Transcripts For CNBC Squawk Box 20140922

Retailer tesco to announce it overstated profits by over 400 million. The g20 finance ministers are wrapping up meetings in australia saying they are close to adding an extra 2 trillion to the economy, but the group is warning that europes slowdown remains a major stumbling block. And it is playing out if we take at what is happening with the u. S. Equity futures. Right now the dow futures are down by 28 points below fair value. The s p futures are up by 7 points. Although, andrew, this is an improvement from earlier this morning. Yes, it is. Thank you for that. As joe was telling us, it is a merger monday. Its already shaping up to be a busy monday for deals. Just crossing the tape this morning, germanys merck buying sigmaaldrich. That company is valued at 17 billion. Thats a huge deal. We have both executives from both companies to join us first right here on cnbc and well have that interview at 6 40 a. M. Eastern time. Also, it is official, siemens is buying u. S. Oil field maker dresserrand with shares up 30 over the last three months on takeover speculation. Siemens beat their rival from the swiss pump maker sulzer. Ge was also circling with interest. Joe, you have a little more speculation about a deal in the tech world. Well, you can see both of those Companies Worth more to foreign entities. Aldrich is a crown jewel in u. S. Companies. They made over 200,000 different products. And the things they would make, when you do something called a restriction enzyme to clean the acids at the same place, totally different, hundreds of different places to do it and it will leave sticky things to clone she chemical weaponses, and sigmaaldrich you could count on. Its a Great Company that is going to merck. Not the merck here but the one in germany. And it has to deal with world war i or world war ii where they were founded over there and then they were in germany and then youre talking about different names. The same company but merck they are not a separate drug compa company, but there was a u. S. Unit formed after we got angry at the germans. It was after world war i. After world war i. We were talking about in makeup, i said these companies, i dont think the Obama Administration really understands that youre not going to be able to stop this, but this is a type of inversion. They have to understand because its becoming more and more clear they dont lose any money on that. But we are losing they dont lose, they pay the same amount of money on the sales in the u. S. They still cant take their taxes overseas. They wouldnt come back anyway, but they wont have to do this ridiculous system we have. But the other thing, they will stay with it and build plants away from the hightech environment we have here. So the jobs will continue to be lost. But the guys in washington can only see their hand in front of their face with the actual amount of revenue. The question well ask the executives when we get to 6 40 is when you think about who else is at the table and who else was able to pay more or less or what the issue was. Was it actually the fact that they were foreign allowed them to pay more because of the tax issue or Something Else. Well, merck has a lot of reasons to buy sigmaaldrich. Merck is a Great Company, but we buy Foreign Companies all the time. We do. I just want to separate the issue. I dont believe inversion and this issue are the same issue. You are saying you dont believe that our companies are looking better than others around the table . Im not saying thats the only reason the tax inversion issue is about companies in the u. S. Pretending to live somewhere else. It all relates back to the problem we have with Corporate Tax code. But they are both seeing symptoms of the tax rates being inequitable with the rest of the world. It is capital flowing out. What we have been saying is it is not just the up versions where you care about the unpatriotic businesses that go to change their name. This is more capital leaving the United States because its treated better elsewhere. Its as simple as that. Other places are able to make more money. Theres no disputing it. It doesnt matter where you agree with me or not. Let me make the argument put your nose in front of your face, you think they are going to do this just for tax . The only reason he said im going with pfizer he did. No, there are other reasons. Do the math. Figure it out. Its simple to see why you would even resist the notion thats what is happening when it is so clear. I think its a partial reason. And just like you said, maybe its not the only reason. Its not the only reason but the end result is the same. I think we need to fix the tax plan. The capital is still leaving the country, which is a negative for us as we lose two more companies today because of it. And the longer they drag their feet and pretend they can somehow just put a bandaid on it, im not sure it is good for all of us. Im not sure either of these transactions would happen anywhere. Let me just say, i dont care whether you are not sure, this is whats happening. Thank you for the dogma. Emc is holding talks with dell and hewlettpackard. The data storage maker is exploring options including a sale. The wall street journal reports talks with hp broke down weeks ago. Meantime, dell could explore buying assets rather than all the relative sizes of the two companies. Well look at the markets, we have seen they are indicated lower this morning but nothing that is substantial given the weakness abroad. Futures are now down 32 points. On the dow down 7. On the s p, as far as the walmart facility, we are down to 91. 95. The tenyear note was above 2. 56 now. It backed off in terms of the yield. Well check out the euro versus the dollar, and a pound didnt a little better leading up to the vote and it fell off again. 125 is the stuff. 12. 50 is where we saw this back earlier this year, which would be significant. And global news this morning, microsoft is delaying the launch of the xbox one console in china set for release tomorrow. The company isnt giving a reason but media reports note that china is under investigation by the Chinese Government for suspected antitrust relations related to the windows on raying system. And microsoft office. China lifted a ban on gaming consoles earlier this year. Now to the worlds biggest ipo of all time. There was overwhelming demand for alibabas offering which initially raised nearly 22 billion. Shares surging near 40 in the stocks debut on friday. As a result, the underwriters are joining us from beijing. Eunice yoon . Reporter the market feels like a massive hangover after a party. Some are very proud about the company, but a lot of the market chatter is, okay, now you have the largest ipo, what are you going to do next. And the focus has been about the questions on companies futures. Questions on how to deal with increased competition in the slowdown. A lot of people are saying, now we have seen the Company Issue additional shares. And i spoke to a couple traders who said, thats great but what do they know that we dont know. And its really feeding into those doubts a questions. And today we saw that plant in some of the alibaba stunts acting as a profile. That could be because of a runup in the stock ahead of the ipo, but at the same time its feeding into all the questions about the evaluation of this stock. Eunice yoon, thank you. Alibaba soaring on the first day of trading hitting the intraday high of nearly 100 and closing out the day at 93 per share. Take a look at the stock this morning. Up right now looking at 94. 55. What does the future hold for alibaba . Lets talk to squawk on the street. Reporter we hope in the next 10 to 15 years the world changes because of that. We want to be bigger than walmart. It is not the device. We hope 15 years later this is a company like microsoft, like ibm and walmart that changeshaped the world. At one point we mentioned on friday the alibaba Market Capital was bigger than walmart and ge. Joining me is ronald who was with us on friday to preview the alibaba ipo. The big question is, what did you think of first day trading and more importantly was it a successful ipo or a failed ipo . And you can look at it in both ways given how it ended. Sure. I would say first and foremost it was pretty successful given where it was originally priced and how the day went on. I hear you in terms of where it closely traded up to, close to 100. Buy and large, this is one of the Largest Technology companies out there with the Market Capital 200,000. Its a big ceo that is very successful with a lot of opportunity ahead. But not this price . Well, he clearly could have priced it higher giving the demand. You cover yahoo shares if you want the alibaba ipo, you can buy the company directly and dont need to buy it through yahoo . The benefit of yahoo is they still own 16 of the company. So there will be more sales here Going Forward. Lockup over here. But weve always said that with the ipo, theres a bigger focus on overall operation and theres a lot of things that need to go through to take the next leg up. If you want to play alibaba, would you gubuy . Theres no indication that alibaba is a juggernaut of where they stand in the tech world and the internet world and china, specifically. If we had a choice, because we do now that its a public company, we are talking about a company like facebook. With any new ipo, theres risks up and down but bottom line is hes a phenomenal company and you heard what the founder is talking about, as you read to the next perspective, theres probably minute mall risk. You just said if you had the option you wouldnt play yahoo or alibaba and buy facebook. Why is that . Well, just from what were seeing here with the growth continuing, theres a lot of opportunity with the current businesses as they are within global installs and suggest ed panels. I think the growth here can continue. As a result, when you look at evaluation perspective, facebook is trading near 14 times 2016. A discount to alibaba, not to mention, we are a year and a half to two years since going public. I think i know how to talk to the street and theres not a lot of talk about walmart. They dont do a lot of business in the United States right now and set up an office in Silicon Valley to buy up smaller companies, but theres no infrastructure here. Is there any risk, if you will, to the u. S. Businesses . And what should they be doing if they do have a risk . Well, theres always risks but it is also called competition. Im sure amazon would welcome it. Walmart is trying to get into the ecommerce base for a number of years now. A Larger Company is shown to me in terms of niv. The best thing to come over here, they have launched 11 games for the beginning of whats happened. Quite frankly, im sure those in seattle would welcome more competition to keep everyone on their toes. Thank you, justice. A big debut weekend for apple 2 with the lines out of control here in new york. Close to 5,000 people. Tim cook showed up to greet buyers and the poor staff out there. And then theres this, the new wall street journal report says the launch of the iphone 6 could boost retail sales for this month by as much as a half percent. John fork is joining us now with more, we worry about a lot of the weakness we have seen in retail sales in the past, this absence of people buying things over the phone. I dont know if thats true or not, but thats good or bad for retail sales, does it go up or get redirected . The weather is good and people are coming out in line buying coffee and other stuff after their post iphone glow. So i dont see how it can be such a bad thing, but 10 million is the unit number to watch. Normally at 8 30 eastern after an iphone launch, apple will put out a press release to say how the iphone did over the weekend. Last year the number was 9 million, but they didnt to preorders. So theres kind of this calculus going on, no preorders, 9 million. How long was the line outside the new york store at lunch last year . It was around 1500 deep. This time it was close to 1900 deep. And i kept seeing reports on twitter monitoring this over the weekend, watching the analyst reports. There continued to be lines saturday and sunday. Also, the scalpers were out in force. Many seem to be from china. A few documented cases of people saying they were in line getting these phones for family and friends and then dropping them off with people no doubt funneling these phones to other countries. So i think theres really interesting reason to believe this could be an absolutely huge launch. Maybe over 12 million units. Well know in a couple hours because carriers have the new upgrade plans to latch onto even though they are paying more per month to get the new technology. Theres that. Theres also a growth in largescreen phones where a lot of the growth is. Having played in that market, pent up demand. A lot of people who couldnt get the size of iphone they wanted may have gone to samsung. Now they have an option. The lines show they are getting it. You still have the old iphone, what are you doing . I brought two of the units i have, but im an obsessive smartphone user. I type scripts, elements, email. You have scripts on there . I do. The iphone 6 is too big for me to reach my thumb to the screen. Im the same way. Once you are used to typing one way, its hard to switch. They have a way to make it smaller, right . They do. But when you are on saysi obses you dont like change either. I love change and am into the gadgets. But this time its taking me longer to decide if im going to migrate to the iphone 6. I like the new one. I like the bigger screen because theres so much i use it for. How about the big big . Thats too big, but i like this one. I have the apple 6. People are driving. And thats why they are doing they shouldnt be doing that anyway. What is so important that youre doing this that you have to do everything onehanded . Like driving. I dont when are you doing it with where you need to do it with one hand, what are you doing . Other things going . You just said its hard to get your thumb into its just a habit. All one handed . Yeah, maybe i got the mouse going on the computer with the internet, multiple screens. A lot to work on. Do you try to dictate it . It is better when dictating into the phone. You can see the words appear as youre speaking them whereas before you had to wait and then figure out yeah, it usually gets its own that you have to laugh. I feel like they are getting it better and tweaking it. I like it a lot. Sometimes it seems pretty obvious and they come up with names, proper, and thats what you got . Did you upgrade to ios 8 . No. You probably need to upgrade. I need to do that, too. Thank you, john. Come on down with the devices as quickly as possible. We played with them on friday. They are cool. Much more on this megadeal of the morning. Merck is scoring on a deal with the players coming up next hour. And becky is on the blue carpet kicking off with a big Award Ceremony with the stars out. Becky caught up with a few of them including one bigtime producer. Thats after the break. Welcome back. The tenth annual Clinton Global Initiative opened last night. Becky was there walking the blue carpet along with Madeline Albright and donna karen, lee you dicaprio and seth myers were there among others. Well be live at the Clinton Global Initiative today, but there were a lot there last night. There is a theory out there that americans, in particular, think big business is corrupt. Now, i got the chance to talk to grazer and asked whether his industry, hollywood, is playing some sort of a role in that to make corporations out to be the bad guys. Well, they are an easy choice for conflict. I mean, so you dont want to make the whole corporation bad, but usually in movies or Television Shows you find a way to sing alreadyulasingularize t. According to the study we just rolled out that well have more information on next hour, a third of americans think corporations are evil. This has to have come from the financial crisis and the fallout from that or a surprise meeting as a result of the survey, but well talk more about that. Joe, you made a point in the past, if you look at cartoons out there, they tend to villainize corporations. But they are more likely to be a ceo or a drug member. More likely . Are you going to argue with me, andrew . Yes. Are there more shows that have a villain . Yes, i can show you statistics. Did you see, what was this business, lego and both cars movies . Its not fun the fugitive of the pharmaceutical company. Think about just any villain. You need a villain. But i think the bigger issue is that people can say greed and profit incentive but they are two different things. Two people are free to make their own decision in a transaction. They base things on whether its going to be profitable and that allocates andcapital in a more efficient way. I was surprised because i know americans have a bad taste in their mouth from the financial crisis and blame wall street and blame the big banks. I was surprised to see that so Many Americans still blame big corporations overall. And with to this day i see the media has a, for some reason, parental action to show that side of things. I would go back to the housing crisis as a societything. I see something totally different. People who feel powerless always hate people with power. Whether its a company or anything, thats what creates the drama. So youre talking about ceos or something . Yeah. Im saying, employees often feel powerless. So they hate the government, too . Sure. So they hate the government and corporate. I think youll be surprised that the attitudes between developed nations and developing nations, were going to talk a lot more about this coming up next hour. People that start businesses and employ a lot of people are the object of derision and Something Else. In fact, i think it was one of the guys on youtube that said over in ireland when you see a guy up on a house in a big hill, you say i want to get that guy. Whereas when you come to the United States, you look at that house and say, i want to be that guy. Unfortunately sadly, its changing and shouldnt. Nobody talks about prosperity. What politician uses prosperity in a campaign speech. Romney uses it constantly. And it didnt work. Well talk about this. Next hour well talk about the poll results. Tomorrow, squawk box will be reporting live from the clinton blue carpet and well talk more about the corporate perception indicator, next. Yeah now that the new iphone is here i bet its been crazy. Flashback. Yes, we have the new iphone. You get 10 gigs of truly shareable data. Its two to ten lines unlimited talk and text starting at 130 dollars a month. Not too crazy. A little bit. The new iphone is here. And at t has the perfect plan to go with it. 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Cme group how the world advances. Good morning. Welcome back to squawk box. Im joe kernan along with becky quick and andrew ross sorkin. The oktoberfest is underway. There are a lot of tags on the keg brews. And the event dates back to the 19th century when 6 million visitors around the world are expected to raise a glass during the festival in munich. Is it september 22 snnd . It is. Its early. Making headlines, google reportedly selecting htc to take the next nexus tablet. This affects googles longterm strategy of using multiple partners on a device from a manufacturer from gaining a monopoly with it. Another recordsetting week with the dampaverages. Key data coming this week further fuel or to disrupt this rally . Joining us is alek young. When we see red arrows this morning and hear concerns on whats happening with china and europes economy, is that enough to slow things down here or will we be able to stay afloat regardless . Well, i think we have been seeing some pretty significant headwinds in terms of global economies for months. And the u. S. Economy has been able to kind of weather that. So we would expect that to continue. And i think the biggest macwrote issue is the tight anything by the fed. But what we are concerned about is the lack of inflation. We saw that heat up with people worried about the fed. The dollar is very strong now with Commodity Prices coming down pretty aggressively, so were remaining fairly sane with the fed. Yes, they moved in 2015 but it will be pretty modest. Already if you look at where the fed is forecasting the fed funds, it will be at the end of next year. The fed members are saying 137. The markets saying 75 basis points. So the markets already saying more so than the fed itself. And if we continue to see dollar strength, which we expect because the Interest Rate and growth differentials you mention are good for keeping inflation down and keeping whatever tightening we get out of the fed at a pretty moderate pace. So right now you have a goldilocks scenario improving gradually but not a lot of inflation. Historically the fed is a bigger threat to the stock market with inflation than when we see tightening with the growing economy. I wonder if the market has lower expectations than the fed does because the fed has been bullish at this point. If the market is underestimating that, are they in for a rude awakening . One of the issues we have not talked much about is the discussion in the fed over the last couple of days downgrading their gdp forecast. How does that play into inflation . Lets remember the highest correlation between rates is with inflation. And if youre going to have a slower gdp growth and take 2015 fed forecasts down from 3. 2 to 2. 9 kind of central tendency, thats going to affect the cyclical animal spirits Going Forward as well. Thats something we definitely have our eye on. Let me ask you this, do we ever get back to the point where we cheer Economic Growth, we cheer when somebody raises their gdp forecast or when we see strong economic numbers rather than saying, yea, this is weaker than we expected and that means the fed is here for long her . I think so so for sure. We are kind of at that point right now. One of the other issues the market is struggling with right now is kind of knowing where the risks are versus thinking about, well, were not exactly sure where the catalyst are for growth Going Forward. Those catalyst seem to be more hidden now than the risks do for the first time in a while. And we think some of the catalysts could be positive for the next couple months Going Forward. Alec, you said the thing you worry about the most is the fed but there are a lot of other issues from the geopolitical perspective, too. At this point the market has shrugged it all off. Does that change at some point and what is the Tipping Point . I think the geopolitical points are tough to predict. First of all, generally speaking the rule of thumb is does it impact trade and really the way it impacts our economy is through the trade flows. The reality is the vast majority of the time the flareups dont amount to anything to disrupt major global economies. And therefore any major selloffs tend to be buying opportunities. Let me ask you about this, the average investor, do you think they are fully invested that the point or still a lot of money on the sidelines . Are people still spooked by what about in 2008 . What do we stand . I really think on a Going Forward basis, if we do see a rise in rates, even if it is just kind of quite moderate, i think people are going to start opening those broker statements and saying for the first time in a long time, wow, bonds can lose money . And i think that has a big affect on the market. We have talked a long time for the great rotation out of bonds into stocks. And its a slowmoving train and thats something to be a positive catalyst Going Forward as well. Another positive on that front, theres been a lot of skepticism about this bull market. And i think the fact that a lot of these negatives havent played out. People have miscalculated on where bond yields would be and underestimated stocks. So i think you have some of this, you can call it bearish capitulation where people get frustrated with having missed things and thats also positive for stocks. Alec and jeremy, thank you for coming in. Germanys merck will acquire a big player. The ceo of sigmaaldrich will be here to talk about the deal. But first, heres a quick check on the European Market breakdown. We asked people a question, how much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Welcome back, everybody. Right now its time for the squawk planner. We have existing home sales that will be released at 10 00 a. M. Eastern time. On the earnings front, look for Quarterly Results from auto zone. And today officially marks 20 years since the First Episode of the hit sitcom friends premier. That show ran for ten seasons on nbc becoming one of the most popular comedies of all time. Thats our squawk planner for today. Joe, back over to you. Thank you. A german drug and chemical maker merck is acquiring sigmaaldrich for 140 a share. Karl ludwig is here, mercks executive board chairman. And we have the president and ceo of sigmaaldrich. I have a lot of experience with your company in terms of having used a lot of the products back in the late 70s and early 80s. I used your restriction enzymes. How many individual products, do you know offhand that sigmaaldrich now sells . We have now over 240,000 products. And we typically add over 5,000 new products every year. So, we are a Much Bigger Company and have gone into different disciplines since the time you started using our products. And we are truly a growing life science business globally for today. I dont know everything that you do now, but it would be that i buy something that would come in this and leave acid at an exact place between base pairs and cost a lot of money. It was amazing and you could always count on it doing exactly what you want it to do. My question now, rakesh, with all the automation now done with sequencing, are people still using these to do basic Science Research . Absolutely. We today are helping researchers, especially on the phrma side on the small pomolece research as well as large molecule research. If you look at the Health Care Value chain, we are strong on the discovery stage of drugs. We are strong in the manufacturing side. And then we made a recent entry pretty strongly to diagnostics. So we cover all three legs and the business is doing tremendously well globally. Well, that makes sense, carl, because i originally thought sigmaaldrich was a Science Company that provitdded the research material, but youre buying it because synergy is with drug discovery, not just for the cash flow it sells off selling the 240,000 different products . Our company is a drug company, but at the same time we are a company in Life Sciences. So we are in Laboratory Essentials as well. We are also a company that provides services to the biopharmaceutical industry. So what this seal does is put two companies together to reach an overlap, and therefore brings about something that is better for the customer and brings additional value for the customer. One thing that was definitely occurring to me, we have been talking about it this morning, what percentage of revenue for sigmaaldrich is overseas . About 60 , joe. And about 40 here at home. 60 outside the u. S. On that you pay both the tax rate of the country where you sell it and you pay whatever you fay in the United States. So you pay both taxes, is that correct . That is correct. So by moving outside and now being with merck, you basically dont have to pay the 35 on the stuff brought back to the United States . Well, really the way they designed the capital structure how did you design the capital structure . We pay taxes for all countries. The german tax rate is not very low either, so we design the taxes according to you dont have to pay taxes twice. You dont have to pay it where you sell it and then you dont have to pay it back here in the United States. Carl, would you at least concede that the after tax results that youre going to get are better than a competing company in the United States at this point . It allowed you to pay more money than a United States company to buy sigmaaldrich. No, we look first at strategy and the first commercial set and the business opportunity. Then you have to take into account issues like labor costs, availability of labor, infrastructure costs, for example, you have extremely low energy costs compared to europe. You have to take into account the dollar depreciating, the euro is falling, and then taxes is not everything. It was a business deal. Let me try this, a similar question but im going to try it on rakesh in a different way. I appreciate what you said, carl. Were there u. S. Companies circling that couldnt have paid the same amount as carl could because carl could find more savings on the tax perspective . Yeah, you know what, i would say is that if you look at the benefits of a combination like this, and how we can enhance the Value Proposition for the customer, and really thats the thesis. Strategically if you cannot enhance the value of the customer then you cannot do the deal. And those benefits will far outweigh the financial benefits that come because weapon dont drive that, that would be more of a driver, but surely this was done on the basis of conversations we had about what we can do in the industry for our customers bringing the two companies together. We definitely appreciate that. But to stair it straight in the face, the bonus that youre going to get, it will not kill you to say yeah, we are not going to be taxed twice on 60 of our revenue. That has to be something to make this an attractive acquisition for merck, is that true or not, rakesh . Well, the u. S. Based tax for our company is 28 to 29 which is on the high side of what most Life Sciences companies do. And as i said, the taxes in germany are not the lowest. But germany, when you sell something in the far east, germanys not going to put its tax on what you sell in the far east. The United States, if you bring it back is going to tax it at the 28 you just talked about. Now 60 of your revenues are generated overseas. Thats 60 of your revenues now not going to be double taxed. The double tax is basically a good idea. I know, thats the point. But the United States we have a tax rate which is very similar to rakesh. Our tax rate is 25 to 26 . But the germans, germany doesnt charge that rate on money coming back to germany on revenue that you sell in the far east. We are moving in the direction which i think basically nothing has to do with the deal, its a business deal. All right. It will be very the point is that as an american, and i the sigmaaldrich, this is a crown jewel of the country, and now obviously were not going to try to close our borders to foreign acquisition. And we dont get the same treatment going abroad. I tell you that we get a lot of nationalism sometimes, and no one is saying that, but this is an example of another asset leaving the United States to some extent. I would think that when you expand plants and when you expand hiring, it is not necessarily going to be in the United States at this point, is it . No, absolutely. We will do the right thing. Weve had the discussion about the expansion. In fact, today most of the expansions we have announced which we will continue have been in the u. S. We are now manufacturing the new wave of cancer drugs, all that expansion is happening in the u. S. We have just recently made a significant expansion in producing toxic compounds in wisconsin. So we have a lot of things happening in the u. S. In fact, we are investing more in the u. S. Than we are investing in asia. We have more than 2,000 employees now in the boston side. We have a very strong commitment Going Forward. So the u. S. Will not suffer from the opposite. Hey, guys, one quick question, youve offered 140 a share for this stock in the free market this morning. The stocks trading at only 119, almost 120, which is a pretty big spread. Why do you think shareholders are anxious that this yield doesnt get done . Cash. I think youll have to ask shareholders. We are ready to go. We are financing with everything in place. We can start. All right. Gentlemen, we hope that this becomes a leading company and move forward. Basic science has been so quick in some of the moves to the not quite so quick, maybe this law will help if the Companies Combine and thats what youre saying. Actually, the free market is now looking to be 137 or 138. 95. So it is trading just a dollar below. You are looking at the old number. No, this was before, yeah. Okay. When we come back, we have a lot more squawk in just a moment. R money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Imagine the luxury. Of not being here. The power you want with the fuel economy you dream of. Performance with a conscience. This is volvo innovating for you. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Another celebrity photo hack in the headlines. This time photos of Jennifer Lawrence and Kim Kardashian appeared on reddit boards. Some were pulled immediately because of the companys new policy on copyright infringement. But others went viral. Still a number of people who have naked pictures of their phones. Rihanna, again, and shes a beautiful woman and everything and smart and great performer, great artist. But i have seen in the posts that shes in the papers a lot. Shes got a great publicist. A lot of times shes not shes used to this. I had a pretty good idea. Kim kardashian. Shes mortified. As modest as she is. Kanyes going to when we come back this morning, how do americans view Corporate America . Does big business have too much influence over Big Government or not enough . We have the results of an exclusive corporate perceptions survey. That is right after this. And the alibaba hangover. The ipo hoopla is over. Turns out more stock was offered than originally thought. Thats coming up on squawk box. How do you beat the number one seed . You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. Whos going to make it happen . Discover a new energy source. Turn ocean waves into power. Design cars that capture their emissions. Build bridges that fix themselves. Get more clean water to everyone. Whos going to take the leap . Whos going to write the code . Whos going to do it . Engineers. Thats who. Thats what i want to do. Be an engineer. Join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. Lets make a deal money. The week kicks off with billions in transactions. The alibaba hangover. Fridays ipo turning into the biggest public debut in history. Now what . Where does the chinese ecommerce giant go from here . A cnbc exclusive. We have the results of a massive new survey on corporate perception. Then we take the data around the globe. Squawk box begins right now. Dont stand so close to me dont stand so close to me good morning and welcome to squawk box. Im joe kernen with becky quick and andrew ross sorkin. Where was that . Blue is the color of the state . No i think its the color of the cgi. Is that because of the state . I didnt get to ask him. Blue used to be my favorite color. Youre wearing blue today. I know. Start of the Clinton Global Initiative. Whenever you say cgi, i think of cmgi which was that incubator. I think of cgi in terms of the animation in movies. Yeah. All right. Well all be at the event tomorrow talking to the leaders is it in new york city . Its at the sheraton. And you want me there . Yes. Jacket or no jacket . I think you might want a jacket tomorrow. All right. And in a few moments becky will the findings of a huge new cnbc surv survey. Plus her conversation whats his name . Do i have to call him sting . Did he make that up . Stinger. Sting. What is that . I knew you were going to ask me this. Does he have a name . He does. I meant to look this up this morning. His name is Gordon Matthew thomas sumner. Sting. What he had to say about the big independence vote in scotland. Im going to come up with something. I dont know. But first andrew has some of the mornings top stories. You ever thought about it . Im just going with andrew. You know what i like . Flea. Flea. That was a good one. We should start a twitter poll. You already have one name. Its joe. You are the joe. Lets talk to you about headlines. Go ahead, flea. How about louse . Whats his name is flea in red hot chili peppers. So its already taken. Two takeover deals in the news this morning. Merck buying Life Sciences buying sigmaaldrich. Also Germanys Siemens buying Oil Equipment maker dresserrand for 83 per share. Share hs risen last week on reports that a deal was close. You know, with siemens, that allows them both of them were trying to make it. But i wonder what is the overseas revenue of dresserrand. Maybe not as high. So this i might actually say has more to do with what did i will get your take on dresserrand in just a moment. But maybe more domestic based. But 60 of the revenue is outside of the United States. How much is in germany . Im sure its less than 20 . So on 50 of the entire revenue of sigmaaldrich they will no longer get double taxed. Right. We have some exclusive data out this morning. Partnered on a massive new survey called the corporate perception indicator. Becky has the details. Perception, power, profit, hope, fear, responsibility. How do you feel about corporations and their obligations . What about the leaders on the inside . Cnbc surveyed more than 25,000 people in 25 Global Markets from the general public and the executive suite about how they perceived corporations. The results . More than a third of the u. S. General public view corporations as a source of fear. And more than half of the u. S. Respondents think corporationing are a bad thing for society. But others in other developing countries still view job creation as the most Important Role played by the corporation. Emerging markets. Brazil, india, and south africa are more likely to see corporations as a source of hope, more likely to say that strong corporations are good especially to strengthen local economies. But the view capturing a global majority, corporations take advantage of tax loopholes. This is high in developed economies. More than half of Business Leaders 56 and 62 of the general public. Perhaps not surprisingly as the tax inversion debate rages, the u. S. Numbers tick higher to 61 of executives. Joining us right now is the ceo of bursten stellar. Thank you for being here today. Thanks for all the cooperation. I was surprised by the results that came out. I know attitudes are different between developed nations and emerging nations. That jumped out. You have on oped today that points out a lot of these things. In china it is 84 . Its amazing. And i think the dichblgs between the emerging markets and the developed markets are really what jump out here at you. Its fascinating. The sense of optimism. Whereas in the developed markets especially in the United States and europe, theres a sense of stall. And people just are not reembracing the business sector. What do you think happened . After the financial crisis that people were obviously wary, but what went wrong in terms of not turning that around . I think the recovery has been imperfect. Its been slower than people would want and its been halting in places. Theres a lot of people who are feeling hurt and feeling pain from all of that. People blame the media for everything. But there is something to the media. I dont know. The whole liberal zeitgeist that they dont have a problem with the government but have a problem with corporations. Seems like they have it backwards. But even with that, you look at these results and theres a lot of strength. App lot of positive reports including in developed markets. People give them overwhelming credit for creating Economic Growth, creating jobs, being more socially responsible than they were a decade ago. It is getting through. Its just about helping unless you want to live in a country where job creation is generated by the public sector, and we know what usually kind of country that is or what kind of country that becomes. By definition, private sector jobs are what create prosperity. And theyre generated by corporations. Agree with that completely. And 50 years ago or whatever it was, 80 years ago talked about in developed countries the sooner or later you get an elite academic class that turns its back on capitalism. One observation. Look at the developed countries. I believe in capitalism. You always say that. You always say that. Why down in south america would they be 80 easy easy. Hold on. Because their markets are growing. More people are getting jobs. More people are getting out of a lower class. Whats happening in the United States . Because were already here in large part. Whats happening . The middle class in the United States is getting hollowed out and the top is making more money im not saying you just made my point. In china they moved to where gdp is 10 grand. Were already at 50 here. We dont appreciate 50 . If youre in the middle class and youre not a beneficiary of the corporations getting more money, i understand why you might be upset about it. Becky were seeing on the set exactly what cnbc and bursonmarsteller would generate. Its a natural phenomenon. Emerging economies, progress is happening at a faster rate. Its naturally going to happen. Whereas in a developed market one like this one that suffered the financial crisis, that process is stalled. They dont get to the point there where they start questioning whether capitalism was the economic model getting them where they want to go. Were at that here and its sad. I dont think so. You look at the findings carefully, they give a lot of credit to those generating Economic Growth and jobs. The governments not generating any of that. They dont say its the government in our markets. They believe it is the private sector. They come to some weird conclusions. There is a disconnect. The hope fear thing is the one that drives through. Thats of concern. And we have to figure out how to sort of rejump start a sense of growth for everyone in this economy. Lets talk taxes very quickly. The inversion topic has been a huge one on this set as well. In the findings, it was 62 of the general population. 56 of executive suites that think corporations take advantage of tax loopholes nap is a large number. It is. And it speaks to why the tax inversion topic has been big politically and why people are focused on it. You dont have to say anything, but we have had a president that for six years, can you name a part of the corporate world that has not at some point been a part of this. Insurance companies, remember what happened there. Pharmaceutical companies, remember what happened there. Financial companies. In terms of being nullified. You hear that day in and day out. Thats going to have an effect. If someone drives a bus for 40 years, that is more virtuous in some peoples eyes than someone who creates jobs. And yet i want to come back to what i said before, the public across the world including the u. S. Gives the corporate sector credit for being the most important but less here than anywhere else. Well, thats true. Where we have the highest standard of living and highest gdp. Right. You get to the point of exact lie. Ill say the things you cant say, don. Youre very articulate. Thank you. Anything else that really jumped out at you that surprised you or shocked you . It wasnt a surprise, but this what i call this sort of street versus the sweet. Which we went into this looking for jumps out at you. There are some changes. There are some places of alignment like this on taxes. But by and large across the world as you would imagine, the Corporate Executives view the corporate sector in a much more positive way. I want to thank you for coming in today and for all your cooperation on this. Its been incredibly enlightening. Looking forward to have you back soon. Thank you. Our thanks to don barrett. You can see more exclusive coverage on cnbc. Com corporatesurvey. Coming up next, alibabas chairman jack ma said his American Hero was forrest gump. He invested in a Fruit Company and ma a gajillion dollars. Whats next for alibaba . Squawk returns with that in just moment. Ceo s. Wow, sounds like a great deal. So im getting exactly what i want, then . Appears so. Now, um, im not too sure what to do with my arms right now cause this is when i usually start throwing things. Oh, thats terrifying at ts bestever pricing. 210 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at 130 a month. Welcome back to squawk box, everybody. In our headlines today, blackstone is reportedly giving up on russia. Theyve decided not to renew the contracts of consultants in that country. In addition to the effect of the sanctions on statebacked russian companies, blackstones decision was also impacted by the fact it had now found suitable Investment Opportunities in the last three years. Thats a big move. Look, they have a huge presence there. Do they stay or go . Its an issue all of them are grappling with. Maybe this is just the beginning. Lets talk china for a second. Alibabas opening with a bang. More than 270 million shares traded. Well above twitter. Lets look at what alibabas founder said to cnbc on friday morning about his companys philosophy. I believe that customer and shareholder number three. But today what weve got is not money. What weve got is the trust from the people. Millions of Small Business shareholders. Im very honored. And as a result of the overwhelming demand for alibaba alibabas offering, they have decided to sell an additional 48 million shares. Here to break down where alibaba goes here, gill loria. And a price target now of 80 per share. How do we explain that . How could you have an outperform with an 80 . That usually means buy. But if its an 80 target, i would be selling immediately, right . Thats right. The price target was set more than a week ago when the range for the ipo was ranged at 60 to 66. 80 incorporated a couple of things. The risk of the ipo. After facebook, thats a risk upon itself. And it was really set in a vacuum. At the low end of the range versus where the high end of the range at facebook is. Interestingly the stock ended up in the middle of that. About 31 times my outyear estimates. So if youre an investor and youre watching us right this moment and youre thinking should i call my broker to buy this thing, the answer is what . The answer is that i still think its a company thats going to do very well. It will be at the higher end of the trading. Maybe id wait for a better opportunity. Wait for better opportunity. Some people say the way to play alibaba is to own yahoo . Does that make sense to you . Only if you believe yahoo s core business is worth something substantial. Otherwise you could get alibaba directly by investing in alibaba. Yahoo s ownership stake is indirect and will be hard to measure. And where are you on yahoo . Thats not traded down on friday, oddly enough. I dont cover yahoo . But the challenges they have are well documented. One of the questions we always ask about ipos especially when they leap like this or fall on ipo day is whether they were priced correctly. How do you see it . I think they were priced to have a very strong first day performance. Very deliberately. I think jack ma wanted the ipo to go well, wanted to reward a lot of constituents. Many of the constituents didnt sell all their shares. So they still benefit from the higher stock price. He wanted to make sure a positive First Impression was made and i think he was successful. Okay. Gil, we want tonk thau. Were going to leave it there. Appreciate it. Still to come this morning, the Clinton Global Initiative brings out World Leaders and the stars including sting. Find out what the rocker had to say about scotlands recent vote against breaking away from the uk. Squawk box will be right back. 90 turnout. And it was wonderful everybody cared passionately about their identity whether you wanted to be scottish or british. Im frankly glad it went the british way. I think were better together. But it was they showed the rest of the country that we need more democracy in our country. And i thought it was a thrilling victory for that. That was sting and his wife trudy on the blue carpet last night talking about scotland voting to stay a part of the united kingdom. We know sting and other celebrities from the uk said they were in favor of this. Im going to go back to kahuna. So im going to go from now on for your name. I think its worked for sting. I was thinking maestro by me but that was taken. Ive got one for you too. I bet you do. Based on too big to fail. I think just calling you big. Is that cool . If i call you big . Mr. Big . I think im not going to give that up. So im kahuna. Whats miss quick . Ill just stick with becky. This is where we get into dangerous a lot of people said that your picture on the mug looks like a bratz doll. I dont want to be called that. Ill stick with becky. Brain is taken. Thats right. How about quickie . I always call you quickie. You actually do call me that. I dont know if i want that to be my permanent moniker though. You want to be big or just ann drew . I like big. Im going to take big. Im not going to turn that down. Knowing where you could have gone, i will take it. I like aaron ross sorkin. Unfortunately that does happen all the time. That does bring in a new level of success for you. That i dont have. That youre working on. Let me tell you about other headlines this morning. The heirs to an oil fortune are selling out of fossil fuels. The Rockefeller Brothers plan to announce their organization is selling assets tied to fossil fuels and changing to sustainable energy. So we do have a couple of those like so many generations of wealthy people. They can take it down to 200 or 300. Million . Theyve been so successful when run by well, they were in the oil business. But the fifth and sixth generation, a lot of time theyve had so much money for so long. You think by selling theyre going to lose money . If they invest in only renewable. I dont think its just renewable. I think in the energy space. Well see how the day. Hope they do well. Coming up, one of the best selling stocks. And worlds are colliding. Well bring the global power of squawk box together to find out how corporations are viewed around the world. We return in just a moment. Hi, are we still on for tomorrow . Tomorrow. Quick look at the weather. Nice day, beautiful tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. What a day. Cant wait til tomorrow. Welcome back to squawk box this morning. Among the stories front and center, august figures on existing home sales are due. Thats at 10 00 eastern time this morning. Looking far 1 increase from the prior month. And the weekend box office, the maze runner taking the top spot. With 32 million in sales. Also gas prices continue to fall. And that drop, 9 cents per gallon over the last two weeks to an average of 3. 37. The surveys author says another few cents may be trimmed off prices over the next few weeks. Earlier this hour we told you about an exclusive new survey. The cnbc bursonmarsteller corporation indicator. 75 of the public surveyed in china had a favorable view of corporations compared to just 49 in the u. S. Joining us right now to talk to us about the perception of corporations around the globe, it is a worldwide squawk box summit this morning. Susan lee joins us from hong kong. And from europe we have geoff cutmore. Its great to see you both. Hey, great to see you. Great to see you, becky. This is something we never do and i dont understand why we dont do it more often. But we have everybody on board to talk about this survey. I think what surprised me the most was the favorability itself. How people view corporations. Its favorable around the globe, but just barely in some of the developed nations. You look at 72 in emerging markets. Why do you think it happens that way . Susan, well start with you. Yeah. Well, in china there are this perception that maybe the private sector, the big corporations are the ones driving chinas economy creating the jobs, lifting the millions of people out of poverty into middle income. Youre right. You pointed out to the chinese results. 75 of those respondents in china actually believe and are favorable towards big business. 53 whether its for the Business Leader side or the general population want business and corporations to drive the economy Going Forward. And 84 in china say that big business is their source of hope. In fact, a lot of the respondents in this survey want the Chinese Government to maybe get their nose out of things and they want less control from the chinese authorities in where the chinese economy goes in is the future. Geoff, if you look at europe, they have the most negative responses to corporation. We talked earlier this hour about maybe this is the natural progression of things. What do you think it is . Yeah, i think you can draw a direct line here from the Global Financial crisis. And the problem for europe is a lot of europe is still not growing. In fact, some of it is still experiencing negative growth rates. And i guess when you ask people about their view on companies, its inevitable that you get the response that people in many parts of europe feel that companies have become less socially responsible. A lot of europes look to companies as that major source of hiring. And they are high unemployment levels. So its no surprise when you look at this data, youve got 40 , 50 in many countries saying that they feel companies have become less socially responsible and particularly when you look at the larger corporations and american corporations, there is a less favorable view and the germans and the russians are almost level pegging on this with executives around 59 of executives in those two locations saying that they have a less favorable view of large u. S. Companies. I think theres a dotted line to some of the big stories here. Not least the nsa spying scandal, the ongoing spat with google. Brussels. There are lots of issues that have cropped up since the Global Financial crisis that is still making europeans very sore about the way they feel that companies have behaved. So theres a general image problem, i think, for Large Companies and specifically large american companies. Do you think corporations as a result have been humbled by this . I think its pretty hard to see it. I dont know how you would gauge it from where you sit there in the states, but in europe, apart from the banking and financial industry where we know theres been a lot of pain after the Global Financial crisis, i think its pretty difficult to look around the rest of the sectors and say companies are humbled and are behaving in a contrite fashion. I mean, youve only got to look at this whole inversion issue and the way some people responded to questions on tax and tax avoidance they see taking place at Companies Like amazon and apple and so forth to understand why people still feel sore about these things and why campaig campaigns to punish companies by not buying things have managed to gain traction here in western europe, becky. I wouldnt necessarily say humbled, but i do think that corporations behave a little differently. Maybe its being gun shy. Maybe a little reluctant to go before the press. Or to push things forward. Maybe they operate a little more quietly than they did before 2008. I dont know. I would say in europe i think our access to a lot of Blue Chip Companies and middle Line Companies has actually improved since the Global Financial crisis. I think because there is this perception of maybe an image problem, a lot of boards are working a little harder to get their investor relation departments going out talking to journalists trying to explain exactly why theyre doing the things theyre doing. But i still feel that the big issue is still the one of growth more broadly and the feel good economically for a lot of europeans. Its just not there at the moment. If you look at italy, france, spain, portugal, these are all economies with high unemployment levels still. And they are struggling to reform, restructure, and get growth back for their citizens. I think when you ask those people, its inevitable their perception of corporate life and the things ceos and executives do is going to be checkered by some of the anger they still feel about what happened in 1998. Or 2008. We all lose a decade here and there sometimes. Susan, when you look at 2008 and what happened in the aftermath, do you think that it had less of an impact . That it blew by them . What happened . Why do you think the levels are higher in terms of trust when it comes to asian nations . Well, you know, mainly here in the asia pacific, we were insulated from 2008. China went on this wild Spending Program in november of that year. 600 billion funneled to the economy. That went across the asia pacific. And investments across the emerging markets. To them, corporations have been doing well. That is up until recently when we have a dramatic slowdown taking place in china. This a managed slowdown from the government looking to take on corruption, looking to stamp out some excess capacity and to possibly take some heat off the boil on some of these economies. To them they feel like private business and businesses are still driving the economy, creating the jobs, and helping them put food on the table. And lifting them out of poverty. Susan, geoff, i want to thank you for joining us. We should do this more often, guys. Thank you, becky. Coming up, two downgrades for a tech giant. And the ceo of xprize launching a new program today. Squawk box will be right back. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Take a look at some stocks to watch this morning. Yahoo downgraded to neutral from buy. Bank of America Merrill lynch. Price target to 46 from 40. Meantime bernstein is cutting the rating. Its thesis was based on the view that the value of alibaba was misunderstood and underestimated. And that has played out. And autozones earnings has beat it but revenues are down. Coming up, they are a leader in crowdsourcing innovation and today theyre announcing a 15 million prize to help spread literacy around the world. Also check out the futures at this hour. Youll see red arrows still there. But the losses have moderated somewhat. Dow down 16 points. S p futured off by just under five points. And nasdaq 11. 5. Stick around. Whenwork with equity experts who work with regional experts who work with Portfolio Management experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Welcome back, everybody. Lets jump back into the shark tank. We have an update on the founder of mos bows. He was on two weeks ago and has been featured from vogue to gq magazine. He was even on shark tank. When he joined us this month he spoke about deciding to start his bow tie company. How did you come up with this idea when you were 9 years old. I really love to dress nice and i couldnt find other bow ties i really liked. So i asked my grandmother to teach me how to sew. After that ive been on shark tank and other publications. Damon, how did you find mo . It was really shark tank. We dont know anybody coming on the show. He came up there, he was so adornl but he was also laser focused on what he wanted to do. Heres the update for you. The same day mo was on she show we also had Niemann Marcus on the show. She approached him about brings them to the stores. They are samples are now at headquarters under review. Its proof that squawk box is where deals are made. Well keep you updated. Dont miss shark tank five nights a week right here on cnbc. Lets talk about education this morning. Global Nonprofit Organization xprize is encouraging to solve worlds problems between competition. The group is rolling out its latest challenge this morning. The global xprize. Joining us with the detail is the chairman and ceo of the xprize. Explain this. I always think of you in space flight and the prizes that youve done before. How did you get to literacy . So, at xprize we look for huge global challenges that arent being solved and then we put up a large amount of money and ask the world, entrepreneurs, to solve those challenges. Today one of the biggest issues is literacy. 200 million of the illiterate are kids. So our question is can technology do this and do it really well . So how does this work . If im on the other side of the tv right now and im watching and thinking i actually want to participate in this, i want to submit something to you. How does it work . So first of all, go to our website xprize. Org. You can find out how to get involved. Its a 15 million purse thats been put up by a number of donors including one unanimous donor. And were asking teams to build a piece of software. And were going to be taking the top were going to have thousands of teams compete. The top five pieces will be deployed in africa with 5,000 kids. In order to win this, you have to take a kid whos illiterate and take them to reading, writing, a in 18 months. Its extraordinary. I have two children at home and i want the Software Available to them as well. Just to clarify, this is software only. Whoever comes up with the cheapest tablet, for example, thats not part of this competition. Thats correct. The cost of tablets are plummeting. We are baselining android as the operates system. One of the things that you can do is were testing this with 5,000 kids in africa. The goal is to double it. So weve launched a crowd funding campaign. If you go and you support that campaign, you can actually get access to the software 18 months before it goes open stores. I should mention that. The end of this competition, the Winning Software is going to be open stores. Imagine it on every tablet and smartphone around the world. Where every device becomes a teacher in the box, so to speak. The people who are going to win this, they are going to be university teams. It may be teams out of the largest software companies. It may be high school teams, university teams, entrepreneurs in Silicon Valley, entrepreneur in san jose that partners with one many mumbai. I dont know. We expect thousands hundreds if not thousands of teams to compete. Thats the beautiful thing. Wour goal is the most sophisticated, powerful piece of Software Ever produced to take a child, keep them engaged and then give them the gift of literacy. Could you see yourself doing this for math in the future . Well, this is going to include math. Thats an important part of the equation. Its the basics for a person to be a contributing citizen to society. We know that the more literal a population is, the more peaceful, more contributing to the population they are. Traditionally you have a named sponsor for each of the different prizes. Why in this case is there no named sponsor . It turned out to be a group of philanthropist. One that is anonymous. And anothothers who have contri towards this. They wanted to put this concept of Global Learning first versus themselves. So this is really a Mission Driven philanthropic. The Winning Technology is going to be open stores to the world. Very cool. Peter, thanks for joining us. My pleasure. Come on back when you pick the winner. I will. I hope people go to xprize. Org and get involved. Thank you. In other news, a world record set in canada this weekend. 542 employees of oil and gas giant nexon gathered outside their headquarters dressed as batman. They did this to kick off their united campaign. They were doing the ymca there. You could tell. The officials from the guinness book of World Records were on hand. This doubled the privacy record of 250 people, i guess. There you go. Guinness, i dont know. Theyve lost their mind. Every week we have the biggest gathering, candy bar, blah blah blah. I always wanted to be in it when afs kid though. See big, the nickname, i think it should be big. See, i thought we had decided the is. We did. What i didnt. Is like when you call a bald guy curly or a big tall guy shorty or something. That it sort of was you still down with it or not . Because of too big to fail, i think its still good. Big. Too big to fail. But youre saying it sarcastically. I just said there are people bald nicknamed curly. I didnt say yours should i call you baldy. You could. But that would be true, wouldnt it . If you were to take it off. Lets tell you about other entertainment news. Paula deen is buying the rights to her food network shows. The wall street journal says shes planning to use the footage for her online venture. Its sent set to launch on wednesday. I had some comments about this next story too. Another big weekend for the nfl. The cardinals took it out look at the writing. They took it out on the San Francisco 49ers. And the super bowl rematch in seattle, well, it went to the seahawks. Well, they had to do it in overtime. That was unbelievable. After a late scoring drive by Peyton Manning and the broncos. My only comment was that after all of the media hype, is it now will we be updated from time to time or is the media now moved on to Something Else . And af beef to pick with you a little bit. The last time we argued about whether something was lasting or not, it was occupy wall street. And they are so gone. Except they were there yesterday. It was like a occupy wall street march. The climate march. No, no. It was going to be something that might not just fade into the past. It totally faded. Occupy wall street faded into the past as a movement. The 99 versus 1 thing they created and inequality thing they raised is something we talk about every day. Not necessarily. But with the nfl, how about this . Im just asking you. Is it over . Roger goodell was at the giants game and the giants won. The press Conference Last Week everyone still called for his head. Now what . I suspect it will linger because there are media and other people that still want his head. And so there will be continued march on that issue. However, i dont think he loses his job nor do i think necessarily that he should. Lets say theres another incident with an nfl player. Hell be back in the headlines. Any type of incident. Is it goodells will it be his fault no matter what happens snex . Fair or unfair, hes going to be held responsible so its not his response the next time someone is a frail how the media works and how the public reacts, thats he cant be held responsible for the reactions of all the people in the future. He can be responsible for how the nfl responds to it. But if something were to happen, if one of these guys gets drunk and has a bad car wreck or something. Whats but the idea is whatever hes going to do hes not ding a twogame suspension. But also he creates is deterrence. The reason why people will hold him responsible is hopefully he will create such a deterrent system to that people wont get involved in these things and therefore he will get held responsible for what they do. We have huge deterrents for things already but sometimes people do evil things. For whatever reason, the rematch of the broncos and the seahawks was a big deal yesterday. And the game did not disappoint at all. After what happened last year. It was good for denver because they can be on the same field. But it was good for seattle to prevail. And then you also saw did you see andy dalton make that reception . I saw a clip of it. Then the giants did better and green bay still i dont know what happened. Anyway, tonight theres another game we dont really care about since its on a different network. Its the jets. When we come back, the Trucking Industry spends 125 billion a year on fuel. But Sir Richard Branson is looking to change that. His nonprofit wants to save the industry billions of dollars a year. Plus the lines for the iphone 6 and 6 plus across the country were out of control. Well find out how many devices were sold on the first weekend and what impact it will have on the bottom line. Squawk box will be right back. train horn vo wherever our trains go, the economy comes to life. Norfolk southern. One line, infinite possibilities. Its monday. A brand new start. Your chance to rise and shine. With centurylink as your trusted technology partner, you can do just that. With our visionary cloud infrastructure, Global Broadband network and Custom Communications solutions, your business is more reliable secure agile. And with responsive, dedicated support, we help you shine every day of the week. Centurylink your link to whats next. Welcome back to squawk box here on cnbc, first in business worldwide. Im maestro. No. You want kahuna . Kahunas better. Here with quickie and big. The guy was such a nerd on seinfeld. And speaking of big, a big win for the bengals yesterday. And a bit of history as well. Andy dalton becomes the first cincinnati quarterback ever to catch a touchdown pass. This was it. He is a gamer. But you can tell there because, you know, he had to dive over the corner of the end zone. Cincy remains undefeated along with the arizona cardinals. And cramers Philadelphia Eagles which i like the skins. I have a soft spot for them. Theyre battling at least. I think thats the cover of the Washington Post today. At least the redskins are showing plenty of fight. We havent had harwood on, but he would probably somebody said that where did i read this over the weekend . Maybe jon stewart said this. The name is the least offensive thing on that field if youve seen the way theyve been playing. And the other one is palin or someone said im defended by the name too, washington. Haha. Heard that a few times. Lets get to our headlines this morning. Two takeover deals in the news. Mercks germany is buying sigmaaldrich for 140 per share and cash. And dresserrand. 7. 6 billion deal thats worth 83 a share. Also blackberry is going to be selling its new phone in the United States at a lower price point than the new iphone. I would expect that. Its also hoping that will grab more of the market. Compared to 649 for the iphone 6. And 749 for the iphone 6 plus. It goes on sale in the u. S. On wednesday. Im fairly certain we will not see lines around the block to buy these things. Dont be mean. Were not going to cover the launch at all . What are the features . Nothing . No . Thats sad. It is sad. They also said they were giving up on the consumer markets. You didnt care about alibaba. We figured out why. Because you were out on friday. I was excited but i thought there was too much excitement about it. Lived up to all the excitement so far. Only because they mispriced it. How can you misprice something at 300 billion . Then its really worth a lot. In and of itself did you would have argued they would have priced it higher. Thats an amazing story that all of a sudden a company is worth 250 million. You should have been excited either way. I think it was because you were out and werent going to be here. If youre not in the forest to hear the tree, it didnt fall. Ill go for that. Where were you . I was hanging out with my wife. All right. Also lets talk about microsoft. It had been scheduled to debut tomorrow. But it says it should be on the market in china by the end of the year. Speaking of alibaba, getting ready to start a second day of trading in its debut since it surged close to 40 . The biggest ipo in history. Our dominic chu is here to break down where they rank. Its immediately one of the biggest market caps, isnt it . Immediately. Lets look at what ranges were talking about. At 68 bucks a share, it was also going to be one of the Biggest Companies in america. Now heres where it opened up. You get all the way back up to the level. It opened about 93 bucks a share. All of a sudden it becomes a 240 billion company. Thats the same size as chevron. One of the Biggest Oil Companies in the world. And heres the big one. If it goes up to 93 a share, 95 is where it gets interesting. Now it becomes worth about 245 billion. Thats the same size as walmart. So the worlds biggest retailer is now the same size as alibaba if it gots up to 95. And i dont know you and a lot of other folks here know this company well. Ge. Its 263 billion. Alibaba if it gets up to 102 a share will pass general electric. This is a massive, Massive Company were talking about. You know, dom, for people that were hoping for another google where it goes from 80 to 800 or Something Like that, if this thing doubles, its at apple at 600 billion. And if it would double again, its the first trilliondollar company. And when we talk about soninlaw of the smaller ipos that have gone up, all of a sudden they go up 8,000 . At that point then youre talking about something. It was immediately up against the large numbers on its ipo day. I wonder about it. I also like all the corporate intrigue about how its run and whether the Corporate Governance is really there. If you want to be a conspiracy theorist if you write the script of something really nasty, there are people who think its a head fake completely at these levels. Ive been on board. I dont know. You never know. With these chinese companies, the accounting is going to be an issue. People are always going to question whether or not the financials are going to work out for them. Some of these other companies, like we talked about baidu the other day. Hopefully if something was going to come out, it would have come out in the last nine years. A play on 1. 2 billion people coming into the middle class is going to be compelling if you do the numbers. Its the whole story. If you can sell a toothbrush to every person in china, thats a business. Right. Very good. Thank you, dom. It is climate week this week. And Sir Richard Branson is launching a way for the truck industry to save up to 40 billion by 2016. Take it away, phil. I want to bring in sir Richard Bronson along with the program lead. They join us from new york city to announce this initiative. Trucking efficiency. Org. Give us the overall view of what you hope this program will accomplish when it comes to making the Trucking Industry much more fuel efficient. We set up a not for profit a few years ago called the carbon war room to work with the 21 industries that put out the most carbon in the world and try to work out ways to making them more efficient. And the carbon War Room Team has set up a group of people to try to work with the Trucking Industry to see if they can make trucks a lot more efficient and save, you know, the Truck Drivers a lot of money and theyve done great. Theyve come up with i think 60 or 70 different ideas to make trucks much more efficient and it would make a massive difference to trucking here in america and around the world. Mark, youve got about 70 different fuel efficiency tools, so to speak. Ideas that different fleet operators and were talking more of the independent operators. Large ones as well should be working together. It brings up the question why havent they been working together in the past . Shouldnt they have been using a lot of these tools in the past . Working together in terms of saving themselves money . Many are. Thats the key people were working with in this to work with those who are getting the benefits from them. A semitractor in the United States uses about enough fuel about 70,000 per year in fuel. And these techniques have been developed by the industry. Some are longer than others, more efficient than others. But they all give opportunities to lower the fuel spend by 30 or 40 . So those 70,000 can be reduced significantly. Those are annual fuel costs per truck. And so with this operation im sorry to cut you off there. But youre of the belief if these operators do not start using more fuel efficient techniques that ultimately some of them could be jeopardizing their future job chances. Going out of business . Thats right. They all exist. We see all Different Levels of the industry. Its not a matter of how big you are. Its more a matter of the information they lack. So this is to work with the early adopters, get the information and get it out in a way that am can take action whether theyre small or large. And also help the manufacturers, the truck and trailer builders putting this technology on new trailers. And also the manufacturers of the opponents that work hard to bring in the market. Joe, go ahead. Have you guys talked to boone . Are you working with the pickens plan on all this . If you were to convert the entire fleet to natural gas, theres no infrastructure for that, but i mean, thats helps in a lot of ways. I think youd save more than 40 billion, wouldnt you . This is on the idea theres less fuel on these trucks. What were working on putting out reports and the meetings around them amount to how do you lower the cost of operation but primarily through reduced use of the fuel. So almost exclusively these trucks that were talking about is diesel, natural gas as something emerging. But for the most part the technologies were working with will improve economics with whatever fuel is being used. Weve got a lot of plans and you guys arent talking to pi picke pickens, hes not talking to you. It seems there would be more overlap there and it would be a good answer to our needs. And weve got a lot of natural gas now, obviously, in this country. Its cleaner and cheaper. Just seems like it makes sense. Wech talked. And the point that were trying to do is be as broad based and as urgent as we can. Helping these diesel trucks as they emerge, use less fuel and be more efficient is where the success is. Were working with all kinds of people in the industry. The manufacturers but also people like the Rocky Mountain institute. Free to understand all the opportunities that exist now and in the future. But not let the future and the feeling of being perfect in the longterm get in the way of doing things right now. Is Carbon Dioxide war room, the sign would be too big. Or do you want to conflate the carbon, sooty one . What were trying to do is help industries reduce its carbon output. Carbon dioxide output. You mean the black sooty element or co2 the gas . Both. We want to reduce the carbon output so people can save money. And so carbon. Im not quite sure what the point is youre trying to make. Because carbon is an element. Its a solid. Its a black, solid, sooty element. Co2 is a completely different compound. Its a molecule that if you reduce the amount of fuel by 40 , youre going to reduce both, i believe. Unless im being stupid. Thank you. Go ahead, phil. Well, richard. Ive got one last question for you. Operating transportation in a cleaner environment, biofuels. Theres been so much talk in the industry about the potential there. Yet when i talk with people in the industry what they always say is its a potential. Im not really sure how much it will impact our savings and when well really see it make a huge impact. Whats your perspective there . Its tough. There are methods to there are fuels that have been developed. That can be used in airplanes. And are clean fuels. That a willing to recycle the waste product out of the chimneys of plants. And they worked out a way of turning that into jet aviation fuel. So a fantastic system. The question is will Companies Like this be able to expand quick enough to look after the enormous amount of airplanes in the sky. That will take the fuels from them and their first big plant is in shanghai and we fly there. So we can start that way. There are enough steel plants worldwide to cater every plane in the world. So in time i think well get there, but it is going to take time. Sir Richard Branson joining us with their plan trucking efficiency. Org which they have launched today. Becky, thats another first on squawk interview for you. Thank you so much. When we come back this morning, our new cnbc survey finds that americans fear big business. At least a third of them do. Also nearly half the country says Corporate America is a problem. Up next, though, a squawk portfolio. Louis navellier. Ou . Im looking for a phone plan. It has to be a great one, and i dont compromise. Ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. Wow, sounds like a great deal. So im getting exactly what i want, then . Appears so. Now, um, im not too sure what to do with my arms right now cause this is when i usually start throwing things. Oh, thats terrifying bestever pricing. 210 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at 130 a month. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Welcome back to squawk box, everyone. In our headlines this morning, wpp announcing it is increasing its investment in Ad Technology company app nexus. Well speak with their ceo on wednesday morning. He says this makes his company the clear alternative to google. Worth over a billion dollars now. We are kicking off the squawk platinum portfolio with louis navellier. Chief Investment Officer of navellier associates. He joins us now. Louis joined us on april 7th and his first pick up is. His second up 42 making it the highest performing in the portfolio. And his third is up just 1 . He is dropping it because he recently downgraded from a strong buy to a hold. Hes now replacing it with gilead which is not something that i associate with you naturally because its got such a big market cap. You like stuff with room to run normally, dont you . Yeah. B you think it can double from here some day . It pulled back recently. You can get hepatitis c and die or you can take their pill. So basically theyre winning. Theres some competing products as well, but this is the best one in your view . Absolutely. Its better than death. But theres other hepatitis c formulations. Of course. But they have the market share. That was weird. They call it nona, nonb and then came up with c. I would have started with c. I quickly knew c was next, didnt you . Normally we loved how the slogan for the people in scotland that didnt want to break off, its not worth the risk. In other words, it would be great, but it might not work right. With you, you always are ready to take risk. Youre ready for things to go to you swing for the fences with navellier. Your career has sort of been that way. Yeah. But i go into the season locked and loaded. All those stocks you mentioned have great sales and earnings. We just had the best in years. The third quartering wont be quite as good. But im very confident. The markets best ive ever seen in my lifetime. 2 dividend yield. My average stocks going to be gone in 15 years on buybacks. Now another good earning season. You follow Chuck Peterson . Yeah. You do. And that makes sense to retire sock theres supply and demand. Absolutely. In august the buybacks reexploded. And every kid that takes finance 101 learns do i finance my business with equity when you have low ps and low Interest Rates, its a no brainer. Now you have all this sh in here driving our levels lower. Until they raise rates, buybacks will continue. And ps are going down. Has there before been a time in your career where you werent just focused on the micro where you said the fed has orchestrated a problem here . Were still okay . You dont think weve got too much money sloshing around . We do have too much money sloshing around. And now you have deflation risks that were importing from europe. But i am having a flashback. This is similar to the late 90s. This is identical to 95 and 96. I start off with that chart when i do a seminar and say were back in the late 90s and weve got another threeplus years to go here. Thank you for being here. Appreciate it. Coming up, you saw the lines. Now coming the numbers. Data departmeexpected shortly. And google naming the maker of its next generation nexus tablet. Check out shares of google over the past year. Act i. Scene 3. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. A programming note for you. Squawk box will be reporting live from the Clinton Global Initiative tomorrow talking to some of the worlds leaders of government and business. We caught up with Randy Jackson last night. We talked about how the Music Industry is changing and what he thinks needs to be done to keep it healthy. I always say i always equate it back to the content. Its a funny thing. If somethings really good, it seems to sell. We can learn a lot from the simple things. Is it really great . Should i really own this . I think the content is beaten up and i dont think its as good as it used to be. Asked him also if he thought the internet was good or bad for the industry. He said he thinks its a good thing. You need to weed out the good from the bad. Cant get to good in the Music Industry online. I guess its good for music being out there, people carrying it around. That was his takeaway. Lets see other corporate headlines this morning. The wall street journal reporting that google has now selected htc to make its next nexus tablet. It reflects googles longterm strategy to develop a base of partners. From any one gaining a monopoly. Coming up, the cnbc bursonmarsteller corporate perception indicator showing more than half of the consumers surveyed think its bad when corporations are strong. We debate the numbers and the reason why america is so negative on Corporate America as we head to break check out what Academy Award winning producer brian grazer had to say about the role of hollywood in the depiction of big business. Well, theyre an easy choice for conflict. And you dont want to make the whole corporation bad, but usually in movies or Television Shows, you find a way to singularize that and have some person in one of these corporations be evil or diabolic diabolical. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Lets look at stocks in the news ahead of trading session this morning. A list of takeover because Circuit Board maker viasystems being bought for 368 million. That comes to about 16. 46 per share. Thats nearly 41 premium over fridays close. Alibaba shares are lower in premarket trading this morning. Youll recall its first trade on friday was 92. 70. Went as high as 99. 70 before falling back. Right now about 93. 25. And shares of emc, theyre getting a boost this morning. Emc has held merging talks and continuing to explore various strategic options. Earlier this morning we told you about new data from the cnbc bursonmarsteller corporate perception indicator. 46 said its a bad thing when corporations are strong and influential. Do americans fear big business and is it justified . Joining us to talk about this barney frank who is now a cnbc contributor. And president of the American Action forum. Congressman frank. I like barney. Im not a congressman anymore. I think the title should die with the office. We have too much deference. Lets not put it where it doesnt need it. Mr. Frank best . Barney is fine, joe. Okay, good. Barney, looking at some of your comments, i agree with a lot of what youre saying now. Much more moderate at times. But youre not anticorporatist at all. You think maybe that part of the perception is because of ceo pay which needs, i would assume, you would think it needs to be based on performance. Two things, i havent become any more moderate. When youre in the arena as i was, theres a focus including i must say from the media on some of the things that may be more controversial. So i never felt i was accurately represented. It wasnt that people were saying things i didnt believe. But other stuff was left out. If you will remember, beginning of 2008, im very proud of what hank paulson said in his book when he came to a Democratic Congress in 2008 said weve got a terrible crisis and have to do some things, we did them. And the result was the t. A. R. P. Which i believe will go down in history as one of the most successful unpopular things the federal government ever did. But i do think that ceo pay, upper end pay is excessive. I think what you have is a case of people setting their pay far beyond what would be economically necessary. That, i dont believe in the financial area you have to pay people that much to do their jobs. There is also with a linger anger that Financial Institutions contribute to that they were somehow rewarded. There was a misperception that what the federal government did, bipartisan push in the congress, somehow rewarded them. Theres also this frustration that no ones gone to jail. Ive said in several cases to some liberal friends, the problem is precisely the reason we had to pass a law was some of this stuff wasnt illegal. And we made it illegal. And if people did this in the future, they would be subject to penalties. But liberals should not be looking at a Retroactive Application of the criminal statutes. Were just going to press pause for one second, if you could, because we have new numbers. Apple Sales Numbers just came out while you were speaking with a record number. We just want to bring josh lipton into the conversation briefly. Josh . Yeah. It was the big data point. First weekend sales. Apple just now reporting that it sold over 10 million new iphone 6 and iphone 6 plus models. That is a new record. And 1 million more than what we saw last year with the launch of the 5s and 5c. In a statement, tim cook saying the sales exceeded our expectations for the launch weekend and we couldnt be happier. He goes on to say we could have sold more with greater supply and are working hard to fill orders as quickly as possible. Analysts on the street were divided about what we would see here. Some did think wed see 10 million. Others thought 7 million or 8 million. They talked about strong supply constraints. They talked that china is not part of this launch weekend. But apple saying over 10 million new iphone 6 models bb sold. That is a new record. Back to you. Ill put my faith in what the stock does on that news. Anyway, thank you. Back to the conversation. Doug, one of the things that disturbed me a little bit about these numbers and i dont know if you were watching earlier, but in developing countries like china, 80 positive view of corporations. Down in south america, a view that corporations are the how you hoped to pull yourself up from whatever plight youre in. In the United States, i mentioned there will be an elite amount of types that will always reject capitalism even though it allowed them to get to where they dont have to do anything anymore. I look at it as a sad thing where in this country where we used to think this is where you can really do it based on merit and weve lost sight of that. I think its sad. The results i find very troubling. But i think the environment has a lot to do with it. You go to china, brazil, developing world. You can see people Getting Better because of the efforts of these businesses. Things arent Getting Better. We have to decide who to blame on that. But corporate profits are very high. Why arent they hiring more . Why arent they spending more . No doubt about that. I think it has a lot to do with what the survey looks right now. Barney, the reason you dont get hammered db youve seen the hawkins testimony. I mean, you knew the ins and outs of finance. The reason people look at congress and say they have no idea is because some of the questions you hear, you may have been one of the few people that knew what was going on. We didnt always agree, but we knew you knew what was going on. Are you saddened by the notion that the job generators are being at this point sort of look down upon . Well, its an interesting dichotomy in what you say. People think bad of congress, you think thats great because theyre all stupid. When people think back of corporations, you get upset. I would have to say and theres a problem with the social acumen of the corporation. But what youre seeing is a general unhappiness with the institution. I think the American Public is at this point far too negative. There was a column in the New York Times rating what the public thought of institutions. And the institution that the public thought the least of in the congress was the institution that the public is in charge of selecting. They should have put themselves on the list because everybody in there got elected. So i think there is this general i do have to take issue. I dont know where you find this academic class. Socialism hasnt come to america. Capitalism was not good prediction. Despite some best efforts. There are a lot of people who are critical of the corporate excesses who are hardly social. Pretty close. Thats just silly. Silly name calling. I asked him what he said. He said a welfare state capitalist. Thats different from a socialist. He believes as i do that you rely on the economy. 50 in his case of gdp could go towards the government. By the way, heres what i would like everybody to do. We could cut substantially if we brought down to swollen budget. Nothings changing your view on that in the last year, barney . No. Heres the deal. We dont need thermonuclear weapons to deal with terrorists. I wished by the way Nuclear Submarines defeated terrorists because then we won. We dont need troops all over the world. I think we need to fight the terrorists, but its not the equivalent of being able to fight a thermonuclear war. Lets get back to business. The argument which i made in the 7 00 hour is you have the middle arguably being hollowed out. They have not risen the way the top has. And arguably you could say its regulations, you could say its government. I would argue technology is playing a huge role in that and were going through a horrible transition period. Education technology. So maybe thats one and two. How are you going to change that perception . And should it change . So, first of all, the facts arent really there. I mean, if you look at the data, we know that in the 80s the wage distribution started widening. Bottom fell, top rose. Somewhere in the 90s the bottom stopped dropping and the top kept rising. Thats clear. Its also true if you look another the harvard study that mobility is unchanged in the last years. We have more rich people. Thats perceived to be the problem. Why . That is a good question. Hold on. This whole debate but the answer i think the argument would be that the distribution is not equitable in that the middle class has not risen not even at the same rate, in fact arguably with inflation has dropped. Or at least been stagnant. If you look at the broad pressures of well being, if you look at after tax, the middle class has gotten better. If you look at measures of consumption, lifestyles, theyve gotten way better. So the more you look at the data, the less is actually going on. Other than the clear unmistakable rise at the top which is by youre not arguing theres stagnation in the middle . It may not be as much as people would like. We have terrible growth right now. If you go back to this survey, whats going on. Corporations are making a lot of money. How . Mostly by controlling costs. Its a bad growth environment. That is the fundamental government problem. Weve got to go. Cant call you congressman ever again or chairman. Okay, barney, thank you. Good to have you on today. Nice to see you guys. Well see you again. The beard is good. Thanks, joe. Thanks, doug. I dont know what that is you have . Is that a beard . Its sort of a beard. Scruff. Scruff. Do you go out at night and get through velvet ropes . They do with that, right . I came straight from the club to here. Yes. Apple sales are out. Big numbers from the tech giant. Gene munster on what sales of the new iphone mean for apples bottom line. Plus our tech crew joins us on the set to break it all down. Then later its time for beer. The first day of fall marking a special time of year. That story just ahead. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Welcome back to squawk box. A record setting weekend for apple with iphone sales topping 10 million. Joining us now is gene munster also jon fortt whos happily brought me an iphone 6. 6 plus, both. Gene, help us through this. 10 million. What was your expectation . Well, we were looking for a lower number at 6. 5 million. But i think the important part is this. Couple quick takeaways. Apple gains the number a bit so it was up 11 . When you adjust for the china launch not being this year and some of the fill of the 5c which didnt count a year ago, the true units were up probably 50 in the street up 17 . So that 50 run rate isnt going to continue. But i think any way you cut this, its a lot better than the plus11 at first glance. And are you surprised between the split . What is your thought of the split between people buying the iphone 6 and then the 6 plus . A lot more people buying the 6 plus. In particular youll see the larger units account for 30 of the total units. The launch day was about 57 . So it was a dramatic increase. Weve got to factor in theres a bit of the apple fan effect that happens on the first day. So probably going to come back, but i think its safe to say that youre going to look at a mix between the 6 and 6 plus of 50 50. That has a huge impact on what the margins and gross profit dollars are. So the apples really turning all the right dials on this launch. Whats the margin differential between the 6 and the 6 plus from your math . Well, the differential, the capacity is one of the big issues. But its 6 greater on the 6 plus than the 6. And on top of that, people get more capacity too. Thats like 97 gross margin. So that has wicked gross margins. You have to figure the market plays into this as well. There were a number of people in new york buying who looked to be taking them overseas to markets who hadnt launched the iphone yet. A lot of those particularly in asia. Apple did not give a number for ios 8 upgrades in this release. Last year they said 200 million were already on ios 7. That was a record upgrade pace. Part of it is because they seem to alternate years which they say they put emphasis into update on the os rather than the hardware. And this year the updates were modest. I bet the numbers werent that impressive. Thats probably why they werent in that release. I also think its interesting we hit the 10 million number with apple record over the year before. Considering china hasnt laum l launched yet. There were people that worried what it meant for apple stock that china had this delay. Does that turn into a positive because theres another catalyst coming, a lot of people would think, in calendar q4 for the iphone when it does launch in china. Absolutely. I think that the setup is slightly different today than what we were thinking a few weeks ago. In particular, the shift of the china launch, the shift of the iwatch timing, and the potential how payments plays out. The easy money before was sell apple today because youve got to sell it on the day that the big numbers come out on the product. But how theyre layering things over the next six to nine months, theres reason to be optimistic over that period. And your target there . Were at 120. And youve got ipads coming. Might have a new mac book. And watches. Thank you very much. Thank you. Appreciate it. Still to come this morning, an eagles fan whos flying high. Well check in with jim cramer after this. And let beer start to flow. Squawk box returns with the booze news right after this. His. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple, unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Welcome back, everybody. Check out shares of clorox this morning. The company is exiting the venezuelan operations and backing fullyear earnings guidance. Stock ups 3. 25 . Down to the New York Stock Exchange jim cramer joinses now. I think its a big win. I like seeing your dad, too, jimmy, i agree. Tough to hate the eagle when you see a smile on your fathers face. Washingtons not a bad team. Its a good win. No, kirk cousins is it right quarterback for the offense i have to tell you, the redskins are loaded. They are really better than people realized. Much better than they were last year. I thought the bengals were great. The best offensive line in football, joe. Offensive lines where its all won. Offensive line for the eagles is so tattered, thats why mccoy can get no yardage. Gun shy. Big game against the giants this week. I thought the redskins were very, very good. Im afraid to hope. Im like our survey today about hope. Im afraid to hope. Too many postseason i dont know who shows up postseason. We need an emerging market nfl team. Jim, weve been talking about this all day. I mean, weve got sigmaaldrich, weve been talking about this, 60 overseas. We had the ceos on. I couldnt get them to say that that germany, whenever they bring back to germany will be taxes whatever germany is. Everything else, the other 60 , not taxed at the u. S. Rate. Its isnt that a better deal for them . Yes. Yes. I think about yahoo two downgrades. Couldnt they make it so their alibaba is not taxed . The company would be worst so much more. Moneys money, right . Yes. Just would not im 60 s a big number in terms of revenue. Suddenly, its not subject to 35 they said their u. S. Rate is 28 . Even 28 of what sigma do, they do billions, right . Yes. Thats a billion dollars, most likely, that no longer gets taken up by uncle sam, the tax man. We get to pay more so the corporations pay less. You know its going to come out somewhere, but its individuals. Police in this case, the doing the inversion is not going to help because this is a german company. They will continue to do that, even if we make it impossible for companies to invert here, were going to lose a lot of our companies to people that can do it from over there. They can pay more dresserrand, the other day, i mean how much is i thought that that might be a shale play. How much of dresserrand is overseas, do you know . Most of it i feel like a lot of stuff motivated by taxes, and i think our government doesnt seem to understand that. Our treasury secretary, all theyve got to do is say, well make new rules and new rules will be bad for companies that do this stuff. And its going to stop. But that hasnt happened. All right. Thank you, guys. Thanks. See you later. Coming up, gasoline prices may be falling but one governor says its still time to get more of his States Residents behind the wheel of electric cars. Tomorrow, dont miss squawk box. Live from the Clinton Global Initiative in new york. Back in a moment. Hi can i help you . Im looking for a phone plan. It has to be a great one, and i dont compromise. Ok, how about 10 gigs of data to share, unlimited talk and text, and you can choose from 2 to 10 lines. Wow, sounds like a great deal. So im getting exactly what i want, then . Appears so. Now, um, im not too sure what to do with my arms right now cause this is when i usually start throwing things. Oh, thats terrifying at ts bestever pricing. 210 lines, 10 gigs of truly shareable data, unlimited talk and text, starting at 130 a month. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. California governor jerry brown signing a package of bills this weekend to boost purchases of lech trek cars. The legislation include a measure to make affordable for lower income residents the law sets a goal of zero emission vehicles on california roads by 2023. Its official, folks. Theres still more than a week left in september, but octoberfest is under way in germany. Its one of the countrys favorite and most famous festivals. This event date backs to 19th century. Around 6 million visitors from around the world are expected to raise a glass during the festival in munich. Its not just beer, right . I never been. A lot of food, i think. We should go. Music. A lot of music. What do you think . What do the overalls call . The lederhosen. Yeah. Weve had our weve had our heads super imposed over lederhosen, its not a good look. Thanks, kahuna. Welcome, big, quickie. Quickie okay . Someone wrote in you know here, in europe, quickie has a different meaning. Its like really . Do tell. Never heard that over here. Join us tomorrow, folks. Live from the Clinton Global Initiative. We have a great lineup of guests tomorrow including matt damon. Stick around. Right now, time for squawk on the street the hero i had is forrest gump. Shyears ago you know hes a fictional character, though. I have been watching that movie for about ten times, every time, i watched the movie and i watch movie before it came here, again. Familiarity. Yeah, for coming to the new york because i watched the movie again, telling me that no matter whatever changed, you are you. And im still the guy 15 years ago