A year earlier. Chinas Producer Price index dropped more than 6 . 43rd straight month of declines. Delaying its plan amid market volatility and four of the five companies that have gone public priced offerings below their expected range. Two ipos to watch today. First data and super market chain are both scheduled to price this afternoon but of course already starting to see cracks in the ipo market. Well see where those two go. Shares of sandisk jumping this morning. The flash Memory Company hired a bank to explore a sale of Micron Technology and Western Digital said to be in talks with sandisk. Merger is going through. Well talk about that. But is it the end or the beginning . Were getting closer to the end. But its frothey. These are 60 and 100 million deals too, right . I would argue all being done by companies that have weak fundamentals and thats the scary part. The question though, theyre slightly more rational than the deals at the real end of the bubble which is to say the pie in the sky crazy idea things that make no sense. Worries. Yeah. Well, i dont, you know, who cares who makes miller light. I dont know how you get over some of the regulatory hurdles. That has to be rationalization. 90 of that. Theyre operators. They come through and know exactly how to strip out all the costs. I never thought id say it but i heard those companies are going to report and i say you know im interested. Im interested in how the reports are going to be. I never thought but i am. We have been basing our view of the world on jobs and china. Its going to be interesting to get a snapshot of whats going on. And to see if it confirms or concerns or companies are trading better than we think. Multinationals, strong dollar, how are exports. How the economy over there . Hows the economy domestically . Im excited about earnings season. I talked to a few ceos and i wont say who but the ones i did talk to i did not get great outlooks. I didnt hear amounts of massive confidence or anything to shake this view that we have taken over the last couple of months. Were going to have harwood on. Hillary is a good debater. She is. Shes impressive. There was no contest from anybody on that stage. I read that she gave an impassioned defense of capitalism. Yeah. And bernie and omalley is big on did she go off message . Who is the real hillary . Id like her much more if i thought she really believed that about capitalism. She has been holding firm on not breaking up the banks for a long time. But it was capitalism saying were a capitalist nation and we have to protect people but we are capitalist nation. What are the numbers going to be like 5 million. Probably. Thats pretty good if youre looking back a couple of years ago. It moved more quickly than i expected. The one thing the democrats have going for them and the republicans dont at this point is they seemed much less antagonistic toward each other. It was a more united front and they werent really attacking each other where the republicans are still trying to make a name for themselves because its such a big field that it gets more pointed and you have people really going after each other. They tended to treat each other more respectfully and trying to attack the republicans versus each other. Right. There was one other thing i was thinking. Anyway, stocks to watch. We were out a little late. We were out a little late. Just a little. For us. We were all home by 10 00 and for us, that is late. Because we are lame. Yes. Jp morgan, thank you. Its always hard to do that. Someone stole their slot or something . It was the columbus day holiday which messed everything up. It was a banking holiday on monday so it was a game of Musical Chairs and they lost out. Falling short of estimates on the top and the bottom lines. The bank was hit by weakness in its Trading Division and revenues fell 15 and well have more on jp morgan from an analyst in just a minute. Intels results were above expectations but below last year. Weak demand for pc chips was offset in this case by strength in its data center and internet of things and asml shares down this morning. The company is a major supplier. Earnings fell short of estimates and new orders dropped more than expected. Cxs posted better than expected earnings. Cost cuttings and lower fuel costs. The Company Cautions its significant coal head winds will continue into next year. Lets get a check on the markets this morning. Yesterday you saw the markets pull back slightly. It broke a seven day winning streak for the dow. This morning theres red arrows but these are modest declines. The dow futures down close to 16 points. S p futures down close to 3 and the nasdaq off by 7. 5. If you take a look at early trading in the european markets theres red arrows across the board. Biggest decliner seems to be the dax down by. 9 . Also overnight i asia you can see that the markets closed lower. Lets get back to jp morgan. Ceo jamie dimon is calling the results descent. Joining us to talk about it is director of u. S. He equity research. Thank you for coming in. I should say the headline is jp morgan is getting smaller and the first sentence goes on, really talks about how their decline in assets is down 160 billion. Youd think just on the headline alone its a bad thing but most analysts think its a good thing. Explain. The fed has these enhanced surcharges for the big nasty banks and so jp morgan is trying to work around that. All the components of the Balance Sheet that get treated poorly by the new rules so theyre trying to adjust to the new reality to their credit. They went down one bucket in the new feds proposal. From a 4. 5 charge to a 4 charge so that was the silver lining. Can that go even lower or no. Interesting thing is it went up because the cash went down so you make no money on cash. So they are going to keep at it, right in but jamie was clear last night in saying its going to take awhile. You say okay for example they have the commodities business. We try to look through the business rationalizations, you know, all of that adjustment. The real trouble is outlook was weak and across several of the businesses. Security services which is a global business, em concerns weighing that down, card, you have competition, right . What happened with amex and citi with the costco deal. All the partners trying to take bigger pieces of the economics. Thats going to weigh on the card revenue. You have outlook fair markets revenue not to hot here in the near term to every chance that they had they put out a sober out look. Do you look at this and say these folks are good for whats to come with other banks and the economy or do you say these are operation challenges at jp morgan specific . The big banks are herd animals. They tend to move together. Youre all surfing the same waves. The Economic Issues are going to impact them similarly to how they impacted jp morgan so its going to be a difficult earnings season for the big banks. Do you like any of these stocks . I like Morgan Stanley especially given the beat down the stock has taken. Up 10 year over year. A lot have it and it was the big story in the first half of the year. People felt that was over given the volatility in asia weve seen here recently. Jp morgan sending the message thats not over. Morgan stanley has the most leverage to equities so when im thinking about read throughs and what i want to load up on this morning its probably more fwan stanley. Who would you sell this morning . Well, the market is going to sell jp morgan. The group will be put for sale broadly so if youre asking about how you pair up or what have you, you can almost take your pick and jp morgan is where you have the less basis risk because its already out of the bag. Central Bank Officials sound off. Many calling for a move sooner rather than later. But now another top fed head is coming out in favor of a watch and wait approach. Well kick off that debate, next. First as we head to a break, heres a look back at this date in history. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. Its gotten squarer. Over the years. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. I ripped my pants. You shot a hole in my pants. Can you give us a little peak mark . Flash a little suspender . Oh, man. Im going to quit dieting and quit exercising. You dont have to now. You can hide it. Im a fat guy in a little coat. Fat guy in a little coat. We celebrated a little bit last night and we want you to be a part of it. Tomorrow, come and celebrate throw back thursday with us in the plaza right outside our studio from 7 00 to 8 00 a. M. Eastern. Andrew, becky and i will be joined by q. Carl will be there. David faber and jim cramer all here tomorrow. Theyre working double duty and you get tickets. Theyre free but theres going to be scalpers. I know this. Send an email to squawk boxtbt cnbc. Com. Wow. Just read the screen. Read it from there. And we did have a great celebration in the city last night. Theres dick parsons. Did you see him . I did. We spoke about andrew and his youth again. He had never heard the story of what you were like as a 12yearold and 14yearold. Who do we miss . Theres cindy haynes. He came all the way from chicago and he missed the cups win but wow those are are pretty good shots. That person knew what she was doing with the camera or both of them did. I havent seen these. Thats the whole team. Thank you for arranging. You helped with the monkey bar. You have juice. You have juice. We had fun. It was a good time. And we want to drop names . Who was there . Thats why we used pictures. Steve schwartz. Nelson peltz. Miller. Ron barron. Dan lobe. Barry diller. Yeah. Apparently more pictures later. We have more pictures later im told. We do . Yeah. So save yourself. All right. Lets get down to business. It looks like traders may be betting on 2016. Rates futures suggesting that the first fed hike since 2006 will take place at the march fomc meeting. Right now lets bring in mark grant. He is managing director at Hilltop Securities hoe was also there last night. I was. And Macro Economics chief economist ian shepherdson. You werent there. I got in too late for london. I really tried. All we were doing was getting all these fat cats in one room to grill them on income inequality. We werent drinking. We were there to land journalistically based editorial punches against all of these guys that are part of the problem. We were there to have fun last night. Speak for yourself. I thought i was helping you express no, i was telling her to speak for herself. You were just looking at how these guys live. Studying. Research. Just looking and saying boy, Bernie Sanders was right. Look at these guys. Hey, mark, you have been saying for a long time that you didnt think a fed rate hike would come but now the rest of the market has caught up to your expectations on this. Do you think march is actually the time . It depends. Were getting very close to going into a recession. We have tremendous problems coming out of china. We saw deflation in my friends country because of probably oil. I expect oil to do nothing but flat line around slightly above 40 so i dont think the fed the fed certainly concentrated more on global issues than ive ever seen it concentrate in the last two decades and i think this is going to be a big part of their Decision Making possess. Do you agree with that assessment . Respectfully not. I dont think were anywhere near recession. Unless youre in manufacturing. If youre in manufacturing and made a living out of selling things to china things are really tough. But most businesses dont do that. Were a Domestic Service sector economy and its enjoying this huge wind fall from the drop in gas prices. Its very unbalanced. You can find pockets of real weakness but theres pockets of real strength. The macro is in the labor market and the Unemployment Rate is dropping like a stone and i think that probably they are going to move sooner rather than later. Slowly. Id agree with marks assessment that they are looking at the Global Conditions more than ive ever considered and when you start thinking about the strong and whether or not that creates a problem thats the one thing that could make it difficult for them to raise. Its a big problem if youre in the export business but 13 is export. 87 is domestic. Most people are doing okay in Service Sector businesses which are enjoying that gas price wind fall so, you know, when you weigh it all up on balance you have to remember the Service Sector is 5. 5 times bigger than the Manufacturing Sector and thats where the action is. Its a terrible time to be in a dollar sensitive manufacturing business, no doubt. But most companies in the u. S. Arent in that space. Outside of services, housing seems to be doing better. At last. Its been a really hong haul but were seeing real pick up in demand. Afford blt is okay. Credit standards, lending standards are finally getting easier. Credit scores are falling for applications and loans are closing more quickly which is a really big change and its becoming more competitive again. Something has been hanging around for five or six years is becoming a more positive force and these are below the radar screen at the moment because all the focus is on manufacturing. Big names doing badly but thats not most of the economy. Mark, you have been very right on Interest Rates for a long time. For awhile it made you positive about u. S. Stock but lately you have not liked u. S. Stocks. What do you think happens if your concern is that were looking at a global recession potentially, that doesnt provide a lot of safety anywhere. Thats correct. Though im not, as andrew pointed out once in his New York Times article such a bear about this, i do think theres good spaces we were discussing prior to coming on which are the taxable space. I would rather think its much safer to get yield and 2 or 300 over versus the Corporate Bonds which have a lot more exposure to the, to international situati situation. They can raise rates. They can raise taxes. They dont have a dollar issue. They dont have a china issue and i find that space quite attractive versus being in the equity market right now. What would have to happen in equities before you would say this is a place id like to play again . They go down another couple thousand points. Couple thousand points. On the dow. Not on the s p. So you think the market is overpriced at this point . The market is overpriced. It doesnt take some complicated equation. Your comments on the Manufacturing Sector were correct without question. But youre also looking at twitter cutting people. Walmart is cutting people. Macys is cutting stores. Caterpillar is in big trouble and youre looking around at a wide variety of companies indicating to me that theres real serious issues here. Profit margins are going to be tougher to maintain and these arent huge lay offs. These arent recession type lay offs. These are trying to maintain profitability in what is a slow growth. Not necessarily a negative growth scenario. No but its an indication. Especially twitter. Im picking out a few names it giving me some pause. Are you looking for the market to tank or to sort of live in this zombi land and wait for the real economy to catch up . I think zombie land and heading downward i think china has real problems. Substantial problems. Even the data under china this morning was not good. I think the banks in america are going through some substantial down sizing thats going to effect things and i have concerns in here plus the technicals on the market dont to me look very positive so i look around and say, okay. If its a time not to get appreciation which is what we look for in the equity markets id rather get the yield and get some stability and get 6 in a bbb or a rated taxable bond. Tim agrees with you on the overall market but one point he made was the market has gone up onslow growth and sort of weak prospects for five years and now he thought the economy would get better and now were back to slow growth and zero Interest Rates. Were back to what propelled the market all along. Theres one thing youre not including in there. The market was propoelled by quantitative easing. Hasnt stopped in europe. Yeah and in europe the equity markets are down more than 600 billion while they did qe. 600 billion. What was that . Shovel ready projects. Mark, thanks for coming in. My pleasure. Ian thank you for being here. Thank you. Well catch you at the next 20 year party. 25 maybe. There we go. Lets do 50. When we return the democrats running for the white house square off in las vegas. The highlights next. Also donald trump wasnt on the stage but that didnt stop him from trying to steal the show. He live tweeted the debate writing story theres no star on the stage tonight. Youd be surprised how many followers he got after that. Were back in a moment. Welcome back to squawk box. Were talking politics this morning following the first democratic president ial debate. John harwood is in vegas for the president ial debate. I was there but i was not in the crowd. I was watching and it was a good night for Hillary Clinton. First of all she was surprisingly effective in going after Bernie Sanders her chief principle opponent on the issue of guns. Secretary clinton, is Bernie Sanders tough enough on guns . No. Not at all. We have to look at the fact that we lose 90 people a day on gun violence. Its time the entire country stood up against the nra. Now Hillary Clinton also benefitted from two assists. One of them came from Kevin Mccarthy a few days ago when he