Transcripts For CNBC Squawk Box 20141028

Energy prices are likely to be a point discussed at todays fed meeting. The fomc is expected to turn off its massive Bond Buying Program while ensuring investors it will start ready to act should the economy be threatened. And we will have Steve Liesman joining us with the exclusives from the fe survey later this morning. The s p caseshiller index, consumer confidence, and Third Quarter housing data. As for earnings, among the names posting Quarterly Results before the bell, dupont just hitting the tape. Pfizer, auto nation, corning, when i will pool. Coming this up afternoon, facebook will be on Centers Stage after a market closes. We have the dow looking like it will open higher. Up about 11. 5 points. The nasdaq will open higher, as well, by approximately 24 points. Earnings per share, sales, 7. 5 billion. Revenue is 7. 87 billion. So its a different number. 7. 87 compared to 7. 95. So maybe just a little bit shy of expectations. But pretty close. And then for the year, the company says it is backing its 4 to 4. 10 number and the estimate for analysts is this 4. So analysts are backing 4 to 4. 120. In fact, the First Quarter for the Fourth Quarter of the company, above the year agos 359 cents. Right now weve got 70 cents is what the estimate is. 20 of 60. 59 and 12 is 71. So we do expect a hit in the faurth qua Fourth Quarter numbers, as well. The broader markets, the yield has been moving slightly higher, which some people would say is a positive begin that whether we were down below 2 that was when we were in the middle of all of the angst about whether we were in correction mode. And some of the market sector. Both of the guys we had on set said 9. 8 is no 10. 9. 8 . 9. 8 on the s p. I said it did because i wanted to get it out of the way. Im willing to round it up. Come on. Its pretty close. Yeah. The market is not that exciting. Lets look at the dollar quickly. Good time to go to europe. Might even to get you better. 126. 08. 200 bucks for that . I could almost hold my breath the. No, you couldnt. Currency is way overvalued. Take a quick look at gold, which at this point is isnt much to watch. 1227. At my gas station i was excited to see 2. 99. Its under three. I think premium was like 3. 17. But i was almost, and it filled up for 38. I paid 42. I wasnt completely empty. Youre carbon footprint. This is all greek to me. I know it is. You have no idea about driving. Youve never done it. Jeeves fills up the car. Youre basically a virgin in terms of driving a car, right . I can drive a car. I cant drive a stick. You Company Drive a sick. What is that second pedal for . Keep it in first gear. What was i going to say . Where was i going . Well, i oh, oh, your big carbon footprint. Global warming in hawaii, theres lava. Thats how hot it is. 15 feet an hour . I guarantee you anchors will be asking whether thats due to global warming. Dont you have three suvs . No. One is a minivan. Ill tell you about a number of the Early Morning stockholders. I love my minivan, thank you. Madison square garden is exploring a split into two companies. The entertainment business could be separated from the shorts business. Shares are rising on the news. John rogers is joining us in just a few minutes at 6 15 eastern time and well be talking to mario gaboelli this morning. Shares are tumbling that the Current Quarter is going to be weaker than expected. Investors are concerned about how many people are joining the social site and how often theyre beating. Its earnings were in line with estimates. Our q4 numbers, let me be specific, are a raise on the full year for us and a raise on the Third Quarter. I would say about our business specifically of 1 billion Digital Advertising businesses, we are of the lives i ing. Oh, what happens . Twitter. Whats going on . Those guys needs a quit. Huh . Chaps this quarter . At the end of the day, still a pretty big platform. Get me some doritos. Peter said they were all a bunch of stoners. You were surprised . Im disappointed that there is a lot of optimism coming out of the country. But at the end of the day, you have to have exposure in media. Tv, weakening, theres a lot of uncertainty about how digital expects that. Twitter is peter, so a point, you just take away the funny part of it was that the assets of this company are phenomenal. Phenomenal. And they can run this thing and then do well. But if they actually knew what they were doing, it would be doing so much better. Looking at that, thats the question. By the way, its not like this is a completely ridiculous visit. It wasnt the top or bottom line. It was the user growth that disappointed you. I think its expectations in the sense that they had more than what people were than what they did last quarter. I think its the commentary about how they get to next year. Pricing is generating a little bit. Users are decelerating a little bit. At the end of the day, its still at 50 . They claim that they would be profitable by a penny per quarter or this last quarter if it wasnt to accomplish it . Its a little agreeshus. Its incredibly high. So targets across the street have to take that into account. Actually, but thing i do want to come back to is when you get about the user growth, its about 1 to 2 million users, but they would have beaten by if not for a Software Issue that they had overseas. What do you mean . We had a glitch that made it more difficult to stay logged into twitter. They acknowledged they think that cost them about 2 million tweets. Here is the other suggestion. The suggestion is people are using twitter less, meaning theres more people using twitter, but the ones that are on it are tweeting less and does it really mean that theyre engaged . That becomes the question. That is another one of the disappointing parts. As you increase the quality of the site, usage would improve. It is, but just marginally. That affects the amount of inventory you have to sell. Still, you take a look the at ever at this, regardless of peoples attitudes and how theyre using twitter, why are you giving them to me . That was another surprise yesterday, how much mobile accelerated. Your price target on the stock . 56. Thank you for coming in. Novartis posted better than expected earnsings as well as revenues. Shares trading higher. Here to break down the results is joe jiminez, ceo of novartis. Im going to have a soft spot for you, joe. I think the last time i saw you it was at davos, actually. We are going back. Hopefully youll come on when were over there. It was in davos, thats exactly right. Hopefully youll come back this year because were having a meeting about it, right . Eight straight quarters is a pretty good growth, right . Right. Yes. Well, what were doing at novartis is we are focusing on the innovation and thats really driving a lot of our growth. So we were able to, in the Third Quarter, to grow sales 5 and cost and currency despite the fact that we had a significant patent exploration in one of hour biggest drugs. So im feeling good about the saying groels and the eps double digits growth thats coming with that. Its keep it simple stupid in the drug business. And you need to spend on r d and bring new products. Thats whats helping your quarter, too. Yeah. We have three drugs that in the third quartzer were up over 20 . Gileia, afintor and for sigma, these are delivered between had 00 million and 600 million and they grew over 20 . When that happened, youre able to more than compensate for any pat incident expiration that youre going through. From diavan, the Blood Pressure, i guess thats one of the things youre referring to there. We also had lily on last week. You were involved in that threeway deal with a switch of assets. Can you explain how that set you up for the future and what you did for people that dont remember . Yeah, yes. Back in april, we took a hard look at our portfolio. I believe in the next three years, were going to have to focus on businesses that have innovation power and global scale. Pharmaceuticals, generics, and eye care. These are three divisions that are over 10 billion. They have global scale, they have innovation power. But to do that, we had to optimize our portfolio. And i call this precision m a where we look at our portfolio, look at a partner where they could potentially benefit from some of our as aets. So eli lilly is acquirining our Animal Health business, with gsk, were acquiring their business. We say a powerful number two in oncology and gsk becomes the leading vaccines business. Together we form a joint venture on overthecounter drugs creating one of the biggest otc businesses globally. This is a transformation that is really opt miedzing the novartis portfolio. Many people in the industry said swaps dont work. And i think all three of us, lilly, gsk, and novartis proved them dead wrong. So what is you may be able to file fairley soon for this heart drug . I love the name. Do not change its name. Lcz696. I cant wait to see that on nightly news with Brian Williams as theyre talking about it. But do you really think its going to be a multi Million Dollar drug . What does it do . This is going to be a very important drug. They found lcz696 reduced death from cardiovascular means by 20 and it also reduced hospitalization costs by 20 . Now, there are over 25 Million People in the u. S. And europe with Heart Failure. And Heart Failure causes Health Systems over 100 billion every year. So if you have a drug that can reduce hopzation, thats going to have a bith impact. We have now filed. Were in a rolling submission with the fda. The fda and everyone Regulatory Authority is very excited about this drug. And were expecting to get approval. And to begin selling this drug in 2015. So were looking forward to that being a multi block burst for novartis. People dont realize, novartis is one of the biggest market caps, bigger than pfizer, bigger than merck. Youre coming to us from lon. People at home should try to do an interview with like an eightsecond delay. Its fun. They didnt move london to china, did they, do you know . In fact hes doing a good job. Im impressed because its hard to jump right on. John, if you could book our time, lel love to see you more. Maybe the lag will be less in china the. Good. Weve got some sports news force you. The Dallas Cowboys there in overtime. The redskins. I like the cowboys, the redskins, the patriots. I think you you kind of owe yeah. You have mentioned those. And the bengals beat the ravens. They dont want you back. I dont care. Theyre going to have to do a lot more. They dont want you back. You are like but after 25 years, they finally just after the colts game, i had it. But this was rg3. Is he coming back . Nope. This was dallass first loss since the opener. And they look good. Thats why it watts a good rivalry last night. Hopefully the bengals keep looking. Bengals. You sound like gym dmans. I dont, then. The last no, the first guess. Noise . Well start bashing some corporations next block. That is your you took my advice and wrote about that. Yep, your advice. You had no column yesterday. And i said, are you going to see that every week . I said why dont you write about hillary, businesses dont create jobs. Its true. And i you know what . Im not going to read your column. I hear them for three hours. Were going to talk about an product i care about after the break. What is that . Applepay. Tim cook firing back at cvc and rite said. It would be a planned for investors right here on squawk box when we come back. E financial noise financial noise financial noise financial noise welcome back to squawk box. Apple and alibaba could be teaming up. Alibaba founder jack ma said he was interested in a partnership between apple pay and alipay. Thats, of course, alibabas payment company. When tim cook was asked, he also hinted at a collaboration. Were going to talk about getting married later this week. So well see. Did jack leave . Oh, no, hes still here. And so i have the utmost respect for jack and we would love to partner with people that are wicked smart, that have flexible pain, that are productbased. And that push us. And we like to push them. And so those partners we work the best with. And i think jack has the company thats exactly like that. And i love what hes done. I think hes a briltant guy. I think he has brilliant people in the company. And so if we can find some areas of common space, i love it. I love partnering with people like that. And later this morning, were going to be hearing what tim cook had to say to other retailers, including rite aid, that have cut off apple pay. What do you think of the move to by those retailers . I cant figure out what im i cant figure out what happened. I dont understand how they why they signed up originally. If they planned to cut someone made a better deal with this merchant consortium then why did they sign up . They only had it going for a week and then they stopped it . And they were going to do to use this to publicly zie . Sgln. If you decide apple is it what bothers me about mcs, a bunch of merchants that get together and pool, they share the information so they have a better idea of who is shopping across a lot of Different Things. Thats a privacy issue. Im mott sury as a consumer would want to give information away. Im told that they can have loyalty systems. But they are looking at invading your privacy. If youre willing to give that up because you get Something Back in return, thats one thing. What do you do with your plus things . Still got it. How long do you have . Not many more days. I kind of like it now. You do . I think im a you know, its such a big screen that im starting to i was playing with im getting nervous. What were you playing with . A big screen. I was about to say i do we need that music . I know the word youre going to say today. Do we need the music . I was going to have i would a smaller one. But nonetheless hard to imagine. You look at the screen, you look at the screen and you think to yourself, can you really go back . I dont know. Thats the thing, i think it would she addicted to go to a bigger screen. I have offered you a merse. Mario gabelli joe will die for this. I will tell you about earnings this morning, etna posted better than expected results, raised the forecast membership and it rose for a tenth straight quarter. Etnas government business now makes up more than 40 of health premiums. I dont know if you saw yesterday, just totally by coincidence, the New York Times did a big look back on obamacare. I know its only and it hs nothing to do with this article they wrote yesterday, but they found that for people that get government sushsydys to buy health care, it has helped those people. They were able to find that it did what it was is that a factually accurate article . It is. It did what it was intended to do and people that have been given the money to buy insurance, some of them have actually bought insurance and theyre using it now. Now, addition tearing down walls. Exactly. You normally love that im talking about democrats. Not one word about whether job creation could be growing. All it was was for people who get the entitlement, theyre better off. Thats like saying in europe, the people that get all the theyre doing better than if they werent getting but that was the entire thrust of this huge threepage piece, fourpage pieces, exactly a week before theyre trying to just salvage this you know, bruised and battered are you ready for this on sus . I think so. Over the weekend, they had a tie that was so it wasnt tie spry . All right, tie spry. Neck wear, neck wear. Thats a good idea. Anyway, lets talk about another story that weve mention dollars this morning. Madison square garden is talking about spinning off its Live Entertainment business. Nominating nelson pells Scott Sterling to the board of directors. John rogers joins us on the squawk news line. Msg was one of his original picks and the squawk box flattened portfolio. Aerial owns nearly 2 misdemeanor shares of msg. I dont think of this . It would be terrific and the right thing for shareholders. Is it right right now because of what you see in terms of sports, the huge valuation, they own both the knicks and the rangers and this would give them an opportunity to get valuation for that. I think they went to los angeles and made a difference. They value sports teams more than ever. The knicks are really well positioned this year with putting together a great News Organization to mix into the world championship. Is that a suggestion that this to grow . I think they need to grow because Live Television is so important these days. And, you know, people run the pace so much of these properties, because of it. John, do you have any concern . We were talking about amc in the segment yesterday. Amc was white hot. That was a spinoff of the dolan spun off. It was white hot. Just a year ago, we thought that was going to it felt like that between mad men and the walking dead and breaking dead. And now that stock has taken a stumble because think think its a different issue. I think its different with sports franchises that seems to add value year ar yeefr and generation to generation. So if they do, in fact, spin off the sports interests, you would hold your shares . Sure. Madison square garden has such a large moat around it. There is no implication for Madison Squared garden. Thank you for calling in this morning. Still to come, crude oil is hovering around 81 a barrel. Right now, down close to 25 from its june high. At what price will american dealers start tapping their wells . Are we close to having that happen . Stick around to find out. Plus, a new survey of ceos, a survey on hiring for the next year. Squawk box will be right back. 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 come from all walks of life. If you have high blood sugar, ask your doctor about farxiga. Its a different kind of medicine that works by removing some sugar from your body. Along with diet and exercise, farxiga helps lower blood sugar in adults with type 2 diabetes. With one pill a day, farxiga helps lower your a1c. And, although its not a weightloss or bloodpressure drug, farxiga may help you lose weight and may even lower Blood Pressure when used with certain diabetes medicines. Do not take if allergic to farxiga or its ingredients. Symptoms of a serious allergic reaction include rash, swelling or difficulty breathing or swallowing. If you have any of these symptoms, stop taking farxiga and seek medical help right away. Do not take farxiga if you have severe kidney problems, are on dialysis, or have bladder cancer. Tell your doctor right away if you have blood or red color in your urine or pain while you urinate. Farxiga can cause serious side effects, including dehydration, genital yeast infections in women and men, low blood sugar,kidney problems, and increased bad cholesterol. Common side effects include urinary tract infections, changes in urination, and runny nose. Do the walk of life yeah, you do the walk of life need to lower your blood sugar . Ask your doctor about farxiga and visit our website to learn how you may be able to get every month free. This guy could take down your entire company. H . Stay with me. On thursday a hamster video goes online. On friday it goes viral a network choking phenomenon. Why do you care . Hes on the same cloud as your business. The more hits he gets, the slower your business may get. Do you want to share your cloud with a hamster . Today theres a new way to work. And its made with ibm. Good morning. Welcome back to squawk box here on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin. Gm is moving the production of a key part of the chevy volt from mexico to michigan. In case they this year. Ceo mary barra is expected to make that announcement later today. Gm wont hire any new workers to make the parts. And shares of Regal Entertainment get ago boost this morning. The nations top theater chain announcing it is considering Strategic Options, including a sale. Also, if you havent been watching, shares of recepto are jumping. The company saying its bowel disorder drug did meet a mid stage trial goal. If you watch the nightly news, you realize theres a lot of things that go wrong as you get older. And i dont know which bowel disorder were talking about. This is a 1. 8 billion company before that move. So youre talking about adding what is that, almost 600 million worth of market cap just today on results for that. But i was just watching you know, there is something that they were talking about. The brics lining up . Yeah. I was watching it and it looks bad. I hate that ad. Yeah, it gets totally the kids watch that with me and totally for chronic constipation. I was watching it and the visuals thats how you sell these things. They draw pictures of bricks over somebodys stomach. Nothing is moving. Nothing. Let me tell you about something else. Not frozen, sort of the opposite. The opposite problem. Hot la vie in hawaii in this instance. Residents in the path of the molten rock have packed up and left their homes this morning. No mandatory evacuations have been ordered, but most residents have been making preparations to leave. Lava itself, it is fascinating. We think of boiling water at 212 or whatever it is. 2,000 degrees. This is so hot, this solid rock is melting. What could you stop it with if you had to . The oicean could stop it and cool it all down. And if youve been to the big island, there are parts of the big island that all black. In the stock market, we saw a lackluster growth. The s p 500 dipping slightly. So is this still a stock pickers market . Joining us now, our two small cap managers. Craig hodges, chris wrestler is the fund manager of needham growth fund. Gentlemen, thanks for being here with us this morning. Chris, why dont we Start Talking about why small caps. They have gotten battered and beaten over the course of this year. Last year had a great year. Were not really surprised that there was some correction small caps this year. They have been probably hit a little harder than the larger cap names. But we think thats the opportunity right here going into 2015. We think earnings have been pretty good so far. Were probably going to see a lot more. We dont know if weve seen the bottom here over the last couple of weeks. We were expecting higher volatility in september, october, and we certainly werent disappointed in that. We do think volatility will remain here for a while. So pick your points, find Good Companies and invest money for the longterm. Craig, i have to say, i dont understand entirely why small caps have been under so much more pressure. Because all of the major indices had great years last year. This is the one that has taken a beating, though. It has outperformed for quite a extended period of time. Anytime theres the upheaval that you see, i think that those things that have moved the most a lot of times get hit the most. The good thing with small caps is the markets arent deep like they used to be. And when you have Smaller Companies that theres not deep markets, they tend to the volatility increases and that sort of thing. Why is that . Well, you know, with the Market Making the change, 2003, 2004 became a not profitable business. People stopped doing et for business profits like they used to. Nowadays when you want to go in to sell a stock, markets are pretty thin. You have to work them for a very long time. The thing that i see right now, there is a lot of volatility. Now is a great time to be looking at small caps. As he knows, as well, october is when most mutual funds yearend and you take your tax losses in october. Theres a lot of stocks that have got. Hit. I think next month youll see some of that i think going the other way. At hodges capital, were looking at a lot of good names that have had big air pockets under them. Lets talk about one or two of the names hau like the most. Sure. Trade in the industry sess probably my favorite idea right now. The market cap just in the last month, you know, this is a very good company thats got very good future ahead of it. Rail isnt flowing. Their tank cars, theres been a little bit of slowdown. Were looking for 5 earnings on a 35 stock. Theres been you know, the whole oil by rail has cooled a little bit. But theres a big backlog for rail cars. So we love that. Materials and other company, its had about a 20point from 105 down to 85. The frack, sand business and they just made acquisitions to double their fracks. When youre related to oil right now, theyve taken you you down. Select the airlines, airlines have retreated significantly. American Hawaiian Airlines is one of the small cap names we like. Chris, what about you . What are some of the areas you think are right this morning . One you like there, as an International Leasing company for airlines. Fuel efficiency, were seeing prices now, dont know how long thats going to last longer term. I think we need more Efficient Airlines and a play on the global economy. Still we have a slowdown on the brics and in europe. We like the air leasing business. The companies, you know, in the memory, logic area, theyre really great opportunities here. So theres a lot more capital intensity. Thank you for joining us today. The latest ipo pollsters, the young president s organization, an exclusive cnbc partner which has more than 20,000 executives worldwide. The companies generate 6 trillion in annual revenue and Worldwide Executive optimism dropped over the last quarter with 6 out of 9 global regions down. The u. S. Had only a slight dip as many ceos still see strong economic signs. Author than 70 are expecting higher sales next year. And only 5 plan to cut jobs. And when we return, the ceo of Choice Hotels gives us a post holiday lodging updates. Squawk box will be right back. Welcome back, everybody. After the bell, the markets will hear from social media giant facebook, the economic front, the government will release the durable goods reports. Expectations are for an increase of 0. 7 . Well have those numbers at 8 30 a. M. Eastern time. That is todays squawk planner. When squawk box returns, well check in with the ceo of Choice Hotels. How does the outlook look for the housing giant and its stable brands that crisscross the nation . Find out when squawk box returns. In retirement, will you outlive your money . Uhhh. No, that cant happen. Thats the thing, you dont know how long it has to last. Everyone has retirement questions. So ameriprise created the exclusive. Confident retirement approach. Now you and your ameripise advisor can get the real answers you need. Well, knowing gives you confidence. Start building your confident retirement today. Welcome back to squawk box this morning. Shares of Choice Hotels up around 12 this year sitting at a near 52week high. Choice a good proxy for how main street is how the economy is feeling about travel. The earnings beat on the bottom line but they did miss on the revenue forecast. Joining us now to talk about it is steve joyce of Choice Hotels international. Good morning. Good morning. Technically we beat our revenue forecast, but its all good. There were some estimates that were higher. We came in way higher. 9 room increase which is amazing. A lot of our brands were double digit. So we had a phenomenal quarter. And in terms of your brands, theyre all in relatively the same tier. But are there ones killing it in a way the others are not . Whats interesting is this point youre seeing a lot of pickup at the lower end. So in the upper economy and the lower moderate tier, were seeing increases. U. S. Or globally now . U. S. Because europe is slow. And asia actually has slowed down as well. So for us the u. S. Is really the hottest market were dealing in. The results are good. Job creation is really helping. Those are our folks being put back to work. As a result were seeing really phenomenal increases. Whats a price point of some of these hotels . Upper economy which is typically in the 40 to 50 range to upscale which can be as much as 300 or 400 in the city. But typically is more in the 125 to 150 range. This is again, were you think youre speaking greek to me . Yeah, yeah. We were talking about driving earlier, football. Yeah. Paying for wifi. I know youre a big wifi payer. Just your price, you drive in he offers free wifi at all his hotels. You have never thats never happened to you, has it . Absolutely. Up on the 22nd floor . How do you park on the 22nd floor of the waldorf . Not in new york city. We actually told them you were happy with them. What lace . Upstate new york. For a Birthday Party for a great aunt. It was a comfort inn, wasnt it . Yeah. Awesome. And whats going to happen is even you have to travel for the holidays and see your relatives. Even little old me. You have your choice or hard or soft pillows. Thats nice. So 150,000 flat screens. So were redoing the whole brand. Weve got a lot of Different Things going on. Youre smart. Thats a good idea. Theres not that many things to get right, right . What they want is they want wifi, a good tv, good shower experience. And they want a good bed. And basically want clean and a good bed. What does that mean in terms of the capital youre putting into it. . In average, in the comfort inn, theres several hundred Million Dollars going in. Its a big brand. Over 2,000 hotels. Its all franchise. All franchise. No matter where you stay you can count on the brand youre going to get the same experience. Exactly. And weve got a great push because we think were a great value for business travelers. But the Holiday Season is upon us. And it looks like people are going to be traveling in big numbers. All right. Youre expanding in turkey. We are. What is going on there for you . Turkey is an explosive hotel market. Every time i go back there, its grown. Its amazing. Weve got a great hotel in the financial district. Weve got two topped off. The next one thats going to open is on the airport and one on the horn which is the old city on the river. Fabulous hotels, great partners. We think were going to end up with 15 or 20 hotels there in the relatively near future. What do lower gas prices mean for your hotel . Its great for our folks. We are a drive market. You probably fly, but most of our customers drive. And they are clearly feeling that benefit in their pocket. Do you see it almost instantaneously . Its funny. We see an increase in travel. It is more driven by the jobs market. Those 248,000 who went back to work, theyre in education, training, i. T. , great collar jobs. Those are our customers. We like to say we represent the 99 . Those folk who is are going back to work, theyre feeling better about themselves in their own situation. Theyre traveling for business, but then theyre also going to travel personally. I know the airline prices are increasing. Theyre up pretty significantly and will be this Holiday Season. Does that help you too . That helps because it puts more people on the road. And the more people on the road, were both. Were on the way, but were also trying to be your destination as well. Which is the Upscale Hotels were doing. Youre a relatively all inclusive. The airlines have gone the opposite way especially on the lower end. Spirit airlines will charge you to nickel and dime you for everything. We decided to charge bag fees and decided it wasnt popular with our customers. Our whole thing is the value. So our customers are rational consumers. But they are very careful with their money. As a result we need to provide great value to them and we do. We got to go. How much money did you leave overnight for the maid, for the service . I left her 10 this morning. It makes me more generous than i am. Normally i would about a five. But i left 10. Good to know. Coming up, crudes crumble. Down 25 in the last five months. How will this impact the nations oil industry . And you really think this . Should drillers start to scale back . Were going put that question to americas richest oil man. Harold hamm. He is next on squawk box. And keep that cheap gas selfie, keep it coming. We want to see if we can find the cheapest gas across america. Tweet us and use the cheapgas. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. The pros and cons of lower oil prices. Should American Drillers stop pumping . Harold hamm responds to some critics that say its time to kill the drill. Driving the bottom line. The automakers rolling out strong sales. Will that mean bigger sales . Cnbcs next 25. How is media mogul Ryan Seacrest shaping the outlook of hollywood . The second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with becky quick and joe kernen as we get ready to talk to americas richest oil man harold hamm. We need you to take a gas price selfie showing off the lowest price that you can find at the pump. This picture coming in from northern new jersey this morning. So if youre filling up on the way to work, take a second to join our conversation. You can tweet us using the cheapgas. We will show off those selfies throughout the program. Oh, weve got some earnings here. Yes, andrew. Yes, we do. And the stock is trading higher. Its a dow component. That was the last trade. I got 20. 20 to 29. 50 for pfizer at this point. And on an adjusted basis the company was able to report 57 cents a share which is 2 cents ahead of expectations. Im looking at 12. 235 for the number that analysts were looking for for revenue. And the company thats above, right . Adjusted for the full year. The the estimate is 224 right now. So that range bracket is where wall street is at this point. Then full year revenue. 49. 7. And wall street right now is at 49. 46. Did you listen to what i said . I said 48. 7 to 49. 7. In the midpoint as well. Merck had a pretty good number. Novartis had a good number. Ian reed is talking about how they are well positioned, he says, to potentially allocate capital for the benefit of shareholders across multiple financial and strategic opportunities. You know, they have a stated interest in trying to do something. And theyll do what they need to do with astrazeneca. That didnt work. How long do they have to wait . Six months . I thought theyre out of that. They are. But there was a certain period. Im not sure it would be as attractive anymore. More top stories at this hour. The fed getting ready to take away the punch bowl. Their meeting will conclude tomorrow expected to include an end to the asset purchase program. Joseph, whats going on on twitter . Oh, twitter, i have my questions. Although i do watch it, becky, youre right. To see whats happening. Like for anything. Ebola. Its the social media constantly on your cell phone. But the chairs this morning are under pressure. Is that trending . Twitter weakness. Revenue did beat forecasts. A particular concern was a drop in users engagement with timeline views per user dropping by 7 . I dont know what they can do about aholes that are all over the twitter sphere. People who write online graffiti and i look and they have zero followers. They go onto twitter to because they cant send you an email. To send you something, you know have you done that . No. You havent done that to bill oreilly or glenn beck . No. You think i should . Hannity. I love those guys. A guy said something and i knocked him down. Thats the way you do it. Haters are going to hate. Remember that song from yesterday. Yeah. Were going to play that. Boone pickens is calling for Oil Companies to stop drilling. Pickens said too much supply is putting pressure on the price of crude. But no oil Company Wants to be the first one to tap the brakes. Americas richest oil man is taking issue with that argument. Harold hamm is the ceo of Continental Resources and he joins us right now with why he thinks Boone Pickens got that wrong. What did he say that you disagree with . Certainly. Were used to responding to Natural Gas Prices and oil prices. Thats what we live on is commodity prices. The independent has been quickly adjusted. They can do it quickly. Everybodys lease is held by production. So we cut back quickly and thats what we do, respond. So some of these projections out there, people arent taking that into effect at all. We cut back quickly and were used to doing that. Oil prices go down 20 and we adjust. That sounds kind of what boones argument was making that the reason prices are dropping is that people are pumping so much at this point. Do you think an oil glut is why we seen prices plummet . Lets talk about the oil glut. First of all, theres not a glut in the market at all. What were seeing is people out here projecting next year that we might see that. And certainly itd have to be a Perfect World to see that. I frankly dont believe thats going to happen. They discount whats going on in the rest of the world. Oil supplys going down in venz venezuela and argentina. Even ours is going down. The only place is onshore u. S. Thats going up. You know, weve had challenges of course in the gulf off shore as everybodys aware. So that supply has been cut. So only place is the onshore u. S. And demand is there in a world these third world countries that are still converting as quickly as they can to motorize vehicles and demand is up. Even though chinas economy may be soft, those people are still buying cars and building roads. I guess the biggest question is when you start looking at the shale production, how much of the shale production here in the United States is the stuff that is high cost that no longer makes any sense if oil drops below 80 . Well, its all high cost. These are expensive wells theyre expensive when you go down and go a mile or two sideways, it gets expensive. So theyre all expensive. Thats where thats at. Do none of them turn a profit at under 80 . Or whats the threshold . People said, yeah, after it gets in the 70s, people are hurt. And certainly they are. You know we dont see a need for it to be there. Some of these other factors out there right now, the saudis saying that they are weighing in, frankly they dont have the excess capacity to do what theyve done historically for the past 40 years. Is that why they changed their strategy . About maintaining market share . Well, they theyre probably going to maintain their market share. But opec production has been flat for the last several years. It had been going up. And theyre having to do what were doing. Convert over to horizontal drilling and the same thing were doing. So its their production is going to be expensive as well. Are you capping wells at this point . Are we what . Stopping . Are you stopping drilling or capping wells at this point . Wier just like everybody else. When the price is down, were going to adjust and do it quickly. But have you yet . We havent yet, no. So this thing hadnt been like most supply demand situations. Basically it was due to the saudis comments. Theyre getting ready for an important meeting november 27th. Theyre pulling everyone together. Let me ask you. We know that you are the richest oil man out there. I wonder what sort of impact it has on you when you see crude Oil Prices Tumble more than 25 from their highs. How does that personally impact you . When you say richest oil man youre talking about stock in the company. And thats not what you take to the bank every day. So were used to the prices going up and down. Is it 75 where you cap things and say were going to make sure we have an impact on where prices are headed . What you do, you dont cap producing wells. You know, what you do is cut back in new drilling. And certainly thats going to have a very big impact on things. You know, the shale wells, they fall off quickly. National production falls real rapidly. How much has already change snd not just your plans but plans of other producers . Has there been a big pulling in of the horns and stopping production . Aye heard from other producers recently theyve got projects on the books and were going to wait to see what happens here for awhile. Were not going to do those. What does that mean in terms of jobs in the United States . Well, i think certainly theres going to be a slowdown. You know, going forward. I mean, you look at all the oil states. Thats where all the jobs have been added. You know, been good for everybody. In the oil states. And certainly jobs is up. Been a good thing. Yeah, itll slow down. I know you and boone are friends. Have you talked to him at all about things he said in the wall street journal and other places . I havent talked with him recently. I see him at different events. But what do you think hes missing here . Excuse me . What do you think hes missing in the things hes said and in your own views on the industry at this point . As far as different, you know, boone is has been involved in a lot of other things. Wind and natural gas. And hes a big follower in those areas. As far as crude oil, i dont think hes heavily involved with that like the rest of us. Harold, thank you very much for joining us walking through some of this with us today. We hope to have you back again to talk more about it soon. Okay, becky. Very good to be with you. Thank you. Were going to continue part of this conversation, because the benefit of low oil prices for Transportation Companies is straightforward. But Companies Across many other sectors are set to gain as oil prices fall. Dominic chu joins us now with a look at three companies that might not come to mind when you think about the benefits of cheap oil. Dom . Take a look at this. Lets get to the conversation about cheaper oil losers. We do know that alternative energy not as attractive because you dont have to do with lower oil prices. Service companies. Look at the winners here. There are some sectors that have decent sized winning. If you at industrials and materials. If oil goes down, they do better. Utilities and airlines. Lets focus on a couple of these sectors. Look at these companies. First of all, you have a big name. One of them at least like huntsman chemicals. If you have Lower Energy Prices overall, the cost goes down nap improves their profit margin. According to michael purvis, he says Companies Like huntsman can do well if prices continue to drop. Then theres other Power Producers like dynegy that uses coal or natural gas to power turbines that make electricity. He singles out dynegy because lower generation helps their profits as well. Then theres one other to focus on. He says it may be a bit of a leap. He thinks apple does well. Because as consumers start to play less for energy, they start to spend in other places in the economy. Buying the new iphone 6 or 6 plus or those new ipads. Watch those types of companies. Those ripple effects could be what carries the oil market on the Positive Side for certain stocks. Thank you for that, dom. I had not thought of those companies. Andrew and becky, pfizer is that guidance they gave was narrowing their previous guidance. The stock now is doing pretty well. Theyre going to buy back another hundred million shares. Not hundred Million Dollars worth, but cutting total shares by another outstanding hundred million by the end of the year. And they also talked about some of their best growth is coming in emerging markets. Solid Revenue Growth in emerging markets. It was last week the board of directors authorized that new share purchase program. In the old days 5 billion of their shares this year with another 4. 2 billion repurchased through october 27. And in the old days youd authorize these Share Repurchases. Not necessarily use them. Pfizer actually using them because they dont have another opportunity in terms of who theyre looking to necessarily buy. Your column today, Andrew Ross Sorkin, in the New York Times, wall street wonders about Hillary Clinton is not awful. Thats high praise from joe. It was my idea which you dont cite anywhere. Yesterday you said you had nothing to do and i gave you this thing to do. But you did both siepds pretty well. You talked to the guy at slate. Is slate . Salon. Im sorry. Salon. He says its not what hillary said. Its her inextricable link with already being so business friendly that makes her so awful. Where read the Ari Fleischer comment. I did. But how about the people that they dont want bill maher speaking at berkeley because hes too conservative . They dont want him there because of the islam comments. Theres a big protest at berkeley. They dont want that right wing nut glenn beck type bill maher. Are there people like that on the right that are that crazy on an extreme . Who would it be . Oh. Coming up thats not nice. Coming up, the profit drive at autonation. The nations largest auto that was a good call. Ceo mike jackson talks sales. Air bags, not wind bags in this case. But air bags and the impact of sinking prices at the pump. A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com takeand. 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 earnings from autonation beating this morning. Rising by 10 . That was also better than expected. Its an alltime record for quarterly earnings. Ceo mike jackson joins us now. Last quarter you were a couple of cents shy. We usually dont remember back a quarter, but we like to hype whatever is current when were talking because were cable. But you told us and we probably were, like, going sure mike. But the analysts didnt listen to you about investments or something and that it was totally in the cards. And now youre beating by 4 cents this quarter. I guess you were telling the truth. But joe, what i was trying to say last time is there is companies who give guidance and those who do not. We do not give guidance. So its to be expected. Certain quarters will be a little bit lower. Others will be a little bit higher. Directionally were in line with analysts. It was a brilliant quarter for the company, joe. Best ever. 90 cents earnings per share. Up 20 . All aspects of our business were improved. And also have to say on the capital side it was very good for the company. We made a major acquisition in seattle, washington, including a mercedesbenz and volvo franchise. We were awarded the open point for parr sha in orange county, california. In case you ever move there, we can take care of you. And we also purchased 350 million worth of stock since the last time we spoke. Year to date weve purchased 8 of the outstanding shares. Overall a brilliant quarter. And weve had buyback discussions. Sometimes it makes sense for people, sometimes it doesnt. If the stock keeps going up again and again and again obviously every time you bought it in the past, it made sense. Mike, weve got to talk about joe, just before you leave Share Repurchase, i saw the story in the wall street journal today. Its like golf. Theres good golfers and theres bad golfers. Theres good Share Repurchase and theres bad Share Repurchase. Now, i may be a marginal, lousy golfer, but i am a plus six when it comes to Share Repurchase. Weve repurchased 80 of the outstanding shares at an average price of 18 a share for a stock thats now trading at 50. All the same while o investing in the organic business and growing this to almost a 20 billion enterprise this year. And improving operating results. So theres good Share Repurchase and bad Share Repurchase. Just have to know what youre doing. On the buybacks, heres the question. How much time and energy do you focus on you always bought when you thought the stock was cheap. Not necessarily. Absolutely. You always think the stocks going higher. Right . Why would you be in business if you think youre in a trading range . Joe, if i could tell you how i think about it. You were in a cyclical business. There are world events where there is dislocation between what i think the companys worth and what the Investment Community thinks its worth. Im on andrews page. But dan carp thought and i have a contrarian view, i buy. Dan thought kodak was cheap at 70. But he was wrong. I know. I understand that. But he was wrong. You have to be right. It matters if youre right or wrong. Right. But if youre doing all the right things with your business and obviously youre not ceo to have your stock going from five to zero. You were ceo to have your stock go from 5 to 50. Every time you bought from 5 to 50, it was a good idea to retire the shares and shrink the float. And reward the people that hold onto the stock. Right . Well, tell me about correct. Average Share Repurchase price is 18 a share. Are your dealerships mobbed with people who say please dont let the air bag throw shrapnel into my artery . This is very incoherent why the incidents are very rare when they do occur theyre shocking where these cylinders rupture and spray shrapnel into the driver. Takata is the manufacturer. What were looking at is weve got certain manufacturers who tell us just tell people to keep driving the car until it can be repaired. The chance of occurrence is so rare. And others are saying disconnect the air bag immediately until the repair can be made. When you have Something Like this that goes across the industry, it seems like its a steady hand on the tiller. All right, mike. Were going to have to talk about buybacks and other stuff next time. Weve got to go. Got to get to the tees. See you soon. Thanks, mike. Good seeing you this morning. Coming up, it is one week until the elections. Well handicap the races. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. With the easytouse suite of tradintrading tools. Tures. At optionsxpress by charles schwab. And well give you a one hundred fifty dollar amazon. Com gift card when you open an account. If youre looking for a trade idea, start at the idea hub. Where options and futures opportunities are organized by volatility, earnings, market activity and income strategies. Then run your new idea through the trade and probability calculator to get a quick look at the possible upside and downside. Streaming charts give you the realtime quotes and customized views of the market that can help you make your final decision. And when youre ready to make it happen, walk limit helps you save time by searching for the most favorable price. Find new ideas, analyze and execute your trades with just a few simple clicks, with optionsxpress. For a one hundred fifty dollar amazon. Com gift card when you open an account, call 18889805745 today. Optionsxpress by charles schwab. Coming up, Mario Gabelli usually looking for a love connection. But well ask him about the split plan when we return. Saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. receptionist Gunderman Group is growing. Ky 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. E financial noise financial noise financial noise financial noise just want to say, i bundled home and auto with state farm, saved 760 bucks. Love this guy. So sorry. Okay, does it bother anybody else that the mime is talking . Frrreeeeaky [ male announcer ] savings worth talking about. State farm. Welcome back to squawk box. Heres what we are watching this morning. Blackstone reportedly ready to seek 13 billion for its next Real Estate Fund. Got 25 of its earnings from that Real Estate Fund in the first three quarters of the year. Also we can tell you about alibaba. It wants to bring u. S. Movies to china. Founder jack ma visiting hollywood film studios this week. And honda is cutting its full year sales forecast. And check this out. A huge fan of halloween has been shut down by police in southern california. This home was lit by 12,000 lights synchronized to music such as thriller. They shut it down due to noise and traffic complaints. What time were they doing this . What time do you go to bed . Oh, yeah. Thats awesome though. Im in bed before its dark. Okay. That is cool. Im on their side. Cops. In which case, whoa. We are just one week away from the Midterm Election day. John harwood joins us with a look at the money being spent ahead of tuesdays vote. The political ads on your television tells you theres a ton of money in the campaign, youre not imagining it. But what difference will it make . Lets look at the totals how much theyve changed over time. Look at 2006, the year democrats surged to take the house and the senate. 2. 8 billion on congressional races. In 2010 when republicans roared back to win the house, 4 billion our friends at open secrets. Org project will be spent this year. Theres been a surge of socalled outside money. Yes, you can see from these numbers it has more than tripled since 2006. Gone up almost 400 billion since the Citizens United decision in 2010. But its gone up steadily even before that. Lets take a look at some sectors. If you look at wall street money which is larger than any other business sector, its gotten slightly more republican since president obamas star has faded. 53 in 2010. Now its 62 republican in 2014. Lets go to tech money nap leans towards democrats, but a little less than it did four years ago. 55 democrat in 2006. 65 in 2010. 60 in 2014. And finally energy money is more tilted than either of the first two toward republicans who are fighting president obama on climate change. 74 republican during the bush administration. Then went down to 63 with a democrat in the white house. Now 78 tilting republican. But heres the thing about campaign money, the red team and blue team tend to end up with comparable amounts of it. Moderate republican edge in 2006. 84 million in a 3 billion campaign. Democrat hs an edge of 40 million in 2010. This year the republican edge is up 157 million. But in a 4 billion campaign, what does that how much difference is that going to make . I dont think its going to decide the outcome, guys. All right. Come on over, john harwood. Politico is here and suddenly on the redskins band wagon. Where ive been for 42 years. Two skins fans on here at one time. I like the redskins. High five from across the set. It wasnt my peak monday night redskins cowboys experience which was in 1974. Playing at rfk. Im a High School Sports editor. Abc lets me in the booth for the game. Thats the game where kenny houston tackles Walt Garrison at the 1 yard line. No way, really . This is the beginning of your Television Career . So we can blame whos that guy . Kenny houston. So it was don meredith and frank gifford. Did you go to a home game last year . I did. I went to the San Francisco game. You want rg3 back or do you like colt mccoy . I love colt mccoy, but i want rg3 back. Hes a winner. Rg3 has got to be 100 . Then you put him in. Lets talk about next weeks must we . Lets talk about next weeks critical election. The balance of power in congress is at stake. John is still with us. Where do you want to start today . Start with the senate. Whats going to happen. Why dont you do that . Whats your number now, 52 . I think republicans could probably get to 52. You look at the ones they start with. West virginia, montana, south dakota. Thats three that are for sure pickups. Theyll probably get alaska and arkansas. Then a Playing Field of north carolina, iowa, new hampshire. A couple others where they could get pickups. Theres no huge wave developing, i dont think, for republicans in this election but theres enough dissatisfaction with the president and the economy that the republicans are likely to get seats. Until recently ive had and most of the people im talking about were democrat, but they said theyve been saying they were going to at least hold their own in the house and hold some seats. Thats no longer theres little chance. Half dozen. Get a half dozen in the house. I would say theres very little chance that Democrats Gain any seats anywhere other than the governors mansions. So im trying to figure out, this country, we need help. Im trying to figure out the last two years whether theres any hope for anything good happening other than, you know, completely partisan executive actions which are just going to divide the country even more. I think thats coming. I have a somewhat different view. Well, did you see the piece where he said if the president can say, hey, look. Im outnumbered here. He can say to his base which doesnt even matter anymore that ive got to work with them. Is that possible he does that and ends up looking better by finally compromising a little . I could mot expect Corporate Tax reform. Regulations . Getting some of those out . Anything probusiness . Well, arent trade deals probusiness . Theyre a no brainer and we dont do them. Right. If you look at the 2016 map and this may be Wishful Thinking for the white house o, but the way u look at it youve got republicans that won in states that obama won in 2008 and 2012 up for reelection. Rob portman in ohio. A number of others. Theyre going to want a record of degetting something done. These guys running in 2016 want to get Corporate Tax reform done, something on immigration done. Thats probably overwhelmed by the president ial stuff on the republican side. But theres a window there where some things could get done because of those marginal republicans running in 2016. Can you revisit and you can admit to how much i love brit hume. I covered the first Bush White House with him. You had a little tiff yesterday. If im wrong about paraphrasing what youre saying, Hillary Clinton saying that businesses dont create jobs. You said thats nothing new. Thats kind of like just the democratic line that theyve been saying for a i while. Thats what the democrats say. And my question would be how can an entire party in a two party system how can one party have as one of their basic tenants that businesses dont create jobs . Thats not their basic tenant. Thats what he said and you said thats nothing new. If you look at the sequence of sentences in her speech, she was saying the trickle down economics is something that i and my husband bill clinton reject and weve rejected it for a long time. She didnt mention that she was talking about Corporate Tax cuts at the same moment that she said businesses dont create jobs. It was an argument against a philosophy that says cut taxes at the top, cut taxes for businesses in order to stimulate growth. And shes saying we all got to work together. Weve got to raise the minimum wage. I dont know. Read the quote. Dont ever let anyone tell how do you misspeak with Something Like that . She screwed up. Dont ever let anyone tell you businesses do not create jobs. What she meant to say was Corporate Tax cuts dont create jobs. She was saying businesses alone dont create jobs. No. Youre not back to you didnt build this are you john . Thats what it sounded like to me. It was echoing. Yeah. It is you didnt build this. When i said on twitter this is a ridiculous statement for a democrat to make, everybody jumped all over me saying its not businesses that create jobs. Demand creates jobs. Theres a huge part of the Democratic Party that does believe that its not corporations and businesses that create jobs, its demand that creates jobs, consumers that create jobs through government action. We knew she was going to have to blank left. Thats playing out. The question is does she stay there . Where is she really . Dont we think i think the answer is shes not there. Because she already double backed on monday. I think to the extent there were people on wall street or elsewhere who said my goodness what is she saying. I think the nobody with a brain really wonders whether she was changing. And i think the other piece you want this in your piece today. There was an expectation by default over the next two years shes going to have to tackle left even if shes not really left. So she didnt mean it. So then when do they actually mean anything . You can pin that on any elected official. This was a statement kind of like mitt romney saying corporations are people too. Contentfree statement. Didnt mean anything. Of course corporations are run by people. Theyre started by people. Blah blah blah. Theyre not machines. Its the same kind of thing. She needs to tack left a bit and shes not good at doing it. Thats not where shes going to wind up. And her efforts to do it so far have been clumsy. Does that penalize her if she runs . I dont think so. She gets the nomination by a virtual acclimation regardless. Is it a slam dunk that a democrat wins in 2016 given there has been a pushback in sort of a buyers remorse . Of course not. But all the polls show her beating jeb. We dont even know whos running at this point. Jeb bush could give her an extremely close race. Exactly. It depends entirely on who the republicans nominate. Somebody like jeb absolutely could. Hillary has an advantage in the electoral college, no question about it. She is not a slam dunk to win the white house. Want to go back to your underlying point about the whole party. The whole party definitely views Corporate America differently than republicans do. But that is widely shared up and down the party. And its but its not like theyre saying the corporations dont exist or shouldnt exist or should whatever. The guy from salon, i mentioned there are people so far out the people that think bill maher is too conservative to go to berkeley. Isnt that great . How is that even possible . Because thats how far you can go out on and i asked are there any right wingers that extreme and both of them started coughing and looking at me. They thought that was funny. You remind me of the guard for the right wing. Thank you. Thank you. I was teasing. Except theres one on tv or two instead of 4,000 in your case. Gentlemen, thank you. When we come back this morning, the garden plans a split. Msg, Madison Square garden, wants to unlock sports value from entertainment business. Well talk to Mario Gabelli about it in a moment. Well be right back. 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. What are you guys doing . Yoga, its supposed to make us more productive. Better mind and body keeps us efficient. You guys have misread the memo. This is the new lenovo yoga with the intel core i5 vpro processor. It combines the productivity of an ultra book with the touch benefits of a tablet. And its custom configured by cdw. So we can stop doing this . My head hurts. [painful grunts] today could be the day. The day we give you hope. Relief. A cure. Today, we believe every life deserves worldclass care. As one of the top four hospitals in the nation, over 100,000 people from around the world come to Cleveland Clinic for care each year. And were ready for you with a Second Opinion or a sameday appointment today today today and everyday. Call today, for an appointment today. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. Welcome back to squawk box. A wild game on broadway last night. The rangers trailing 30 after two periods before battling back in the third. Rookie anthony de claire got his first goal and tied at 44. Then less than a minute the rangers scored to win 54. The Minnesota Wild had only given up six goals this season before last night. Lets talk about Madison Square garden because its exploring splitting into two publicly traded companies. To unlock value in the knicks and sports franchises and entertainment businesses. Mario gabelli joins us now what are you laughing it . The people are talking to me. Mr. Gabelli joins us now on the squawk newsline. Good morning to you. God to be on the program. We call you the love doctor. Usually things are coming together. This is coming apart. Are you a fan . Well, im a big fan. I hopefully will be at the Game Tomorrow Night against the bulls. Are you a fan of splitting these businesses . Well, i dont know the details at the moment, but looks like the building itself and the air rights and all of the venues are going to nucal entertainment. What that allows is jimmy dolan who has a passion and love for sports but also a passion and love for music to pursue other ventures in the Live Entertainment area. And live nation has done quite well. But the Corporate Governance is what caused the stock to go back up. An addition of nelson on the board. And that goes to show that hes become for whatever reason a lot more sensitive to the stock price relative to the underlying value. And one way you look at it, you get the knicks and rangers. The stock up 6 today is part of that. Point of clarification. The teams would be separated effectively from the real estate . Yeah. Youve got the msg network which is the crown jewel and the teams which are part of the crown jewels so you have that element. And then the venues which include the garden itself. Im told the air rights over the garden which have a significant value. The forum, the radio city, beacon theater, and so on are all part of nuco along with xyz dollars of cash which i didnt know. To the extent that sould would argue are look. Companies under the frequent system, companies should be allowed to allocate capital to where they think the highest return would be and to take risk. And if they make mistakes, e the shareholders have to hold the board and the management accountable. In this particular case, were delighted that they are doing this and giving clarity to what i want to hold as a holding. This is only the knicks and the rangers are very attractive. Would you want to continue to own both pieces . Yes. Yes. I owned i voted against the deal of cable vision going private. I own walking dead that is amc network and still cable vision. So weve held onto the pieces. And, you know, we continue to hold pieces of the companies. Neither one is going to be sold. Both are going to be managed over the next five years depending on how jimmy dolan wants to run the businesses. He controls the company with the stock. Thats not going to change. There it is. Mario gabelli, the love doctor, thank you. Hugs and kisses. Nice thing you sent becky. Hang in there, joe. You wont get one. Did you bring it down . No. Seriously, how much do you have to pay for those things . Priceless. Okay. 12. Hes very jealous, mario. Im delighted. Thats the worst looking you didnt bring it down . No. I was taunting him upstairs. What are you going to do with it . Its behind me on my desk. Andrew might want it. Had two officers today. You need it for your iphone 6. For my large iphone. Coming up, he is changing the face of media. Radio personality and tv host and producer Ryan Seacrest and how he is shaping the next 25 years. Do we have him . No. Were going to talk about him. At the top of the hour, twitter getting hit by slower user growth. About the lack of upsets. Speaking of twitter, tweet us pictures, how much are you paying at the pump today . Heres the esteemed and talented squawk producer matt greco filling up. He also had one of those hot dogs that are probably four weeks old for breakfast. What an Outstanding Young man here. Send us your pictures online. She inspires you. No question about that. But your erectile dysfunction that could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in Blood Pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid long term injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. 2014 marks cnbcs 25th anniversary. Earlier this year we revealed our lists of the rebels, icons, and leaders who has the most impact over the past quarter century. Now were turning to our list of the next 25 years. And today a true American Idol. Ryan seacrest. When i was a kid i was always fascinated by the guys on the radio, the deejays at night. I remember when i was interning at a local station in atlanta, how in awe i was of every single mechanic of the operation. I felt that and i thought if i could get to know everyone in that department and the next department and the other department that that would benefit me in some way later. So i tried to learn all different parts of the business. This American Idol. I really believed when i started American Idol we would get canceled after a season because thats what happened to shows. And then we got a second season. I thought weve hit jackpot here. And then 14 years later, im still doing it. Thank god. I would watch merv griffin and dick clark. He pulled me aside and said if they all think they can do it, youre doing a good job. It should always look easy. And its not always that easy. Its true that theres some great opportunity afforded to you when youre in front of the camera. And so to be able to leverage that into something that is an asset to have to own for the future i think is a smart lesson i learned from. The goals of the company are to create compelling content, to tell great stories. Its a really simple goal. We consume media all the time. Were always on the go. Radio is with you in the car or on an app. Television is with you also on your phone, your tablet. So i think to the extent that were creating better Quality Content for all of these different outlets, thats where its going. And i made an investment in a Company Called digitour. Its become a really successful touring operation. I think that part of our agenda for the future is to continue to invest in things that are happening socially and in digital media. Seacrest global group is an Investment Fund to look at Different Companies in media. Theres going to be a bigger need for that kind of marketing as time goes on to take the dollar further when it comes to marketing spendings and advertising spendings. Ryan seacrest distinction has been a lot of fun. I wanted to design something that could give guys who are starting out looking for their first suit or theyre on the move to feel comfortable and confident in. And im wearing one now. This is it. I think as i look at the future, i definitely see myself doing a little bit of everything, but a little less of everything. I like everything, but maybe just with lower case letters, not capital letters. And we want you to keep watching cnbc to see more of the list of people who will have the biggest impact on the next 25 years. When we come back, in the next hour of squawk box doves take flight. Is the fed ready to respond . Squawk box will respond. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say, a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move, wherever you are. And start working on your next big idea. And start working on your next big idea. How can in china,sumption impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. The smartest or nothing. The quietest or nothing. The sleekest. Sexiest,. Baddest,. Safest,. Tightest,. Quickest,. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. The best or nothing. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with joe kernen and becky quick. A jogger in the uk learning a tough lesson. Watch with where youre going. A man jogging found himself surrounded by security. David cameron maintained his composure and was whisked away. The jogger was arrested but after questioning, Police Released him saying the man was just in the wrong place at the wrong time. Heres whats happening at this hour. The fed is set to begin a twoday meeting with an announcement tomorrow afternoon. The fmoc is expected to turn off the Bond Buying Program while ensuring the economy will be ready to act. Durable goods set to be released in 30 minutes. And if youve been watching the futures this morning, youll see at this point after a disappointing day yesterday, there are some rather strong green arrows. Dow up 95 points above fair value. S p 500 over 12. And nasdaq over 24. So the serious music, does it fit with markets going up. Its on serious topics. Markets going up. Let me hear it. Is that okay . Yeah, its okay. Number of stocks on the move this morning. Pfizer beating the street. Shares rising on the news. Twitter, shares getting hurt badly today after the company warned that the Current Quarter is going to be weaker than expected. And people arent using it for long enough or not enough new people . What was it . Not enough new people or not enough people using it long enough . Combo. I think it was both. I think they added more people the previous quarter than they did this quarter. Okay. Kohls shares getting hit being near the low end of prior forecasts. Sales have weakened little. And crocs are under pressure predicting under analyst estimates. Buffalo wild wings, a big earner topping expectations. Wow. We have that ceo on occasionally. And Regal Entertainment shares. Considering some Strategic Options including a sale. And shares of receptos, the company says its bowel disorder drug met a midstage trial goal. Lets get to Steve Leisman who has the results this morning on the fed survey ahead of this meeting. Steve . Andrew, thanks very much. Two years and 1. 6 trillion later, qe 4 coming to an end. The question is what happens next . And the answer is we wait. In fact, as a result of whats happened between the meetings, the weakness in europe, the rise of ebola, maybe well wait longer. Lets look at the timeline. They had in the prior survey expected rate hikes in june 2015. Now its a month later. July 2015 for the first rate hike. How about when the Balance Sheet will be able to decline. It has been december 2015. Push it ahead. Now its january 2015. When does the fed reach the end of the cycle. Push it ahead a quarter. You take a step back. Everything moved ahead as a result of the weakness. By the way, interestingly they didnt extend the growth forecast. Just extended how much accommodation is going to be. Lets look at the path of Interest Rates here. Just 2 end of 2016. And theres the new terminal rates. You see is compared to the prior survey, it is shallower and its extended out. Just a little bit. And whats happened is compared to where the feds own forecasts are, the gap has grown even wider than it was before. Moving on, tony said no. The risk to the forecast. They say 21 say balance. 13 said the risk is that the fed is more balancehawkish. Sending a long commentary to the survey saying this escape hasnt been and wont be easy. Finally, what are the chances of things . European qe 74 . 34 of our panelists think so. Qe 4, 19 right now. Joe, you can read all about this on cnbc. Com. More people think were likely to get qe 4 than a recession . So you think theyll do qe4 without a recession . The question is will there be another kwaunt tautive easying. And the question is the next 12 months. Still. One out of five basically thinks were getting more qe . That is the current percentage, becky. If theres nothing if theres no negative effects, why not, steve . I would make it permanent. I think the fed wants out of the quantitative easing. You told me there is no negative consequences. I have not lets just stay at zero and keep buying. Whats the problem . Keep it coming, baby. Well be at 20,000. Benefits appear to outweigh the costs. That doesnt say there are no costs. There are costs to it. Theres distortion of markets, choices that are made otherwise not so im exaggerating your viewpoint . Okay. First time ive ever done that. Thank you. The fed is kicking off its twoday policy meeting. Theyre going to wait to see if the central bank starts their easy money policy tomorrow. For more on the end were joined by the investment and management at barclays looking over some of your notes. Ive just been thinking about this. It was a correction. Lets say you want lose ten pounds and you lose 9. 9 pound. You didnt lose ten. Did you put them back on . I do. But in this case the correction is supposed to do certain things. And its supposed to bring out complacency. You would put check marks on all the things we saw and says this qualifies, this qualifies it. Do we want to argue about ten basis points . So we did make a correction. Can we go to new highs now . We could. We surely could. It all would depend upon earnings. Right . And the story for sure. Youre not willing to say yes, but youre saying this was enough of a correction where we dont need necessarily to test the lows again. We will make new highs, for sure. When, im not sure. It could be in the next six months for sure. A high probability of that. We did have a correction of 2. 5 off that prior high which i think was 2010. I think were going to end the year somewhere between 180 and 2010. So well recover all of it at that juncture. And you say the volatility is not worse. If it did help do what a correction is intended to do by getting peoples attention and making them question, you know, staying in certain stocks, then it was something to be expected. We went from 12 to 30. And when you look back at vol spikes in some environments, it went higher. Was it unusual . No. Expec expec expected . Sure. Whats unusual is we hadnt had anything like this in two years. Theres some data where they say what the companies cite as concerns. And the concerns that are in the popular mind right now didnt figure prominently at all in those earnings released. So theres a cognitive disdense between what the folks Running Companies see and the people who are investing right now. Thats a picture of the world not ending with quantitative easying coming to an end. If we go to new highs, that correction was enough to ring it counts. It counts. Why wouldnt it count . Because people will say you will read we havent had a 10 correction in four years. Okay. We got to go. Thank you. Thanks for coming in the studio. Coming up when we return, they go up to 30 miles per hour, have a range of 30 miles, and will be built in the usa. Indiabased. We got some scooters that are coming and they believe the market is ready to take off. Phil lebeau has it. Mahindra scooters. And later from the fire phone to drones, amazon seems to have its tentacles in all types of businesses. That some feel the company shouldnt be in. Is jeff bezos a good leader . Well discuss in just a bit. Ok, if youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . 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. 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. Its a fresh approach on education superintendent of public instruction Tom Torlaksons blueprint for great schools. Torlaksons blueprint outlines how investing in our schools will reduce class sizes, bring back music and art, and provide a wellrounded education. And torlaksons plan calls for more parental involvement. Spending decisions about our education dollars should be made by parents and teachers, not by politicians. Tell Tom Torlakson to keep fighting for a plan that invests in our public schools. Welcome back to squawk box this morning. The futures right now, take a look. We do have green arrows. Dow would open higher about 90 points higher. S p 500 up about 11. 5 points higher. Nasdaq up about 24 points. Move over harleydavidson, watch out vespa. Here comes mahindra. Our phil lebeau joins us with more. Phil . Hey, becky. Were down here at the mahindra tractor factory. Were going to talk about that later today. But first we want to tell you about mahindras new project in the kwiets. This is a huge indian conglomerate that is expanding rapidly here. This is the new product theyre pushing. Genze electric scooters. In the United States . Will these really sell . Mahindra believes they will. When you look at these, top speed 30 miles per hour, 30 miles to a charge. And heres the interesting part, the battery pack, you can take it out, bring it into your home or office and charge it up on a wall outlet. Price tag . 3,000. Theyre going to go on sale within the next couple of months in the u. S. The ceo believes they will sell here in the u. S. Because were increasingly frustrated with congestion here. People are looking at them not only for environmental reasons but pure congestion. I mean, we are sitting here in washington, d. C. I went to a dinner last night, i had to walk the last four blocks. It was as reminiscent of mumbai as any other place, the traffic. The traffic everywhere in the world is becoming nightmarish. People are going to want very easy urban transport. As you take a look at shares of mahindra, keep this in mind. Mahindra over the course of its history has gradually expanded from its base in india. It is now the largest tractor manufacturer by volume in the world. Certainly john deere is more profitable because it makes larger, more expensive tractors. But this is one example of what mahindra sees in the United States. He believes this is his Growth Market not only with tractors but also with the genze scooter which goes on sale in the next few months in the u. S. Theyre going to be manufactured in michigan. Interesting little scooter. It will be interesting to see what that market is for electric scooters. Back to you. Phil, did they say how many they expect to sell in the first year or so . They havent put a volume number out there yet. Theyre careful about that. But they believe theyre targeting certain cities. San francisco is a perfect example. They believe that thats a market thats ripe for electric scooters. Boston, new york, major cities. Phil, how i would just my question would be how big did mopeds get in the u. S. . Because electric versus gas, i dont think thats enough to be a game changer. I mean, i dont see mopeds as being a popular form of transportation. Its not as popular here as it is abroad other places. Theyre not. And you get jostled or bumped by a car on one of those things, they seem just as dangerous as mopeds. Well, listen. Its not a huge market. And mahindra will tell you hes not going to get rich off of selling them in the United States. But this is an entry into this market for mahindra. As you look at this company they have gradually put down stakes in different parts of this country in different areas. Saying you make suvs in the india market. Will they try to sell them here in the United States . We asked him about that and he said maybe. Eventually. But right now i want to concentrate on the genze scooter, the tractors, and a few other industrial products. And b then eventually they might do the suv. Yeah. That was just my question. I just dont know all of a sudden if mopeds havent taken off, i dont know why an electric mow today would do that much better. In San Francisco, though, youre right. There it would be i have an electric moped, look at me. Thank you. Yeah. Select markets. Yeah. All right. Did you get on one . Do we have any shots of that . Oh, no. But i will. Little bit later on. City boy like myself on one of these tractors. No we want you on the moped. Want to see that tomorrow. Coming up, tim cook taking a shot at rite aid and other retailers that dropped apple pay. Jack ma hints that alibaba could be keying up with apple. Well hear from both execs after the break. And then investors and users logging out of twitter. Were going to speak to an analyst about user growth. The companys Business Model and whether or not the stock is cheap or expensive where it is right now. Well be right back. What if we finally had a back yard . That would be amazing. Hey, what if we took down this wall . What if this was my art studio . What if we were preapproved . Shut up from finding to financing, howd you do that . Zillow. At the wall street journal event last night, tim cook took to the stage and talked about a wide range of topics including the rollout of their new mobile payment system, apple pay. Josh lipton joins us with some of those highlights. Josh, good morning. Morning, becky. Well, apple pay already has a lot of fans but some retailers like cvs and rite aid are refusing the service. I think its a skirmish. Its a you know, we started last monday. Weve been at it far week. And i follow these numbers pretty closely. These first 72 hours wed gone over the 1 million market on activations of cards. Cook says he expects more merchants to sign on as apple pay is an easier, faster, and more secure way he says to make payments. Now, Alibabas Jack Ma was also at the event. He was asked about alibaba now developing a new operating system and whether that is a threat to google. Google does not cork pretty well with china government. So that makes the engine disabled stuff. And that makes chinese user not using smoothly. A lot of Chinese People cannot use. So we need to work on that. So obviously ma seeing opportunities here beyond just being an ecommerce giant and offering alibaba operating system he thinks is one of them. By the way, ma is now a big movie fan as we know. Hes making the rounds in hollywood to try to learn more about the movie business which he says is another big opportunity in china. Joe, back to you. All right, josh. Thank you. Heres an example of a bad winner. He just beat his teammates and friends to clinch the 2014 table tennis mens world cup title in germany. He then will proceed to put his foot through some advertising boards. And that led to him taking off his shirt should see this soon. Theres the board. Why is he kicking the boards . So excited. And then he takes his shirt off and throws it into the crowd. He was stripped after this literally of his prize money. 45,000 in prize money for excessive celebration. Thats what happens when you kick the advertisers. Did you see the nfl guy . Who was that . That did the celebrating and tore an acl . No. He was that excited. He was that excited. And in fact, they were, like, losing. They were down by i dont know how mu how many touchdowns. So he sacked a backup quarterback that he did a big celebration and tore a ligament. Lets tell you about another quick story. Dont call it a cronut. Dunkin donuts offering a hybrid next week. They would like it to be known adds the croissant doughnut. Im hoping theyre going to deliver some of these the delay they launch right here so we can have them for breakfast. Okay. When we come back this morning, breaking news. Durable goods numbers are going to be hitting the wires. Well get the Market Reaction right after the break. And later, is the bezos magic fading at amazon . That stock down 14 over the course of the year. Well talk his leadership and more. Right now look at the u. S. Equity futures. Right now the dow futures up by about 85 points. The nasdaq up by 22. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. 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 were just seconds away from durable goods data. Weve been watching the futures. They have been high all morning long. The dow up by 85 points. The s p futures up by ten. Getting a bit of help from some of the earnings weve heard this morning. Pfizer is trading a little bit up after beating expectations. Also check out the 10year note. At this point the yield looks like its sitting at 2. 287 . And oil prices have been a huge focus for us. Lower oil prices have been helping things at the pump for consumers. Right now wti up to 85. 51. Lets look at the stocks to watch this morning. Raising its forecast. Membership rose for a tenth straight quarter. The ceo says aetnas business makes up 40 of health premiums. Revenue coming in in line. The largest maker of Home Appliances is citing costs from acquisitions. And shares of coach jumping. Better than expected earnings and revenue. Jim is standing by at the cme in chicago with some of the durable numbers weve been waiting for. Steve leisman is live here in the studio. Looking for 0. 7 . At least going the other way. Its very voltive number. Theres not been a lot of big u. S. Data for the market. We were focused on earnings and probably going to get the numbers right now. Jim is standing by with those numbers right now. Call this number volatile is a bit of an understatement. They come out as a disappointment. Durable goods out at negative 1. 3. Basically no revision last night. Transportation negative 1. 3. Comes out negative. 2 also. And nondefense comes out as negative 1. 7. So bad along the board here. The stocks take it a little bit higher. They were up coming in now up about plus six. So they lost three handles. The 10year yields is down a little bit. We started this day with some good feelings about some decent earnings numbers. This number does nothing to keep that going. It really turns that around. Jim, its still kind of shocking to see the 10year sitting below 2. 3 . Its amazing. I think when you look to that date two weeks ago when we had that mass iive capitulation. If you look at the numbers as a whole, theyve been reasonable. If you look at earnings as a whole, theyve been reasonable to decent. When you look at a 10year around 2. 3, i think thats too low. When you say you think weve bottomed in terms of the yield, i think we hit 3 before we hit 2 . I do think that. I think like i said, you dont see days like that two weeks ago when you see massive trading on that low print and then turn around and not have it mean something. Our numbers could get off. But as long as i think were going higher as long as we stay in the path around and we see nothing thats going to knock us off it right now. Jim, thank you very much. Thank you. Right now lets bring in Steve Leisman. He has more on what to make of some of those numbers. One thing we focus on in this number is a Capital Spending number. And its nondefense capital goods, looks at the order of machinery and things of company pfs that was down minus 1. 7. Weve been okay on the Capital Spending number. There was an expectation things would accelerate. They did not. Th again, its a volatile number. But im looking at a lot of negatives. Businesses took a pause from the orders of capital goods. Also these are durable goods, goods that are around for longer than three years. General machinery down 2. 8 . Electronics down 2. 5. The Motor Vehicles were down 0. 1. The details are not suggesting theres a reason for optimism. Would that coincide with all the chaos in the markets a few weeks ago . They would. Decide not to place an order for a machine. Wait a couple of weeks. The machine or dishwasher. We know the number took a pause as well. Germany, europe, a lot of stuff, right . Its its tenuous the connection between durable goods and noetz headlines. I dont think its surprising now. How long have we had just this overall tepid sort of wondering why our corporations arent growing more. The Capital Spending numbers of late have not been that bad, joe. Look at the overall to say its tenuous when definitely theres something causing something and its been causing it for a long time. I meant those things you were talking about. Take your big. The markets, the stock markets at least have rebounded from those concerns. The question is will consumer and Business Confidence have rebounded as quickly . I think thats a great question. With 33 year over year on durable goods orders in july. 9 in august and 3 in september. Were still ahead of where we were last year and its the reverse of the 2001 expansion which was very slow and then it ramped up. This was very fast on the front end and been kind of down. It was ticking up but now i think theres a good question. The only thing we had out there was the u. S. Economy. Asian weakness concerned, european weakness concerns. And now people have to worry about the u. S. Economy. That gdp number we have, its going to come down today. We were at 3. 1. It will come down into the 2s now. Wasnt it a durable number that that started this whole also you talked about the Business Confidence number. Which was not a good number. It gets us to where you were talking about earlier where one in five are expecting youll see qe4. That theyre not done. One thing i know is the fed doesnt want to go back. When you listen to what guys like bill dudley are saying, what they really dont want to do is to start policy going one way, a tightening process and then have to reverse course. Not going to look like qe3. It would be something different, right . It would be a new form of stimulus to say this is a new plan that theyre undertaking. I dont expect to see a repeat. Thap thats when you lose the friar tuck. Could you be my witness on this, becky . There is no bet. I did not take the bet. Youre not going to shave your head . No. Because youve offered nothing. Im getting a tattoo. But that doesnt do it for me. I think you should offer to shave your head. Thatd be easy. Its just velcro. Im trying to help you. Im trying to make you an iconic you think being bald would just being clean. Jeff mackey, man. You know, crazy. Beck, i think qe4 would look like qe3. But heres the story. What the fed wants to do now is adjust policy with Interest Rates. If we do get poor economic results, they will simply extend the time of rate hikes. And give us a shallower half. If they came up with something new and said this is a new thing were trying, something different, well see. All right. Steve, thank you. Sure. Okay. Twitter beating expectations on the top line for the Third Quarter, but shares taking a hit following a warning on Fourth Quarter sales. The stock now down 33 year to date. And later today were going to get facebook their earnings. They report their results. That stock is a completely different story. Theyre up 47 year to date. Join us us now is neil dash who covers both companies. Neil, were you surprised by not necessarily twitters numbers, but what it portends for the future . You know, the guide was definitely lower than we expected. When we actually kind of looked at the numbers, it assumed no growth in monthly users. They are kind of resetting expectations a little bit. You have a new cfo coming in. Our guess is he wants to give himself a little more wiggle room and cushion. The revenue was 4 million short of where we were expecting. I think theres a fair amount of conservative built in there. Theres new ad products which we think will contribute. Weve never seen twitter not grow their monthly active users. Thats the midpoint was suggesting. So we do believe that they will add probably 8 million to 8 million monthly users in the next quarter. Which stock do you think is going to do better . Our top pick is facebook right now. Wed still bet on facebook. What are you expecting to hear this afternoon . Yeah. First its really on the mobile side. Were expecting about 2 billion in mobile revenue. About 24 months ago they had little money coming from mobile. But i think what will be really interesting is going to be what they have to say about whats app. I dont think anyone used the video until the als ice bucket challenge. That got millions of people to try facebook video and share it. I think video advertisers will be excited about that opportunity. How much do you care about them trying to monetize instagram . We pegged it at a revenue opportunity. But theyre taking a very slow approach to the side. We think of it as youtube and google. Google didnt layer in a lot of advertising until three, four, five years after the private got a lot of scale and a lot more embedded into overall culture. And we think thats what facebook is doing. How much does twitter have to start to look like facebook to make the kind of margins and be as successful as they have been . How much of the interface do you think has to change . You know, i think the interface does have to change a little bit. I think 500 Million People come to twitter on a regular basis but dont log in because they dont know what to do. I think what they need to do is make the content more interesting, make it more compact and unique for individuals. Thats going to involve a lot more Product Innovation on their front in terms of making the product unique and engaging individual users. Weve got to leave it there. Thank you though. Thank you. Coming up next were going to talk about jeff bezos. Is he lost in the ecommerce jungle . None sparking the interest of consumers or shareholders at least not yet. The question then becomes should amazon get back to doing what it does best . Were going to discuss the bezos factor and the direction of the company when we return. Take a look at futures. Were back in a moment. Ye yes we have the new iphone. How cause everyones coming in for the new iphone. Whwhat. Kind of service plan can you get . Well right now if you select the 15 gig plan well double your data and make it 30 gigs for the same price. Well that great youll take it. In head are you inside my mind right now . Nope where was. Albuquerque who was the porcupine what is my fave hollandaise sauce no way. The new iphone is here and now you get 30 gigs of data to share starting at 160 dollars a month. Welcome back, everybody. Amazon shares down over 27 year to date. The Company Continues to suffer losses stemming from failed product launches. In the last year it announced ventures into drones, the fire phone, fire tv, amazon pantry and amazon fresh. Is this what the company should be doing with investors money or is jeff bezos lost in the jungle . Bill george thinks hes on the right track. Hes a Harvard Business School Professor and ceo. But Jonathan Geller thinks bezos and team are lost in the jungle. Gentlemen, welcome to both of you. Get ready to make your cases here. Jonathan, why dont we start with you . There have been plenty who questioned bezos in the past. Theyve been wrong. Hes been right. Why is this time different . I think its a lot more difficult now. Instead of spending 10 million to undercut a competitor, they have to spend billions of dollars for tv content alone. So you look at the verticals theyre trying to get into and the big boys theyre trying to play with, theyre now a smaller fish in a big sea when you look at them competing. These are big, Big Companies that have big budgets that have all the things that amazon wants. I dont think they can afford to leap into those categories. Bill, why do you think investors should have a little patience here . Well, jeff bezos has proved himself time and again to be a visionary. Okay, he busted his pick with the apple phone excuse me. The fire phone. But i tell you, he is going through do major transitions. One from being a Software Content Services Provider to a hardware provider as well. And also this major shift from Online Retailing into being immediate information. Its going to cost a lot of money. I remember i was with them when they tried to bring out the kindle. I said how much money are you prepared to lose on this product and he said how much can we raise . He said ill spend whatever it takes. And i think youll see i think he should probably cap his losses on the phone, but i think fire tv and all these things related to the shift into Media Information is going to be a very Important Movement for him. I think theyll get there. George, heres a Corporate Governance issue. Companies are splitting themselves like crazy. Everybody is splitting up into a hundred different pieces on the assumption somehow they can become that much more focused. Why are you laughing . No. Bill george. Oh. I called him george. I had, bill. Its nice to see you. Anyway, what do you make of that trend broadly speaking . I think its a big mistake for i. T. Companies to follow this trend. I think i have real questions about ebay breaking up, to tell you the truth. This is the current thing. Five to seven years theyll be back to putting them back together again. You need to compete with people like google. Thats who amazon is looking at. Bezos has built from nothing to a very big entity just like larry paige has. You have to keep going in many ways. Mark zuckerberg is doing the same thing. I think you need to build very Strong Network services. And this whole information thing is a huge game. And hes competing with all kiechbds of people. So hes got to take that on. Hes going to invest billions. The one thing about bezos, i think we have to raise the question, andrew, is at what time do investors see monetize of these gains. Its been 15 years. Theyve been very patient. And fantastic Revenue Growth. And lots of eyeballs as jeff likes to say. When do they monetize the gains and bring it to the bottom line like google and facebook and others have . That seems to be the question investors are asking right now. At the end of the day, markets will pay for possibilities but there has to be a reality. Everybody has to pinch themselves at some point. I think if we keep talking about what areas amazon wants to go into, theyre never going to make money. Every single industry and market they want to get into, they have to spend so much money. I think its interesting that people think bezos can snap his fingers and magically youll see a load of profit. Although one of the things were not looking at on the screen would be amazon cloud. And thats something that the early spending, the heavy spending got them to be one of the top three players. According to satya nadella, youre looking at those. Its a great point. I think its a great infrastructure and they did a great job there. So these things can yield results, but i think if we look at their hardware side of the business, theyre all loss leaders to keep many the ecosystem. But theyre ecosystem isnt as strong as other ecosystems. Its just for amazon prime. And youre getting into grocery delivery and drones and you have moon shots. I think its preposterous at some point. Well, i think hes got to keep trying. And look at the tenyear record. Hes up 740 . I know. There have been times theyve been wrong. Dont bet against him for the longterm. Hes proved it every time. Thank you both. Well see you back here again soon. When we come back this morning, jim cramer on this mornings movers. And then an advance of advanced war fair coming to a walmart near you. Squawk box will be right back. What if there was a credit card where the reward was that new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com but parallel parking isnt one you do a lof them. Ings great. Youre either too far from the curb. Or too close to other cars. Its just a matter of time until you rip some guys bumper off. So, here are your choices take the bus. Or get Liberty Mutual insurance. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. See Car Insurance in a whole new light. Call Liberty Mutual insurance. And youll see just how much it has to offer, especially if youre thinking of moving an old 401 k to a fidelity ira. It gives you a wide range of investment options. And the free help you need to make sure your investments fit your goals and what youre really investing for. Tap into the full power of your fidelity green line. Call today and well make it easy to move that old 401 k to a fidelity rollover ira. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. And often even more. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 89. 95 a month. Comcast business. Built for business. Jim cramer you joins us now. Pulling back on the durable goods number. Its notoriously volatile and a monthly thing. So there is some, i dont know what the standard deviation is, but it is disconcerting, isnt it . I think this is why the feds on hold. I just think every single month has something wrong with it. I still believe that we are not talking enough about whether job creation is going to be hurt by affordable cares. I think we are not talking enough about how the dollar has been made so strong by our socalled trade friends. I dont know. I just think theres a lot of stuff that i think you and i find very disconcerting that ends up in these kinds of numbers. In a not ideological way, that was the problem i had with the New York Times on the obama piece yesterday. People in need of insurance when you get a subsidy its going to help them. They didnt take a single look at maybe some of the down side i dont think they associated any of the weakness and demand weve seen for the past three years to the uncertainty engendered by 17 of the economy suddenly being changed and taken under government domain. Yeah. I think this is, rather than discuss what the feds doing, i think there is just a free pass. I think the president is getting a free pass. We just accept the fact our trading partners, europes weak. When you have these bankers on like i have all the time on mad money, they say the Regulatory Environment is horrible. These are guys who never complain. These are not squawkers. They just say its too hard to get a loan. We dont want to make a mistake. Our clients are very worried about what they should be doing with affordable care. These are the issues tying everything up. Durables, thats just airplanes. Theres labor issues. I dont think they are all big complainers. And the demand you know some day the demand is not going to be weak because of the hangover from 2008. Some day its going to be weak because of things that are occurring right now that we have to face the fact its not just that we are trying to come back from a deep financial break. Also, we always favor globalization. Why do we have a deficit with every single country we face globalization with . There is a lot of stuff i just dont feel the government is doing anything to help business. You get weaker numbers. You can say its not the governments job. We would both say governments job to try to create a benign environment where you want to create a business. Yeah. Did you weigh in on businesses dont let anyone tell you businesses create jobs . Did you say anything about that . No. I think weve been around long enough to know if you let the government step back, there are lots of people who want to do things. For the guys, 50 employee people, they dont know what to do. They dont know if they are going to be pursued by the government. They dont even know. If you cant figure it out. Do anything . We are down 15. We were up 90 earlier. Youll let us know at 9 30. Thanks for the chance to say this stuff. Dont forget the redskins last night. We still like dallas, right . The washingtons were i thought that was the worst name. The snyders . They put a hit on romo. Oh, man. He does have heart. He is tough. Thats a great rivalry. Nfc east. You cant count on them. You cant favor one team by ten. All right, jim. Thank you. Coming up next, can kevin spacey help activism sell its latest installment . Here is a look at shares of activision over the past year. Up about 7 . Financial noise financial noise financial noise financial noise 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. Twith available forwardd collision warningigned. And new blind spot monitor and a 2014 top safety pick plus rating. Cost of entry . A fortune. Until now. Hey sarah, new jetta . Yup. Can i check it out . Maybe at halftime . Introducing lots of new. The new volkswagen jetta. Isnt it time for german engineering . The latest installment of the call of duty goes on sale next week. Walmart is selling advanced 24 hours before its official release. A couple more cheap gas tweets before we leave. Executive producer Sandy Cannold tweeted us the best place to find cheap gas is taco bell where you get for 1. 09 a bean burrito and cheap gas. Who is your favorite . Happy birthday to our director paul defabo. Hes a genius. He can get anything to work. Happy birthday, paul. Have a great day. Right now its time for squawk on the street. Good morning and welcome to squawk on the street. Im david faber along with jim cramer. Carl is on assignment. The latest home shiller report released. Taking a look at futures this morning. We are set, poised for a higher open at this point