Big in content with the launch of a primelike service. And pepsicos new pledge to slash calories in its beverage. Sarah eisens exclusive interview with the chairman and Ceo Indra Nooyi. Bryan moynihan says revenue growth, risk management, cost down three, trading revenue up 18, fic trading up 39. Numbers not quite as good as jpms but better than citi in some cases. Yeah, book value of 17. 14, impressed by expense control here. Really excited about the Wealth Management growth. Theres a lot here to like. And its not like the old days where talking about the Justice Department has decided to crack down on this or that. And by the way, oil and gas literally seven months ago we were worried about losses. No, big drop in worries about the nonperformers in oil. So this is a clean quarter. The problem of course is that this market is you need a rate hike, but if we had a rate hike then the whole market goes down. And we got stan fisher speaking at 12 00. You know, stan sell them fisher, thats what theyre calling him now. We got decent numbers certainly from jpm and then wells and citi, but the stocks didnt really after a strong beginning they did not follow through. Oh, it was horrible. J. P. Morgan a downgrade today on valuation. Valuation. These stocks are back to where they were maybe in december. And ive got to tell you, citi is substantial discount and they had a great quarter. I dont get it. Everybodys had a reasonably good quarter if theyve been big enough in the markets. Lets put wells separately. Wells a separate issue. And the rate hikes rates may go up, which is going to help net interest margin. What happened . I dont know. I mean, i did a lot of work on citi both before and after the quarter just thinking what did i miss, what did i miss, what did i miss. It was a fine quarter. Big discount to book, buying back a lot of stock. But i think this cohort is a jinx cohort. I think every time i get excited about bank stocks, i get my head cut off. Even in the end i think citi was great ran from 45 to 48, theres nothing left. J. P. Morgan not only is the fortress balance sheet, but what would you call it, david . Kind of like a je bralter. Yeah, thats the next thing that comes to mind. Kbw takes wells to market perform on the notion that they thought minor changes might be enough to fix the changes. They no longer think thats the case. When you get together with people, say youre talking football over the weekend, say, geez, the giants look good, but how about wells fargo . This was it. This was the breakout scam. People just hate wells fargo. And i dont think it goes away very fast. I think the taint reminds me of the taint bank of america had forever where you just said, you know what, you dont know whats going to pop up next. More hearings, subpoenas, its on the griddle. And i think that wells hurt the whole group. You do . I really do. I think wells hurt the whole group. That makes sense it might. Sentiment wise, yeah. Once again were in a situation where like the governments going to play a role. And i just think that even though you have tremendous fixed Income Growth for bank of america, i mean its really pretty amazing. Up 32 in sales in trading in terms of thats fabulous. Thats a big number. Equities down 17 , but still. Right. Theyve never been a Big Powerhouse in that area. No, they havent. But this Wealth Management business, when they get it right by the way, when you look at theyre not going by accounts per share. Theyre trying to get as much money per guys who open accounts. What a great business to open a Checking Account and they pay you nothing, right . They pay you nothing in your Checking Account. So you raise rates, you got to buy bank of americas number one deposit base in the country. But you know what, at the same time we are in some sort of funk. I was going over jimmy carters famous may less speech doug oeb o o oeber oberhelman out at caterpillar. Board elected jim the journal runs a front page story. Oh, the front page story. It sounded like an o bbit. Yeah, i think it did sound like an obit. Easy come, easy go. I think a lot is behind him. This is incredible. Doug the last few quarters frankly i know they werent that great, but the lay offs have made it so theyre making more per tractor. I dont want to say anyone deserves better because this is a world where what have you done for me lately. But that article today was really a rehatch of a lot of things caterpillar did wrong a long time ago and i think theyve recovered from it. Right. Group president responsible for energy and transportation, looks like hes not going to be chairman. David calhoun is going to become nonexecutive chairman, ed rust will remain on the board. These are big changes. Geez, this is huge. I got to tell you its kind of unceremonious. Theyre about to report. I mean, this is like firing head coach with a couple games left in the season. It is. Although they will say its not firing because of course hes elected to retire effective march 30. Its a fivemonth period in which hell be able to pass the baton. I thought this was going to be a good quarter. And i am surprised about this. That worries you . Worries me about the quarter . No. The fact hes retiring in march youre worried about the quarter . No. I dont think you send a guy packing if the quarter was fabulous, but he took expenses down and, yes, in 2010, he made mistakes. Hes had to pay for those mistakes for seven years. Time to get him a get out of jail free card. But, wow, i find this shocking. Right before the report. Well, between stumpf two of the largest names at two of the Biggest Companies ahead of earnings season. I mean, stumpf i want to go back over for a second. John stumpf ran a very good bank. And you go over bank of america and its true bank of america is trying to get as much per account, but not open as many per account. Still so many questions open at wells fargo. But caterpillar, this stock has been a horse, been one of the best performing stocks in the dow. Its the best dow stock of the year. And now . They choose now . But he has a board thats a top board. Did you know hes got a real board . Hes got a real board, yeah. Listen, you never know whats behind this. How old is oberhelm, do we know . Hes been there 41 years at caterpillar. Its not as though hes out immediately, which immediately reads like, okay, something was really wrong. No. But it doesnt also read like your typical succession. He deserves better. Where you oftentimes no, even in the case of wells you knew sloan was the guy most likely. You just thought it was two years hence. Right. Hes 63. Who . Stumpf was 63. Yeah, stumpf was 63. But break form here, i didnt get to talk about the great quarter at hasbro. Id like to know more because i felt this was going to be a very good quarter for doug. I think hes done so much to be able to recover. The cost structure that hes taken out. And i think i know this is a lot of stories about china and the ridiculous overbuild. I dont know, i think china was coming back for doug. He put a lot of the bad stuff past him. Lets see. Im sure the stock will be down because people say what the hecks going on there, right . A 35year veteran, will become ceo january 1 and then youll have the change in chairman, i believe. All right. So they give him some time. Maybe its not then the chairmanship will be given up by mr. Oberhelman to dave calhoun. I think doug has done a very good job last couple quarters taking a lot of costs out. You changed your tune on him. Because he did better. Hey, listen, if this guy was still in last place, you know, hey, id slag him. But the guy the guy was in the playoffs. The playoffs. Well cover caterpillar all day obviously. Move onto apple, goldman out this morning suggesting apple go big when it comes to content. The firm saying apple should launch a 50 a month subscription bundle including the iphone, apple music, apple tv, original content and potentially live sports. Goldman believes such a strategy would position apple well versus amazon and alphabet on a day where ihs has some figures on the dollars netflix and amazon is throwing at new content 7 billion. I know. But i thought this was an excellent piece about apple. I thought it was really interesting. Not talking about raising rates, theyre turning upside down saying, listen, make a lot of money in the rates or give you a break on the blades. It was very important. Now, by the way, one of the things i flew last night, i didnt look at anybody because the galaxy note 7, youre not allowed to have them. So suddenly i look and its all ios next to me. No face mask and rubber gloves . You were okay . I didnt wear the face mask or rubber gloves because the faa has woken up to this issue. At the same time this is a piece which says, listen, tim tim cook, this is your chance to make a ton of money, but i dont think theyre going to do it. I think that they have this piecemeal thing where you pay them i dont know when you pay your bill do you even bother to look at it . I do sometimes. I look at the verizon bill. Dont look at the verizon bill. Its too scary. It is scary. You ever look at your verizon bill . Its like a car. Im like whats going on . Whos been texting . The family verizon thing, i mean, there should be verizon is without a doubt a company that reports this week they know how to make money off you. And i dont think the aol thing, that isnt what moves the needle. What moves the needle is the family plan, you know . It does. This apple thesis is sure to just start at some point expect that, oh, theyre going to buy media company. It feels tailor made for like bankers to go out and start pushing that idea again. That doesnt happen, david. The research guys dont talk to remember that spitzer settlement, that doesnt happen anymore. No, it doesnt. Chinese wall. Im not saying that it happens, but its going to but i think, look, the reports great. I dont think tim cooks going to do it. I think you owe him this stock because of the problems with the galaxy samsung note 7 and the switching which turns out to be a lot easier to do. Thats why you own the stock. Thats it. Also bloomberg saying theyve decided to give up on the car for now. Hundreds of layoffs theyre citing. Wow. On that project. More on that later. When we come back, sarah eisens exclusive with indra noyyi, what the pepsi ceo is saying about the price line, m a strategy, look at the premarket, s p has gained alternate gains and losses for zempb sessions now. Back in a minute. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential sprint . Im hearing good things about the network. All the networks are great now. Were talking within a 1 difference in reliability of each other. And, sprint saves you 50 on most Current National carrier rates. Save money on your phone bill, invest it in your small business. 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Yeah, september ip coming in a little light, up 0. 1, we were looking for 0. 2. We did lose another tenth on a revision. August moves to minus 0. 5 . Utilization rates we were looking for around 75. 6, we end up with 75. 4. And last month lost 0. 2 to 75. 3. Listen, it hasnt been a great year for the utilization rates. As a matter of fact, the low read for the year is 74. 9, the best read of the year is 75. 9. So you can see its been in a pretty tight range. As carl mentioned the most hot read we had was the october read this morning on empire. You know, manufacturing around gotham not looking so good down 6. 8, so well continue. Theres more data to go on the inflation front. The word of the week, stag flags carl back to you. Rick, thanks so much. Rick santelli, talk to you soon. Pepsico rolling out a new sustainability agenda, a push to offer healthier foods and beverage choices. Company plans to reduce sugar, salt and fat in its products. Our sarah eisen sat down with chairman and Ceo Indra Nooyi in exclusive interview and asked about a pullback in the stock after what was a pretty Strong Quarter. In the long term the stock will come back. Again, were going to deliver the numbers. Were going to deliver great top line and bottom line performance. Its got to be balanced. I think hitting the pedal on one or the other is not a very good thing. Our performance is balanced. Good top line growth, good bottom line performance. Were just going to keep focusing on that. We cannot control the markets. We can perform, we can tell our story. The rest of it is whatever happens to overall. When it comes to m a and the industry, nooyi says theres room for deals to be made, but not megadeals, at least at pepsi. Take a listen to that. I think when you have so many mid cap and Small Cap Companies theres room to take out some more costs. I think as a Large Cap Company ourselves we are at scale. Were efficient. And if we need to do something from an m a perspective, it will be small tuckins to fill out, you know, white spaces. I dont think theres any need for an almost 65 billion company thats present in so many countries to make any megadeals. Sounds like were a ways from doing another quaker type deal. That was a long time ago. Yeah. It does look, i think indra has a very good portfolio. I cant say enough about that snack business and how it is the big driver for supermarkets. Supermarkets are downright now. They need the cash flow. Lays has been great. The whole aisle. And the good for you obviously that they are starting to make those into billion dollar businesses, that matters too, sabra. So i have the press drinks but i feel theres m a in that business. I think that is not done because theres not a lot of growth in the center of the store. Right. Perhaps m a not involving pepsico. Not involving pepsico. Perhaps involviinining mondo wanted to buy hershey, that didnt happen. By the way kraft heinz stock has been okay. Theyve got some currency. They can do something. Theyre still finishing up their sort of or getting right. The final stages of the consolidation amongst the two companies. These companies have no growth. People have to understand pepsico has actual organic growth. A lot of these guys dont have organic growth. How much is the liability of the dollar going into this earnings season . Well, you get a proctor, proctor spent a lot of its call talking about currency and how to understand the inner play, you know, that you get. Kimberly clark, thats got a lot of international too. This group, kellogg, Big International business, but i think really its tech that youre going to see have to explain the dollar. The dollar versus the euro is going so the right way. And when you have stan selling fisher speaking at noon, that could send the dollar further up. Yeah, dudley on friday all but basically saying december, right . Just like rosengren the day before . Were building in a rate hike. Thats one of the reasons i felt the bank stocks shopt have come down on friday. Building a rate hike thats the group to own. But again, i do feel very strongly that wells fargo makes it feel like that the governments back. And the government the combination it was like we had a Bernie Sanders tweet at quarter of 4 00 that hurt the drug group. I mean, twitter, geez, its so much easier to just pound companies with twitter than anything else. But, look, i think pepsico already reported, it was a great quarter. Not thinking about them, but yes, going ahead we are going to have to worry about the dollar particularly for companies with giant european exposure, which there are many. Cramers mad dash, take one and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Thosthey are. Sses . Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. All right. We got about taking a peek there call it seven minutes. Like to let people know how much time until the opening bell. Absolutely. Very important. Its a monday. Were all kind of Getting Started here. Now we got our mad dash. You want to go hasbro. I want to go hasbro. First of all, great quarter. But second, when it had its breakdown, it had a july breakdown okay right here, the quarter was a good one but people didnt like it because they had some problems with some girl stuff, some of their girls toys. Thats really been changed. This stock though cannot look at this. This is a very interesting pattern weve seen so far in this Third Quarter results. Is it a Company Reports a great quarter but does not get back to even. It struggles. Now, i think brian goldner, who will be on squawk box tomorrow, has always told a good story about narrative and why people should own, the longterm girls thesis here for toys, david, its a great quarter. Youre raising an interesting point. Now, its early, we still havent gotten earnings from the vast majority of companies. Right. But so far to your point, they dont seem to