Transcripts For CNBC Squawk Box 20141017

Streak. That would be the longest one of the year. The major averages are now on pace for a fourth straight weekly drop. A lot of wild swings in the market, but its continue to go raise questions about the Federal Reserves next move. Comments from st. Louis fed president jim bullard, who we talk to regularly on this program, suggesting the Central Banks should consider its taper. Thats been fueling some stock buying. I heard a guy say that on this show the other day. His initials are j. K. , i think. What about liesman . Liesman would be balder today. But he hes not real slick, but he did not take he was smart enough not to he was thinks like six months from now, a year. Next day. Next day. I wasnt going to say this because weve got headlines to get to, but in the old days, there was this funny cartoon that said the market sold off early in the morning when it was noted that an asteroid would destroy the earth on saturday, but rallied at 10 after the money supply came in lower than spen expected. So now ebola is the same, but qe might continue that is sick, andrew, isnt it . The Market Reaction is whats sick. I dont think its im just sort of making a point. But for some reason, i read about nigeria and sen gegal, an in both places did epidemiological detective work, they circled it, they on monday, nigeria hi, meg. Hi. Youre here. You know more about this. Nigeria monday is the day if no one gets it, then theyre ebola free, right . A country of how many Million People and senegal, too. Nigeria had 20 cases, i believe, and eight deaths. It did spread in nigeria more widely than weve seen in the United States. If they can do it, cant we do it . Thats the hope. Im not seeming superior to them, but hopefully theres a chance for us. And thats great about the work weve done to this point to do that. Weve been awfully sloppy with did you see the president yesterday we have a whole segment we have to do on this. We will. But the president said im not philosophically opposed to first time ive ever seen him, you know, consider the other side of something and say, you know what . Maybe i have to put something that we need to consider. Im talking about a travel ban. Here we go. Oops. Taken all the wind out of the sails of the im sorry. Of this piece. I was the one that said qe was coming. I was trying to give smu credit and then you well, i also know this stuff. President obama said he might appoint an ebola czar. Were going to talk about that in just a moment. The comments come amid criticism which becky mentioned about the governments handling of the deadly ebola virus. Is there anything that you would like to add . Lets talk about the news that came out overnight and the news that came out last night about all of the places that people who were involved in treating Thomas Eric Duncan or handling his specimens have traveled. Were talking about the second nurse, amber vincent. We learned last night that the cdc is looking at the flight she took out of dallas to cleveland saying that due to more information theyve gleaned from their investigation, potentially theres reason to contact all of those patients on that flight. She she wasnt feeling well, even though she didnt have the 100. 4 threshold. She was 99. 5 when she traveled. So im blaming her now again. No, im not blaming her yet. When you listen to the cdc, they said there were no problems. You were not symptomatic until you had this threshold temperature. It doesnt take into account the fact that different people react differently. Which passenger would have been in contact with bodily fluids . If theyre telling us the truth about the threat of an airborne transition being low or nonexistent, i just dont see how it would have been easily transmittable. Right. The communications are confusing right now. And lets talk about the other piece of news that just came out overnight, which is that somebody involved in handling specimen from eric duncan, it was handling samples, then got on a cruise ship that left the United States and is now in isolation on that cruise ship in a cabin. Its important to note that its been 19 days since that person came into contact with the specimen. And hasnt shown any symptoms. Were almost to that 21day window when that would be how did they find out that that person had touched the specimen and then thats like being in jail because its going to be a small, little confined space on the ship. Yeah. How long are they on the ship for . Right now, according to reports were seeing, its parked off the coast of belize. Belize wont let the cruise ship. This sounds like a core legislature of murphys law. It almost sounds like a joke. What do you get when you cross ebola with a cruise ship . Seriously . Ebola found its way to a cruise ship . Weve been so lax and now we but you know what im saying. Because the way you think of noravirus and youre on a confined space and all the water is being recirculated. And now the possibility of ebola. That almost sounds like a bad joke. Right. We should note this person its been 19 days since the contact, so its very, very unlikely this person is going to come down in the next two days with ebola. Joe mentioned the piece out, i suspect you read that piece on the cover of drudge about nigeria and some of these other places, sierra leone, closing the boarders, and by next week eradicating you think i Read Everything on drudge everything day . No, no. I hope you stau entire Huffington Post today. I breathed it in. Well, you wrote most of those pieces. The question that i have for you is have they really eradicated it . Because i would imagine they could have somebody come in on tuesday morning. Thats always the worry. If its still existing in the world and in those west african concerns, it could travel anywhere. The way they deed an outbreak is over is two periods of the incubation period. So 42 days. So past 21 days and 21 days again since anybody has shown any symptoms. It doesnt seem like you know everything thats happening in countries with and nigeria is now letting planes back in. Im not sure about that. Yesterday dr. Frieden was asked about nigeria closing the boarders and somebody was sayingny gear ya had closed the boarders and he was saying he didnt think that was they had closed the boarders initially to get a handle on everything and reopened them with aggressive temperature taking and other types of sort of tracking. I dont know enough about lets talk quickly just about what happened in washington yesterday. There was a lot of news. We were at this hearing and there were repeated call force a travel ban or travel restrictions coming in from west africa. Dr. Frieden getting grilled about why hes not thinking about this. He timely said well consider anything to keep americans safe and, of course, president obama saying hes not philosophically opposed to that and now talking about whether it is prudent to appoint an ebola czar. Some people are saying, isnt that what the cdc is supposed to do . I also have to say, watching a lot of that congressional testimony yesterday, were any of them even listening to the answers . Some eem them would make points, not lisp to a single point that any of these guys said back. There were some wacky questions, too. Any sort of congressional hearing, those kinds of questions come out. One last piece, nina pham, the nurse who we saw the video of her earlier. You watch her interacting. Shes been transferred now to the nih in ba they had these da for treatment because there are still 50 people that theyre monitoring in dallas. Health care workers lent her thomas duncans room. If any of them show up, they have to handle them. There arent a lot of beds in all of these Containment Centers to treat all these patients. Just the event. And care givers. Its somebody who is in there because she has is compassion. I dont know whether they got on a plane or not. I know who had the early call on this is levecster. When they started out, protocol, most have been protocol my they had no that was ridiculous. Blaming the nurses. Operator error is what you heard. Blaming the nurses when you start when they had no idea how to deal with this situation. That was bad of frieden right there. Frieden was covering his own [ expletive ] right there. We had the right thing and these nurses must have done it a little bit. They didnt. They didnt have any can equipment. And were hearing communication from the hospital. Theyve engaged a pr firm. Theyre sending out videos. And a lot of disagreements now and different kind of messaging coming out from the cdc and from the hospital. You would, in texas you would treat yourself i guess is what you were saying . Nope. Do you remember boris said they dont have that i in europe. And, meg, even watching i dont know who was supposed to be in charge. Theyre invited in. But i dont know who should have been responsible for tracking everybody who went into that hospital room, making sure that they were kind of under at least some sort of selfimposed quarantine. Thats where i feel like we fell down on the job. It was patient zero. There had been no previous patients, so theres no reason to think for two days, they didnt know he had ebola, did they . Theyre saying thats when he but even when he came back the first few days he was in the hospital, so youre talking four days from the time he first went into the emergency room. And that Hospital System apologized for that yesterday in the shaerhearing. It was explicit. In the meantime, the dow closing down for the sixth consecutive session, marking its worst volatility of the year. That is a question kwk kwk had for Lloyd Blankfein. A few weeks ago, people were bemoaning the lack of risk premiums, the inability to sprayed the good from the bd because theres not a lot of premium attached to things. Its kinds of like the wish from the bottle. Were a little bit beyond what heem are looking for. Allison dean, a cnbc contrinter, kevin gettes a r a raymond james. Is this volatility here safe for a while . I think the volatility is here to stay. The markets in fair val territory which means the chance for the u. S. Growth rate to accelerate diminished somewhat. I think there will be more winners than losers when the comes to corporate profit. That could create a lot of volatility in the market. Kevin, would you agree with that . Yeah, i would. Starting with the fed weighing in on Global Growth and the drop in oil prices and ebola and a number of things that have brought more questions to the market which is increasing the volatility. So from a bond market perspective, theyre watching the stock market. The stock market is trying to figure out, you know, is this the time to buy or are we going to see more volatility take us down . Without a doubt, its going to be here probably until the end of the calendar year or until the fed weighs in further. Weve been thinking about the fed speak, thinking about what bullard had to say. And maybe were interpreting this wrong, but wondering if theres going to be a qe4. Kevin, do you think thats the case . I really dont think so. And im not sure its actually needed. The thing about the qes, is you do them until they stop working. I think qe3 in particular has stopped working for a while now. Im not sure that theres a whole lot to gaim gain by continuing to keep buying mortgages and treasuries from the feds perspective. The u. S. Economy is going along pretty well. Its not great. Its choppy and lumpy. But its not at a point where were seeing whats going on in europe. From that perspective, i dont think qe4 makes much sense. What makes sense is the fed hold pat for a while based on the Inflation Numbers alone. Do you really want to focus on how will the economy is doing, but the lack of inflation sister better story. Theres been no evidence to say that you do it until it stops working. It stops working when did the fed ever say that, kevin . Well, i think its he depend in the marketplace, joe, that when but theyve been doing it for a wheel year. Theyve been doing it for a whole year after it stops. Most people think only e1 had poch effect. And so hes had qe3 the. I think one of my points was that what was the taper tantrum . That was like 700 points. These guys are doing qe15. Do you remember last sternum, joe, when the fed started hinting it might stop qe . It might not be helping, but it might be providing support to make them a little nervous in the face of other things going on. Definitely. You know, im like everybody else. Im glad the market is stabilizing a little. Nobody likes volatility when the market is headed down 400 points on the open. But i dont i feel guilty saying, ghee, the fed is back helping us again. You know . I dont i wish we could do it on our own, some day. Alison, i guess ill ask you quickly, what do you think happens from here . Were a little calmed down. Does that give people a chance to collect themselves and rethink before we get into massive swings one direction or the other . Well, you know, the Positive Side of volatility is it gives you opportunities to buy Good Companies at good prices. You have to be patient and not when the market is pulling back, decide everything is going to continue to go down. If the overall market, in my opinion, is valued around 2000 or a little higher, youre going to see opportunities through some of the better growers and Healthy Companies being served in the market selldown. Okay. Yes. You pick your stocks and be patient, usually have opportunities to buy Good Companies at good price necessary a volatile environment. Alison, kevin, thank you both for joining us approximated. When we return, the chinese going wild for the iphone 6. We have that next. Plus, a swing and a miss for google. What has investors worried about the tech giant . We have that after the break. And the table set for the fall classic, the giants beating the st. Louis cardinals in the League Championship series. They will now face the kansas royals in the world series. Game one, tuesday night. A single ember that escapes from a wildfire can travel more than a mile. That single ember can ignite and destroy your home or even your community you cant control where that ember will land only what happens when it does get fire adapted now at fireadapted. Org sdwloo the iphone 6 is officially on sale in china. Eunice yoon joins us from beijing. Andrew had one, but you got it legally. 6 plus, yeah. You got the 6 plus. In the United States. Legal. Oh, you guys got it legally . Now we can actually get it legally, as well. The lines today at the apple store were very orderly, very calm. People were just really excited to get their iphone 6s. Like you said, our launch was about a month later than yours because of olympicsing issues. But that was worked out. So people now dont have to go to the black market and buy the iphone 6 for 3,000 or so. Instead, they can get et legally, officially at the apple stoors or at the telecom shops. This is what tim cook had to say earlier today about the launch here in china. Weve had a lot of customers wanting to buy. We are launching as soon as we can. The it takes time to the through the process. Were happy to be doing it. And a lot of people were very happy that they were able to see the iphone 6 is here because they really like the big screens. That was the comment that we got over and over from a lot of people because they say now you can watch movies even better on these big screens. Some of the numbers, we had an unofficial number, preorders going to 20 million. Ive been warned over and over again by various analysts that the reason why that number is there and sounds very inflated is because they said a lot of people go online and they register over and over again. So that is probably not going to be a big issue. There is one other thing i wanted to tell you guys. Weve been reporting about how the iphone 6 is the death of the and in china, they have an answer. There is one phone shop that actually is now offering free tailoring services for anybody who has a pair of pants and wants to have wiser pockets so you can stick your iphone 6 neatly into your pockets. Eunice, there is what we were just talking about, asking andrew where he puts that thing. Ive seen him putting it in his pocket. Thats not a phone in your pocket. He could wear his skinny jeans, get one big pocket at the back. You cant sit with an iphone in your pocket, right . Right. If im wearing a suit coat or a blazer with, thats great. Thats how they bend. I got a pair like two weeks ago, right . Finally. Joe has a you know, i think its stretched that he hell be fine. No, i like the way they feel. I hate to admit that. I do. They feel better than all cotton. You guys are behind the times. Women knew this about 0 years ago. The death of them was two weeks after i got them, which is like everything for me. Where is your iphone 6 plus now . Oh, you dont have it in your no. Wherever my coat is. All right. Okay. Were going to talk about google. Eunice got a lot in there. She did. Well done, eunice. Thank you. Google shares sliding after the companys chief earnings reporting a miss on both the top and the bottom line. The big issue, slowing growth in the companys core, advertising business. Here to break down the results and the road ahead is daniel ernston, daniel, what do you make of this . Its not that they are not theyre not theyre not growing as fast as we thought. What does that really portend . Yeah. Theres always so many moving parts with google. So its a little bit hard to call it. But their core business, actually, was googles sight for that fuel surge, ad mob, a detective correct, that is up 24 year to year. What occurred to them was par neither sites. So if youre not searching google with your iphone plus, that hurts google. Theyre over the core bes of 24 . Earnings were up 18 yeefr other year. They generated 6 billion in cash flow from prigzs. Its indigital advertising. If its 17 times earnings compared to a 35 for 140 for a twitter. So its a good business. But, you know, its one core trend. Im not getting too worried about it. Daniel, what do you make of how much theyre spending in terms of hiring. They seem to be on a hiring tear. It does worry me. My point there is no that its growth, but there is a spending. A couple of years ago, when we were upgrading, it was thats the future, though. Is this longterm thinking . Right. So the difference between understanding the software and the Machine Learning and the Information Processing going into that is actually bold. But one of the things that they said on the call eight last night was that a lot of their most of their growth in operating costs and r d are actually focused on that core business that generates revenue. I thought that was kind of a change in the way they presented that. You know, the cloud computing, the data sensors, Building Infrastructure because we keep hitting our capacity. So i think it was pretty positive. It felt a lot better. Google never says anything. The calls now are long, they good many gave you no depails. We have to leave tlit. Thank you for joining us, dan. Thank you. Im going to ask you, you were sticking that in your pocket during this. It works. But not in the skipny jeans. No. If its front pockets, you can dole with it. Gentlemen. But kenny jeans, theyre very shallow pockets. You can barely get your keys in there. Well, and it doesnt look nice. Up next, one of the Biggest Companies on the planet, were talking about General Electric. The numbers and instant analysis coming right after the break. [ heart beating, monitor beeping ] woman what do you mean, Homeowners Insurance doesnt cover floods . [ heart rate increases ] man a few inches of water caused all this . [ heart rate increases ] woman 2 but i dont even live near the water. What you dont know about Flood Insurance may shock you including the fact that a preferred risk policy starts as low as 129 a year. For an agent, call the number that appears on your screen. You would need like a bunch of those to clean this mess. [ kc ] youre probably right. Hi, cascade kitchen counselor. 1 pac of cascade complete cleans tough food better than 6 pacs of the bargain brand combined. Cascade. Beyond clean and shine. Every time. Than 6 pacs f the bargain brand combined. Whos going to do it . 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. [ male announcer ] join the scientists and engineers of exxonmobil in inspiring americas future engineers. Energy lives here. receptionist Gunderman Group is growing. Getting in a groove. Growth is gratifying. Goal is to grow. Gotta get greater growth. I just talked to ups. They got expert advise, special discounts, new technologies. Like smart pick ups. Theyll only show up when you print a label and its automatic. We save time and money. Time . Money . Time and money. Awesome. Awesome awesome awesome awesome all awesome i love logistics. Good morning and welcome back to squawk box here on cnbc. I am joe kernen along with becky quick and Andrew Ross Sorkin. Were waiting for results from General Electric and, you know, six sigma. Normally they hit right at 6 30. Weve got seven seconds until 6 30. You know, how many mistakes are you allowed to make in like a million things . Youre allowed to make like one or something. So they dont want being late oh, they did it. Right on the money. Six sigma earnings. What is this . Likes look adjusted 38 cents. Okay. Adjusted net of 38 cents and that compares to 37 cent estimates. So a penny ahead of estimates. Revenue, lets check that. Theyre expecting 36. 793. And its 36. 2. But the company says that some shipments in the power business were shifted out a quarter. So the company, at the same time, says theyre now guiding organic Revenue Growth, the estimate was 4 to 7 . Theyre guiding Revenue Growth higher for the year. There are some comments from volatile, but infrastructure opportunity. The environment is volatile, and that may be the key take away. We heard yesterday from Lloyd Blankfein that things were going well but that things could change on a time. Jeff immelt saying the environment is volatile, but opportunities exist and ge is executing well. And you can look right there at that chart, ladies and gentlemen, and see. The high for the year is 28. The low 23. 69. So it closed just above its low and this is with a yeel of 3. 6 . So some of the selloff weve seen in the dow, some of this is reflected. Margins up 90 basis points. Were excited about that. Industrial earnings up, i think, 9 . The industrial segment profits up 9 and 10 yeartodate. And orders always seem to do pretty well. Sometimes i wonder, they keep you know, a lot of times theyll have double digit, like 22 . Its hard to translate that sometimes into Revenue Growth. But they continue to shrink ge capital. Lets get some instant analysis. Hey, man. Nick heyman has gofrd ge for like a hundred years. You knew edison, right . I was in his fraternity. Did you go to keggers and stuff . We lit up the night. How about the metrics . Its okay because you had the push on wind in particular without the Renewable Energy credit of 2. 2 cents a kilowatt being extended by congress. The big pent up that you had knit first half of the year clearly as it relates to the u. S. Portion of the wind business is starting to go on pause and hope that congress in the session will figure out how to turn that switch back on. So that may be pushed yet into 15. Well have to see what congress does. But overall, i think that the 38 cents adjusted to exclude any charge for their jp coming divestiture here, their australian finance business, that would be in line with the 38 cents that we had. So this company now that the events of the appliance business, did you like that deal . Do they still sort of benefit from if things do well there. Do you like the current mix that immelt has now put together . And is he finished . Yeah. Its you know, i think hes pretty much done. But i think theres three things to have to be figured out here. Enhanced simplicity. So we spend less time, is the quarter great, is the quarter light . The second thing is folks have to understand energys impact and put it into context better. On a pro forma basis, it would appear to dilute ge industrials margins. Appliances, thats been sold to electrolux. Lighting, got to wonder where thats going. Its not a big deal. And then theres energy management. And theyve put one of their ace turn arounds on the case at energy management. It broke even, essentially, in the first quarter. It will be back to double digit by the end of next year. If that occurs as we anticipate, you will more than offset any dilutive impact from alstom. With alstom, ge is a complete a to z in the most important base Infrastructure Market in the world, which is power, electricity. So they have all the distributive power, all the base load, all the renewables, the grid. Thats key because the next frontier for infrastructure, Industrial Infrastructure is undevelop undeveloped countries as opposed to emerging countries. Ge set up really well on the power side as well as oil and gas and transportation. There is a lot of Land Locked Countries in the world. You couldnt form a company with all those assets. The alstom deal, ive had people say they love that deal, especially right at the beginning. But by the time its done, did some of the concessions that the company had to make make it not as attractive at the beginning. Is that your view or is it all said and done . Its a transformational. One was goodrich over at United Technologies and this was the second. And its transformational, joe, because of the fact that it today gives ge, as i mentioned, end to end coverage here with regard to the most critical cornerstone for base infrastructure. And when you look at the fact that alstom appears to dilute and secondly they gave maybe 10 , 15 of their targeted initial five year synergies away, the assumptions here are very conservative to get that billion 1 2 dollar synergies over the first five years. What they bought is a 9 margin business. Today we follow alstom. What it is intended to become is about a 13. 5 to 15 margin. Same business for ge today are in the upper teens. Quickly, if this is transformational, when does it pay off in the stock price . 16 is when it impacts because it closes in mid 15. 16 is when you see the beginning of the break away performance in a very modest Global Growth environment of 8 , 9 organic Revenue Growth and low to double digit eps growth. So we would think that starts to be showing up probably, what, second half of next year . Immelt looked really happy in that picture that we had. Very similar hair to you, too. Mine is a lot whiter. No, i think you guys have caught up. And its happened at the same time as weve been following the company. If jeffs first week was september 11th. September 11th. Thats jeffs first week. Its like, wow, thats great. Im the ceo of General Electric and then the planes hit. Nick, thank you. Thank you, guys. Have a great way, a good weekend. Its scary how much he knows about this company. You need a life somewhere. Anyways, thank you. See ya. Doesnt he know i understood things i didnt understand. Did you take notes . Mentally, yes. Alstom, pay off the first half of 2015. Wont show up until 2016. I have a dvr. Apparently thats what you have planning to do. What was that . You were watching that do you know whats coming out . What . That stuffed animal, the filthiest movie ive ever seen. Ted. How are they going to outdo that . They already kicked a guy off, that guy from seventh heaven. Hes perfect for that. That movie is totally inappropriate. That guy. He is a problem. He is a preacher. Is that a universal picture . Its going to be great. Coming up next, he is a rebel icon, an innovator, a closer look at the man who is trying to change a man who jay leno thinks he is the newest prime time star. The life and times of elon musk when we return. And a programming note, jon fortt sitting down for an exclusive interview with microsofts the ceo nadella. Thats on monday at 6 00 a. M. Eastern time. Ill be watching. 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That single ember can ignite and destroy your home or even your community you cant control where that ember will land only what happens when it does get fire adapted now at fireadapted. Org 2014 is cnbcs 25th anniversary. This career, we looked at the leaders who impacted business over the last quarter century. Over the next four weeks, were going to be hearing from some of those people. Here right now is an engineer, investor and within of the worlds biggest dreamers, elon mrufk in his own words. I initially think that changed the world or will that affect the future. And wondrous new technology where you see it and youre like, wow, how does that even happen . How is that possible . Rather than reasoning, you boil things down to the most fundamental truths you can imagine and you reason up from there. And this is a good way to figure out if something really makes sense or if its just what everybody else is doing. Initially, it was not my intention to be a ceo. There are other things that are important to happen. We started spacex for tesla, it was less than 50 . In the case of solar, i thought probably the success was greater than 50 , but it wasnt it wasnt a magnitude of success. There are things to get done, okay, its worth trying. I really feel that tes that turned a corner. People will view this as a time when an electric car became a viable company. I think thats how this period will be looked at in the future. Im always going to be involved in tesla, i mean, forever. I would certainly stay on in some role beyond the four or five years point. But, well have to see whether me being ceo is the right thing in four or five years. I think what weve done thus far is relatively minor. Honestly, id characterize it as revolutionary. What we hope to achieve and can encourage the rest of the industry to do is to achieve full reusability with rocketry. It would ensure life as we know it in the case of a calamity on earth. We need to have things in life that are exciting and inspiring. Were going to have several more cnbc next 25 pieces that will be unveiled in the coming weeks. This is just the beginning. Elon musk. Who i do think, by the way, is one of the few people who everyone voted. Who you think will be in 25 years from now will clearly be right. And be influencing the future. And jou joe is looking like, no, come on. He is the man of the hour. But hes the guy three companies, right . Tesla, spacex with tesla, we talked bit last week, i need a name for them, the teslazarians. Even if tesla doesnt exist 25 years from now i cant imagine hes not still doing things. When you bet on people, i would bet on him. Right. But he loves stock. Theres no one left to buy it at this point. Could be. Could be. Up next, the euro is taking a breather. Major averages bouncing off recent lows, especially in germany where the dax took a big slide this week. The euro problems didnt just disappear. Were going to talk about that, next. You know how fast you were going . About 55. Where you headed at such an appropriate speed . Across the country to enhance the nations most reliable 4g lte network. Hows it working for ya . Better than ever. Howd you do it . Added cell sites. Increased capacity. And your point is. So you can download music, games, and directions for the road when you need them. Whos this guy . Oh thats charlie. You ever put pepper spray on your burrito . I like it spicy but not like uggggh spicy. He always like this . You have no idea. At t. The nations most reliable 4g lte network. Sometimes, healthys not on the menu. Luckily, always keep my Meta Health Bars handy. My favorite bar, hands down. From the makers of metamucil, new multi health Meta Health Bars have natural psyllium fiber that helps promote heart health, with a taste that consumers prefer. Would you like one of these instead . Yummy thanks experience the meta effect, with our new multi Health Wellness line. And see how one small change can lead to good things. Welcome back, everybody. A rebound for the european markets this morning after falling to 13month lows. But the problems in the eurozone are not going away. Michelle carusocabrera joins us with more on this. Theyre higher across the board. They are off highs at the equity markets. When it comes to the bond market in europe, we are seeing still the divergence i told you about yesterday. Its just the opposite moves. People are calmer. So they are selling germany, but they are buying italy, spain, portugal, greece. So that lock step we had seen before, everybody goes down together because they believe the ecb is going to take action. So the divergence is getting smushed a little. Im saying the divergence still exists. Just yesterday we saw people buying germany and selling italy and spain. Now its just the reverse today. Right . So the risk on risk off is definitely still in place. In the last 20 minutes, the head of the german bank has started speaking. If you think all the volatility of the last month of the German Market has changed the german Central Banks mind, absolutely not. He says there is no need for more stimulus in germany. Thats directly at draghi who says countries with fiscal space ought to spend more money. Hes against the recent outcome of and saying the other countries have to do structural reforms. Here in the United States, were talking about the possibility of qe4. And in europe theyre wondering if qe1 is going to come. Weve already folded. Michelle, stay here. We want to bring in a guest to talk more about this. Douglas rediker represented the United States on the executive board of the imf from 2010 to 2012. And doug, the huge questions exist, how big of a problem is this economic turnaround in germany and the rest of europe . What do you think . I think you have to decide especially if you go back to what michelle just said if they are embedded with any risk at all. If you believe what draghi said two years ago which is the central bank would do whatever it takes, then theres no credit risk you should assume all eurozone members should have a tight spread. If you believe that the ecb is not invincible, if theres any risk out there at all that would go into the credit risk category, then youve got to draw that distinction which is a noncredit risk sovereign to almost everybody elsewhere theres some level of credit risk. Thats where you seeing that divergence. I dont think the european authorities much less themselves have figured out the answer to that question. The bigger question is are they going to stand up with each other . So theres always been, since the beginning of time within europe, tension between amongst others the french and the germans. And they usually surprise in the end by coming to some sort of agreement even if they dont trust or like each other or believe in the same things. They usually come up with something that allows everyone to believe that europe will muddle through. That is the basic thesis of the european union. The question now is whether with that chink in the armor of invii invincib invincibility. Whether that is a lack of cohesion at the political level that the ecb cant address. So if you have questionable doubt about the ecbs ability to step in. The bank clearly taking issue with draghi. Youve got france, germany, and italy not agreeing. Then investors are correct in saying is there really a Cohesive Center here for europe or are the doubts really real . What do you think ultimately . Can the ecb embark ofr quantitative easing or are the germans going to do everything they can to stop them . The message you see coming out of the ecb has been one of progressively trying to get everyone to believe that qe is on the cards. We just dont know when. The strategy so far has been to do this abs covered bond process, see if that works. If it doesnt work as well as theyd like it to be, then the assumption is theyll go down the qe route. But the germans are pushing back very, very strongly as you suggested earlier. I personally think in the end they will have to do qe. And even if the germans object, the German Economy is not doing so well that they really have solid ground to stand on. But its clearly going to heighten tension within the Investor Universe thats worried about this public dispute between germany and the ecb. Then the end of the day, is qe in europe really enough . Or is it a signaling mechanism . If thats undermined between germany and the others, the question is if it really works. Thank you for joining us today. Thank you, michelle. Coming up, the fed to the rescue. The mere suggestion of the central bank sticking with its Bond Buying Program helped some say to bring the markets back. More on the wild ride next. Plus major hospitals like new yorks mt. Sinai are looking for the best but preparing for the worst. Are the First Responders ready . Squawk box will return in just a moment. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov Synchrony Financial partners with over two hundred thousand businesses, from fashion retailers to healthcare providers, from jewelers to Sporting Good stores, to help their customers get what they want and need. Banking. Loyalty. Analytics. Synchrony financial. Engage with us. Everythings fine. Everythings fine. Dont worry, people. Welcome back. Didnt have to listen to us. This is squawk box on cnbc. First in business worldwide. Im becky quick along with joe kernen and Andrew Ross Sorkin. The major averages are on pace for their fourth straight week of losses, but the bulls arent heading to the weekend without a fight. Weve been watching the futures. At least at this hour, there are some green arrows. S p up by 16 points. The nasdaq up by 36. Theres been speculation about more easy money from the fed stoking the markets. Thats what turns things around yesterday. So its the perfect day to have boston fed president Eric Rosengren joining us. Leisman should have shaved his head. He didnt take the bet. He shouldnt have to save it. He said no. But he also said they werent going to do qe. If he wanted to be honorable, he would theres nothing to shave. Get rid of the friar tuck thing and go to mr. Clean, mini me, a bad ass. Bald guys, you think theyre bad ass. Two stocks to watch this morning. Both driven by quarterly results. Beat the street by a penny. Ceo says the environment while still volatile, there are opportunities in infrastructure that exist for ge. And he says that the company is executing well. Uhoh. Heres leisman. Okay. And hes he said he didnt mention whether he no, he didnt pay off on the bet. Google missing the mark on earnings revenue. Reporting a slowdown in paid clicks on ad links next to its search results. Andrew, have you ever do you click on things on google . Yes. To check things out . Check them out. Have you bought things based on that . I bought things. I put my credit card in that slot. Thats my problem. I cant find that slot on my computer. Lets tell you about other news. Hurricane gonzalo is bearing down on bermuda. Its a powerful category 4 Storm Hurricane gonzalo. I was going to call it gonzo. Many tourists have been evacuated. Expected to pass 29 miles close of bermuda tonight. Close enough to be a direct hit. Bermuda. You did it right. Thank you. The president said he might just appoint an ebola czar. That comes amongst criticism of the handling of the virus. Meg tirrell is back with this. You were just telling us other things we hadnt heard about. Yeah. At the hearing yesterday, there are a lot of questions about what happened in dallas. Accountability questions, whos in charge. But the primary theme really was calling for restrictions on travel. I want to join with chairman upton in urging the president to immediately institute a travel ban until such time that they can firmly and scientifically prove that americans are safe from having more ebola patients coming into the United States. Now, the cdc and white house messaging on why there was a travel restriction from the west african countriecountries. It would be counterproductive to stopping the virus at its source. Now theyre focusing on the fact they wont be able to track people. People would come in anyway even with the travel ban. So its interesting hearing the different kind of messaging on that. This matters when were hearing about this cruise ship that came out overnight. Were hearing about the flight that amber vinson took to cleveland. A lot of concerns about how ebola spreads. Dr. Frieden addressed that yesterday reiterating its spread by direct contact. There will not be a large outbreak here barring a mutation. Were absolutely looking for other mutations or changes. What we have seen is very little change in the virus. We dont think it is spreading by any different way. We are confident this is not airborne a transmission. Thats been the main question. Can this mutate. And if it does is that how we get a wider spread virus. Hes trying to make sure people arent afraid its spreading easily than we know it does. I watched a lot of that testimony yesterday that you were following so closely. The one decent question was from a representative who said, okay. This is what the cdcs original guidelines were in terms of what the proper clothing would be, how protected you could be. You could still see skin around their faces. Then heres you when you were dressed when you were exposed to ebola. I dont know where he was. I think he was in an african country. He went to west africa for this. He was in the full gear with the head thing and everything else. That was the one point. Yes, whats the cdc say and what would you do in that situation . A lot of questions about the changing messaging. Hearing from the hospital, too, that protocols were changing quickly. How it was confusing, they werent trained, they didnt know what to do at the beginning. I think theres going to be czar. You mention a czar, theres going to be is a czar. I want a czar. I want a layer between the president and this guy. Thats the big gulp guy, frieden. Have you heard this debate that if you were to stop flights from africa that depending on the dallas situation, that people would say you got to stop flights out of places like dallas. I dont think its a fair argument, but i heard that made. Because we had some cases there . No. If you decide that youre not going to have flights from west africa, for example, but then it creates a hysteria about thats kind of the problem is the people will get here anyway. I think the cdc is finally being honest about what the concern is. You wont be able to track them. Theyll get here anyway. Theyll get sneakier. Theyll try harder. There still needs to be a focus on west africa. Its getting really bad there. Its getting worse there. Exactly. And flu season is coming. More people are going to be coming into emergency rooms. But were at the Infectious Diseases last week, ebola is still small. Three cases in the United States. Two alive. Two transmitted here. Thank you, meg. Were going get to dom for a second. Its been a wild week on wall street. The dow now down for six straight days. That doesnt begin to tell the story because volatility and volume, two words of the week. Dominic chu joins us with that. Heres what were talking about. Were going through the market pedometer again. You can see here on our nice large wall. These are all the candle charts for all the swings during each day so far this week. If you go all the way back to monday, we were, you know, again, a big swing here today. But pr the top to the bottom you can see there during the course of the day, we swung by nearly 300 points. So thats a big deal. Then you move to tuesday, the 14th and we thought well get a big. People will consolidate a bit. But that still led to a 190 point swing between the highs and the lows of the dow here. Now here on wednesday was that really, really big gap down. We started off the day and then dropped 370 points off the get go. And then somehow managed to make even worse lowed before closing up a little bit. That was a 460 point range. The wildest day this week. And then yesterday we did see a little bit more of the volatility return. At least we were trying to make a bottom here going to the upside. Between the tops and bottoms here, we saw about 276 points. About 1200 points overall. The range from top to bottom for the week between 750 to 800 points here. The point being, this volatility had not been evident over the past different new highs weve hit over the past couple years. Thats why some traders are concerned. Even though were seeing what looks to be a sign of 150 point open for the dow on todays trading session, it doesnt mean its going to stay that way. Thats the big key here. Dom, its like october, number one. Number two, its friday. Number three, its like arent we in the teens of october . Like the ides of october. Its like going into october with the market really volatile. This is a key day. Were up this morning. But you can imagine if its a slow sort of decline throughout the and im not saying its going to be. But who knows. But itd be scary. But its a good point here. Heres the reason why some of the bulls are a little bit more bullish, if you will, today. If you look what happened with the russell 2000 and midcap 400. Youre seeing a trend higher. The russell 2000 is on higher caps. They were the hardest hit during this downturn. If theyre making a bottom, maybe thats a good sign. And some people pointed out this is the tail end of what has been an ongoing correction for a lot of parts of the market that dont make headlines every day. That its been, like, three months that a lot of stocks have been in a rotating sort of a correction. So maybe the big ones and the media gets involved at the end of it. Energy was the big one. Thats the one we have to watch. Thats okay though. If its lower oil prices, you know, theyve had so many good years. Those fat cats in big oil. Lets get right to it. Jurien timer, confusing. Why have the j if youre not going to use it. And our guest host this morning, of course shes got a bunch of ts. She was recently named is this true . Yeah. Im told it is. Wow. Wow. Whoa. Named one of the top 25 most powerful women. Oh, women in finance. I think why why limit yourself like that. Just to finance. You are just powerful. Im still young. So how you feeling after these last three weeks . Im glad i dye my hair. If i didnt id have a lot of gray. Dont you have a lot of responsibility . Its harder for you than it is for us. We develop home. Bad day. I love what i do. So that makes it all okay. Seriously. I love what i do. I dont enjoy downturns. No one does. But its fascinating. Hows friday going to be, today . Let me get my crystal ball out and tell you . Do you feel better today than you did yeah. Wednesday this week felt like a capitulation. One fixed income i had to write this down. One told me 36 point basis move in the treasury was a ten sigma event. When you have that kind of pressure across markets, it feels i mean, the technical term one used to use in investment banks is a puke. Which is a bit crass. But when you get that, it usually helps you find a base. Weve had some helpful comments. We need to look for capitulations not just in equity markets. Its all connected. Right . And maybe rebeccas right. That was the day that a lot of maybe we made some bottoms there. What do you think . Yeah. Good morning. Wednesday was a really well day as was just mentioned. Treasuries gapped down in a big way. Almost like a flash crash in the treasury market. But at the low on wednesday, the s p actually using data was down 9. 9 . So thats pretty much a 10 correction, small caps down i think 13 from their highs. As far as remembering if you go back a hundred years, youll find the odds of having a 10 correction at any given time is about one in three. Historically they happen very frequently. Its just the last few years weve gotten spoiled by having no more than a 5 draw down. And as you mentioned, weve had these stealthy corrections all year. This is sort of the fourth one. This hasnt been so stealthy. And now the average symptom in the s p 500 is down about 15 . Were still getting good numbers in the u. S. The fed really watches that. A lot of this started with these dots coming out of the september fed meeting. Being much more hawkish than people thought. And then the dollar went up, Inflation Expectations went down. So itll be important to see the fed sort of dial down that all that rhetoric. And its really happening. Weve seen some fed officials in recent days doing exactly that. Even wondering if qe should end or not. And if they can sort of message the market back towards, you know, low for longer, then were going to continue to have moderate growth with very little inflation and theres not a lot not to like about that fundamentally. Okay. Yeah. You make some good points. Humans put together these indices. And this will go down on record adds not correction in the s p. If it holds here. But those are we put those names together as humans. There are other indices that did have the correction. Its just all perception. Anyway, we got to keep it short. Im not really sure why, but we do. I think 94 is still a good analog. That was a stealth bear market during a rate cycle. And the s p went down more than 9 but the average stock was down 20 . Then you had a liftoff after that. Okay. Thank you and well have more from rebecca throughout the show. Up next, how prepared are our hospitals . Mt. Sinai in new york looking about ebola. We will be joined right after the break. Location. Location. shouting location. Heres the location that matters the most. Here. Or here. Or here. Its wherever this is. To get customers to come here and stay here, youre going to need an app that connects to all your systems. So they can bank, shop, do what they need to do, and you gotta do it fast. Before the competition does. Its tough out here; you better be on the right cloud. Today theres a new way to work. And its made with ibm. A single ember that escapes from a wildfire can travel more than a mile. That single ember can ignite and destroy your home or even your community you cant control where that ember will land only what happens when it does get fire adapted now at fireadapted. Org welcome back, everybody. Weve been looking through some of the earnings numbers. We are looking through the Morgan Stanley numbers that are just hitting revenues at 8. 9 billion. Were looking at items at 77 cents a share. You dont trust me . Go ahead. Hold on. You dont trust me. Im going to check to make sure you get all this right. Im only focusing on the compensation numbers. I said did you see it. He said compensation thats the first thing you look at. Thats not normal. The bottom line, i think, andrew what did you say it was . 84 cents . No. Because you have to exclude some stuff, it gets to 77 cents. What was the estimate . I believe it was 54. Okay. Good. Well continue to watch that. Does that do it for you . 33. 40 today. The mt. Sinai Health System designated as one of the four that can handle ebola patients. Mt. Sinai yesterday running Emergency Preparedness drills. Joining us with more is dr. Jeremy bole. Doctor, thank you for being here today. My pleasure. We have spoken with the ceo of mt. Sinai. We know you have been Running Drills and had secret shoppers, so to speak, and tested people along the way. What do you do to prepare for Something Like this . This isnt something you can prepare for overnight. I think youve got to at the earliest possible time when theres a potential threat work on multiple levels to make sure they feel totally confident. That they know what to wear, to isolate that patient. They know how to ask for help. And we have the ability to provide ongoing care if we need to test in Critical Care setting. I think weve all been stunned by the lack of protocol at texas presbyterian. Its very concerning to think about the nurses and doctors on the front lines. I would agree. At a minimum, we know that the staff there did not feel safe. They didnt feel like they knew exactly what to do. The instructions were changing over time. And given this disease has a 50 mortality rate in the best of circumstances, everybody who had interactions with the patient who are at risk for ebola has no know exactly what to do. When youre putting your gear and on taking it off, somebodys got to be watching to make sure youre not contaminated. How consistent has the recommendations in terms of protocol from the cdc been . In terms of the preparations youre making. How much are you listening to them and how much are you doing your own thing . Right. So the recommendations have evolved i think as most people recognize. Part of our responsibility is to listen to everybody. Were listening to the cdc. Were speaking with other hospitals like emory. Were following and reviewing the Doctors Without Borders guidelines. Its to get the best information as quickly as possible recognizing that the state of the art may evolve and rapidly. Do you have confidence that other hospitals are going to be ready . I do have confidence you can figure it out. Im less confident i am wrong to be less confident that everyone else can . Theres going to be variability in readiness and capability. Our view is and i think the cdc is in a similar position is that everybody has to be ready to identify patients. Because somebody can walk into any hospital in this country from west africa with symptoms that are consistent with ebola. They have to be ready to stick them in a room and isolate them. At that point, though, in all likelihood we should probably be transferred to a few a handful of centers in each state that are ready to manage the patient and protect the staff statement. You new yorkers, the only places how about cedar sinai out in l. A. . How about the mayo clinic . There are places so in flyover states you might be okay . Not just in manhattan . Hospitals in the state of new york i would worry about. Doctor, you said 50 . People stress 70 . And they explain that 50 away. I cant remember their rationale. Ive seen the cases and it comes out to 50 . But they say its actually 70 for some extenuating reason. Is it 70 or i mean, id feel better if it was 50 . Is it 50 or 70 . I dont feel better at either number. Both are bad. One out of four of chance is not as good as a one out of two chance. I would agree. But i think the issue is that we dont really know. In the optimal setting, so in an intensive care setting. I think its reasonable that it will be tested in the coming months. One really important thing. Were s to get fears in consumer confidence. People worried about flying. But the risks to the economy, to the markets is i think one more of confidence than an actual pandemic, frankly. What would you say to people who are wondering if they should get on a plane in the next few months . Youre right. I dont think theres any risk to the public in flying. The odds of transmission are extraordinarily low. Because she was very early in the condition. When people are at dangerous to others is when theyre incredibly sick. In those cases theyre always in a hospital. Theyre always in isolation. Theyre having a lot of vomiting and diarrhea. But early on in the disease, again, this is transmitted through bodily fluids. And those are not spread around the airplanes. And again, for the vast majority of flights, theres no concern whatsoever. So i think this is an issue of confidence much more than a true risk to the public. Dr. Boal thank you for coming in today. Morgan stanley very quickly just the number we should be matching up in 65 cents versus the 54 cents. If you take out the positive dva and the tax benefit that coming out. Well then the 77 on the screen is the one we should not be using. Right. But the stocks up sharply. Its up 1. 10 or so. We will talk about that when squawk box comes back. Breath and. Exhale. Aflac and a gentle wavelike motion. Ahhh ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters at aflac. Com. [sfx] duck snoring sometimes they just drop in. Always obvious. 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. The all new, head turning cadillac ats coupe. Its irresistible. Ghave a nice flight r bag right here. Traveling can feel like one big mystery. Youre never quite sure what is coming your way. But when youve got an entire company who knows that the most ontime flights are nothing if we cant get your things there too. Its no wonder more People Choose delta than any other airline. Welcome back to squawk box this morning. Here are the stories that are front and center. Right now walgreens former cfo, hes suing the operator. He alleges the companys executives defamed him in news reports and blamed him for earnings forecast error. Also two more firms are firie i pimco. They are dropping pimco as their manager of their bond portfolios. And the fbi director has a harsh message for the to stop encrypting smartphone data. If not, he warns that murder cases could be slowed and some suspects could walk away free. All because he says authorities cant get to the information that they need. And check out shares of Morgan Stanley this morning. That company reporting better than expected earnings at 65 cents a share. Not 77 cents a share. Thats 11 cents ahead of estimates. Revenues excluding dva coming in at 8. 7 billion. They beat pretty much across everything. Yeah. That stock is up sharply. Up 1. 77. Theres a tax benefit. So 19 cents total on that 84 cents. The Investment Banking number beating. The equity number beating. Wealth management, same in line. The income disparity definitely being added here, andrew. They missed on investment management. That was their only miss. The compensation as a percentage of it, it was did you do that one . I have not done the math on that yet. We have an analyst on to talk about it. Not just that. What would be okay . 40what . 40 . You know me, i want it to be as tiny. The boston economic conference is taking place today. Janet yellen set to take the stage in just about an hour. Well be monitoring her speech for any of the news on the economic front. Obviously the markets keying on everything the fed is saying at this point. In the meantime, lets get to Steve Leisman. Hes at that conference and standing by with an interview youll see only here on cnbc. Steve, good morning. Good morning, becky. Im here with boston fed president Eric Rosengren. Welcome to boston. Lets talk about the weakness out of europe. Does that change your view of the pace with which the fed should taper quantitative easing . As you know, Financial Markets have been quite turbulent. I would remind you just a couple months ago we were talking about how little turbulence there was. It will take us time to process whats the reason for the turbulence. And so i think were going to have to factor that into our decision. But i think its a little bit too soon to make a judgment. But theres only a couple weeks until according to new statements you guys are set to end the third round of quantitative easing. So unless we have to change our forecast, we have made a lot of progress in labor markets. Were at 5. 9 on the Unemployment Rate. We were much higher at the outset of the program. The program was really designed once we made on the program and labor markets more generally that that program would end. If it looks like were not going to get that kind of progress now going forward, wed have to reconsider it. Id be Surprise Fire Department in the next two weeks we get enough data to change our mind on that. Lets talk about whats been happening globally. When you see European Economic weakness come across, how concerned does it make you for the United States . Europe has been weak for quite some time. I think there has been some news thats been a little bit weaker. I would say my fundamental outlook for europe hasnt changed that dramatically. I would say Financial Markets have moved more than the Economic Data coming out of europe. That being said, theyre certainly having significant problems. Their inflation rate is too low. Unemployment rate in many European Countries is too high. We are concerned about europe. We should be concerned about europe. It does affect the u. S. Economy. And so hopefully theyll start getting a bit stronger growth than what theyve been seeing recently. When you say financial data, sounds like youre saying markets have overreacted to the data. Either that or they underreacted going into this. So its a little bit hard to tell the low volatility before or the high volatility were seeing now, i think you average between the two and you probably get a better perspective. I think people were surprised that the market wasnt reacting a little bit more to the bad news coming out of europe. It has been for some time that weve been getting fairly weak reports coming out of europe. Talk about the outlook here in the United States. You had suggested that a mid2015 is where everybody was clustered. Does that still seem the case . Ive said i think it would be appropriate to raise shortterm rates once were within one years of getting to full employment and inflation rate of 2 . Well have to see whether thats what we actually get. At this point well have to see whether the Financial Market turbulence is something more significant. I would say so far the Economic Data has not shifted enough to make me think that my overall forecast would be dramatically different. Two recent developments, certainly in europe but also expected in the United States is lower inflation. When do you think the fed is going to hit that 2 target . And whats your immediate outlook right now . Were at 1. 5 right now. Certainly with the dollar getting stronger, with Oil Prices Going down, its likely that the Inflation Numbers are going to be a good bit weaker over the next six months. Given that were trying to get to 2 we actually dont want inflation to go down from this point. I would say that inflations a fairly slowmoving process and i think it would take us several years to get completely back to 2 . Given whats happened with oil, have you changed your inflation outlook . I focus on core inflation. And so we think about oil prices. We think about food prices, but this is that reason that has fluctuated a lot over the last several weeks. They could easily go back up. So i think we need to smooth through that process. If we stay at 80 a barrel, a little bit over, then that is going to indicate that were likely to have a fairly low pce and total pce read over the next several quarters. This is a conference here about inequality of opportunity here. But one of the things thats out there in terms of the criticism of the Federal Reserve is the fed is responsible for income inequality. That its policies itself have exacerbated it by raising asset prices. And not helped average americans. How do you respond to that . I think average americans have been helped by the actions weve taken. One of the things that really impacts a family is unemployment. The Unemployment Rate has come down quite dramatically. Now, there are other things we care about as well. Weve had slow wage growth. Certainly if we see us hitting our inflation target of 2 , we would expect well also see some increases in wages as well. So i think all americans are helped by low Unemployment Rate. All americans are helped by wages starting to go up faster than what weve been seeing. The focus you mngsed was on inequality of opportunity. And i think that reflects much larger trends than just Monetary Policy that tends to be cyclical. Thanks for joining us today. Thank you. Joe, back to you from boston. Great, steve. Thank you. I understand eric doesnt have an ear piece in. So we cant really talk to him. But steve, just before we go, we almost made that bet thoer day and youre pretty smart. Do unctiyou think at this point you made the bet about qe that you would have to be considering paying off now or do we actually have to what would construe me actually being right about that . Okay, eric cant hear. So what were talking about, joe, if im not mistaken is joe wanted to bet that i would shave my head if the fed did qe again. So hes ready for me to pay out. So im going to take joes remark as a question to you. Is there a chance that the Federal Reserve does quantitative easing again . I dont expect that well need to. If the economy got weak enough that it was required, we should do it. I certainly hope and i dont expect that will be the case, but i cant rule anything out at this time. All right, joe. Do you hear that . Thats the best i can get from the boston fed president. Do you want to make that bet now . Yes or no, steve . And some of our viewers, i said you would be a total bad ass like that. They said fu manchu plus the bald and youd be on the tonight show. I mean, think about it. Im trying to help. Joe, appearing on squawk box is the greatest thing that happens to me. Im very happy to do that. I have no desire to go elevate my game in that regard. Good answer. Im just fine. Good. I love being with you on the show, joe. You know, that will always help, complimenting the show. Thank you, steve. Well see you again in five minutes. I think rosengren is dovish . According to a chart i looked up, theres a chart that kind of ranks everybody on a hawkish dovish level. Hes seen as one of the more dovish ones. But, you know, that was really interesting. That was good. Coming up, a trip inside Morgan Stanleys results. Well speak to an analyst. A lot of stocks are higher today. Then later, heightened anxiety over the spread of the ebola virus and how authorities are handling the situation. Well have the latest on ebola in america. Sounds like a nightly news thing here. And a look at how airlines are looking to handle a true outbreak. Squawk box will be right back. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Were a force of nature, too. An Unprecedented Program arting busithat partners businesses with universities across the state. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov Morgan Stanley out with Third Quarter results earlier this hour. Beating the estimates on both the top and bottom line. With reaction, david hilder from hamilton banking. We dont always compare everything to Goldman Sachs, but since we just had goldman earlier this week, how did the two measure up . With morgan sort of do we see similar things in terms of the environments theyre operating in . We do see similar things. I think Morgan Stanley had a great quarter. I think goldman had a much bigger rebound. But Morgan Stanley was strong in Investment Banking revenues. They were up 33 year over year. And their equity trading revenues were up 40 . Fixed income up 19 . Do you even compare their businesses anymore . Goldman and morgan . The reason i ask is the business changes so much. Thats right. I mean, Morgan Stanley gets almost half its revenues from the retail securities business. This quarter because of all the strength and institutional, that was a little bit more than half. But they are at the top level, theyre certainly different firms with different strategies today. But you can line up the institutional businesses pretty well. One thing weve been talking about since the recovery started is getting banks to lend more, get that going through the economy to help corporations. How are you seeing the numbers coming up so far this quarter in terms of loan growth and quality . Is it improving . Can we take that as a better macro sign or not . Yes. I think we saw what i view as strong loan growth at many of the largest banks. Certainly one of the biggest areas of strength was commercial and industrial loans which is basically unsecure commercial loans. And we saw small improvements in credit quality across the board. Credit quality is still getting better. And yes, we saw, you know, good kind of anywhere from 7 to 12 growth. All right. Yeah, they do have youre not going to im waiting for you. Whats that . You want to ask a compensation question . What was the percentage of compensation . What was that number . Did you say 4. 2 billion . On the institutional side it was around 40 of revenues. You have to adjust for dva. But its certainly nothing outside of what Morgan Stanley has been paying in recent quarters on a percentage basis. Okay. The other thing i would mention is that on the retail side, we saw at Morgan Stanley a sequential improvement in the pretax margin to 22 from 21 . So again, theyre continuing to do better in terms of profitability on the retail side. All right. David hilder, thank you. Happy to do it. Takes guts to leave drexel in your name as a firm, doesnt it . Sure. Although its been awhile. You remember drexel . I absolutely remember drexel. A furniture maker and a university. There you go. When we come back, oil bouncing back slightly. What price would kill u. S. Oil . Well find out after this. By the way, check where oil prices are right now. Up about 1. 15. Squawk box will be right back. So i can reach ally bank 24 7, but there are no branches . 24 7 its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Philosophy is, reynolds . No. Not exactly. To attain success, one must project success. Thats why we use fedex one rate®. Their flat rate shipping. Exactly. It makes us look topnotch but we know its affordable. garage door opening sighs honey, havent i asked you to please use the. We dont have a reception entrance. Ship a pak via Fedex Express saver® for as low as 7. 50. Lets take a look at a couple of stocks to watch this morning. Well start with ge. Earnings kbeeting the street by a penny. The environment is volatile but Growth Opportunities exist for the company and thats up as you can see. Thats a current quote. Honeywell earnings up. Boosted the low end of its full year forecast. Range for profit and for revenue. That stock is up sharply. Google missed the mark. Earnings and revenue falling short. Reported a slowdown in paid clicks. On ad links. That are next to its search results. Do you know what those are, joe . I kind of have seen them. I never clicked on them. I dont want anything. We have a guest. Lets talk about oil. Plunging oil prices changing the calculus for power players like the United States. Weve been talking a lot about this all weeg. So how low will prices go and at what point does the drop do more harm than good . Joining us now to answer it jack gerard. How low does it go . I guess it depends who youre talking to. There is speculation it will go lower than it is today. The fundamentals are what we need to keep in mind. Most of the push to lower the price was driven by the concern over Slower Growth particularly in europe and in asia. But fundamental lly on a global scale, were still going to need more oil over time. And so i think what were seeing is a market adjustment. How low will it go today . Some believe that its kind of reached its bottom. That its eventually going to climb back out. I think its too early to tell. What do you believe . Well, we have members that represent the whole continuum of oil and gas production. It all depends which basin youre in. Our industry is very cost conscious. Is there a seven handle coming . Well, again, its hard to tell. It depends who youre talking to and where youre producing. Hey, theres been a lot of conspiracy theories the last few weeks that the Falling Oil Prices are something meant to pressure russia. Maybe even the Saudi Arabian producers to do it to slow down the u. S. Shale revolution and shut in production here. Seems to me this is more of a middle eastern thing where the producer are tired of the rest of the opec members cheating and theyre trying to pressure them before we get to the next opec meetings. But youre focusing on the u. S. Do you think the fact the saudis cut prices to asia, do you think this has anything to do with them looking at the u. S. Growing production . Well, they could be looking at that closely now, but i think the fundamentals have really changed. What i mean by that is, if we look back just five or six short years ago, no one would have thought that opec would be where it is today. I think theyre really in the process of soul searching. The one strength weve had is we increased here at home over the last four or five years. And so its changed that equation. Before when they could kind of work it out internally, that fundamental has shifted now because the u. S. Has become a true competitor. And i believe if well get our policy right in the u. S. , allow for export, were going to continue to put pressure on opec and other major producers around the world. Real quick before we let you go. I tried to get you on the downside. You didnt want to go there. Whats the upside . If its going higher . Its interesting. Some have speculated. The head of the eia said this production today, the price today due to volatility in the middle east and elsewhere may have been as high as 150. Today the price is considerably less because of domestic production. Were in a market adjustment time right now. And ultimately its going to find where it should be, but the key to this from the u. S. Perspective is weve got a unique historic opportunity to be the biggest player in the world. If we seize it, well change the course of history from an energy perspective. Lets hope we do that. Thanks for joining us this morning. Still to come this morning, feel like youve been carrying the weight of the world on your shoulders . Are you running uphill when it comes to putting your money to work . Have no fear. Well tell you how to lose the extra luggage and become a lean investing machine. Look at the futures this morning. Much better picture for the bulls. Dow futures looking up 163 points above fair value. S p up by 21 points. Nasdaq up 43. Squawk box will be right back. No hidden fees, from the bank where no branches equals great rates. As the company thats all about printing. But did you know we also support hospitals using Electronic Health records for more than 30 million patients . Or that our Software Helps over 20 million smartphone users remotely configure email every month . Or how about processing nearly 5 billion in electronic toll payments a year . In fact, todays xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. With xerox, youre ready for real business. You would need like a bunch of those to clean this mess. [ kc ] youre probably right. Hi, cascade kitchen counselor. 1 pac of cascade complete cleans tough food better than 6 pacs of the bargain brand combined. Cascade. Beyond clean and shine. Every time. Than 6 pacs of the bargain brand combined. So i can reach ally bank 24 7, but there are24 7branches . Its just im a little reluctant to try new things. Whats wrong with trying new things . Feel that in your muscles . Yeah. I do. Try a new way to bank, where no branches equals great rates. Welcome back to squawk box. Here on cnbc first in business worldwide. Im joe kernen along with Andrew Ross Sorkin and becky quick. President obama says its possible hell appoint an ebola czar to manage the countrys response to the outbreak. He also said that philosophically he doesnt object to a travel ban from west africa. But most experts and that is true, say that it could be counterproductive and maybe not be effective. I dont know. Obama could encourage people to hide their home origin. Well have more on this from the front lines. We would mean the airlines in that case. Well talk about that in just a bit. But first the other big story of the hour. The markets, of course. Stock futures pointing to a higher opening. The bulls making one more charge to stem the weeks big losses. The dow is on a sixday losing streak. The major averages are now on pace for a fourth straight weekly drop. About 30 minutes ago, boston fed president Eric Rosengren spoke to cnbc about the possibility of another amid the current economic turmoil and the environment. I dont expect that well need to. If the economy got weak enough that it was required, we should do it. Ii certainly hope and i dont expect that will be the case. But i cant rule anything out at this time. Investors take note of rosengrens comments. Well see what happens. But yesterday that was one of the things cited. There were comments from somebody the day before too. It happened quicker where they at least opened the door to that possibility. What else could drive todays trading session . This gentleman is back again. Is this a different report than what you did you are very busy. Arent you, dominic chu . You guys have got me very busy. How do you know so much . I dont know that much. I just try to put some pieces together from you guys here. So how about this. Last time last hour we told you about all the volatility of the stocks. This time around, lets tell you about whats happening with the markets and why some stabilization at least for right now might be a positive sign. First of all, the russell 2000. You can see here its up almost 2 . So if those small caps the ones that got hit the hardest are fighting some base here, maybe thats a sign of some positivity here. Also one other sector youll want to watch is the energy sector. They have had a rough week and a rough few months to be honest since oils hit their highs back in june. You can see here, though, that over the last couple days weve seen a nice trend here for energy stocks. Theyre the ones that got hit the hardest. Energy stocks might be one of those places that go and look. Other places investors are checking out are some of the most widely held stocks in america. If you have a 401 k , an ira, anything like that, you probably own some of these stocks. Apple shares are down 4 since the highs in september. So again, better than the overall market. The s p is down almost 7 . Take a look at another one. Microsoft shares here. Those again are maybe doing a llt bit in line. Down about 8 as well since the market highs in september. Moving on to another widely held popular stock, its been a relative outperformer if you want to look at it that way. Down about 5 since the market highs in september. And then wells fargo on the financials side has been beaten up a little bit more than the overall market. Then Johnson Johnson on the consumer and pharmaceuticals side. Thats one to watch here. Its down about 9 as well. One of the most popular have underperformed the market. If there are places the investors are going to look, look at the energy seconder. And look at the large cap blue chip names. Theyve taken a bigger hit. Back to you. Thank you very much. Lets bring in a global chief analysis. Russing with lets talk a bit about what weve heard from these fed officials. Thats the reason that were citing the markets i guess calming at this point. Things kind of calming down. Is it enough for them simply to say things like this, remind us that theyre still out there. Is that enough to tamp down the volatility weve seen . Over the longterm, i dont think it is. Its nice, its a bit of a safety blanket. But i think the fed officials have been clear. Unless we see real weakness in the economy, in the labor market, qe4 is unlikely. Now, again, there could be a shock that produces that. But obviously that would not be good for the market either. I think right now it will come down to earnings and stabilization in the Global Economy to get the market moving guard again. How do you feel about the fed even talking about this stuff . Do you think thats a good thing or a bad thing . Well, i think the fed has been very clear since the beginning that whether its qe or forward guidance, their actions are data dependent. In some ways what the fed is saying is simply an acknowledgment of the fact theres a lot of uncertainty out there. And whether youre looking at geopolitics or ebola with the sharp acceleration in europe, the reality is things are probably not as rose you as we thought a couple months ago. If things continue to deteriorate, we may have to step in. Thats not our base case scenario. Russ, its rebecca patterson. With our clients weve been actually looking for opportunities during the selloff to buy equities we thought were overvalued before. Were reaching out to clients now saying if youre sitting on cash, you should start putting some to work. Curious. Its a big market. People have different views on this. What are you all telling your clients to do after this pullback . Honestly, i think its very similar. Not that this is necessarily the bottom, but i think for longterm investors, the selloff has created some pockets of value. We do think that the fundamentals globally are sound and particularly in the u. S. , the economy is doing relatively well. So there are places wed like to increase positions. U. S. Large caps were mentioned a few moments ago. I think that makes a lot of sense. I think some bargains have been created. We do see better valuations than we did a couple months ago. And i think investors should be willing to take advantage of that. By the way, not just in equities. But also places in fixed income. One of the things thats opened up the last few weeks is high yield which is not particularly cheap. Its looking to be a much better value than it was just six or eight weeks ago. There was a story in the wall street journal today suggesting the corporate debt markets had been slowing to a crawl because the inventories is fueling this lack of liquidity. Do you see that happening . Fast really interesting. Because this something everyone has been concern pd about. So far the selloff in high yield has been fairly orderly. If you look at the flows, you look at the etfs, you have not seen the massive liquidation. But at least thus far, its been a relatively orderly selloff. We havent seen that problem that a lot of people have been waiting for. Even for junk bonds on thursday potentially . Im sorry . Even for some of the junk bonds on thursday . Well, theres isolated pockets. But if i look at the overall high yield market, we have not seen the type of liquidations and the violent Market Reaction people were expecting. If anything, the irony this week was the 10year treasury on wednesday. You had this incredible swing in yield that has not happened in years. Rates below 10 for the 10year. What happened . And where are we headed from here . I think that very quick in the drop we saw earlier in the week, that was technical. That was a function of some large investors having to unwind. Were now back around 2. 15. One, slower nominal growth. Second, very low yields in europe and japan which are pulling down u. S. Yields. As long as the 10year is, it looks better in comparison. And then finally we have seen a consistent bit from institutions all year. And that has continued. So i think the combination of that has brought yields a lot lower than anyone thought, ourselves included. We do think the yield is going to back up a bit as we get into 2015. But as i wrote about a few days a egg, i believe were in a low for long environment as it applies to rates. Thank you for joining us today. Thank you. Drexel hamilton not related, right . Not only is not not related, but at its core Drexel Hamilton seeks to own and operate a place by veterans. I think we should have people come on a lot. Because that and they do full service. Full Service Institutional broker dealer. So i like it. I like it. So well have the guy back on. Maybe id like to get the ceo on who was in the marine corps and the founder. I would definitely like to help this firm out. If at all possible. You too sorkin . Im happy to. You think they picked an unfortunate name. Coming up, keeping the front lines safe. The president of the Hospital Nurses Association is next. Plus tracing the steps of the second dallas nurse to be infected. Could she have flown on not one but two commercial flights while showing symptoms of the virus . We have details on that story. Plus former continental ceo Gordon Bethune will join us. Back in a moment. Morrow 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. 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. Welcome back to squawk box, everybody. Weve been watching the futures this morning. And a different picture from yesterday at this time. If you look right now, youll see those futures are indicated up by about 140 points above fair value for the dow. S p futures up by 16. 5 points. And the nasdaq up about 30 points. Also keeping an eye on the 10year note. It looks like its yielding 2. 169 . Holding signs and cheering, staffers at texas Presbyterian Hospital gave nurse nina pham is heros sendoff. Pham walked the distance from the ambulance to a specially equipped medical jet before the journey to bethesda, maryland. Shes going to be treated there for ebola. Are hospitals prepared and is the cdc doing enough . Joining us now is the president of the american Nurses Association. Represents the interest of nurses throughout the United States. Welcome. Thanks for joining us today, pam. Thank you. I dont think weve ever had anything quite like this before. Itd be great to think that were all just so competent in the United States that were ready for anything all the time. But and i wish we were for people that deal with patients. But we arent and we werent. You know, we really found that there were some lapses that created the problem that these two nurses have now become infected. But i would have to say that for many years weve had very good Infection Control and prevention procedures. I think ebola has created some challenges that now weve really learned very quickly. The american Nurses Association has been in touch with the cdc on a regular basis. There was a Conference Call yesterday with more than 6,000 nurses dialed in to express our concerns that we really believe there needs to be greater clarity and a stepping up of the protective equipment thats recommended. As we know, its important to understand how to put on and take off this equipment. We are assured that there are plenty of supplies nationwide and so were really encouraging our nurses to work carefully and closely with the organizations to make sure they have adequate training, they have the supplies. And if theres any concerns to raise them quickly and have them resolved. One of the things that and early on, we chafed a little bit at the cdc director in saying while we had some very obvious protocols, obviously they werent followed. Did that rub you and people in your profession the wrong way . Because that obviously was not i dont know what he was trying to do at well, i guess i know what he was trying to do. But i thought it was disingenuous and not a good way to start things off. Theres been a very Strong Movement in health care for more than a decade to really create a culture of safety. And part of that means that there is no blame. We look for problems and we correct them. So i think there was some disappointment that some of that language sounded like there was blame being placed. But whats most important is to learn very rapidly, correct the problems, make sure we spread the information about what are the best practices. And in this case its rapid identification with screening tools and the right questions. And vital signs to be taken when someone comes to an emergency department. Have they traveled from west africa . Have they been in contact with anyone known to have had ebola or exposure . Do they have a fever . What other symptoms they have. And then to move into a mode where if someone is identified, theyre quickly put into isolation and then we follow them and move them to a higher level of care. And so, you know, i think those are the kinds of things were really focusing on. Knowing that education is very important and particularly the actual protection of workers with the ability to understand and practice and have a buddy system to know that theyre putting on protective equipment appropriately. And then taking it off. Because thats where we think there were problems with these two Health Care Workers becoming infected. Pam, how confident do you feel we know how to handle the waste that is generated by ebola patie patient, that we know what to do with anything that comes down the line. Are there other problems in the system that worry you that you think we havent addressed yet . You know, actually, there is a lot of Information Available from the cdc on these issues. Such as dealing with Laboratory Specimens and Waste Management. Again, i think the fear factor that was raised created a fair amount of chaos early on. So individuals or companies that have not been accustomed to how to deal with Waste Management said no, were not going to handle it. Some of that also happened within the institution. I think we have clear direction on those activities right now. And so there is incineration going on. Theres disinfection going on. We also have great information from places like emory and nebraska and the sites that have a lot of experience handling these kinds of issues. So again, we have that Information Available to our hospitals and were working closely with the American Hospital association as well. Heres a question about the nurse who traveled. Look, the cdc has mismanaged in my estimation from the get go. However, sort of common sense at least on my side suggests that if you are exposed to ebola whether you have it or not, the idea of traveling doesnt seem like such a great idea to begin with. Do you put any sense of responsibility on that nurse and what direction have you given to or has been given to other Health Care Professionals about what they can and cannot do when they leave the hospital and go home at the end of the day . We really have been relying on the cdc for their direction. And again, knowing that theres a very long incubation period with exposure to this illness. And that theres also a delay from the time that someone would first report symptoms. Thats why they have individuals monitoring their temperatures to when they show real signs of the disease and at that point become infectious. I think were learning all the time. Were being more cautious or overcautious than we were several weeks ago. What were seeing is a set of recommendations to say if theres any thought theres been any exposure or risk, that individuals will not travel. I think as were learning more, were going to be able to have a much more measured approach to what those requirements and recommendations will be. That was dubbed patient zero. That was the first one and obviously mistakes were made. And if that could if that has been put to bed now and from here on out, were going to do things right, that would be one thing. But we havent been tested again. Are you confident that the entire system in this country is now ready for if there is another case and nurses are protected . I think we are much more ready. And i think what were hearing from organizations or hospitals in particular is that clearly the front end screening which is a Public Health issue is in place. And so that again is very important. I think where the discussion is moving now is should we expect all organizations or all hospitals to be able to treat any ebola patient who might cross their threshold. Or do we need to look at a distributed system where initially they go to a limited number of institution. Ultimately we want to know that the control mechanisms are in place so that were not going to see a major epidemic in the u. S. Okay. All right. Thank you very much. We appreciate it. Thank you. See you later. Coming up, bermuda bracing for impact. More on ebola and the airlines with former Continental Airlines ceo Gordon Bethune. And blankfein will have comments. And check out the futures at this hour. It does look like its going to be a better day at least at the moment. Dow up about 132 points higher. Squawk box will return in just a moment. When change is in the air you see things in a whole new way. Its in this spirit that ing u. S. Is becoming a new kind of company. Ing u. S. Is now voya. Changing the way you think of retirement. And cialis for daily use helps you be Ready Anytime the moment is right. 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Thats why we created programs which encourage people to take their medications regularly. So join us as we raise a glass to everyone who remembered today. Bottoms up, america. See you tomorrow. Same time. Another innovation from cvs health. Because health is everything. The all new, head turning cadillac ats coupe. Its irresistible. Hurricane gonzalo is headed for bermuda with maximum sustained winds of 145 miles an hour. That makes gonzalo a major category 4 hurricane. People in bermuda are getting ready. Theyre boarding up things and batoning down in the atlantic. Gonzalo is the sixth hurricane of the season in the atlantic. Also if you are watching us over a cup of coffee this morning, this story is for you. Starbucks is giving customers a chance to earn free coffee for life. They are encouraging people to use its new app that lets you pay with a mobile device. Ten lucky winners will be named. They are launching its Pay Ahead Program nationwide next year. Other news on the company, starbucks is relaxing its dress code. That means the barista will be able to show off a tattoo or small nose piercing. How do you feel about it . How do i feel . Knock yourself out. Are you thinking about a nose piercing . Im thinking about a tattoo. Where . Well, a squawk tattoo over here. I dont know if id get that. You think thats a bad idea . No . I dont know. What about bad idea. Theyre hard to remove. What would you do . Cnbc peacock. No, no. Hes holding off on that too. Its for when you move on and up. Longterm contract. Sorry. What about gonzo . What did you say . I like to call it hurricane gon gonzolo. Sounds better to me. Are you smarter than a fifth grader . I dont know about that part. But at least one aurora, colorado, road worker might not be. Road paint thats supposed to read stop instead says sotp. Despite that one issue, the paint seems to be doing its job. Most drivers get the idea. They still stop. The word is misspelled on a road leaving a sams club store parking lot. The store has not responded to media inquiries. Wow. Sotp. Okay. Well, i dont know. You know, when youre that close the guy doing it wasnt standing back really. I feel bad sort of. You feel bad for that person . A little. Im surprised you have not made the comment that im sure thats a Government Employee that did that. That goes without saying. But it might have been a sams club employee. Im sure the person knew the correct spelling. Look, i caught myself misspelling stuff this morning. I was texting too quickly. Theres no spell check for the stencil. We can combine the tattoo and that story together. Because there are been misspelling on tattoos. Yes. I saw one it was rihanna or somebody, right . Had a total misspelling. And then youre totally screwed. That hurts to get rid of. You know what i cant like are the homemade tattoos ive seen . If i were going to get one, i would want a really good one. The homemade ones there for a day or two . Nowhere people do them and the writing is bad. If i did a joe and andrew bff for life, would that that will last. That will stand the test of time. I have confidence in that. You could get matching ones. Or where you put them together it makes a heart that is broken if were apart. Can becky be in the middle. Do you want to be in the middle . Ill let this man love thing stand on its own. Threes company. We had her on. It was a pleasure for me. You got one of those things. The cowl sweater things. Yeah. Very functional. Its upstairs right now. Except she put the hood up and looked like the grim reaper up and scared everyone. Coming up, a read on the state of the housing market. September Housing Starts released after the break. Back in a moment. Always obvious. Rtunities aren 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. Introducing Synchrony Financial bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Engage with us. Housing starts are out. Lets get to rick santelli. Rick . September starts. 1. 07 million yuunits. Thats 6 plus higher than our last look which had had a humongous released. No, it was not a downward revision. It went to 957. But in the context of that, of course, that number became down about 12. 8 . That put this number up. I take that back. And almost virtually identical number for permits. Thats up i dont know 1. 5 , 1. 4 or so. Of course these are september numbers and they stack up pretty good. Keep in mind when it comes to starts, our july number was the highest. These numbers are getting up to best numbers weve seen since 07 and 08. So, joe, how you doing today . If we worked on the robes and special crowns were going to give to all the fed officials that have to tell people, listen, put down your gps and take your cell phone away from your nose and kind of look around so we can tell you where rates are going to go . I like the i just like it when i think i know someone and then when they sort of confirm it. Thats okay with me, rick. I mean, then you have like are americans happy outsourcing just about every part of their life to people that they cant get through to the ballot box so they elect their congressmen and we end up with this group of people that have mostly i know Richard Fisher might be different but mostly have never created anything. Okay . Not jobs, not true economic growth. The real smart people. Okay . But why is this why is everything around me that has price discovery have to be i think we need to make a special song before the fed officials grab the mic. Something like that. What do you think . Well, i just know that and i kind of almost understand it because theyre very you know about good intentions. And theyre well intentioned. Oh, they are well intentioned. But so are all those ceos and heads of investment banks that used to say things and kick the tires. You dont get that anymore. Theyre afraid to get the phone calls with 5 billion fines attached to the other line. I do sort of blame congress a little for the dual mandate. Because as long as one of the mandates dual mandate . Their mandate has more cylinders than a v12 engine these days. But you figure, all right. We dont know whether qe helps, but obviously europes thinking about it. Come on. Qe helps. If inflation stays quiet and we still have an economy thats not up to par, then they figure why not. I think thats what theyre thinking. What does qe help . I look at help the way kanzians used to look at help. This isnt help. This is subsidy. We havent even officially ended the last one and theyre dangling another one. Because listen, america. Americans, people, human nature, never give up subsidies without a fight. And were training all these market people to permanently and forever price in subsidies and that is the problem. Well, you know, its were going to be theres a lot of great things about europe, rick. And a lot of people i hope people do think theyre great. Because we are becoming europe once again. I think we ought to go to tiffany and get a bunch of crowns made. Because thats what it is. Americans want to be led by the nose. Whether its siri or the Federal Reserve. You know, were going to leisman now and hes probably got i dont know what im sure hes going to pick up this thread. Lets bring in Steve Leisman for more reaction. I know rosengren did not have an ifb. Unfortunately you have one. But youre going to ignore this, arent you . I know you. If i understood what you were talking about, i would join in. But i dont really get it. I dont understand the idea of subsidy or whatever youre talking about there. But let me talk about the data for a second. The starts were better than expected. A little bit better revision to august. And a good number for permits which is sort of a leading indicator. I will tell you that the permits are down for Single Family but up for multifamily. And a lot o the gyrations weve had had in this. I breathe a sigh of relief with every piece of u. S. Data. The way markets are cured is how it will withstand with whats happening in europe. Every time a piece of data comes out that shows were going okay that i think the markets will breathe a sigh of relief. Had a problem with retail data this week. On janet yellen, no comment on the economy. She does point out shes concerned about the growing burden of student debt and the decline in business formation. These are longer term concerns. Shes not addressing whats happening in turbulence overseas. But as you heard, rosengren did talk about it. But probably not enough time between now and the next meeting for the fed to alter the course its on. That is to really end quantitative easing. Of course things could change between now and then. But at the moment, it looks like theyre going to end qe. Ive been maintaining the real tool for the federal e reserve is the federal guidance. Its when they will hike rates and the slope of the incline. And right now those are relatively dovish when it comes to what the guidance is. I want them to end it too. I dont think youll pay off on a bet unless they end it and restart it. I think you try to welch and say that is not a new qe. So i want them to end it. Because i dont think joe, you know, i talked about the bet with some interesting and smart economic people here. What they dont understand is the other side of the bet. Your offer if you lose the bet to shave your head if its a risk presents no risk to you and no reward to me. I understand that. Which is what we talk about all day long to people. Is risk reward. I understand that. But whats the reward . There is none, joe. So until you come up, until you put something on the line, there is no bet. Someone said that on twitter. They said you need to shave your head. I said okay. So then you are conceding my hair is real. They said no. Because steve, thank you. How about ill get a tattoo. If you get a grateful dead tattoo, i would make a bet. Thats one i would get. I want you to win. Im after a win win here. I think you should get morning in america. Or ronald reagan. A picture of the gipper across my back. Thats an idea. Reagan for rushmore. Reagan for life. Shes going to come in and talk about nothing funny. Im not a tattoo myself. You are talking it. Okay. But i think steve said something important about the markets. Im segueing. Did you see how subtle that was . That the markets breathing a sigh of relief with any data point with no spillover from europe. Its a calming influence. But i think what was ignored earlier this week is we got Mortgage Applications up 6 following another increase the week before refis up 10 . The fall in oil prices a use discuss a lot is helping and now those low Interest Rates are starting to kick in. So thats a good thing. It is. Refere carl has tattoo of lucky. And cross out the joe. Put in the lucky. Goldman sachs chairman says the fed has handled this economy correctly. He actually sat down with us yesterday to talk about everything from the market downturn to ebola. Probably not tattoos though. Carl joins us with more. Good morning. Good morning. Good to hear all of you this morning. Pretty good quarter from goldman as you know by now. I see that Morgan Stanley looks good too. We covered on the call yesterday. Wednesday, all the selling on wednesday was, quote, painful for their clients. We talked about whether or not that was going to drive a mass liquidation. Lloyd said he wouldnt get hyperbolic about that. But we did ask him to expand on what we saw on wednesday and what that all meant. Few weeks ago, people were bemoaning the lack of volatility. No so much volatility, but the lack of risk premium. The ability to separate good from the bad. And wishing for it, its like the genie in the bottle. You wish, wish, wish. Now all of a sudden we have an avalanche of volatility. A little bit beyond what people were hoping for. Lloyd tackled all the things the markets been handed in the past couple of weeks. Europe, you guys were just talking about europe. He said the Decision Making process on Economic Policy there is not well constructed. Certainly nowhere near where we have in the states. The fed, he called them wise and courageous for standing up to those that have second guessed them for careers. And again on ebola, we said how is your average investor supposed to manage and evaluate this risk. Heres what he said. I wouldnt try to create another virus of fear that just has its own life to it. You know, when people all of a sudden are afraid to mingle in the public or get onto you know, not there. And if all you do is turn on the tv set and thats what anybodys talking about, i could see how your fees can play on you. Thats a virus itself. Were not done talking to goldman. Later this morning the chair of tmt. Well talk media on a week netflix and google missed. And the head of banking will talk about valuations, ipos, inversion policy. All of that coming up later this morning. So joe, i think tattoo, nicholson. What do you say . You mean jack . I met him. I love him. Yes, jack. I know. I was there when you met him. Ive never seen you more star struck. Totally. I couldnt even put a sentence together. How many movies . Think about it. And you get done with them and think of chinatown or something. You know . Not even the new ones. You know what . Seeing him at the angelica next to each other. So you didnt take the lucky bait. How are the twins . Good . Everyones good. Lucky, you know, hes getting older as are your dogs. Well, we lost one. We lost reagan, carl. I havent told anyone. Yeah, we only have two. Now sorkins thinking of a dog. Thats why i mentioned lucky. A dog or a hamster. Very similar. I still have on my phone today. For him that was the highlight. Carl, what kind of shoes are those crocs you had on without the socks . These are ralph lauren, you know, sort of loafers. But, man. This went viral yet. It did. We were talking about ebola and fed policy. All people wanted to know is why i wasnt wearing socks and why lloyd wasnt wearing socks. Were in california. He wasnt wearing them, so you didnt wear them either . Yeah. Carl, those are grandpa jeans too. Those are grandpa obama jeans. Dont you have any skinny jeans . Can you move on to the next segment . Ill see you at 9 00. Carl, good to see you. Thank you. All right. Some thanks for getting up early. Giving a tough time. You got ideas now about dogs . Lucky, you could have. Im still working on the tat. I was thinking make an x1 for you. Im not going to out you on what rich bernstein said. I cant do it. Please dont. Because you denied youre a tattoo person. Rich immediately thinks that means youre big on piercings. All right. Never mind. Thats rich bernstein and i outed him. Im glad its friday. Let me out us. Lets take it to break. All right. Were taking a break. Turbulent times here at the set, but also for airlines. News that a Health Worker diagnosed with ebola flew on a commercial flight the might before showing symptoms raising a scare that the virus could reduce air travel. Gordon bethune will join us to discuss the ebola threat and the health of our nations Airline Sector as we head to a break. Take a look at the Airline Index over the past week. It has come back a little bit. Were back in just a moment. Guys youre not gonna believe this watch this. Sam always gives you the good news in person, then the bad news on email. Good newsfedex has flat rate shipping. Its called fedex one rate ®. And its affordable. Sounds great. cell phone typing typing continues woosh cell phones buzz, chirp and we have to work the weekend. Great. More good newsits friday woo ship a pak via Fedex Express saver® for as low as 7. 50. Welcome back to squawk box, everyone. Weve been watching the futures and things are in a much better position for the bulls than they were yesterday at this time. Dow future up 150 points. S p futures up by about 18 points. Theyve been positive all morning long, but they got a boost from the Housing Starts. Airline stocks bouncing back a bit after along with the broader transport but fear of ebola has the potential to move the stocks back into the red. Joining us now is former Continental Airlines ceo Gordon Bethune. Good morning, andrew. What is your sense of the fear of ebola which is really what this is all playing into relating to what the next couple of months are going to look like on airplanes in the United States . I suspect, andrew, it depends on how we get our arms around it as a nation and get some controls where people have confidence. Obviously theres a lot of riskadverse people that dont need to travel and wont. And so if you start seeing more and more outbreaks in the United States, youre going to see less an less travel. Thats just the way its going to be. Do you think that we should have a travel ban to west africa right now . Well, it doesnt help the person that did come into this country went in via nigeria which hasnt had any ebola in months. So its hard to get them because they have so many different paths. They can go to london and then come here. You would just destroy the whole system. So thats not going to be the way you approach it. Do you have confidence that the tsa and the whole system at the airports, i mean, where those airplanes are coming in right now will be able to will be able to take peoples temperature, do it properly, and keep the country protected . I do. And i believe that they can. They just need to demonstrate that. Thats what the public lacks is the confidence in the government. You have confidence in the airplane when you fly. You know youve got professional men and women in government oversight. You need to implement some control there. What do you make of the way frontier approached this particular issue in the past 24, 48 hours . They talked about taking the plane out of service, doing a complete scrub of the plane. By the way, i have not heard that from the other airlines that i imagine at some point had passengers that did travel with ebola on them. You know, i dont know what airline that would be. I think frontiers doing the right thing. Its getting confidence back in the airline. Obviously, that theyre going to take whatever steps necessary to give the passenger a sense of confidence that its a clean airplane. And i think theyre doing all the right things. Hey, gordon, how do you think the fall in oil is going to provide an offset or how much of an offset is it providing for the air industry . It just drops right to the bottom line. You can call it a win fall but i remember the torture going up to 100 crude and coming back down through 80 is going to help the bottom line. All airlines. Gordon, were going to leave the conversation there. We appreciate it. Okay. I dont know what to make one last question before you go, gordon. What do you think about the Airline Stocks themselves . Now are they undervalued . Well, i believe so. Only because of the potential of the revenue staying stable and expenses dropping via the oil price. That would give them some upside on the tape. Okay. Gordon, thank you. Appreciate it again. Up next weve got jim cramer from the flor of the New York Stock Exchange. Plus, monday a cnbc exclusive. John fortt will bring us that interview 6 00 a. M. I love having a free checked bag. With my united mileageplus explorer card. I have saved 75 in checked bag fees. Priority boarding is really important to us. You can just get on the plane and relax. I love to travel, no foreign transaction fees means real savings. We can go to any country and spend money the way we would in the us. When i spend money on this card i can see brazil in my future. I use the explorer card to earn miles in order to go visit my family which means a lot to me. Head down to the New York Stock Exchange with cramer. I wish we had more time, jim. Im surprised the jets hung in there. That was a shocker. Youre the only guy i talk sports with normally. Were you surprised . They could have won that game. The jets are going to win a couple of games. Geno smith looked good last night. I was impressed with the jets. The score doesnt say that, but i was impressed with the game. Second. We are now in the business hoping oil prices go up and Interest Rates go up. Thats what has to happen for stock prices to stabilize. Its a weird world. Do you think it was the fed comments yesterday about qe . I think it was the turn in oil. We have a lot of companies, you can hear baker hughes call. Where you got to 70, 75, you had companies that couldnt pay their debt covenants. You could see the declines in oils and mass limited partnerships. People felt the complex would stop the growth in this country. When oil went up, it was terrific. Schlumberger great, honeywell fabulous, General Electric amazing, Morgan Stanley good. Google was a fabulous quarter. These analysts, you have to look at the cost per click. Thats what matters. The only number i care about. It was sensational. Google turning after down 30 last night, google cost per clicks, right metric. Lots to like this morning. A deal over in europe. Chinese, maybe a huge subsidy this weekend. But no new ebola cases either. How many days ago did duncan come down with it that we know he was contagious . He found out, we know the timeline. He was contagious september 24th. Todays day 23. Its supposed to take only 21 days. Where are the people who came down with it. We needed more time. The president last night had a press conference. He seemed focused on this. The cdc guys are going to focus on the flu. Also said im not philosophically opposed to him. Youve been asking that all morning. Remember, this is day 23 when duncan came here. 21day incubation. Where are the other ebola cases. Thanks. Up next, we have a secret to share. It involves joe and a tattoo. What can your fidelity greenline do for you . Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. 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[ male announcer ] see how schwab can help light a way forward. So you can make your move, wherever you are. And start working on your next big idea. The all new, head turningon cadillac ats coupe. Idea. Its irresistible. Welcome back. Earlier in the show we were talking about tattoos. Joe swears he doesnt have one. Oh, boy. We found someone in the building snapped a picture of joe in the mens room. Its a tramp stamp. After a workout. I went to see this. If you look just above it, there is a Beautiful Image of roger. You dont know thats true as far as know. I resemble that remark. Sue you for defamation of character. You have a very girly back. Thank you. Thank you. Youre welcome. Would you prefer if i looked like an ape . No rebecca, thank you for joining us today. Its been fun. The one thing you said earlier that people should probably hear again, youve been telling clients to put money in as things calmed down. We are not sure this is the absolute bottom. The more we see Economic Data confirming europe is not affecting the u. S. Economy in a major way, i think this is an opportunity. People have been waiting for the correction. I think we got it. If well have a lot of cash, its a great time to start putting some of that back to work over the next couple of weeks. Small cap is having a nice run, too. Thank you for being with us today. That does it for us today. Have a wonderful weekend. Show it off live. Get away from us right now. Ah time for squawk on the street. Go away. From that to this. Good morning and welcome to squawk on the street. Im david faber with jim cramer. Carl quintanilla is at the Goldman Sachs innovators and builders in santa barbara, california, where he conducted an exclusive interview with goldmans chairman Lloyd Blankfein. Hell have more on that and that conference. Lets give you a look