Crude oil will watch, as well, down 6 of the past 7 weeks. As we mentioned, our road map begins withal ibm. A deal to offload the chip business. Markets feeling the impact of that ibm news. The dow has been dragged lower but the s p holding on. Is this a setup for another volatile week . And as it fprepares to launch after the bell, apple launches a catch. Premarket, the dow component reporting 3. 68 a share. Well below forecast of 4. 31. Sales fell across several divisions. Ibms chairman and ceo Ginni Rometty say theyre disappointed in the performance and will pay 1. 5 billion to take over ibms chip unit. David will have that interview with rometty an hour from now. What are the key questions we need to ask . You know, i think, carl, when we talk about these companies these days the theme keeps coming up, whether it was ebay, hewlettpacka hewlettpackard, and now ibm. The speed is the overriding theme, having continued to speed up. What is that doing to so Many Companies in terms of their ability to respond and how are they responding . Of course as you well know and jail knows, this is a company that has been repositioning itself over time but perhaps has to do this in an even faster way to keep up with this ever changing market lace. Can it do it while still trying to maintain some of the financial goals. Clearly the fiveyear plan, jim, is out the window. That is really the devastating theme. I was looking at the Analyst Meeting from earlier this year and theyre talking about 20. At least 20 in 2015. This goes back to pauls days. Yes. I was looking at that, too. And paul, it all started with the prediction he made in 2010 saying that, listen, this is possible to do. May 12th of 2010, he said 12 to 15 Earnings Growth is in the cards. 20 a share at least in 2015. 24 is tend of that. Its all over. I think a lot of this zirks bm losing to ishsbm. Ibm cloud taking business from ibm regular and you just dont make that much money in the cloud. You need to be a sales force. Com. David, this is going an important moment because Warren Buffett has loved this company because he likes the buyback. I see the material deceleration this quarter. I think its incredible. Incredible situation. Well, as you know, one of the key criticisms over time has been in terms of making the eps number through buyback as opposed to organic Revenue Growth and significant profit growth. Were going to have Ginni Rometty about buffettand the shareholder base. The Conference Call is i believe still going on. Mrs. Rometty is on that call. That is not typical for an ibm ceo. Many of her predecessors also did not participate in those calls. So that does go at least to the urgency they see of communicating at this critical juncture for the company. This is the lowest q3 revenue for big blue in five years. And the spoke says it is not gap down 7 1 2 since 2002. You could be looking at historic price action in big blue today. They talk about this quote, jim. We saw marked slowdown in september and client buying behavior and our results point to the unprecedented pace of change in our industry. When you couple ibm and sap and google and netflix and ebay and ncr, whats going snon. September is europe. September, china. These are things that have been plaguing a lot of the industrials. Thats why a lot of industrials have come down. I could counter with honeywell having a really good number. I could easily counter with ppg saying we can handle this slowdown. We will see 3m this week. I would like to hear what they have to say. Ibm is making excuses here. Are you on rometty watch, so to speak . I have to be. Theres no way you can look at these numbers and she either has to throw paul under the busby saying, listen, this is not our model or do something dramatic and keep buying back stock. One thing thats unbelievable with this company is it has chosen not to apply money to making a question situations to give real growth in social, real growth in internet, real growth in mobile. It has just stayed the same. It is a second rate accenture. Some would say it became a bit later than it should have but a significant deal with them and brought them into the cloud and they have expanded greatly on that. They would also say and i wont speak for mrs. Rometty, but they have made a lot of investment, jim, in these very area wheres their own Free Cash Flow which is significant. Yeah, you can make that perhaps more acquisitions that could go on. They have been investing, including the business today. Maybe the hand is just really bad. Yes, theyve made these theyve made acquisitions but they spent 11. 8 billion and they have very little to show for it other than the allegiance of Warren Buffett who says he likes companies who buy back stock. Is this the case where they please buffett and no one else. Is this a tesco . Is this a situation where Warren Buffett said it wasnt that big and i should have stayed away from tech the way i should have sdad away from airlines. I need to know this because he is an unprecedented buyer of the stock who moved the stock from the 120s with this goal in mind that the earnings were going to be there buecause of buybacks. We want earnings via growth. Wow. Tough call. Meantime, well keep an eye on that. Jim . Sorry. Go ahead, david. No, i was just going to say, jim, you know, how important is buffett then over all to the thesis at ibm . I think that as long as Warren Buffett came on squawk box and said hes still happy with ibm and be buy back, this is a little more like cocacola than we thought, a little more like wells fargo than we thought. Its a lot of business here, temporary shortfall. This the quarter that makes me feel this is a company that has been beaten by the changes, the lightning like changes that are happening in technology where you have cloudbased companies that simply have no legacy, that dont have to worry. Plus, i mean, ibm had we got to find out about september because china had been so important for them. What is going on in china . David, we know china has just been hammered here. Yeah, you know, thats a great question, jim, as you point out. We all know about the slowing growth in europe. China had been a bright spot. Currently not this quarter. Certainly going to focus on that in terms of where the global slowdown is particularly impacting what, again, in the words of the ceo of at ibm are those disappointing numbers for this quarter. And, listen, well give mrs. Rometty her opportunity to speak and well have the questions and see what the answers are. You need to know. Find out why software was so light. Software sales fell. This was the bright light. I thought software was where they were going to make their money. Thats what those acquisitions were about. Brick revenue down 7. Thats excurrency as well. Another factor dealing with ibm. I wanted them to win because i love Warren Buffett and i know buffett is so right so often you dont want to bet against him but the pull back and buyback is extraordinary. That earnings miss weighing on futures as the markets are coming off another volatile week. Stocks did finish lower for the week. S p turning in the first four week losing streaks since august of 2011. How much did friday mean to the bulls, jim . Look, i think that i know you never want to jinx a Health Care Situation but we left here thinking that this was a critical weekend for ebola. And it was. And it was. We had a terrific new yorker writer on squawk box and he had been a big, i think, very circumspect about what this country was going to be doing with ebola and i think we all feel better. We feel better because there were people in close proximity with the late mr. Duncan whom we all thought were going to come down with it. This is one of the things you keep hoping for the best. The idea we would sit here now three weeks later and four weeks later and say, you know what, nobody came down with it . Maybe we have so overreacted this this situation. Hopefully. Sunday did mark 21 days for a few dozen people who came in contact with thomas eric duncan. I think they basically gave 43 people the all clear to the extent we know what an all clear means. Didnt we think that most of these people were going to come down with it and the cdc has been marginalized. Listen, the guy is just a politician. Hes this guy those who know him know that those who make excuses will be gone so fast that there is a new sense of urgency by the president. That marked the term was that fireside chat. I think it did market turn. And, david, we also have the pentagon. The military engine is beginning to kick in. The pentagon now has assembling this 30person team. If theres a new case in the u. S. You wont be dealing with the cdc. You will have pentagontrained officials moving in to establish essentially the best containment device we can deliver. Yeah. You know, jim, of course, you and i Abubakar Shekau last week, carl was out much of the week. Was we doesed ebola a great deal and you did discuss it in terms of negative influence on the market. So i do wonder, given at least what seemed to be and certainly a positive sign that all of those people that mr. Done can was in contact with do not have seem to have contracted the virus. Are we going to see perhaps a positive tone as a result of that . Well, i think that the hidden negative to this market has been, well, the airlines, we dont know whats going to happen. There are still 130 people who did, who were on that flight with them. I think there is a sense when you see people who lived with mr. Duncan, when you see emergency workers who took him to the hospital, you begin to think we as a country were panicked. Maybe we as a country shouldnt have been panicked. Maybe the problem is the cdc and the problems. The protocols were the wrong protocols. I saw disney go from 85 to 79. 80 at one point off a downgrade that to me read like ebola. I dont feel like that is a reason to sell stocks right now. I think you want to sell stocks off of international weakness, off of russia, off of europe. David, all week last week was saying to me, jim, be careful, be careful how much you mention ebola because it may not be the factor that is going to drive this economy. I feel now that if the government got ahead of ebola, then the market got down ahead of itself. Were going to talk a lot more about that. When we come back, davids live and exclusive interview with the chairman and ceo of ibm. Ginni rometty, as it takes a toll on the stock and the markets this morning. Apple pay is due to report earnings after the bell. Will all of that news gave the tech giant a boost . Futures, did take it on the chin as ibm came out. Look at futures there. Apple of course set to report earnings after the bell tonight. Launching apple pay today. That Payment System will allow iphone users to purchase items at more than 220,000 stores using their smartphone and their fingerprint. Eddie q of Internet Software and services told josh lipton hes confident consumer will embrace the new technology. We design all of our products for the mass market. Everyone has to pay every single day multiple times. If we can make that better, fast faster, more secure, more private, i certainly believe everyone is going to use it. This is going to be interesting because they signed up so many retailers and card companies. But corporate cards are not there yet . No. Companys prepaid karsds are not there yet. Its not going to be ubiquitous on day one. It doesnt have to be. They have the big card companies. I was looking at ncrs reporter today. By the way, in the apple quarter you will not see any of this. This is a 2015 story. Apple thinks big. Theyre not thinking this quarter. And its going to be one of these things where actions against apple but they will roll over this industry the way they rolled over music. Theyre just too big. And when you see the ads this weekend, sprint is trying to give you the phone. Everyone is trying to give you the phone. So if youre if you were a retailer what you want to do is say, you know what . Im apple compliant. And retailers are buckle. What are they, retail, bricks and mortars. Whatever you say, pal. Do you foresee what has come to be known as the typical apple beat and then miserable sandbagging guidance . The analysts just dont the way this quarter works is theres always some analyst who wants to stake out the negative. I understand, sure, they won the game. Absolutely. But theyre not going to the playoffs. Apples playoff bound. Theyre playoff bound. Theyre coming out. Are we going to see what was looking for what the low was in the past couple of weeks here. 97 . The company is addicted to its buyback. And this is a real buyback. If you look at this buyback versus the ibm buyback. Apple report numbers and were going to come in here tomorrow and see that blah blah firm has downgraded it and the reason will be some analysis about the number of phones that were sold in the peoples republic of china and china mobile not being that good and were all sitting here saying, wow, that wasnt that good a quarter. And the week later stock will be up and like, wow, you know what, maybe that was a better quarter which is whats been happening with a lot of stocks. We mentioned earlier worries of tech. Google for instance, last week. I kd loo at google. Google does not care about wall street. Ibm carries passionately about wall street. Google cares about google. The key line in that quarter, in the Conference Call was like, you know what, guys, we spent like drunken sailors because we get the best people in the world. We spent like disciplined sailors. The problem with google is they dont have wall streets quarterly theyre doing what we want out of businesses which is thinking multiple year. Right. You know what, one of the things you have to is get around the idea that not everybody wants to beat the quarter. Some people want to beat every other company and thats googles strength. You said in the past dont trade apple. No. Own it. Is it cheap enough to start buying it . Yeah. Its funny. With this going m quarter, google is now cheaper than apple. Its actually twice as cheap. When you look at growth versus the multiple, google is having tremendous shrinkage. Theyve got much better growth than apple but apple is still very good. With ibm out of the way ibm is not a factor. The dow should have google in it. Ibm is 200 160 billion company. M. Well get the mad dash as we countdown to the opening bell in a minute. Then as we said earlier, davids live and exclusive interview with Ginni Rometty of ibm is coming up. Take one more look at the future as we kick off a very busy earnings week. Squawk on the street is back in a second. You can bring back a lot of things from a trip around the world. But you cant always bring back customer data. Because many customers dont like it when their data moves around. Can i go now . If youre going to do business globally, you need a cloud that can keep your data where it needs to be. Today, theres a new way to work and its made with ibm. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts means your peace of mind. Its no wonder last year we sold over three million tires. And during the big tire event, get up to 140 in mailin rebates on four select tires. Maestro of project management. 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I feel Like Companies that blow out the quarter versus baker hughes which is much more down beat saying dont give up on oil yet. Halliburton is doing a remarkable job. Sl im not giving up on oil. I think oil holds 79, 80 that is key for the American Drilling program. A lot written over the weekend argue that production does not get cut as much as some people fear. No. Putin said it gets cut. Thats great. I putin is slashing numbers in america. No, natural gas is not nearly as bad as some of the dire we are in a period where if it gets cold natural gas, not a lot of storage in the company. A lot of people claims theres storage and it turns out there isnt. I think southwestern got the better of chesapeake. Vf corp missed by a penny. Timberland. I like eric wiseman. I like the dividend boost. I like the fact they guided up. Shortterm panic because theres a lot of things in the ncr quarter which says that retail is weaker. Retail is case by case. If you can get this thing down here i think you really have a good buy. Very good company. A dick fisher of the fed is on with liesman during squawk box with this morning suggested that maybe this retail sales number was an outlier to the downside. Interesting. Dick fisher quoted yesterday by the cowboys announcers saying that fisher watches the cowboys and uses their stuff in his actual statements. That made fisher first time in a long time with me have a lot of credibility. Yes. Lets see. Well get the opening bell in a few minutes. Dont go anywhere. Decay. Its the opposite of evolution. The absence of improvement. And the enemy of perfection. Which is why you can never stop moving forward. Never stop inventing. Introducing the mercedesbenz gla. A breakthrough in design, aerodynamics and engineering. Because the only way to triumph over decay. Is to leave it in its own dust. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. Well get the opening bell in 2 1 2 minutes p the dow has not put two whipping sessions together in over a month. And ibm, thats an amazing stat. Ibm is not helping today with their miss. Ibm has not delivered an increase in revenue in ten quarters now. And theyre you know how hard it is to move it down 8 1 2 . Remember, weve got a situation where t