a month's time. if not before. thanks again. >> okay. good to see you. >> jason furman down in washington. let's get to bob pisani here see what's moving on the floor with the dow down 20. hey, bob. >> good morning, carl. modest impact from the jobs report on our markets, but a lot more notable impact overseas where that big drop in the pound that we saw for whatever reason that's helping companies in the uk that are exporters, weak pound helps them out. so some of the commodity firms, billiton, glencore, burberry, they've had a good week overall. here in the u.s. sort of a mixed market here. the recent advancers are declining today. utilities have been a loser this week, they're up today. banks, materials and industrials are down. i think industrials and materials down because of what happened with honeywell there. we've been talking about honeywell kutding sales and profit outlook. honeywell down, textron down, remember they make beech craft and cessna airplanes, united tech, dover, not only did they lower their guidance overall on sales, but they did talk about the aerospace market because this is very important for honeywell. they're saying that the aerospace and foreign defense markets have gotten notably more difficult. they're also saying business jet engine sales were hurt by soft energy sales as well as the antiluxury campaign in china, that's an interesting comment. the aerospace revenue is very important for honeywell. almost 40% of their revenues come from aerospace. automation and control they also talked a little about falling volumes in markets for standards and logistics products. put up honeywell revenues you can see there are significant revenues from the aerospace area. performance material also about 24%. let's turn to the ipo market and see what's going on today because marcus lemonis is here, remember 11.4 million shares at $22. that was the mid price -- mid range of the price talk of $21 to $23. you see here indications are right now and these are preliminary indications $23 to $24. looks like it's going to open on the upside. of course marcus will be here talking for us, rvs for millennials, a very interesting space to work in overall. big debate. we had a desert for ipos for six months. we said it's starting to open up and it's gone from desert to frothy in a week or two. look what's happened to coupa, nutanix, twilio, nutanix and coupa for example both priced below their last round of funding. so it will get frothy when you see companies trying to reach for much higher prices than people were anticipating. so far that has not happened yet. they're just opening at higher prices. that may encourage greediness down the road but hasn't yet. what is powering the ipo market? the stock market is holding up. number two, existing ipos have done well. that's a flashing green light to everyone. most recent ipos especially doing well. remember the window to go public this year is closing. they'll be less ipos immediately around presidential election and then it will close down again around thanksgiving. so finally a couple of ones that may be coming in the next few weeks, blackline, an automated accounting and finance software firm. quantenna, chip manufacturer for high speed wi-fi networks, they could go in the next couple weeks. there's a big one, zto, essentially the u.p.s. of china. if the market continues like this you could see that one go even before the end of the month. right now the dow down 44 points, still waiting for camping world to open 23 to 24 right now. guys, back to you. bob, we'll talk to you in a bit. let's get to the bond pits as well. rick santelli has a lot to watch at the cme. hey, rick. >> oh, yes, holy cow, a lot to watch in the markets, a lot of baseball to watch tonight at wrigley field. if we look at an intraday of 2s, a lot of volatility and mostly lo lower on the number. down 7 on the week. let's go to the other end of the curve, shall we? if we look at the intraday 30 had more bias on its volatility period at 8:30 eastern to the upside, but all in all it stands unchanged and on the week look at the weekly chart it's up 13 basis points. bit of curve steepening going there. wonder if the bank of japan is a bit jealous. look at what's going on in bunds, one-week chart clearly had a response and look similar to ours. on the day bunds up three, on the week up 13. one-week gilts looks similar to bunds. we talked about this for two weeks. watch out above 90 basis points. and let's go to the epicenter of the action foreign exchange, we'll start with the dollar/yen, not necessarily the wildest ride of all, but it's had a heck of a run currently the dollar versus yen dollar at the best level since the end of july. and here we go, the chart of the day, maybe the chart of the decade so far, the year-to-date of the pound/dollar, we know the volatility last night, but what's fascinating is it closed the year at 147.35, it's high, can't make this stuff up, was right on brexit day at 148.77. as it sits right now at 123.90, it's had a wild ride well off its lows but the important of intraday call it robots, call it whatever you want, the volatility is a lot like that old pac-man game. even though we hit a low and we bounce, wu dug the tunnel, we cleared the zone for some of that price structure. you want to really put a yellow highlighter on the intraday activity. it may define the range that we will go down to and start to test over time. carl, back to you. >> all right, rick, thanks so much. rick santelli in chicago. today's jobs number likely to be mentioned in sunday's presidential debate. we're going to explore what else we can expect from round two of clinton versus trump. dow's down 51 points. we're back in just a moment. i'm the company data hog. i do the sales, thmarketing. have to do that from my phone. we use tons ofata. need data ani need it now.ry about it 'cause everything is unlimite it's thend of data limits for your business. get lite4g ltea as low as $30 buc perine. switch your business to t-bi @work. like our passiveressivped us we could fenvironmt. iues, we're not passive agessive. there are no bad suestionhere.hey, no mter holame ty ar well sai ann. ve always admired how you jus, nowiout thki.e ty ar very brave. good point ted. you're living prf that oken't evething. thank you. we , fex helped simplr e-co business. we d thisnot paive gressive eironme i just wanted to say, you guys are doing a great job. what's that supposed to mean? fedex. helping small busiss simplify e-commerce. hey smaybe let's pl upoufriend, the digital part. but it's a manufacturing job. ah, well ge is doing a lot of cool ingsigally helmaines communicate might want to east mention that. i'm buie withy twhands. does that thaten you? no! don't be silly. i'm just, , going too to chop some od with that? ye wdon't have an ax. or a firlace. good to prepared. it was already a crazy week for the pound even before that flash crash last night. of course we're watching it right now at 124. falling pound is just one of the issues jim is going to discuss with brian moynihan of bank of america in a cnbc exclusive later on today. jim, what are the main questions for brian today? >> well, you know what, this bank has probably been at the forefront of technology. and technology by the way means you're spending less money and getting more out of each customer. now, when you hear more out of each customer, what do you think? well, there was another bank trying to get more out of each customer in a different way, wells fargo. maybe the way to be able to get more out is to be able to offer an app that people love. i want to know if people ever switch banks because they like the technology better? because i've got to tell you no bank has been more forward looking than bank of america about what to do in order to please millennials who do bank and will end up owning the bank system. >> we look forward to that, jim. that's going to be a good one. we're going to get stop trading with jim in just a minute. my business wabuilt withason... g by making every dollar count. wi it, i earn unlimited 2%sh cash back ontal one. all of mpurchasing.and thatatnlk fr spa means thousands of dollars each year going back into myusiness... which addsuel tomy btom line. at's in yourlet? ...doesn't go on yr wrist. technology... ♪ the highly advanceaudi a4, with cla-leang horsepower. keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california. time for cramer and stop trading. >> one of the most consistent companies i follow in the industrial world is ppg, old pittsburgh pipe glass, obviously they're into much more than that these days, but what a devastating announcement they had, preannouncement talking about slower than expected growth in europe, year over year volumes going by 1.5% and using word disappointed with this quarter's eps sluggish economic environment. this company does not miss unless things are getting worse. wow, that is some hit. >> jim, what's on mad tonight? >> well, we're going to have ado adobe. i think adobe's really important because it's one of these companies that literally is the central part of the new technology world. and obviously brian moynihan wide ranging bank of america doing so much in tech. and that stock's been a horse of late. nobody's talking about it. we will. >> we can't wait to have you back onset, jim. safe travels home. >> i miss you guys. >> what a week out in san francisco. jim cramer, "mad money" tonight. when we come back, we'll continue to track the path of hurricane matthew, goldman's chief economist january hatzius and the fed down in a range of 47. don't go away. (gasping) are you all right? i was in a room ll of ligh you were there. u wereinancially secur it was glorious. how do you know th? i work at ally - it's my b to kw about finances. toss me back in, i'll check. he's ndininout if i have! ing stops fm doing right by ourustomers. allydo irigh he's ndininout if i have! n the spdboat.m doing right by ourustomers. althe conference cal he's ndininout if i have! the ulte arena for business. hour afterour divdeep, hing ba, anputting cks in rows. the only problem with conferce c: evtually thehave tend. unless you have the coastbusin. it lets you switch seaessly from your skhone evtually thehave tend. to youmobi with no interptions. gethe re ophone and the phones are free. comcast buness. anbuilt for business.ee. comcast buness. to wevy millisecdelinover 200 tters. r ho. both on the trac with the help at&t, red bl racing can sre critical information about every inch of e car from vtually a brakes are getting warm. confirmed,aniel you neool your. undetood, brake bias back 2 clicks. gi thee agility to have speed & precision. use nonone knows &e at&t. just got our first trade of camping world up better than 8%. 11 million shares pricing at $22 raising about $250 million. we're going to talk to marcus lemon dl lemonis later this morning. welcome back to "squawk on the street," carl quintanilla, sarah eisen, david faber at post nine. a lot to get to this morning. >> and we do have some more economic data crossing the tape at this hour. rick santelli has those numbers for us. rick. >> thank you, sarah. yes, our august final read on wholesale inventories and sales, of course, on the inventories side down 0.2. down 0.2 is the second worst level of the year, but the worst is minus 0.6, so pretty widespread there. and last month stands unrevised. however, when you look at the trade sales side, a nice surprise to the upside up a whopping 0.7 though last month we did lose a bit more than established when we first saw the number. down 0.4 increased to down 0.6, but still decent news there and we know inventory cycles have been a huge factor in potentially the wild ride we've seen in gdp. interest rates are definitely down on the day, but they're all up on the week and we'll continue to monitor the wild ride on the british pound. carl, back to you. >> all right, rick, thank you vchl. meanwhile, hurricane matthew battering florida as it makes landfall overnight. our morgan brennan is in daytona beach and joins us with more. hi, morgan. >> hey, carl. so conditions are definitely getting much more severe here as we speak right now. we've got roof shingles that have just been hitting the ground, aluminum siding strewn about on the roads. you can see behind me we've got palm trees basically bent like question marks. perhaps most notably we have storm surge now. so not only can you not see the beach, but this surge is coming up on to the promenade. current forecasts say we could see a top of three to four feet in terms of storm surge here along this beach. i should also note high tide is at 12:45 p.m. so it could actually get worse. just a short while ago florida governor rick scott actually giving an update on all the conditions for this storm along the coast. >> the eye has not made direct landfall, it still is time to make a direct hit and as we've seen it's wobbled. we're very concerned about storm surge and the worst effects are still likely to come. >> so he's warning that actually jacksonville, which is about an hour, hour and a half north of here, could see the worst effects of that storm surge. but overall we've got about 600,000 homes that are without power right now. some utilities in south florida are already working to restore power. florida power and light sending out a tweet just a short while ago saying that its customers in miami-dade and broward counties will all have power restored by the end of the day and many of their customers in palm beach county as well, but, guys, this storm is really the worst of it is just sweeping in here. and we expect really from now through the next couple of hours to see the worst effects take place here. back over to you. >> morgan brennan, thank you so much for that. looking at the picture from daytona. for the latest on matthew's path we turn to necn chief meteorologist matt noise at cnbc headquarters for us this morning. hey, matt. >> hey, carl. we certainly saw in morgan's report the wind is blowing. morgan mentioned 600,000 without power. we knew power outages would be a big issue. the other thing is when you look at the structure of the storm right now still has a very well defined core here talking 120-mile-per-hour sustained winds. gusts in the last hour to about 107 miles an hour along the eastern florida coast, anywhere from port canaveral forward. part of the issue is wind blows against the shoreline, water, storm surge, that's been a big issue as well. we're still expecting a high to in some spots extreme storm surge in the northern coast of florida, jacksonville area, right up the coast of georgia and south carolina. one of the issues is this. we've heard folks who did decide to ride out the storm around the cape canaveral area end up calling in for help but the first responders couldn't get to them. take that as a lesson. northeast florida running out of time, georgia, if you're deciding not to evacuate, you're taking a risk. some people are really sad they did not take the advice. this is the forecast track, it's going to continue to parallel the coast, that's why we say georgia, south carolina, southern parts of north carolina, south of wilmington, that's going to be a concern not only with storm surge and win but rainfall. talking about over a foot of rain that's possible in south and north carolina. north carolina in particular is water logged especially east to route 1 there's possibility we'll get significant flooding out of all this. there's a lot of factors we're watching with this. of course we're going to keep you posted throughout the day, carl. >> matt, thank you very much. matt noyes at hq. joining us on the phone is the mayor of west palm beach. mayor, great to have you with us. >> good morning. >> reports indicate that areas of southern florida, miami and so forth, managed to dodge the worst of what is expected. what does it look like from west palm? >> well, we have been very fortunate. and we did not get as bad a storm as we had been expecting. right now things are very calm. we have crews out looking at the damage assessments and starting cleanup. we have some trees down. we have a lot of people without electricity. we have a couple water main breaks. and basically that's it. so we're really pretty good shape. >> yeah, if this had tracked a little more inland or hit a little farther south, it could have been a much different story. >> absolutely. absolutely. we were prepared for the worst and hoping for the best. and i think our preparation paid off but we're also lucky to not get the storm we thought we were going to have. >> can you give us an update, miss mayor, about the airport? is it still closed? and how do you make the assessment about when you decide to reopen it? >> yeah, the airport is opening at noon. reopening at noon. so that's good news. and we're starting to get all our services back online. >> what about local businesses, schools, everything else that needs to get back to normal? what's the update? >> well, schools are closed today and they will reopen after the holiday on monday. and some businesses are slowly getting shudders off. they're just beginning to see that. we're asking people to stay off the roads though because our crews are out there trying to assess the damage and get things cleaned up. so we really ask you stay off the road at least until this afternoon. and then we probably should be okay by then. >> you know, it seems that people who want to stay home even though the evacuation orders come in, i mean, that story will never change as long as there are hurricanes. >> right. >> we're getting some word from our florida affiliates that those who had stayed are now requesting help even though they had been given plenty of warning. >> right. >> i mean, what's your best lesson for people who live in hurricane zones? >> well, you know, we told people to evacuate as well. some people did and didn't. and we really tried to make it clear to them that our emergency responders were not going to go out when the wind was surging. so if they were in trouble, we weren't going to be able to help them. best lesson is to take these things seriously. you know, sometimes people who've been through several hurricanes feel like they know what's going to happen or not going to happen. and you just never know. so when people are directed to evacuate, we hope that they do that. >> mayor, we appreciate your time. we hope you'll keep us updated if there are any further developments. we hope there are none other than cleanup and recovery. thank you so much. >> thank you. take care. >> jeri muoio, mayor of west palm beach. coming up, there's the market picture right now. the dow is down about 34 points. we learned this morning that the u.s. added 156,000 jobs during the month of september. it was a slight uptick in unemployment rate as well. slightly disappointing, but most are saying it does not move the needle for the fed. we will discuss what it means. plus, as carl mentioned camping world has just begun trading here at the new york stock exchange. we'll speak with the ceo of the company, the host of cnbc's "the profit," marcus lemonis, much more ahead on "squawk on the street." soelses ne how's ur mother? she s more care though. she wants to stain her house don't know even where start with that. first, let's take a look at ur fancial plan ansee what we can do ok, so we'veot... 'll listen. we'll talk. we'll pl. baird. narrator: it wasn't that long ago. years of devastating cutbacks to our schools. 30,000 teachers laid off. class sizes increased. art and music programs cut. we can't ever go back. ryan ruelas: so vote yes on proposition 55. reagan duncan: prop 55 prevents 4 billion in new cuts to our schools. letty muñoz-gonzalez: simply by maintaining the current tax rate on the wealthiest californians. ryan ruelas: no new education cuts, and no new taxes. reagan duncan: vote yes on 55. sarah morgan: to help our children thrive. prop 64 makes marijuana legal in california for adults 21 and over. and here's what else it does: bans marijuana use in public. permits sales only at licensed marijuana businesses, not at grocery or convenience stores. and prop 64 generates a billion in new tax revenue for california to fund after-school programs and job training and placement initiatives. learn more at yeson64.org vote yes on 64. the big jobs report out this morning. the u.s. added 156,000 jobs in september. we also saw a slight uptick in the nation's unemployment rate to 5%. our steve liesman joins us with more. and while those headlines, steve, are somewhat disappointing, there were some encouraging signs in here. >> yes, and i think, sarah, two women on the fed are feeling pretty good today. fed chair janet yellen and fed chair brainard both argued when they kept steady the labor market has more room to run. and just as you suggest today's data supports that. nonfarm payroll coming in a bit below expectations 156 opposed to the 170-plus looked for. i'll explain why in a minute. unemployment rate ticking up to 5%. note that that 156 is double the growth of the labor force, double what the fed thinks they need to keep unemployment rate unchanged. but the labor force participation kicking up to 62.9, that's a big factor. look at the year over year change in the labor force, it is up by some 3 million people have come back to work in america or at least counted themselves as back to work. that's a big change. now i want to show you where the jobs were. temporary help up 23,000, construction up 23,000, retail, this is an interesting story because october they start to hire for the holiday season, so maybe a positive sign for christmas sales. and then there's government down 11,000. that's a big reason why the miss. economists expected government to add jobs, manufacturing that's a problem for the economy down 13,000. the market overall took the number as a sign the fed would keep rates unchanged in november but makes it more likely for a hike to come in december. one fed official on cnbc exclusively this morning argued that she's seen enough to hike now. >> the unemployment rate is about at what my estimate of full employment is, you know, natural rate of unemployment, that's a good number. you got incomes going up. you have solid, you know, hours worked. so, again, i think this is very consistent with what we expected to see, certainly with my forecast. >> mester dissented last meeting, she wanted to hike but she was plain in saying she wants to increase rates again when she gets the next chance in november. but the futures market it sees less than a 10% chance of that happening. and, guys, now almost a 60% chance for december, more on the fed this morning, fed vice chair stan fisher he's speaking in washington at 10:30 today. we'll be monitoring that, sarah. >> steve, thank you. stay with us if you would. we have to talk a lot more about this jobs report, how it impacts the markets. let's bring in david kelly chief market strategist at j.p. morgan funds. monthly jobs report fixture, david, do you agree with that assessment that this report while somewhat disappointing does not take december off the table? >> yeah, i do. and i agree very much with steve's assessment. actually, i don't think it's a disappointing report. as he said the labor force has gone up by 3 million people over the last year. the labor force participation rate has gone up by 0.5%. i don't normally say this but credit to janet yellen -- >> wow, stop the presses, david. >> well, the fed -- she is argued that the labor force participation would pick up as people got used to a tight labor market. and that does seem to be happening. so that's giving them more room to breathe. i still think this economy's very healthy and it is unhealthy to keep interest rates this low at this point. so i think the policy is wrong and they should raise rates in november. they should have started awhile back. but this does justify what she said about the ability of the economy to produce more workers if it could just get the unemployment rate to fall. >> dave, you said something interesting, and that was mester mentioned that she wants to raise rates the next time she gets a chance, which is november. i know you asked her -- >> no, she didn't say directly in november, but she said rates should go up by a quarter point. >> but you did say would the fed raise rates just a few days before the election and she said it's on the table, we're apolitical, we're technocrat suggesting she would, i don't know how relevant that is for the rest of the fed. >> we're in a really weird vortex here, and i think david has talked a lot about this and i think quite elegantly this idea that the fed won't hike because the market doesn't expect the hike. you're looking at the feds funds futures contract, it shows 7.8% chance according to to reuters of a hike in november. unless that number gets higher, i think it's very unlikely the fed will raise rates unless it wants to send the message that the market thinks it's below where it should be. so i don't think that's the case right now. unless the fed starts talking it up, don't expect it to happen, sarah. >> david, you agree with that? markets really leading the fed here? >> i do. the fed doesn't want to be political, but the problem is that if they only raise rates once in a blue moon, then raising rates six days before an election is a big act. if that caused a big market selloff, they would have impact one way or the other in the election and they just don't want to have anything to do with it. for them that's a very good reason even if they won't say it for waiting through november. and luckily i think from their perspective this employment report gives them just enough wiggle room to say, hey, labor force is growing so we may have more time to work with. i think it's paper thin, but i think they could just about get away with it. >> go ahead, steve. >> i want to make one more point about this idea room to run for the labor market. the fact is we are in unchartered territory. we had an extraordinary number of people leaving the work force, some left because they were retired but many left in the prime working age left. we've never seen anything like that. there's no background at all to know when they'll come back or if they'll come back. there were some very smart people who argue they're not coming back, and yellen and brainard decided, you know what, let's take a flight data recorderer -- flier on this. they saw the unemployment rate was not moving while we did 200,000 jobs a month. they said what's going on here? so what they're willing to do it's a gamble. it's dechtly a gamble. on the other side potential higher inflation. maybe they have to move faster in the end, but right now they have policy in favor of putting americans back to work. >> and there will always be, steve, to your point, people who say they're going to hike rates in a period where job growth is slowing, manufacturing has been subtracting jobs for the last five months. david, i want to turn to the markets here, a light selloff i would say on the back of these numbers. we are getting some warnings from big companies like honeywell on earnings, like walmart yesterday, some economic barometers here warning on earnings whether it's annual or quarterly. is the market too optimistic right now about the earnings recovery? >> no, i don't think so. if you look at the amount of warnings going into this earnings season, it's actually a little bit light in terms of cutting the estimates. i think we'll see a nice bounce in operating eps for the s&p 500 in the third quarter relative to the second. i think we're also going to see good gdp number for the third quarter. looks like somewhere in the 2.5% to 3% range. so overall it's -- earnings are bouncing, economy's strengthening, this labor market is heating up because the other key number here is 2.7% on the average hourly earnings on production nonsupervisory workers. wages are slowly creeping up but very much like a frog being boiled here, we're heating up but just slowly enough. >> be careful with the overheating word. steve, final word to you on how third quarter gdp is shaping up and whether we're seeing improvement not just in the labor market but in the broader economy. >> i have to say i'm wary because i've been doing this for awhile. we've been running this cnbc rapid update and it's been healthy and all of a sudden it drops. david's right running 2.6 median forecast of ten economists with their tracking forecast, it's held up relatively well. there's still more data to come. it could still drop out, that happened in the prior quarter. we went into the second quarter with a 2.5% number. it came out at 1.1 and revised up a bit. seems like we're going to get a bounceback. i don't know if we're going to do quite 2% this year. that's something else the fed is dealing with this idea that we may have the job growth pretty good but the gdp numbers are not. >> gentlemen, thank you. good discussion. with the dow down 22, steve liesman and david kelly. some high drama to talk about in the currency market overnight. a flash crash for the british pound. check out the chart. 7:00 p.m. eastern just after that last night 7:00 a.m. in hong kong and singapore, suddenly in a span of two minutes the currency plunges 6% from 126 to the mid 118 level. why? well, one trigger that traders are pointing to some sharp commentary from french president francois hollande calling for a tough exit for the uk, but that does not explain what was a sharp and what some are calling d disorderly move in the market. some traders say it was a series of options orders going through, compounded by light and thin trading during early asia, computer algorithms, typical machine trading quirks we're becoming unfortunately pretty used to. it's also part of a broader move lower for the british pound. take a look at the chart. even after the pound has recovered from those lows overnight, it's still trading more than 1% lower. it was down about 2% about an hour ago. it's still a massive drop. keep in mind before the brexit vote the pound was at 1.50 and now it's trading below 1.24. prime minister theresa may this week outlined her first version of what brexit is going to look like. and it's not pretty. she's suggesting controlling immigration more of a priority than keeping full access to the uk's free trade zone with europe. investors certainly in the currency market giving it a thumbs down, carl, with the pound plunging this week. the question is what does that reflect? it's always tricky to make sense of these moves in the currency market. yes, the uk economy might be holding up right now, but the more we learn about what brexit is going to look like, the more painful it does look for the economy, for british assets, for british competitiveness. and that's why it's so odd to see this preverse move up in the stock market, the ftse 100, clearly there's a lot of exporters that benefit from the weaker pound but the broader 250 is getting hit. >> a lot of expectation that correlation can't continue the way it has been. i love the various theories for the crash, algos, hft, fat finger, even discussion about how much trading desks are staffed at 7:00 p.m. eastern time. people are looking at every possible reason overnight. >> because it is so unusual and especially for the currency market. this is a market where $5 trillion trades every single day. it's deep, it's liquid. you don't get a lot -- >> not as liquid as euro/yen. >> but we're not talking about emerging market currency. the british pound is one of the most highly traded currencies, london is the trading hub for foreign exchange in the world. it's very strange not hearing much of a confirmation on the fat finger thesis or whatever it is, clearly we're going to get used to these computer issues when it comes to trading. but the question is what does it say broadly about the confidence in the market and in this currency, which is very low right now? >> jim called it a number cutting event earlier. >> it's going to ripple for sure. camping world ipo has begun trade as you saw up almost 9%. we're going to talk to ceo and host of cnbc's "the profit," marcus lemonis straight ahead. don't go away. camping world making debut at the nyse. joining us this morning is the chairman and ceo of camping world as well as the star of cnbc's primetime show "the profit." marcus lemonis, so glad to have you. >> this is the first time i've actually been here talking about my own business. >> you're a newsmaker today, that's right. yes. >> i don't want to forget about the small businesses. let's not forget about them. >> no. >> today's a big business day though. >> walk us how this all began this process today leading up to today. >> i think as you think about the evolution of the business, i've had this business for almost 13, 14 years and it was important for me to take the next step. we have over 7,000 employees. and people like to believe that the rv business is really cyclical. i mean, there's parts of it that are, but it was the right time for us. it was really the right time. >> what are you going to do with all this money? >> i'm not selling any shares. >> or just funds raised for the company. >> you know what, i'm a big believer in three things. i hate revenue, i hate motor homes and i hate debt. so we're going to use 100% of the proceeds to delever. we've historically been around three times leverage. you're looking at me wondering why i hate revenue. >> and motor homes. >> i'll tell you why, we've been built on the installed space and we don't want to add stores or do anything that effects our ebitda or ebitda margin. so we really focus on that. we don't like motor homes because they don't turn as fast, they're not as high margin. we sell them, but it's not a big focus for us. >> do millennials buy rvs? >> they buy inexpensive rvs, rvs that are $15,000 to $20,000. >> a lot is done by financing, right? people don't pay for the full vehicle outright. is it a big risk if the fed starts raising interest rates? >> the price of gas and the price of credit doesn't actually affect our business, but the availability of credit does. so if you're looking at one indicator, the macro pieces is consumer credit available. now how it's priced at all. >> how should investors view this in terms of trying to gauge future opportunities for growth. we know thor industries and wennebago have been doing quite well. is that an accurate measure -- >> it's a way to measure how the installed community, the number of rvs in circulation's going to grow. there's 9 million rvs today. 3.3 million of those people are active customers they gave us money in the last 24 mons. for us it's about selling warranties, service, roadside assistance and service parts and we do sell new rvs as well, but we're not as sensitive to that ebb and flow. >> all right. so when you look at the opportunities in terms of continuing to have that growth and ebitda and top line, what are they? >> it's new store openings and acquisitions. so that's really our pipeline. we're open on average six to ten a year, but if the market slows down a little bit, we can do as many as 25 in a year. so you know what we do on the show, right? we look for businesses that need help. that model doesn't just live on tv, that lives in my real life. >> let me ask you about the show a bit. we watch it very consistently in my home and enjoy it a great deal. but you seem to do a lot there. now, i mean, i know through the magic of tv a lot can be done in a day or two, but if i'm a shareholder, marcus, and i'm saying i see you on tv all the time working very hard. >> yes. >> on "the profit," how do i know you're focused on running camping world? >> i have 38 million reasons to care. 43% of the beneficial ownership is mine, i have the golden share in an up sea structure. i think it's clear two things, one, the performance of the company has actually been better while i've been making the show. so maybe my employees would prefer i made more episodes. and, two, when you think about priorities, the bulk of my net worth is in the company. and so there should be no confusion where my focus is. >> for someone who hates revenue, you managed to groet it 25% last year. >> every year for the last five years. >> so how seasonal is it? what happens in the winter and summertime? >> we don't compete with santa claus very well. so july 4th is clearly our christmas. but when i say i hate revenue, what i'm really essentially saying is we don't do deals, we don't open stores, we don't buy businesses for revenue. we buy them for accretive earnings and to grow the database. >> finally you're joining us on a week where ipos continue to do really well and yet there's this hurricane and you've got presence in florida. >> a lot of presence in florida. >> what do you make of those two dynamics? >> it's got an interesting effect for us. while we'll sell very few rvs during the hurricane, we'll sell millions of dollars worth of generators. generators are a big category for our business. i've gotten reports from most of our stores in florida that the hurricane actually didn't really touch much of the land. little bit of storm surge coming for charleston and savannah, but we're fine. >> congratulations, marcus. >> thank you very much. >> very happy for you and proud to call you colleague. marcus lemonis, camping world. make sure to catch cnbc's "the profit," season premiere is tuesday. what a week he's having. october 11th, 10:00 p.m. eastern time. >> it's the number one question i get, do you know marcus lemonis. >> the show is a great way to look at human behavior, marcus, as well. not just small business but also get a sense to people's frailties and all the failures in communication. >> that's truly what "the profit" is about. yes, we're saving small business, but it's about teaching young people today how to think about people differently. how not to behave and how to behave. >> and today you're asking for money. >> i'm asking for money. but we got plenty of demand so we're good. >> thank you, marcus. we'll keep an eye on those shares trading higher by more than 8%. let's send it to courtney reagan for a news update. >> good morning, sarah. here's your cnbc news update at this hour. florida governor rick scott saying 600,000 homes are without power as a result of hurricane matthew. he warned the jacksonville area is particularly vulnerable to significant flooding. the category 3 storm is battering the florida coast right now with winds up to 100 miles per hour. flight aware reporting nearly 4,500 flights have been canceled today due to the hurricane. all flights to and from orlando have been canceled, but miami and ft. lauderdale's airports are open for business this morning. colombia president santos winning the nobel peace prize. he's being recognized for his efforts to end a civil war that has killed more than 200,000 colomb colombians. scientists discovering the largest dinosaur ever found in brazil. the dinosaur was an herbivore at about 82 feet long, roughly the size of a yacht. the bones were actually discovered more than 60 years ago but weren't studied properly until recently. that's your cnbc news update for this hour. back over to you, carl. who doesn't love new dinosaurs? so fun. brings out the kid in me all over again. >> thanks, court. courtney reagan back at hq. hurricane matthew battering florida as southeastern georgia now braces itself. our scott kohn is in savannah and joins us with the next. >> hey, carl. 3 million people in the southeastern u.s. being evacuated ahead of hurricane matthew, about half a million of them are here in southeast georgia. and we really are in the final stages of this now. the people here in savannah have been told that they have until noon to get to the evacuation center at the civic center downto downtown. after that the buses, and they're lined up by the dozens of buses that will be taking them to augusta, about two hours away. they'll be gone. a lot of the roads will be closed. the bridge behind me will be cloedsed. and really what we're looking at now in terms of these evacuees is in many ways the most vulnerable population here. >> me and my two boys, i don't know where they're taking us. i don't know where they're taking us, but we came off over by victory by the truman freeway by whole foods and we walked down here to get to the transit center sto we could get on the bus today. >> how far a walk is it? >> we left our house at 6:00 this morning. >> a lot of stories like that, but a lot of people very much taking it in stride. the evacuation orders went out midday yesterday. and by this morning they say they got about 2,000 people through this evacuation, these are the people who don't have transportation. spokesperson for the local chapter of the american red cross says it's a very complex process. >> we want every family member to feel that it's fine and safe to come to this civic center by noon today. and they can bring their pets. we have a process so that we separate them from their pets for a period of time but then they can come and be reunited with their pets after the storm. we want to save lives. we know they want to save their family members' lives. and we just plea that they come in and we'll get them out of the storm's path and we'll bring them safely back home. >> for those that decide to remain, the situation could be dire. we're still under a hurricane warning, the worst of the storm is still several hours away obviously. but we're looking at potentially 75-mile-an-hour or hurricane force winds, storm surges up to seven feet and as much as 15 inches of rain in some places here in southeast georgia. and that's if the storm continues its track offshore, which it's been doing. that's good, but we're certainly not dodged the bullet completely, guys. >> scott, i wonder how people in savannah are reacting to some of the evacuation orders. georgia hasn't had evacuations from some of those outer banks since floyd. you got to go back to '99 for that. >> that's right. that's right. and that's exactly, you know, it's not something that they're familiar with here. but it does seem at least according to the people that we're talking with to be something that they're heeding as a result. they know the unknown. but what you haven't seen is a whole lot of preparations of boarding up windows and things. but we'll see. >> scott cohn in savannah. we'll take a short break. might hear from the president on the other side. don't go away. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my bin before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. sharing a ten by ten room,ng threestruggling.nding, i rent this place and then i started home sharing. my roommates help out all the time. they are glad to meet the guests and that opportunity that airbnb has given me is such a priceless gift. i was able to take three months off to take car of my family during a family tragedy. the extra income that i get from airbnb has been a huge impact in my life. the president wrapping up a briefing a few moments ago with homeland security secretary jeh johnson and fema administrator craig fugate. we're waiting to see if this tape gets rolled back. i guess we're not going to get it. we're awaiting the sound. here is the president. >> obviously everybody has been tracking the course of hurricane matthew. and i just received an update from our fema director craig fugate as well as the rest of our national security team. and i just wanted to make a couple of key points. first, what we're seeing now is matthew having moved above south florida and some of the largest population centers working its way north. and the big concern that people are having right now is the effects it could have in areas like jacksonville on through georgia. and although we've seen some significant damage in portions of south florida, i think the bigger concern at this point is not just hurricane force winds but storm surge. many of you will remember hurricane sandy where initially people thought this doesn't look as bad as we thought and then suddenly you get massive storm surge and a lot of people were severely affected. and so i just want to emphasize to everybody that this is still a really dangerous hurricane, that the potential for storm surge, flooding, loss of life and severe property damage continues to exist. and people continue to need to follow the instructions of their local officials over the course of the next 24, 48, 72 hours. those of you who live in georgia i think should be paying attention because there's been a lot of emphasis on florida, but this thing is going to keep on moving north through florida into south carolina. there are large population centers there that could be vulnerable. so pay attention to what your local officials are telling you. if they tell you to evacuate, you need to get out of there and move to higher ground because storm surge can move very quickly. and people can think that they're out of the woods and then suddenly get hit and not be in a position in which they and their families are safe. so pay attention to local officials. in the meantime, i've been in contact with the governors of all four of the potentially affected states. i want to thank them all for their leadership. there's been strong cooperation between federal and state and local officials. fema has worked diligently to preposition resources, assets, water, food, commodities. and as the hurricane moves north, what craig and his team will be doing is moving those resources and assets further north so that any place that happens to get hit badly will be in a position to immediately come in and help. but i really want to emphasize the governors have been on top of this, state and local officials have been on top of this. they are the ones who are tracking most closely what is happening in your particular community, your particular area. you need to pay attention to them, do what they say, do not be a hold out here because we can always replace property but we can't replace lives. i want to thank craig and his whole team as well as department of homeland security, my own national security team for really staying on top of this. we're going to monitor this throughout the weekend. our thoughts and prayers are with folks who have been effected. even if the damage in south florida wasn't as bad as it could be, there are people who have been affected. and for them they're going to need help. last point i'd like to make is we're still tracking what happened in areas like haiti that were hit more directly. haiti is one of the poorest countries in the world. it has consistently been hit and battered by a lot of natural disasters to compound what is already great poverty there. we know that hundreds of people have lost their lives and that there's been severe property damage and they're going to need help rebuilding. so i would ask all americans to go to the american red cross and other philanthropic agencies to make sure that we're doing what we need to do to help people in need. and we'll continue to provide information if you're interested in how you can help the people of haiti and others you can go to whitehouse.gov and we'll provide you some direction in terms of where even the smallest contribution can really make a big difference. all right. thank you very much, everybody. >> sir, does fema have enough funding? >> fema is in a good position right now. we had some concerns last year when we were in the midst of budget negotiations. i think that we did a good job of making sure that fema was properly funded. not to make you blush, but we happen to have one of the best americans in sefs craig fugate and they know how to manage their money effectively. that's not going to be an issue. of course we always want to be cautious about making assessments with respect to damage. we're still on the front end of this hurricane. we're not on the back end. so we don't know how bad the damage could end up. we don't know how severe the storm surge could end up being. and, you know, we're not going to know for three, four, five days what the ultimate effects of this are. if we end up having really significant problems and really severe property damage, then the staff comes in -- our ability to provide emergency mechanisms more help to local governments, that's always going to be a question. as you know, we still have flooding in louisiana that has left a lot of people homeless. over 100,000 people lost their homes there. and we still have to rebuild. there is a backlog of need from natural disasters around the country that would like hopefully during the lame duck session to figure out how to fund effectively. so the issue's not so much fema's funding for immediate emergency response. the issue is going to be making sure that after the, you know, in this case the hurricane, but in other cases flooding or wildfires or other natural disasters, after they've happened are we in a position to properly help people rebuild. and we'll obviously make those assessments after the fact. and then we'll talk to congress about how we can help out. all right. thank you everybody. >> are you going to vote? >> i'm not going to vote at the precinct. i'll probably do early vote. i'll fill out my form. don't worry, i'll be voting, man. >> okay. >> i'm going to be doing a little campaigning and a little voting too. all right, thanks, guys. >> that is the president as hurricane matthew moves from northern florida up into the coast of georgia arguing that the storm surge now the big concern and asking people to obey orders to evacuate. "squawk on the street" will be right back. thgoofy glasses. yeah. well, we got hand it to fedex. they've helped make our e-commerce so easy, and now we're getting all kinds of new customers. i know. can you believe we're getting ordersrom canada, ireland... this one's going to new zealand. new zealand? psst. ah, false alarm. he you guys are gonna scare away the deer! idiots... providing global access for small business. fedex. hey, it's be crazy with school being back- we're constantly going over our data limit. oh, well, now - all of our new plans come with no data overages. wow, no more overage so that means... go on...say it.. we'll finally be in control... inucing new &t plans with no data overagcharges. and we're back... small cap stock pickers may be about to see a big comeback. that's according to one fund manager. he makes his case of why tradingnation.cnbc.com. more "squawk on the street" coming up. that all-important jobs number, 156,000 jobs added in the month of september slightly disappointing for the second month in a row, keeping markets relatively flat to under a bit of pressure. joining us, the chief analyst at goldman sachs. the vice chairman speaking in washington, d.c., at the iif meeting say thing the jobs report is close to a goldilocks number, and the unemployment rate is chose to its natural rate. what does that suggest to you? >> i mean, i think it's an accurate description. i agree with that basic take. in terms of policy, i think it suggests he thinks they're still on track probably for a hike sometime soon, december meeting being the baseline. i think that is still the message. if you look at other indicators thought week together with the slightly disappointing jobs report, overall i would say the news has been pretty good. if you look at the ism numbers as well as the jobs numbers. >> i think the question we're trying to figure out is a bounceback from a weaker august or does it mean we're on more solid footing in the economy than thought? i think you always need to take a little bit of an average, so i do think it makes sense to view it in the context of what you've seen in the last couple of months. but we have seen i think some stabilization in terms of the growth momentum. if you look at our indicators, august looked like a breakout to the low side, but september i think has reassured most people that we're still on reasonably solid footing. >> the wage growth we saw, 2.6%, growing from last year, average hourly earnings, that continues to show progress in wages. is inflation running a little higher than maybe we think? alan greenspan was warning about that in our conversation yesterday. >> again, i think there are sometimes outside surprises. overall, i think inflation this year has done sort of roughly what many expected, including the fed. which was a move clearly below the mandate to something still below the mandate but not by very much, 1.7% for core pc, now the wage numbers as you say have gradually gained steam, probably still lower than you would expect them to be, but we've definitely made up ground and are fairly close. >> goldman put out a note earlier, this week or last that there is a risk of the economy overheating in '17. was that yours? >> yes, a small but growing risk that if you -- if you don't, you know, normalize at a gradual pace and the economy does pick up some steam, and i do think it probably will pick up a little bit of steam over the next couple of quarters, that you then could get an overheating down the road. whether that's 2017 or maybe more like 2018, i think that's a lilt less clear. that's certainly not my baseline, but i do think that that is the risk of being behind the curve. and if, you know, if you get better growth over the next year, you continue to make up ground in the labor market, go beyond full employment and deliver only one hike, which is basically what's being priced in the market, then i think that it would raise that risk. >> why do you believe the economy is going to improve in the next two quarters? >> mainly because the impulse from financial conditions, which have been holding growth back over the last, you know, four to six quarters, in particular the big appreciation of the currency, i think we've now digested that and that's going to going to turn a little more positive. at the margin, i think fiscal policy is also becoming a little more stimulative. if you take those two things together, to me that says maybe a little more than 2% growth rather than less than 2%, which is where we've been. >> it's not all inclusive, though. david was talking about honeywell and this morning they put out manufacturing continues to lose jobs. i think it's the fifth month in a row. when does that start to come back online and why is there so much pain if, as you say, we have finally digested the impact of the stronger dollar? >> i think it's partly that global conditions and honeywell, of course, is quite a globally exposed company, global conditions are still quite mixed. i mean, i think in the emerging world there's probably some stabilizati stabilization, but these are still pretty weak economies and, you know, manufacturing i think is weaker than the rest of the economy. we saw that in the isms as well. just look at the level of nonmanufacturing versus manufacturing. i think obviously there will be some variation. >> are you expecting a postelection economic activity going into the end of the year to be a sense of relief, at least from the consumer stand point, or not? >> i have not seen a lot of evidence that the impending election has really weighed on activity to a significant degree. i mean, maybe you could make that argument a little bit on the investment side, although even there you look at the last few durable goods reports and we have gotten slightly better orders, so that would maybe be somewhat inconsistent with it. i wouldn't expect necessarily a big bounce back as the election moves into the rear-view mirror. >> what is the dramatic plunge in the british pound telling you about the outlook for the uk? >> first of all, i think it's consistent with the fundamentals. they have deteriorated for the uk. i mean, the extent of the volatility of course is, you know, probably also related to technical factors. but if i look at just the overall move -- >> recession? do you expect a recession there? >> we're not expecting a recession but definitely a weaker economy than elsewhere. it does seem to be fairly isolated. the other numbers in europe have been generally okay. but i do think some of it is fundamental and then there are some technical factors. >> busy day, jan. thanks for joining us on all the topics including jobs. jan hatzius, chief economist at goldman sachs. let's get out to the cme group for rick santelli, who brings us "the santelli exchange." rick? >> hi, dave. thank you. my guest ed lazier. what did you think of the data today? >> it looked like a middling report, but it was slightly better. the reason is one of the things i always like to look at is hours of work. as you know, that ticked up. the average week was up about a tenth. we tend to ignore that. i think it's one of the most important numbers. that makes the report considerably better than it otherwise would have been. >> i was excited when i saw up 2.6 on the earnings side. people are going ing to make more per year but not necessarily. >> the problem is this -- if you look back -- we made a big deal about the census report that median income was up. everybody got excited about that, because it was a pretty good jump. but you have to analyze that, think about that more carefully and ask why is it up? it's not because wages are up. wages were flat throughout that period. they've picked up a little in the last year, but wages were pretty flat. the reason that earnings were up is because employment was up. that's a typical bitz cycle phenomenon. unfortunately -- that's better than alternative, of course. but unfortunately it doesn't suggest that we're on a path to higher earnings in the future. and as a result, i'm just not that excited about the earnings side. to me, it still looks like we're peaking, maybe plateau, but we're not in a place where the economy is suggesting we'll taking off. >> we've seen improvement the skilled side of the equation where there's some pressure. but on the other side, unskilled, we're seeing some depressing data. >> absolutely. that's an important point. if you look at the unemployment rates of those people who have less than a high school education, they've gone up quite significantly in the past couple of months. >> just in the past couple -- this is kind of weird. >> right. well, you know, and again, the educated have stayed stable. so to me that suggests some weakness in that part of the labor market. we see manufacturing jobs continuing to decline. but it's also true in the service sector jobs that are the ones that these individuals take. so there's been some increase in labor force participation, but at the same time we've seen employment decline. >> what about policy implications? if it's the available pool of skilled labor and its effects as it shrinks on the earnings there, the medicine being applied can't change that dynamic. >> absolutely. so this is this issue of what's structural and what's cyclic. >> they've come over to the structural side. >> i think this is cheerily a long-term structural problem. we don't have the kinds of skills -- >> the horrible situation in florida, we are out of time. ed lazear, great to see you. carl, back to you. >> it is 11:00 a.m. on wall street. "squawk alley" is live. ♪ "squawk alley" on a friday morning. i'm carl quintanilla. sarah eisen at post 9. jon fortt at 1 market. kayla has the morning off. we are moments away from cramer's exclusive interview with bank of america's brian moynihan. we'll get his take on the global banking system, deutsche bank, and a lot more. that's coming up in the next few moments. first, though, hundreds of thousands are without power as hurricane matthew slams the east coast of

Related Keywords

Charleston , South Carolina , United States , Louisiana , Nassau County , Florida , Wrigley Field , Illinois , Brazil , China , California , Whitehouse , District Of Columbia , San Francisco , Dover , Ireland , Singapore , Chicago , Miami , New York , Haiti , Canada , Georgia , Japan , North Carolina , Washington , Colombia , New Zealand , London , City Of , United Kingdom , Daytona Beach , Martin County , Phoenix , Arizona , Hong Kong , Ohio , Orlando , Jacksonville , France , Americans , Colombians , Californians , French , British , American , Theresa May , Scott Cohn , Dave Coty , Walt Disney , Billiton Glencore Burberry , Kohl Nordstrom , Brian Moynihan , Janet Yellen , Carl Quintanilla , Lang , Alan Greenspan , Jeh Johnson , Rick Santelli , Larry Ellison , Jason Furman , Scott Kohn , Rick Scott , Craig Fugate , Sarah Morgan , Santa Claus , Reagan Duncan , Dell Emc , Eric Weissman , Morgan Brennan , Jim Cramer , Sarah Eisen , Courtney Reagan , David Kelly , Bob Pisani , P Morgan Citi , Stan Fisher , Ralph Lauren , America Brian Moynihan , Francois Hollande ,