Our road map begins with with jack lew speaking out about trouble in china. Shares in Morgan Stanley sinking on its earnings. Is there more pain to come. And first up, the major indices coming off three straight week of gains. S p up almost 6 since the beginning of the honesmonth. Chinas slowest growth since 2009. Still above consensus. And then jack lew addressed chinese currency valuations earlier this morning on squawk box. I think you have to make sure that china understands that its very important that they keep their commitment to let the rnb go up as well as down and the snapshot today is not the test. Lew also talked about the debt limit, warned us about some accidents coming on that perhaps. And then on the china data, we also got Industrial Production six month low, retail sales maybe a little bit better than expected. I continue to think that domestically china is a little bit better. There was a lot of good commentary on the honeywell call on friday. An otherwise just not as great call because there are divisions that werent that good, but honeywell spoke positively about china. So its a mixed playbook there. And i dont think mixed means you can go buy the minerals. I dont think mixed means that you should feel comfortable with caterpillar, but china has pluses and minuses versus when just six months ago it only had minuses. Youve changed your tune a bit. Well, yes. And you did so on europe and you were right when did you so there. Thank you. So im paying attention. But im wondering what it is that youre seeing in china. Its been such a mixed bag. Weve talked about that a lot p we see a yum and then other hand we see mall sales up sharply. You can go back and forth here. I think some of it is the communist party has relented. The liquor sales of the high end liquor turned up in the numbers. So when you think some of this might have been the crackdown conspicuous consumption seems to be running its course. I think a lot of it is that. And then also the cutting of the tax in half for small engines really did spur a lot of buying. So i think there was pent up demand and there was also shame demand. Now steve wynn talked about the notice of corruption in china. But if you are starting to sell a bit more, maybe what happened is the communist party has lessened the reins on the idea that you are out there showing your wealth. And that has been a big problem. You went into your foxhole about spending but now theyre coming out. Nike was the best dow stock last week. Up almost 5 . And for them thats tiffany. At the same time, the stabilization play in china has been going on for a while now in the marketplace. It was so visible that china was falling apart. Whether correctly or not, the exchange was a thermometer and a lot of people felt it was going to be at the 3,000 level and it hasnt. Weve seen so many articles about them selling treasuries and of course the treasury market is very firm. They can sell all they want. So they obviously had enough fire power to prop the market. Xi did say the slowdown is a normal adjustment arm from an economy that does rely strictly on housing and infrastructure. I think thats right. I think the crackdown on conspicuous consumption at the same time is that switch has hurt them. I want to see what diageo says. I no this will sound a little somber, but if you know johnny black and blue are doing well there, then you know that that means theyre back. Because that is also a sign like jordans. Remember they dont think you know how robert frank does the things about the 685 billion dollar home. They have apartments there. And its not like a fifth avenue apartment. Theyre smaller in size. Small apartments. But robert frank, they might do like the 32,000 home. Be like the robert frank of china. Middle class there is different than middle class here. But you could have that Johnny Walker blue versus the Johnny Walker red which i have at one time before, i did confuse it with paint thinner, but the diageo people not fair. Have you ever had any Three Wise Men . Johnny, jack and jim in one shot glass. Well do it after the show. Thats mo, larry and curly. Yeah. Morgan stanley did miss, profits down 42 in the period. Trading down 17. Gorman says it impacted morgan effexored income and asia Merchant Banking businesses. Although ib town 12, Wealth Management up six. He with talk about the transition, but still highly linked to trade. My Charitable Trust owns it. She traded very well. But my friends on the call are saying please bring back ruth. Please. I was looking for some relief. Sometimes when my trust owns something youre not blaming it on the new cfo. No. If its a bad story, you cant make it a good sorry. If youre the cubs, youre like, wou, i won a game or lrngs we did this great punt and somehow the patriots figured it out but it was. G. Idea. They shouldnt have hiked it and they hiked it and the problem here, the line by james gorman, well address areas of underperformance. Areas. The only area that he said was okay was area 51. Which were still looking for. Return on equity 5. 6 of course. That was not strong. This follows goldmans report of last week which was not a particular good one. That was bad, but this is bad bad bad. This is worse . Yes. Can i say bad bad pbad is worse . We thought it was so great that they moved their model away from the Justice Department, but this is what is left. In the Fourth Quarter, ala the seahawks. Against cam newton. You never know, but given mr. Gorman back to his time at mckenzie, comments to Mary Thompson from the cfo, we will focus on what we can control in fixed income currencies, commodity, balance sheet, capital expenses and head count. Head count. My Charitable Trust just sitting there astonished. I was telling my portfolio manager, listen, dont forget goldman which looked really bad. Conference call didnt embolden me do anything and yet the stock went up eight points from its low. So i think anything is possible in this market. This one, the book value they put out seems cheap, but cheap doesnt make it in a world where skrchlt jp are mo pchlpmorgan was subst better. We looked like we were going to breach 10 for a while. And there it is, this is the one, this is the industry. I expected better. I expected better. Lets move on to another stock that will be moving this morning, valiant shares volable in the premarket. Reported better than expected quarterly profits. Ceo says outside pressures are creating a new pricing environment and that valeant keeps to 10 or less next year. They put out a fairly long slide presentation out talking about their reflections on their strategy and saying a number of important things in terms of their mission and what they see and what they speexpect will han in part talking about they wont take as much price out. They are actually going to start to spend more in r d is what i read here. They say internal r d will become more of a focus. They say their stock price remains at current level. Sharing purchases will be considered. This company runs at a good amount of leverage. It has taken a lot of price increase and it does continue to rack up acquisitions of course as part of key part of its strategy with its incredibly low tax rate. Its not just inverted, but it pays some enormously low tax rate. That is the valiaeant story und mike pearson. But stock getting punished because of the concerns that they will not be able to take price and always wonder whether they will be able to continue successfully the role of strategy. And if youre a lawyer and you got that subpoena, remember they got subpoenaed on pricing both massachusetts and new york. And what i think you would say is listen, we were making a focus here, were not going to do what we were doing. The problem is that there was a considerable cohort of people that they still list as if its a retailer same store sale numbers which are considerably better than walmarts. Again in comparison. And were talking a couple cents a share. Well see. The stock was up, then down. They put this out, i think they got the call going. So lets see where things end up. But we keep a close eye on it because as jim said, well owned by hung fu hedge funds. A Large Company and one that figured and followed its own path. You talk to mike pearson, there is no doubt hes different. But the different about him was slash and burn. He was like the general sherman of drug companies. Now hes like with malice toward now were spend more on r d and not raise prices much. I dont want lincoln from him, i want sherman. But hes giving a little lincoln. When we come back, the ipo market has the need for speed. Ferrari jumping into the waters despite a number of companies postponing their public debuts. Well talk about a big deal this week. The earnings this week, mcdonalds, boeing, coke, am e, you name it. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. Ferreira expected to price at a range of 48 to 52. 9 offering expected to raise about 5 million which will use the proceeds to pay down debt. Match group has also filed for an ipo. And the number of ipos withdrawn or postponed, up to 67 last week. More than in any full year since 2012. I was thinking you could relate that to etf. E tch etf dont buy ipos. And i think thats part of the problem. I think also there seems to be a lag of cash in general on the sidelines that i thought would be coming in. The demand to treasuries remains insane. They dont have an appetite for new. Ferrari and the parlance of those who do these deals, the book looks good. They do expect that to be a pretty strong offering. We will see. But as we know, last week not the so good. Alberts albertsons, well see when that comes. Thats gone for a while. People immediately did the Collateral Damage of walmart to kroger, which then made you feel like that you were overpaying for albertsons. But i think the race has sex to it, has a sex appeal thing. Otherwise the autos have not been good stocks at all. For a while weve talked about staying domestic focused. Is this a domestic story . That will be one of the topics of discussion here, whether its too leveraged to asia or emerging markets in general. When you listen to these Conference Calls, the emerging markets are so, so are horrible. There was a really good article today about if youre robbed in venezuela, they dont want to take Companies Want to get out of it, as well. You have numbers coming out of brazil for thumb compani number and it takes your breath away. So you want everything to be domestic if possible and auto is really fantastic. Mexican auto not that good was in an article. Why dont we toss to phil. I think phil does have some news regarding something in the world of transportation. Morning, phil. Good morning. It is not regarding ferrari, it is regarding united airlines. Remember last week the ceo had a heart at tab and at the time all united would say was that he was hospitalized on thursday and now the question has become for the board what happens with the leadership day to day leadership at united airlines. Just a few minutes ago, henry meyer issued a statement saying the Company Anticipates it will today conclude the corporate governor nance process necessitated by the hospitalization of president and ceo oscar munoz. The Company Expected to release more details either later today or tomorrow. In the meantime, united familys thoughts and well wishes are with oscar. And guys, we cant overstate the importance of what is going on at united from this standpoint. Without clarity about who will be running the company on a day to day basis, it leaves a lot of investors wondering what exactly is going on at united. Not that planes arent taking off and day to day operations arent continuing, but there brings up the question of the fiduciary responsibility of the board to let investors know who is running this company. Remember, they have earnings coming out on thursday morning. Guys, i think well get more details certainly according to the statement later today or certainly by tomorrow at the latest regarding oscar munoz and his day to day governance at united. Back to you. Phil, thank you very much. The lack of clarity on this one is tough because the reports have been could back to work in two weeks, could be looking at interim ceos. Obviously we hope everything is good. At csx, he was remarkable. Trains ran on time. And thats what you need. When he took over, he was outspoken in his criticism, if you will, of the company. And so clearly was going to be somebody who forced a lot of change. But the lack of transparency here could be somewhat troubling. And you know youre dealing with health issues, dealing with a family that i dont even obviously phil has been doing the primary reporting, but may not want to release that much information. But youve got a large investors base, youve just gotten rid of your ceo a month ago. 38 days on the job and hes in the hospital. I dont want to conflate his health with what hes strong at, but the operating ratio for railroad so important, how much money really closed the bottom line. He is such a great pick. I wish him well. Hope hes back. Because he could really the problem with unite the cd conti had been the planes ran on time and the trains ran on time for csx. Well get cramers mad dash and count dodown to opening bel. And well talk about oprah and her stake in Weight Watchers and important to watch monday night football tonight if you own shares of disney. Back in a minute. cole alright, now that we have merged with cableworld, we are so excited to hear your big ideas on how were going to take on directv. So over to you. newhart thank you. Full disclosure. We forgot to come up with ideas. cw exec yeah, we got messed up last night. Youre lucky were even here. newhart but, we did bring breakfast. jmh bagels . newhart nope. woman oh my goodness. newhart peel and eat shrimp. cole not how i would have gone but its good, its innovative. And thats what we want here. vo get rid of cable and switch to directv. Call 1800directv. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Its that time for a mad dash. A Little Company with about a 630 billion market value. Apple. Best large cap pick. By the way, the saturation bombing on this steve jobs movie is pretty amazing. I see the ads everywhere. But this stock has been stuck in a rut. And a lot of analysts have bulled it. They say good things and they cant get out of its way. And i think thats worrisome because its becoming a large source of funds. I continue to say own it, its very inexpensive, but understand that it seems like people sell is this one in order to raise cash for other opportunities. And im not so certain that that isnt going to continue throughout until the end of the Fourth Quarter when maybe people come in at the end. But it seems like it just cant get out of its own way. Still better than the s p, but converging. Yes. Its not what i expected. I think its a good stock to own. And then im a big believe their well see consolidation in this National Organic foods base. And there is a lot of chatter about the fresh market and whether they can do an lbl. They have a fantastic balance sheet. Ive been saying since new guys came in that its worth watching, but when whole foods reports, these companies dont have debt. And now they have become value stocks. And this is the preknow value. What is the chatter on this, is it a management . Those are problematic for the boards in question. You got to get a special committee of course of the board. A lot of focus on them not letting the ceo obviously have an edge. So theyre difficult to pull off in the current environment. Youre right. The deutsche note says it could happen in the low 30s it would be a stretch. Its not expensive. Numbers are not that good. So youre playing with fire. Its like up five, down three, which still makes it a better reward than risk. But my problem is the sector itself is under a lot of pressure, walmart wants to sell things lower. You can understand that. Everybody in the supermarket business is trembling, trembling, about what is going to happen at walmart. What theyre going to do. Are they going to amazon everybody, including amazon. All right. We have a lot more to cover here on squawk on the street including an kroefr boverbid fo sierra. Opening bell in just four minutes. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Youre watching squawk on the street live from the Financial Capital of the world. Well get the opening bell this about 60 seconds on this monday, october 19. If that rings any bells, this date in 87, 22. 6 . Remarkable day. The week before had been the worst. And came in and