Matthew is pounding florida. Our Morgan Brennan is live in Daytona Beach this morning. Good morning, morgan. Good morning, guys. Ill tell you its picking up strength here. Weve had some pieces of the building, this hotel were staying in as well as tiles from the roof have been detached and flying off in the wind just a short while ago, weve got a downed lamp post on the ground behind me and water starting to pool on the ground as well. So this is becoming more and more severe. Now, in terms of weve also seen 67mileperhour gusts of wind, i should note. In terms of where Hurricane Matthew is, it is about 45 miles eastsoutheast of Daytona Beach. Its moving about 13 miles per hour, and that means were going to see the worst of the storm begin to play out some time between 10 30 and 11 30 a. M. Eastern here. Meantime, the space coast, which is further south of us, has really been getting the brunt this morning. Youve got Cape Canaveral reporting wind gust of 107 miles per hour. And in nearby cocoa beach exploding power lines there. So in total weve got more than half a million Power Outages reported in the state of florida. And here i will tell you weve seen lights flickering on and off all morning both in this building and along the strip here against the beach. But in terms of this hotel, i should note that in addition to us, we are staying here with a Power Company workers, Florida Power and light has about 15,000 workers that are on standby or getting deployed right now to deal with these outages throughout the region. Meantime no one here is really going anywhere because daytona is under a mandatory curfew until 7 00 a. M. Tomorrow morning. Guys, back to you. Morgan brennan, were going to be coming back to you throughout the day. It is going to be a very long day for some 500 miles of the southeastern coast. Thank you so much. Guys, we should point out south florida really dodging a bullet here. And even, jim, estimates of how many people were going to be out of power originally thought to be somewhere in the 2. 5 million range, looks like it might be below 1 million. Yeah, its interesting out here at dream force in San Francisco meeting with companies very good company last night private company was saying how is it possible that we are still in a situation where a storm can wipe out a huge part of the electric grid . People are trying to solve that. Because the idea that you should have a Million People out of power because of rain is something that many people are working on out here. Does seem like its a little like 1950 to still think that this is what happened, but dodging a bullet lets talk real life it does seem pretty lucky. Yeah, of course weve talked about all the flight cancellations, 3,000 and counting. Cruise lines redirecting ships, obviously hotels, Walt Disney World closing i think for the fifth time in history. Almost every closure has been because of weather. Yeah. You know, ive been developing a new model on disney that talks a little more about the throughput on people who come through. Ive got some information on that on tonights show. And also about the movie franchise. But the theme parks are going great guns. Can this affect the quarter . Well, i think well asterisk it. I think theres going to be growing attention away from espn and more about technology. Again, but i do understand completely that the closing of the park is very meaningful for those who are doing a model thats trying to figure out exactly what pennies to put in that. Yeah, were going to keep our eye especially now on the georgia coast as some of those outer banks face evacuations for the First Time Since floyd back in 99. Theyre going to get a lot of rain today. Well update you on that. 1,000 nonfarm jobs were added last month. We were looking for closer to 170. Unemployment rate ticks up to 5 , that increase being driven by a rise in the Labor Participation rate. Average Hourly Earnings up 0. 2. David, year on year its 2. 6, but that tick up in labor force getting some peoples attention. It is. As is what appears to be private sector gains, more a bit above what had been estimated. And that could be something at least people are also focused on as they try to interpret what the move will be of course from the Federal Reserve whether this in some way either enhances or perhaps detracts from the idea that theyre going to raise before the end of the year so that private sector gains more in line with the estimate 167,000 versus forecast. But, again, a bit below the ultimate forecast here for what was 175, carl. But i dont think it changes the picture much at all, one would think. Yeah. Jim, big discussion in the last half hour on squawk talking to mester whether or not this really does move any needles going into the november meeting. More of the same. I look at some of the professional job growth that seems good. A lot of the growth thats in Retail Restaurant is very low skilled and not going to be able to raise the unless you use minimum wage, not going to raise what people might be thinking about for wages. So i think this is a number that perhaps if there was not an election someone may say, you know what, things are pretty good, lets raise rates. But theres still a lot of turmoil overseas. We havent gotten to the pound yet. Its one of these things its breathtaking. This is a country with a real currency. And overnight it can drop to a level that makes them feel like the employment numbers less of a worry than actually whats going on in flow funds in currencies. Yeah, lets get to that pound. What a story last night. Volatile moves. If you missed it, the currency plunges 6 against the dollar in two minutes before recovering most losses. Traders are citing everything from thin volume to algos to high frequency. So far no evidence of fat fingered trade or wrongly entered order. Pound has been falling all week after Prime Minister theresa may announced brexit talks will begin end of march. The suggestion that these hard brexit talks that somehow theyre going to make the uk pay with this. Right. There doesnt appear, to your point, carl, to be a fat finger here. Im reading from research this morning from j. P. Morgan looking at trying to understand exactly what that move was about and they point out it was more a oneway market where selling was exacerbated by a cascade of stop loss activity including from option market makers. We dont think its particularly informative to try to attribute the move to any specific overnight news catalyst, but they also point out that the slide, jim, was on high volume. So hard to justify certainly a fat finger, just a mistake in other words that somebody may have made, but it certainly rattled a lot of players in what is an enormous market lets not forget, that trades all day long and all night long, typically, with some lulls in between. Yeah. Look, these are number cutting events. Whenever a number cutting event overnight, the market cant adjust. So youll see a diagio, a company doing quite well, the pound goes down, the stock goes down. But a week, a month or even three months from now well be looking saying they have just been killing it worldwide because their scotch is cheaper than everybody elses scotch. Theres a lot of good that comes from a lower pound. But these british banks, we talk a lot about Deutsche Bank, these british banks these stocks have been horrendous. I think theyll be horrendous again. A lot of discussion this morning about longer term, jim, how the pound trades. Its not trading anymore on retail sales and factory output. Its going to be more of a structural political proxy, Market Structure proxy. Much different from how its traded in the past years. Yeah. I mean, look, i stopped focusing on the pound a long time ago because it just didnt seem significant. Now its suddenly in the mix of something you have to talk at the top. By the way the dollars been strong. And were about to go into earnings season. Many of the ceos who are looking at these numbers theyre going to reference the pound in their numbers. And theyre going to give it another reason to be able to say slower growth, numbers have to come down. We havent even gotten to honeywell yet, which is kind of like take your breath away. But this is kind of a reason to lower numbers. We have to keep that in mind because when the dollar was stable for awhile, we stopped thinking about it. Its going to be back on the griddle. Yeah, again, theres also concern over time youre just going to have repatriation, guys. Central banks owe about 20 of what is the gdp so to speak. And theres a thought at least that you could have repatriation flows that continue to pressure the pound, jim. You bring up honeywell, we should probably get to that. That stock is going to be looking fairly weak ahead of excuse me, its in the next block. Its in the next block. Honeywell in the next block. Sounds good. Well watch that. Of course a lot to come. Hard to tell out here. It is. I was thinking maybe honeywell comes up, maybe it doesnt, you solved that problem. We have a long day ahead. Were going to get fisher at 10 30. We heard from mester, she speaks again at 12 45, then george at 3 00 and brainard at 4 00, jim. Were going to bounce this jobs number around quite a bit. Oh, geez. You know, sometimes there should be nothing to say, but they feel compelled to tell. They feel compelled. It is incredible that the same pieces of data just keep being mulled over by people and it doesnt change anybodys mind. But they do love to talk. What a job. When youre a fed person, youre on tv immediately. I dont know many people that get that luxury. When we come back, a look at this mornings movers including why honeywell is in fact slumping this morning. Later on jims exclusive with br Brian Moynihan of bank of america. Well talk to jason furman, the chairman of the president s council on economic advisors about the jobs number. Well keep our eye on break even levels for the week as the three major indices still stand a chance of going positive for the week. Were back in a minute. Honeywells down sharply in the premarket. The industrial conglomerate lowering year end forecast, they cite a business slowdown and delays. Margin apparently going to take a hit as well. David, youre watching this one. Yeah, i mean, certainly also as a proxy for the industrial economy. Its an important one. What does it say about whether theres been delays or referrals in Capital Projects and if so what is the reason behind that. And, jim, you know, they may say they lowered the high end, but a lot of people tell me they lowered the whole thing. Oh, youre dead right. They did lower the whole thing. They were talking about organic growth what we look for for these industrials, flat to minus 1 now goes to minus 3. The Sales Numbers appreciably lower. Dont forget they had an analyst day earlier this year where they made guidance and i think theyve ripped up that guidance. Weve had a huge run in these industrials in the last couple weeks. Based on, well, i dont know after i read this, maybe nothing, and i think that thats going to be something thats going to resonate. Aerospace has been one of the drivers of this United States economy, this makes me feel perhaps weve been too bullish on aerospace which means there are a lot of companies about to report that are not going to say good things about a line item very important for the u. S. Economy. Jim, ive talked to a couple investors who checked with the company as little as two weeks ago they tell me, maybe theyre exaggerating a bit, who indicated no change in guidance at that point. Which begs the question, i dont have the answer, what changed . No. Look, youre spoton. The reason why this stock is down so much is the reaffirmation was so positive, we thought there goes honeywell again this company is hitting on all cylinders, and its not. Dont forget dave coty retires next year. Maybe it will be clarified by the end of the day, but people are shooting first and asking questions late sgler what other stocks should we keep an eye on as a result . Clearly utx comes into focus, but there are other industrials as well. Well, boeing started moving up after the initial article last week about dream moderate accounting. By the way that kind of accounting has been something used for years. I didnt find that to be that rev la toir, but boeing has been very strong, and you mentioned United Technologies, United Technologies have said they have their own problems making that new fantastic turbine engine. This group goes lower. The question is will defense stocks go lower . Theyve been a strong sector because of the election. Both candidates seeming to want to spend more on it. But the line item about defense spending seems shockingly weak. We need to know more here or this is going to reverberate through a lot of different companies. Moving onto some retail here, jim. We got a couple of upgrades, one for gap as they post comps. Goldman adding ralph lauren to their conviction buy list. Deutsches point on gap is that after spending their money mostly on big ticket items, they see potential for the consumer to fall in love with apparel once again. Geez, well look, ive said fashion is a winner. The only companies that have really had some fashion comebacks, l brands, they had a very good number, you aurban outfitters had a good number, i thought it was interesting about gap theyre talking inflection point. Analysts are liking the fact there seems to be a bottom at gap but old navy is coming back. Gap has tantalized us so many times but i like what i see in terms of valuation. The ralph lauren is a restructuring quarter and i think thats terrific news. Weve had bad news vf corp. We saw Eric Weissman going to be retiring not so good. Lululemon which i like very much has been a continual decliner since they reported. So this apparel and retail group is very much influx. And when it comes back to gap, jim, you mentioned that you think the valuation is compelling, why . Where are we right now on that given of course this move up this morning were seeing . I think that people just kind of felt that gap stores is going away. Its got a going away valuation and this calls into question the notion that it is disappearing. Remember, this whole mall and death mall spiral, when you see gap you immediately look at amazon and see how amazons doing. Any time the mall is doing better people feel amazon is doing worse. Out here theres just a sense that amazon will continue to take money away from the mall. But maybe if you have the right selection, your stock can go up. David, by the way, thats gap accounting. Thats not nongap accounting. I know you care about that. Understood. I do. Thats true. Okay. So no adjustments, or at least maybe fewer adjustments. Banana republic well, yeah, gps kind. Well get cramers mad dash. Well countdown to the opening bell in a moment and take another look at the premarket on this friday. Squawk on the street continues after a break. Your business is on ld. Thats why comcast business doesnt ave you the. When you cl, a sml Business Expert will answerou in abou30 seconds. No annoying hold music. Whenen youeeem. So yr business can get back to business. Coming back from break early to listen to Florida Governor rick scott. If you remember the jacksonville area has a lot of low lying area, especially nassau county. Were very focused on jacksonville. Theres potential for significant flooding there. Damage assessments are just coming in from south florida. They will continue as the storm passes each county. Ive been reaching out to people in each county as it passes. Fish and wildlife has 90 officers now performing search and rescue operations and another 70 on standby. What were doing is as the storm passes, were sending them in to do assessments both property and people. We did the same thing after hermine. They have not reported any issues as of yet. Highway patrol has 150 troopers and Public Safety patrol right now, and another 100 on standby. They have not reported any issues yet. We have over 145 shelters open. We have over 22,000 people in our shelters. I checked all night and we dont have any major traffic or road issues at this time. We have been checking and thats one thing i think that worked with our evacuation so far is we kept our roads open. All major roads and interstates in florida are open. In miami and west palm where the storm has already passed, department of transportation is out investigating the roads and there are no issues to report at this time. All toll suspensions remain in effect. Tolls will remain suspended for at least 24 hours after the storm passes each county. We denied mdxs request to reinstate tolls this morning. Department of transportation will continue to review this on a county by county basis. Some individual gas stations are reporting shortages, fuel shortages. But these stations are quickly being refueled and fuel is readily available across the state. We dont have fuel issues. The current fuel supply in the state is at least five days, thats if even all ports are temporarily closed. So right now we have plenty of fuel in the state. About 600,000 homes are without power. The numbers going to fluctuate, but some Utility Companies have already told me they are already restoring power in miami and palm beach counties. About half the powers out in martin county, about a third in st. Lucie county. As of now Florida Power and light has restored about 27 of initial outages which was over 580,000. Right now they have about 500,000 homes without power. Look, were only halfway through. Were going to have more outages. More outages are going to come. I will be speaking with the Utility Companies this morning to talk about their plans to start restoring power. Its really important that we get power restored as quickly as we can. Last night began setting up housing for utility crews in strategic areas around the state just to make sure as we get all these individuals in that we can get them housed and they can get to work. They