Japanese exports were weak. Not a lot of macrodata on tap. Shares of boeing and gm both higher in the premarket. Better than expected quarterly results. Lamb research buys koa. Western digital buying sandisk, the price 19 billion. Well have the ceo of Western Digital later on the program. And coke reporting a mixed ka quarter. First up, upbeat earnings news from boeing better than expected Third Quarter results on stronger demand for commercial aircraft. The dow component raising their full year guidance and theres gm beating the street with its q3 profit and revenue. Cfo Chuck Stevens this morning on squawk box. A strong truck market a strong suv market is helping, but i think also its our view and our continued focus on driving cost efficiencies and if you look at the material performance and the cost efficiency that we had in the Third Quarter overall about 700 million, a lot of that accrued to north america. I think its seizing the opportunities from a market standpoint but also continuing to drive efficiency in the business. Everybody looking at that north america operating margin, jim. They see 10 for the year. Look, gm, i dont want to say its back because there are still other parts, moving parts that you not so good, but china getting a little better, latin america still bad, europe not that bad. But the u. S. Is really able to carry this thing, and i think theres going to be more calls to be able to say, listen, you have so much cash, lets do something. This stock is back from the brink of 28, 29 where people felt china is so bad that its over. Its clearly not over. The numbers are extraordinary. The u. S. Auto market remains the strongest single part of our industrial economy. There was a guy here who is going to be on the floor who is going to want to do something with gm. They dont want to do something about him. Im talking about sergio mar chone and fiat. Theyre both operating from a position of strength. I lost faith in General Motors in part because they had repeatedly been able to take lemonade and turn it back that lemons. Maybe this is the quarter they dont do that. Theyre just making too much money. The u. S. The job correlation between job and auto is stronger than anything else. When people get a new job, they are buying a new car. The number of cars that are 12 years old on the road remains very big. This is a good quarter from General Motors and it is a surprise. Suvs help a lot. Yes. But in cars u. S. Market share is actually down in cars for gm year on year. They hit 11. 5. A year ago it was 13. 3. They are making more money and trucks matter. Its odd because i know meme have been questioning it, but this is the quarter where the gasoline money finally matters. We know from visa that wasnt in the first quarter. We know from john morgan interview steve leaseman did last week that the money is starting to be spent. We know from this auto number where its being spent. Spent in domestic autos and thats quite exciting. Talk about cash building up, boeings cash flow is up 72 . We mentioned the massive beat, the guidance up, commercial air revenue up 10. I guess whats to worry about, a bubble in wide bodies . The delta situation is now looking to me as if it was a major misdirection play. It was a run at delta and it was supposed to really be a pass and i feel data last week which lowered the boom and said theres a wide bodied glut, they used that term, may have positioned to be able to buy planes cheaper. It looks like a blowout quarter. Boeing has periodically said things on the Conference Call that makes you less optimistic but i have to tell you, i do not see anything in this about the wide bodied glut, and im beginning to believe thats one more time delta is trying to get the best of boeing. Its not going to work this time. The exim bank, maybe that comes up at the debate. Alcoa said aerospace remains a very strong area. Is it as strong as autos . I think thats difficult. Remember, you buy boeing in dollars so its not a weak dollar strong dollar play. I want to hear more about china and whether china is still buying the planes. They did get that big order from boeing. I want to hear more about defense. At the meeting we have at the conference at our debate, i want to know about defense spending because everybody is saying it has to pick up, and thats the line i didnt like in boeing, otherwise i like what i see. A lot to get to, and back to cars for a moment, as david said, ferrari debuting at the big board. The car Company Pricing at 52. Thats the high end of the range. Values the company at 9. 8 billion. Automaker is going to trade under the Ticker Symbol race, race and we will talk to Sergio Marchionne later. As david said, were likely to ask him about why he wants to pair up with gm so badly and whether that can ever be done. And electric cars and a lot of things. Let me get to some specifics on the offering itself before we move into the fundamentals. It looks like it was very well allocated. Heavy management allocation. Im told mr. Marchionne was actually involved in the allocation himself. Remember, hes got Institutional Investors already at fiat, so he wants to make sure to be nice, a lot of management also getting stock. 500 accounts put in, 200 got zero, 65 of the offering going to 25 accounts. It was 20 times covered, jim. Well, i got to tell you, if the price at 52 it sells at 29 times earnings, lets say 65, 70, its at 40 times earnings. Thats highly unusual. 14 multiple to ebitda to the pricing. These are high multiple approximates. Theyre ridiculous multiples particularly because there will be a lock up that expires rather early. But you know what . This is the kind of case, this is a tesla situation. Key to be able to making the numbers is for them to be able to mass produce more cars. Why do we like their cars . Because theyre not mass produced. This is a conundrum deal. Obviously the public is very excited about it and you can tell it when they dont get any sorry. They dont get any. Gm is selling 11 times earnings, ford at 13 times. Fiat chrysler being valued at 18 times earnings. Remember, this is a luxury good. Typically selling at 19 to 22 times earnings. That would put fiat, ferrari, well what low. This is going to be one of the deals thats going to be talking about it comes at a bad time for tesla because tesla just got pulled from Consumer Reports for the new model. This is the new tesla except is burns aton of gasoline and very exciting. The new tesla. They werent subject to emissions standards unless they have 10,000 cars. Are they using i dont know that theyre there yet. Will they get there if they boost production 30 . They have to boost so big and they have to figure out their fleet issues and how you get to these emissions numbers. And you always like to talk about the family stakes. How about piero ferrari, he does pretty well today. He does. Hes going to be richer than elon minsk at the end of the day. I dont know. Its possible. Times were good even before this i think, but theyre getting better. Theres no doubt. Absolutely. Were seeing that over and over again, and this is by the way, sorry Doug Mcmillen to say this, but when you have when ferrari does this well, walmart is the other side of the trade. The Walton Family still has more than mr. Ferrari. They can have all the ferraris they want. What do they drive, david . Station wagons . I dont know what the chosen vehicle is. Eight ferraris at the big board. Weve been onetenth of production. About that. Have you seen the blue one, the ferrari 250 thats outside . Its just a real bad day for husband wife tension. Really . Yeah. Cant you just say no . Shes got an suv for heavens sake. Why does she need a ferrari . Just say no. How about maybe. You can say that. I just got married a year ago. Youve been married lets move to m a, second only to the mets and what i love. We got boy, it was an incredibly busy morning if you missed some of it. Lamb research agrees to acquire kla tencor at 10. 6 bl 10. 6 bill the open. And sandisk to be bought by Western Digital, 87. 50 in cash and stock. Right around 19 billion right now. Its a twotiered structure also which ill get to in a minute. We are going to speak to Western Digital ceo stephen milligan. I like that guy. As for the deal itself, first of all, when it comes to price, they actually have another tier of pricing if they dont get that money from the chinese. Some of that money is going to be allocated towards this deal. Thats the 8510, a share in cash. If for some reason that doesnt happen, then you get 67. 50 a share in cash. A lot more stock. In fact enough it would require a shareholder vote. In speaking to people close to the situation who were involved in the transaction, they think its unlikely theyre not going to get that money from china, but a review is going on, a National Security review, if you will. Its a passive investment, about 15 of the company. Remember, jim and i talked about it at the time. Nonetheless, thats got to be at least a small concern for people. Theyre also talking about this deal not closing until the Third Quarter, although frankly ooirp hearing it could be much closer to june in terms of the expectations. They seem to be very cautious which is why they have the twotiered approach just in case they dont get the money from china which keeps reminding me of a sweetener of some kind. A sliver of stock. And they are also somewhat cautious on saying it could take as long as it will even though its unlikely to go into the Third Quarter. More likely lets call it june. As for the fundamentals, let me just share this with you. 90 of the data in the world has been created in the last two years. Anyway you want to store it, now we will be able to have it for you. Yes. In commodity is the reason. This is a white flag thrown up by sandisk. When this whole chatter started, the stock was at 48. You have done quite well unless you bought it last year when it was 107 padr 107. Its part of a worldwide trade of what i consider shrinkage of the market everywhere. You want to take advantage of Western Digital, the stock got hammered, bad quarter. If you want to buy flash, intel is starting to spend a ton of money overnight about flash. Going to flood the world, 5 to 7 increase in flash. This is a sign that the commodity guys have said you know what . Im done. Sandisk is done. And Western Digital to bulk up and be able to compete has to do this to offer more of a soup to nuts situation. Ive got to tell you, other than arm holdings this morning which used the term apple, saying its a good earnings, everybody single one of these Component Companies is getting crushed. Yes. You mean like a vmware today . Thats another wow. Corvo, skyworks solutions, Western Digital, seagate, intel, sandisk, micron, theyre all getting crushed. Their Addressable Market will grow as a result of the deal and who theyre selling to is also getting larger. Emc dell is one example. Its going to be a larger company. Were going to talk about vmware a little later in the program. Disgusting. Nine down grades. The most in a single day. They bagged so many people. We have to talk about that but before we go, the Lamb Research deal i want to thats a brilliant deal. Why . Why is that a brilliant deal . Because Lamb Research bought novellus at the right time. Kla selling a at good time but this is about having Critical Mass and being able to destroy applied materials. David, you talk about china, i think the chinese are going to drag their feet on approval of this. It matters tremendously because china is trying to put together a johnnycomelately competitor to these, but this is going to be a strong company. Lamb is going to be very strong, and i got to tell you, you could actually argue theyre totally dead. Intel, samsung, and tmc and taiwan semi will love this deal because the give who runs lamb, this fellow, hes a genius. I have had him on you think their customers will like it. Hes again jugenius. One Company Makes the chips, one inspects them. Its one stop shopping. Rick hill smart, smart guy, saying everything is right here. I love that deal. I love this deal. Youre getting a half a share of lamb and 32 in cash. M a, 38 billion. This year 130 billion. Because theyre all getting crushed. How much can you sell into hewlett. Late stage. We like to say. Late stage capitalism. The ugly face of capitalism. They have to do this. Theres no antitrust in these because its like, wow, everyone is getting crushed. This morning is maybe the single most exciting morning i have come across its pretty good. Im going to get out the penguins for vmware. I think thats deserving. Did you see the line that carl this is in the vmware. Not just vmware, we are seeing a massive secular shift right now. Massive secular shift away from what he was talking about. How many days ago . Eight. Yeah. I would use this for some of what Kimberly Clark is talking about in their unbelievably good quarter and im talking about some things they have for adults and some things they have in the bathroom. When we come back, well talk cfo coke cfo on earnings today and, of course, the ferrari ipo first trade coming up in the next hour. Well be right back. Here at td ameritrade, they love innovating. And apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. Cocacola out with mixed results this morning. Lets get to sara eisen at post nine who spoke to coke cfo earlier. Morning. Profit beat but sales missed expectations. Some eng kournment in the fact volumes came in better at 3 , but my worlds are colliding here because for coke it was currencies that really slammed them during the quarter. I talked to the cfo moments ago. She said the macros remain challenging. She said Foreign Exchange was a worse hit than they expected. It hit the top line, the sales number, 8 instead of the 7 that they expected. She did say that we are, quote, aggressively driving productivity. This is a big part of the bullish case on coke, that they have been cutting costs, that included layoffs in the beginning of the year trying to get savings on productivity. She said in terms of the bright spots geographically, north america and latin america is where they saw the most pricing power. They have been going to smaller packages where they can get more profits per ounce on these cans. If you break down the volume numbers, you see the story pretty clearly. All the growth is in packaged water, bottled water, 11 volume growth, teas, the nonsodas, the healthy stuff. Simply orange is killing it. Sporting drinks very popular. In terms of other commentary from kathy waller. Diet is still a problem. She said were still having challenges with diets and lights. Its the change in consumer, however she says we do believe we have loyal diet coke customers. Part of it she did say is a lot of people are switching from diet coke to coke zero where theyre seeing nice growth. I saw a rate of decline in diet drinks a little bit better. What i was quite struck by is the Mass Marketing to mass personalization. The coke cans are mattering. Its working. Its been a huge success. The marketing is very powerful. The estimates from the bite from 4x is enworse than prior. This is a huge problem for them, especially in key geographies for coke, mexico, brazil where the currencies have actually taken quite a beating. China is another big one, big important coke market which is not important to the pepsi market. A lot of people like to compare coke and pepsi. Pepsi had way better organic Revenue Growth. It has the snacks working for them on fritolay. Its almost impossible to hedge against some of the currencies in latin america or turkey. Global beverage grew 3 . Is it one i want to go buy . I think Warren Buffett wont sell on that which is important. Pepsico has better growth, but pepsico is because its snacks. The snack business grows. And they say this is a quarter that was in line on strategy with their expectations. This is a transition year for them. A lot too look forward to in the next year which will put pressure on them to bring setter sales results. But perhaps volume has stabilized. I think thats a very fair depiction of what it was, a volume stabilization. If you want to compare it head to head against pepsico, its apples versus orange unless you want to compare prop can that versus simple orange which he would like. Do they buy monster . I dont know if theyre any hurry to buy monster plus its getting more expensive by the day with all the positive weaker quarter but i think the Distribution System based on germany which is on sales force. Com not s. A. P. , but is strong. I like monster very much for a host of reasons. Better than keurig which hasnt been as hot for pu. Well see new 40 minutes, thank you. Well get cramers mad dash and count down to the opening bell. Still havent gotten to yahoo , biogen. 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