Proctor, utx, merck and more. Nikkei had a sixmonth high of a weaker yen. Oil inventories after the bell. Case schiller home prices up 5. 3. Out of road map begins with major blue chips reporting earnings from cat to gm, due paupt and visa. Under armour shares are down double digits, despite a betterthanexpected number. And the latest regulatory issues surrounding at ts merger with time warner. Netflixs Reed Hastings weighing in on the deal. First up, among the dow components out with results this morning, caterpillar beats on the bottom line, misses on revenue, cuts their fullyear guidance saying most of its end markets remaining challenged. And then proctors results are above consensus. Thursday on squawk on the street sara eisen will have an exclusive with p g Ceo David Taylor coming into the job. Says that this quarter marks what he called a good start for the fiscal year, jim. This is a remarkable morning because you see two Companies LikeProcter Gamble and dupont putting up 3 organic growth in this environment, which is extraordinary, especially when you look at Kimberly Clark predicted no growth, ge, slowing growth. United technologietechnologies,d to see what hes able to do. Theres some challenges. 3m on the other side, consumer electronics. Under armour, the spend, the spend that hes talking about in order to stay in place is really worrying people. The Conference Call is a very grim Conference Call. From the 50 people that got on it are saying what the heck is going on because they have to spend more money on their retail store and infrastructure. So United Technologies which is better than expected. Weve got proctor and gamble putting up unbelievable numbers, including grooming. And then dupont with a remarkable cash flow. 1. 3 billion improvement. Brazil actually positive because of real. Ye, its pushed back. Businesses push back on the dow dupont. But ed greene told you that there was fat at that company. Nelson pelz told you there was fat at that company. It wasnt fat, it was obese. It was obese. As you say, of course, the big future event is the merger with dow. There continues to be concern on the regulatory front. I know well be talking about that when it comes to at t and time warner and their potential deal, but here were talking about a deal that was announced quite some time ago but continues to try to move ahead but concerned. Its really interesting. Dow and dupont have committed to maintaining their r d. The big worry with europe was that if these two companies stopped innovating, its going to let monsanto have the run of the table. So theyre saying were not going to collapse r d. But there is a feeling among the europeans, theyre looking at all acquisitions and mergers as ways to hurt the client. A customer that is hoping for a seed that does great things for corn and a seed that does great thing for wheat may say were not going the to get that development unless you let dow compete with dupont. Monsanto bayer and dow dupont. The farmers are a protected class. If a farmer squawks, the deal doesnt get done. These guys are a little too rosy. I know this is far along in the process. I do think dow and dupont with that commitment to keeping the research is good. But then i look at things like tmobile and at t. How smart was it to kill that deal . That was a smart deal to have killed and to have given at t mobile 6 billion of spectrum in cash to enable them to be really competitive. I look at the Baker Hughes Halliburton and think how great was that to kill. Look at those companies doing really well and competing against each other and trying to get in against a lot of different businesses. So i think the propensity of these regulators to want to kill deals is showing up em peer kael as being positive. Take a look at the performance of dupont and dow later this week. And i read these things and field more bearish about time warner, i just do. In the end did you ever deep, deep dive and look at the at t earnings . I did get a chance to look at them. They were not particularly strong. We talked about the sub loss but they werent great numbers. Many believe the deal is being done from a defensive posture. Randall stevenson will argue differently but i think thats an argument that can be made. I think you have to push back on a guy like randall. Im looking at the wire line business being bad. Im looking at directv peaking. You know, another game last night, i hate to be so granular to talk about football on a daily basis. But were just not seeing games that are i think going to bring people into what are you laughing about . Have you tried to watch fanduel and draftkings, they peaked. They were your viewership. Ive got to tell you, Fourth Quarter viewership down big. Advertisers are not going to get what they need. Lets get to under armour. As you said, down 16 , premarket is getting a lot of peoples attention. The growth rate Going Forward will be less than expected from its investor day last year and that news overshadowing better than expected quarterly results. Kevin plank will be a guest on halftime tomorrow at 12 15 eastern time. North america up 15. 6 is below the 20 that has really been their benchmark for years. But i think theyre really saying a lot of things about needing to be able to the footwear, lets just call a spade a spade. Everyone has always said if you get a revitalized adidas, if you get nike on the ropes, which they tend not to stay on the ropes too much, then youre going to get a figure that is squeezed. People are saying that the footwear, ua is being squeezed. The footwear category is the most competitive category in the business, thats why i like foot locker as opposed to under armour. Lulu, i was hoping they would have a better quarter. North face doing quite terribly. The only people making money in Sports Apparel is the people that make the fabric. If you were involved in a dogfight with nike over footwear, buck knight thats what they call him, they call him buck. Understood. Shoe dog, best competitive biography. Bill walton recommended. A dogfight with nike, nike can take a lot of pain. They can absorb a lot of pain. I dont like mcdonalds bowing able to absorb a lot of pain in burgers. Not unlike proctor did absorb a lot of pain in grooming and in, yes, razor blades. And they have come out on top. Hasnt under armour already paid a price going into today . It was 43 in august. Sometimes there is no price to pay if youre going to go up against nike. Nike can you think that nike doesnt sit here and say im not going to let adidas and under armour come back like this. Under armour will have to spend more money on the retail stores, more money on footwear infrastructure. Need to get more sponsors. I thought Stephen Curry was the greatest thing. Weve got to be careful. We do . Yes. A wounded nike is like a wounded tiger. You know tigers dont normally eat humans, its only when theyre wounded. Only when they have a thorn in their paw. Fortunately theres so few tigers right now. Only a couple thousand left. Thats a good point. I hadnt even thought about that. Hows the elephants doing . Not doing well either. The elephants are not doing well, frogs are not doing well. Bats, dolphins. Whos doing well, mosquitos. Honeybees turned out to be as smart as humans. Did you see that video . I know thats a little off topic. So at 32 on under armour as we look at the stock, and to carls point well below the highs of this year. They just dropped the sales of apparel outlook, just now. I think kevin plank might want to move up his appearance. Kevin is a nice guy. Maybe he wants to be on today, not tomorrow. It may be the wrong time to start a new whiskey. Whiskey . Hes got a whiskey. Thats a separate personal venture . I dont know. Ive got too many other things to do. Real quickly, lets do gm before we go to break. 1. 72 beats 1. 45. Earnings more than double. Our breakeven in europe looks a little its going to be a little harder to do with brexit. But the china story is starting to come out. I know caterpillar is down. I dont know if its going to stay down, frankly. Caterpillar is the story of china turning. Gm is the story of china. Gm is run versus ford. I still gm the cash flow is so gigantic they deploy that. Up against gm is david driverless car favor. You always have to deal with the future. The future is ahead. Its coming. I mean its coming. Hes thinking five to seven years, as its as that, youre going to see these things all over the place. I dont know where the timeline is. You get 10 years, 15 years, 5 years, but its coming. Its coming and happening faster than we think. That mobile eye test dispute really threw me off because the Driverless Cars require so much technology. But you know what, i saw a driverless 16wheeler they got coming out. Its all about amassing the data. Each mile they drive, each experience they have helps them. Theres a great interview with bill ford today about how Silicon Valley thought they would be able to do this all by themselves. Creating a car is a hard thing to do at scale. Yes. Thats why you have to give tesla a hand. Just to circle back to under armour. Under armour is saying dont give up the ship here, business a little better than people expected. You know whats happening, dogfights, gm, ford, fiat. Dogfights with the shoe business. Youre looking for nondogfight situations. Whos nondogfight, alphabet, amazon, facebook. Nondogfight. They are like, hey theyre just cruising. Its like the sagamore spirit is the whiskey. Talk about market power, i know thats a focus of regulators when it comes to at t and time warner. Come on, man, market power. When facebook decided to build dorms to get the stanford guys with computer science, that was game, set, match. How do you compete with a guy building a four season dorm. I dont know how you do. You cant. You cant. Lets say youre like clorox, which should be doing a little better because they have probiotics numbers that were great. Do they have room service . You get out of stanford and your bill is 250,000 in tuition, they make it up the next day. One theyre starting at 270,000. You cant afford the bay area because the average starter home is 1. 3 million. Now, you have to be in the four seasons dorms. Im more of a hotel 6 guy or 8. You are not a hotel 6 guy. You say a lot of things that are true. I dont believe that was one of them. That was a complete fabrication. Thank you for nailing me. Youre welcome. At least we got one of them in the a block. When we come back, well hear what netflix Reed Hastings had to say about the at t time warner deal. Marcell oo claure making news. Well get to whirlpool, merck, visa. Take one more look at the premarket. Were squawk on the street after the break. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims 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 brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. A lot of buzz surrounding at ts 85 billion acquisition of time warner. Last night at the wjsd conference, we asked Reed Hastings what it means for his company. Its hard to tell. Its very early. We didnt know anything about it or are just sorting through it. For sure we want to make it so that we require for at t customers that hbo and netflix are treated the same. Now this theyre going to own hbo, we think that any special treatment for hbo data would be inappropriate. But i think thats pretty basic. But is this going to be a negative for netflix in terms of more competition, at t having more ammunition for its overthetop services . Could be a lot of that. Theres a lot of at t investment in content, so that could make things tougher. On the other hand, its probably going to get easier for us to recruit time warner executives, which are a very talented bunch. So youve got some puts and calls. Do you find it curious that the populism against the deal doesnt extend to executives, rival executives . You know, thats a very good point, it really doesnt. I do think that we are in a world where if youre an upstart, you just are living large. Its just the greatest thing in the world. If youve just been hanging out, fat cat if youre a legacy business, youve got a tougher road. Yes. Reed hastings and netflix have been on the right side of a number of things. Comcast, Time Warner Cable, they werent a fan of that deal. Charter Time Warner Cable, it lived. They got those great rules from the fcc. Im just saying what reed wants i wasnt referring to brazil 37. But reed seems to get what he wants to a certain extent. When you listen to him, dont you feel like he just kind of sits back, hes kind of einstein. I thought the point about time warner executives was an interesting one. The creation of content to the extent Randall Stevenson believes that is a key thing, its the people doing it. If you can get them and netflix is going to spend 7 billion on content next year, i think, that doesnt hurt. When you think about the culture, Randall Stevenson, does he strike you as a guy that could necessarily be more coming up with narcos 2 . No, i dont think so. He knows his limitations. Do you think he could come up no, i think hes hoping that time warner will continue to. Do you think that cinemax would have that incredible product if Randall Stephenson were the final judge . What do you think he watches . Maybe other than the cowboys or something. I dont know mr. Stephensons viewing habits. You can ask him. We talk to Reed Hastings, Reed Hastings is a machine that has learned. Hes more of a technologist than he is a programmer, Reed Hastings. You said this thing about bezos ten years ago. A lot of these guys who were involved in data make it creative. They hire the right people to make sure they have the content they want. They know what you want. So that they have an edge. Now, maybe Randall Stephenson is looking at what people want. He is and is looking at practicalmatic programatic ad solution and deliver Better Solutions to advertisers. I dont understand the thing about this deal other than were not growing, maybe this gives us a shot and our dividends in better shape. Lets say you can work for reed for a lot more money and a beautiful lifestyle in california versus working for Randall Stephenson. Whats the matter . Im listening. Los gatos is a nice place to be. I did like the filing yesterday reminding people its not Time Warner Cable. Did you see that . How many people got that wrong. Can peep like read . Thats asking for too much. That name is being retired, Time Warner Cable. It is complete lly owned by charter, which is becoming spectrum. The offering is becoming spectrum. There was a time when time warner was time warner, aol, Time Warner Cable and time. It got taken apart. Now its just hbo, the Cable Networks and the movie studio. Thats what you get. You know, did you hear anyone joke around at all about what verizon is putting together there with the aol and yahoo . What do you think there . Do you think thats the powerhouse that youve been waiting for . Theres a word for it but we dont say it on tv. It goes before sandwich. I was thinking dont crowd my space, david. When we come back, well get cramers mad dash, count down to the opening bell and take one more look at the premarket. Relatively weak, although theres a lot of earnings we havent gotten to. Squawk on the street continues straight ahead. End synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. Hey lmaybe lets play upl our the digital part. R job, but its a manufacturing job. Yeah, well ge is doing a lot of cool things digitally to help machines communicate, might want to at least mention that. Im building worldchanging machines. With my two hands. Does that threaten you . No dont be silly. Im just, uh, going to go to chop some wood. With that . Yeah we dont have an ax. Or a fireplace. Good to be prepared. Could you cut the bread . Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential lets get to a mad dash with about six minutes or so before we get to the opening bell, jim. Merck reported earnings. Looks like they werent bad. Whats your take . In my next life i want to be a pr person for merck. They should be up and down cheering. I think theres a lot to like, obviously with their anticancer franchise. It is surprising to me that stock is down. Eli lilly was a first class miss. I dont know what to do with that one. David, ive got to tell you that when i look at alergen yesterday and see how much that was down, when i look at valeant that got crushed yesterday, i still say that this is an Election Year and these are very tough stocks to owner in an Election Year. Merck, i believe, raised both top and