Welcome to squawk alley. Happy friday. Im sara eisen. With me this morning my partner in crime, wilfred frost, staying up past 6 00 a. M. And en lee. Four days to go until the election. New reports this morning that russia or another state agency may try to undermine tuesdays voting. This as donald trump and Hillary Clinton make their final push into key battleground states. Our john harwood is in washington, d. C. We have a threepoint race. 47 clinton, 44 trump. Donald trump had moved ahead in that poll earlier this week. That indicates things slipping back a little bit toward Hillary Clinton but not desis live at this point. Look at the battleground map. Electoral votes, Hillary Clinton is leading or solid in more than enough states to get to 270 electoral votes if you look at both how shes doing in Traditional Democratic battlegrounds and some new democratic strongholds. Now, how are the candidates deploying themselves over the weekend . This is the time they race around the country. If you look at Hillary Clintons final push, you can see that she has got a set of surrogates president obama, youve got michelle obama, Vice President biden, bernie sanders, all dotting the map to try to shore up Hillary Clintons support. Donald trump doesnt have those surrogates. But what you can see is hes got his own energy, and he is chris chri crisscrossing the country today, New Hampshire and ohio, trying to figure out ways to break through not just in the midwest, his rust belt strategy is what hes been leaning on most of the campaign but also in places like colorado that democrats have won the last couple elections and also trying to hold on to arizona, which is a republican stronghold. Democrats have only carried it once since world war ii, but Hillary Clinton is xet live the so donald trump has to play defense as well. All sorts of mixups on the swing states this year. John, thank you very much. Lets get to the Cyber Concerns for next tuesday. Nbc reporting that the white house and many Government Departments are on guard. What are they most worried about . Its silly confusion. You dont know whats going on, the internet is down, you think your vote wont get counted. The thing thats working sort of in our favor in terms of our election process is each state has their own process anyway. Machines are not hooked up to the internet. A lot are counted by hand. You can disrupt the internet or parts of the internet across the u. S. On election day. It shouldnt affect you at the polls. Whats the incentive, whether its russia or anyone else, to hack on election day specifically . Totally derail the process . Again, its just to sort of sew confusion, create a sense of fear more than anything else. In terms of practically speaking, i think, yeah, people want to check where their polling place is online, they cant do that, that could disrupt the process. I think, you know, if its russia thats behind it, i think theyre sort of acting like theyre sort of showing their might. Thats what this comes town to. How serious could it be . Could they go far enough that the day after were going to have increased calls from either candidate that this result isnt fair or is it, again, just small amounts of confusion . I think its more small amounts of confusion. Both sides are lorrying up properly. If theres going to be a recount sor some kind of a ballot xef exercise, theyll be fully stocked. Yes, it gives some meat to certain supportering saying if my candidate lost because we were hacked or the process wasnt fair, it does sort of disrupt i wat that way. It misunderstands the nature of the internet to think a hack could disrupt the election itself. Its more the everyday use of the internet. When was that attack . Denial of Services Shut down so many website, paypal, amazon. A lot of Security Experts were out after that saying this is a drill. This looks like a drill, which is scary, because, a, it shows how vulnerable we are, and, b, what is it a drill for . Could it be something leading up to election day . The authorities still dont know who was behind that particular attack, and theres one sort of theory that it wasnt a coordinated thing so much as a bunch of gamers trying to hack into a certain system and they created malware that spread much faster than they thought. Thats one theory. The other is gearing up for big show on election day. After the dust settles if its proven, for example, russia has hacked certain aspects of the election process, whats in the retaliation . You dont want to elevate it to military action. Thats a great point. U. S. Military has done a lot of counter Cyber Espionage so, to speak. Stuxnet is an example of that with israel. There has been retaliation. We just havent seen it. I also think what were seeing is the escalation of a different kind of a cold war, a cyber cold war so, to speak. I think what were seeing is potential emergence i suspect of like a fifth branch of the u. S. Military, where you have a cyber branch to deal specifically with these things. If russia is hacking u. S. Servers, you need to fight back. Feels like its time for that already. Ed, more with you throughout the hour. We want to get to the markets now. The dow is up 26 points. The u. S. Economy added 161,000 new jobs in october. Economists were calling for more like 175,000. The employment rate falling to 4. 9 partly because of people dropping out of the labor force. The s p 500 trying to avoid its longest losing streak in more than 30 years, nine down days. Weve already seen eight. Looks like the s p is positive by about 0. 3. Health care is in the lead. Bob is on the floor with more. Good morning, sara. The market has three problems. Very simple the election, the fed, and crude. Lets take a look. You heard about these eight down days, worst period since 2008. Nine down days, havent done that since 1980. Ten down days havent had that since noah. We dont quite now. Were checking it out. It was a long time ago. The decline in the s p has been gradual, only 5 off the historic high. That was back in august that we hit. The russell 2000, much bigger decline. Thats the fed, small cap worse on higher Interest Rate or periods of rising Interest Rates. If you look at the sectors, you can see this already. Weve been talking about the telecom and reiets getting hit badly. Health care has been hit because of the regulatory concerns weve been seeing and all the Big Health Care dmams are down for this quarter. I want to talk about energy. Look at crude oil. We dont talk about it as much because were obsessed with the election, but its down 9 this week. Oil services down 5 . So, folks, add it all up, you have pressure on pharmaceutical stocks from regulatory issues, pressure on oil from oversupply. You have pressure on industrials from slow global growth. Guy, its no wonder the stock market has been having some problems. Of course some of this may be resolved next week, at least one of those three will be resolved. Dash for cash is what you keep hearing. Bob, thank you. Meantime, its a camera made for adrenaline junkies and the stock may be too. Shares of gopro taking a noetz dive, posting a wilder than expected thirdquarter loss, missing on both the top and blm lines, sales down 40 from a year ago. Ceo nick woodman is placing all his bets on two new cameras and a drone ahead of the hol lay shopping season, but its not just gopro. Earlier this week, fit bit lowered its guidance for the Holiday Quarter nearly 25 sending that stock sinking. And last month ibc had a report saying, quote, significantly designs in the smart watch market for the third quarter. Whats going on in the wearables market, ed . We all have these phones. They work well for video and camera. Do i need to spend 100, 200 for thats not new. Not new but the expectations game is something a lot of tech companies, a lot of Silicon Valley companies have not done a good job of signalling to the market, right, to investors. I think thats a big factor weighing on this. Yeah, i think, you know Consumer Confidence when it comes to tech is sort of a bizarre thing. Iphone comes out, im going to spend my money there. Im not spending it elsewhere. Thats another factor. Obviously we all have smartphones. Thats a threat to the likes of gopro. What about drones . Are they a threat or opportunity for gopro . Definitely an opportunity. Its also still a nascent thing. It started out as a toy. Is it a serious product . How do i use it as an adult . Its not there yet. People dont know how they work. Its expensive, a lot of them, frankly, and the ability to use them, its still limited, right. You can do it in your front yard or backyard, take it out to the field somewhere and play with it, but thats sort of it. Its not something youre going to pull out of your back pocket to capture a moment of friends and family. Could it save gopro . I still dont think that market is big enough yet. Its a growth market, certainly, but if gopro were to pivot that part of it towards were seeing use of drones in more b2b applications, using them to sort of monitor construction sites or dangerous areas where its harder for people to get inside and out, that is a growing market and a real one in terms of theres a real need or efficiency. Can it save nick woodmans billionaire status . I cant keep up. Every day, hes a billionaire, hes not. He has a lot more work to do with that company. Ed, stick around. Well talk to you more. Carl is live at the baron investment summit. Hi. Always good to get here. The Investment Conferences in new york city, this is truly one of the main events. Always good to check in with ron and get his take on not just the shift from akive to passive management but whats going on with fundamental analysis, whats going on with the cost of trading and the markets themselves. So well talk to ron baron about that. Today is especially exciting because well include elon musk, the ceo of tesla. You saw probably a few moments ago that iss recommending that merger with solar city, but well talk about tesla production, talk about raising cash, auto pilot, spacex, artificial intelligence, colonization on mars, and probably the election too. Thats all coming up in just a few minutes. We look forward to that on the other side of the break. Before we go to break, lets take a look at some of this mornings early movers. Shares of starbucks trading near fresh 52week lows, just beating estimates from earnings and revenue. Ambassador announcing a 25 Quarterly Dividend boost. The companys ceo, kevin johnson, on squawk on the street earlier this morning. All retailers are facing challenging conditions. The election is creating noise in the market, requiring retailers, us included, to work harder to break through. And first it was smartphones, now samsung and the u. S. Consumer Product Safety Commission are recalling 2. 8 million toploading washing machines after reports hundreds of units exploded operating at high speed. Nine people have been injured. More to come on squawk alley including our exclusive with Tesla Ceo Elon musk. Dont go anywhere. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back to squawk alley. We got that jobs number this morning. Of course the election is in four days. An awful lot for the market to digest. Joining us here to talk more about the markets ahead of our interview with elon mus income a few moments is ron baron, the chairman and ceo of baron capital, at his Investment Conference at Lincoln Center in new york city. Great to have you. Thank you for having us. Thanks for coming back, carl. We got this election in a few days and this jobs number. I know so much of your thesis is that information gets sloshed around and markets dont know how to discount long term. What are you thinking about whats right in front of us right now . What ive been thinking about a couple weeks, probably wake up twice a night, go look at the odds who will win because its affecting me. I dont think it will affect us long term. At least im hoping it doesnt. I think weve been through a lot in this country for the past 240 years, and we survived and, you know, profited and done better and better. Exceptional country. I think that anything weve gone through depressions and wars and terror attacks, bank runs, everything you could think of. And yet we keep going. And we have this great system thats degraded a lot by Alexander Hamilton. Theme of the conference. Theme of the conference. Exceptional takes time. Its taken us time to become an exceptional nation. We are an exceptional nation, an exceptional place to live. We have a better place to live than anywhere else in the world. The opportunities here are better than anywhere else in the world. People can create businesses and jobs and lifestyles and better here in the u. S. And our grandchildren and their grandchildren will have much better lives than we have, and we have much better lives than John Rockefeller had 100 years ago and henry xiv had 300 years ago. You havent been thrown by fears that all those things you just mentioned are in peril . No, i dont think theyre in peril. And those fears from others hasnt changed your investing thesis either. The reason stocks are so cheap is there are very few people doing research any longer. When i started business in 1970 they had what were called fixed brokerage commissions, and those on average were about 1 of the amount of money that you were using to purchase stock. So, for example, if you were buying a thousand shares of google in 1970 and it was 800 a share, you paid 8,000 as a commission. You can now do that for 7. 95. So when you have 7. 95 as opposed to 8,000, you dont have as much money to spend on research or stockbrokers. A lot fewer stockbrokers, fewer people doing rnl. Therefore the markets are incredibly inefficient. Everything gets priced all same because theyre all part of indexes or etfs. When one goes, the other goes, and everybody is trying to keep up. The computers are doing the trading. No if you look at my screen every day, if all my stocks are up 1 , down a half a percent, like every single one. You call it low dispersion. Its unbelievable. All correlated. Thats because everyone is making decisions about whos going to win the election, whats the price of oil going to be, when is the government going to raise prices . So i dont really buy into all that. And i think that nobody through trying to trade is going to do better in the market except if you can so when i was talking before about commissions, ver2 is a market maker. They trade 9 of the volume on 7 of the volume of General Electric every day or 9 and 7 million shares. Thats what they trade. Every day. It turns out that what would you guess that they make on those trades . I sort of have read your thoughts on this, but its 350. Not a lot. 350. So if i think about 350, i mean, gee, they make 350 every single day on that stock for 50 weeks a year, but thats not the research that people are doing. Theyre just buying and selling, constantly buying and selling. What it does for People Like Us is that if youre trying to do what theyre doing, youre going to lose, but if youre trying to just make longterm investments in businesses that are yet to be much larger and youre buy at a good price relative to what you think they become and what people dont understand they want to buy at some point in the future, then youll make a lot of money. Thats why you think the markets sort of trade in this narrow band for days, for weeks, something happens, they reprice and trade in a narrow band look at netflix. They announce earnings. We have a small position in n netfl netflix. 50 billion company. They announce earnings and the next day its up 20 . 50 billion company. The other companies that are sort of similar up 5 that day. But everything trades together. Its all because theres no advance notice or understanding of whats happening in businesses because people arent doing research. Thats the opportunity. You have not been afraid to add to things under pressure like an under armour or azilla. Correct. That was at 21 or 22, we were buying stock, now in the 30s as an example. Is that a torturous process or no. No. Thats opportunities. The big picture is we think that the economy and the stock market are intertwined and they both approximately double every 10 to 12 years. So stock market doubles every 10 or 12 years and the economy doubles every 10 or 12 years. And you g back to 1960 and its the same thing. The economy is now 18 trillion, 19 trillion, and the stock market is 18,000. 2007 it was 14,000 and 14 trillion. 1960 it was 600 on the dow and 520 billion for the economy. And thats 6. 7 a year compound for economy and 6. 3 for stock market plus dividend. Thats what the stocks and the economy do. What youre facing, the race against is trying to make your money stay whole and your money falls in value roughly 50 every 17 years. Buffett says that 50 years ago when he started his business, what cost him 12 cents now cost him a dollar. Thats eight times. Eight times is three doubles. Two, four, eight, three doubles, that means you lose half the value every 17 years. Thats 3. 5 a year. Just go back one step further, the Louisiana Purchase was by Thomas Jefferson in 1803. And it was enabled because the credit that Alexander Hamilton had established was so great th