>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. it is a big morning for the markets. lots of moves from apple to china's growth. plus another round of quarterly results this morning. we have prized dow components expected to report during "squawk box" this morning. those names including travelers, united technologies, coca-cola and mcdonald's. we'll have those numbers and instant reaction as soon as the numbers are released. and the big story this morning, growth the china. gdp coming in at 7.3%. that was slightly above expectations. but it was also the lowest reading since the first of 2009. we'll have a live report from beijing later in the show. let's find out how the futures are performing at this hour. you can see right now, futures for the dow up about 50 points below fair value. s&p up by 7.5 points. andrew, over to you with the apple story. >> let's talk more about apple.

we'll get more on all of it. >> an rue, apple reported report earnings. strong iphone numbers,.apple shipping nearly 40 million iphones and with a 16% year over year and better than analysts estimated the rt yeaher including only about a week or so or iphone 6 sales, but cook telling me demand so far for the new iphones has been, in his words, off the charts. here is what cook told analysts on the call. >> today, we've launched in 32 countries, including china, and our new iphones will be shipping in 69 countries and territories by the end of this month, making this our fastest and most

successful iphone launch ever. >> another high lie of the quarter, mac ships, the best in the history of mac. so what didn't work? ipad clicking in at 12 million. that was a 13% drop. consumers don't buy ipads as frequently as iphones and it's increasing competition with smartphones from bigger screens. looking ahead, coke is bullish on his company's prospect. i think this will be the best holiday season we have ever had, he tells me. guys, back to you. >> thank you, josh. it is amazing how many phones sold. >> and the revenue number is like for a quarter and it's not christmas. that's 40 billion dollars, wasn't it? >> it's the launch of the new phone, which is impressive.

>> i'm it's a gadget. it's amazing. and everybody already had an iphone. i still bought an iphone. >> i like the bigger screen. i have to tell you. i know you're not thrilled with the bigger screen. >> the big, big -- >> it doesn't fit in the pocket. >> you've got a problem. you can't put it in your back pocket because you'll bend it. you can't put it in your front pocket because you're pierce your -- nads, basically. >> that's not the issue. the issue is you will -- it's too big to have in your pants and sit down. how about that? >> once again, that's been the story of my life. chipotle, your entire life has been too big, it couldn't -- >> my god. >> this squad-ward moment has been brought to you by andrew ross sorkin.

>> thank you. >> you were not talking about anything -- >> un-tward at all right now. >> apple, remember they introduced everything. and it was exciting and you did one more thing and it was at 99. and it didn't really budge. so it's hard to move that stock. a lot of finishes, a lot of love for the stock already. the results that came in were so staggering, just simply the law numbers thems themselves. how do you sell 39.6 million phones? they didn't even need that. >> the plans aren't up yet. >> we should close down the

patent office. i don't see anything after the iphone that would be as popular. what is the next wave that people will use? >> that is the thing. >> monitor your heartbeat on my watch. >> but that's not new. there's nothing -- and everybody already is walking around on the street like looking at the internet or -- >> how about talking to it? >> just read your mind. that would be new. >> nothing would surprise me at this point. there's swiggels every where are going into the phones to do all this stuff. something i do understand much better is mexican food. chipotle, mexican grill beat earnings and revenue in the quarter. but as shares fell sharply after hours after the company forecast a drop in comparable restaurant sales from current double digits.

the company says higher beef, higher dairy prices. diners appeared to shrug off most of these price increases, just like the markets yesterday -- >> shrugged off the ibm. >> even with, i think -- when the closing bell range, i think it was pressure. >> so if it's up 20, how much was ibm -- you don't want to say. you don't want to say single best -- at the end of the day was tend of the market. at the closing bell. maybe people should at a say at the closing bell. >> that is. >> wait a minute. ibm was down how much? >> 10 or 11 at the end of the day? >> at the end of trade, yeah. so you can add that in. so the dow was actually up like

80 points, probably. you look at the s&p, a nis day for the s&p yesterday and down again today. and the nasdaq was up a huge amount, so if ibm in any way -- if ibm in any way represented technology, why was the nasdaq up 40 points? >> because here is what happened. remedi says she's not sure, but they thinks they have to say it's ibm specific. that's what she told david faber yesterday. >> i think everybody already knew, didn't they? why didn't we play drucken miller's comments yesterday? everybody else played it. >> "squawk on the street" played it. it was not something that we really -- >> no, i think anything over -- well, it hasn't been six months. >> at the end of the day. >> at the end of the day, a number of cars recalled from

potentially problemic air bags has been up to 5 million. that defect has been linked to extended exposure to high humidity. toyota is warning ownerings that the recall ed vehicles not to carry passengers until they're replaced. >> i think this is a weird -- that's a weird lead story. the headline itself is weird from the "new york times" i saw. it looked like a stabbing, but the air bag was the killer. isn't that weird? it seems like a weird headline. they usually have bigger -- >> although i -- the picture for you. >> it does. i would have been more serious about -- i don't know. >> how do you find out if it's in your car? >> bad air bags. they made a big deal on the

nightly news last night about it. >> a terrible situation, russian officials are investigating the air crash that killed the ceo of total. stephane pa drazis has the latest from paris this morning. >> good morning. well, the french raters have decided to open an official inquiry and will send an investigation team to russia to assist the local team on the ground based on the early indication the plane crashed at takeoff with a snow removal truck which was operating on the r runway at the time. according to russian investigators, the driver of the truck was also drunk at the time of the accident. in paris, total will organize a board meeting as soon as possible to appoint a new ceo.

the new ceo will likely come from within total. will the new ceo use the same strategy as de margerie? he also insisted on the need for oil companies to operate in all countries, even when the threat of sanctions from conflict makes it difficult, for instance. he was a strong dvenlder of russia on the back of the ukrainian crisis and were planning to double the production from russia by 2020 despite the sanctions. so the whole question now is about the name of the ceo and the future strategy of the company. >> stephane, before you go, clarify one thing for us. you said there was a drunk driver involved. was this the pilot of the plane or was this -- this was a truck on the tarmac? >> no, the -- absolutely.

according to reports we have this morning from russia, the driver of the truck on the runway was drunk. it hasn't been confirmed yet, of course. >> okay. stephane, thank you for that. >> okay. i understand now. all right. >> we had 120 points down, but most of that, probably 100 of it was due to ibm. purely, do the math. at the end, 87, so it was up over a hundred. and then it rebounded to close higher. going in now for some perspective, steve sacks and richard steinberg, president and chief investment officer of global asset management. a lot of people, i'll start with you, rich, said capitulation last week was to noteworthy,

that that basically put in a bottom on equity prices. was that it for this most recent attempt in a 10% correction? we have to settle for 7.5%, i guess? >> yes. i think when the pendulum swings as far as it did, joe, that was reflected in that sub-2% number. now i think the market has some work to do and we'll probably settle it around the 1920 to 1950 level. earnings are coming in good. we have to see whether or not the u.s. is going to decouple from europe. >> so we did put in about -- you don't think we need to get back down and test the lows and then maybe go lower to make a real bottom? you think we already made a bottom in this correction? >> i think we made a bottom, but i would anticipate one more time just to test investors involved. then again, we could focus on earnings. earnings are coming up from next year since my last appearance. the street was at about $130. and, tale, earnings are almost close to 132 right now. so the real key will be whether

or not the u.s. dollar strength starts to affect earnings and we'll start to hear that this week. >> steve, what do you think happened last week? was it the fear of ebola? what do you think caused all the volatility? are we beyond that now? >> i think there are a couple of things, joe.. there's been a big chase on for a lot of growth in the marketplace. you've got ebola fears, all the talk going on in september about a big correction. didn't happen, right? so ultimately, i do think that we're probably closer to the end of this than the beginning. volatility last week, headline headwinds, if you will. i think all this is about revenue growths more than anything.

the other big chase that was going on was the u.s. dollar chase. i think that unwound last week. we have some risk reduction. >> the so europe is not trying to -- or slowing growth elsewhere is not going to cause the u.s. to go into another slow period? >> i don't think so. i think at the end of the day, right, china's gdp number was, what, 7.3%? europe is a different story. europe is in a tougher position. it's a fairley precarious position they're in relative to growth, are they going to slip back into recession. at the end of the day, the u.s. is economy is stronger to lead the rest of the world and resilient enough that it's not going to matter ultimately what europe does. >> do you agree with that, too, rich? it seems like we're having trouble making new highs. i guess it's hard to ever see why the market goes to new highs. do you think we can do that before the end of the year? >> yeah, i think we're going to settle in, joe, by year-end at this 1920 to 1950 level. next year, i think we could be

at 2100. investors, when they get these kinds of huge swings like this, you need some time of healing. and for people to regain confidence, that earnings stocks with a 2% yield in the s&p brings more for the 2.2% ten-year. i think it's going to be slips and starts and i think slowly confidence will regain. europe is only going to grow hotelly at 1 % next year. we're carrying 2.5% to 3% year. so the only way that earnings continue to work is if europe doesn't go into a deeper recession. and it would be reflective of u.s. companies. we repatriated a lot of our international holdings to be back in the u.s. because if there's a rebound globally, we think clients will make more money in the u.s. than they will overseas, especially if the dollar starts to strengthen further. >> and the fed leaves, steve, and oil prices stay where they

are so maybe that offsets each other? >> i think it does. i think that's the offset to the oil in the economy. i think at the end of the day, the unwide winding of the fed balance sheet, it's a big uncertainty. but at the end of the day, we have enough clarity on what's going to happen. i think it's a timing question. >> okay, great. rich, thank you. you don't need to be back here. you don't need to be in new york. you can be -- you can do all this in ft. lauderdale? >> i love seeing you and i am in new york. oh, you're in new york now? >> no, i wish i were. i would be visiting you. i will loaf you on one point. i wish i had taken andrew's advice to start to learn how to meditate, because it would have helped over the last couple of weeks. >> there you go. thank you. and you should. have you -- we can talk about it during the commercial. >> well, i take a 15-minute power nap instead.

that's my meditation. >> i met the guy that you meditated with, partner. >> you did? >> yeah. bob long. and i asked him about it, are you sure -- when i'm in that neglecter world of a nap, are you sure that's not -- do i have to the a word to meditate? >> and what did he is? >> he said it's different. and i told him i was mad at you because you didn't trust me enough to tell me your word. >> my mantra? >> yes. >> you're not supposed to tell anybody your mantra. >> did you ask him why? >> i want to know your mantra. >> i did not even tell my wife my mantra. >> i agree with that, but you can tell me. >> this says a lot about our -- we think to ourselves -- >> no. >> now the story about the passing of a fashion icon.

oscar de-la renta died at the age of 82. first ladies hillary clinton and laura bush both wore his gowns to their inaugural balls. the cover of the "new york times" has a picture of him, called him the designer who stars and became one. >> it was peter tiel's book party. >> you met him there? >> yes, and arianna was a big meditator. that's one of the places i go. yeah. and he accosted me and said that he was -- well, not accosted me, but he said -- and he mentioned it. >> okay. >> i don't know. >> we'll get you going on it. we'll get becky going. we will do a show all squawk meditation. >> it's not an elitist? it's not sort of the upper -- >> no, no, they do it in jersey.

>> of all places. >> wow. >> what do they meditate on, the factories? >> let's talk about apple. when we come back -- >> on mock power. >> we'll be dialing up apple, the break down the results and the holiday shopping season. and the verdict is in for oscar pistorius. he was sentenced to five years in prison. >> five years? >> for the negligent killing of his girlfriend. she was killed last year when he fired -- >> reef ya stein camreef ya steenkamp? >> he allegedly shot her three through the bathroom door.

apple beat street expectations on both the top and bottom line, and reported a whooping, as joe would say, at a 39.3 million iphones have been shipped. the one downside? ipad sales falling 13% from the year ago quarter, selling just 12.3 million units. joining us now to break down the results, will power, senior research analyst. good morning. >> good morning. >> you thought the earnings were great. i still don't understand the ipad thing and whether that's long-term going to be an issue or whether we should just forget about it. >> the ipad weakness has been a

continuing trend for the past several quarters. i think in a lot of respects, it's anybody's guest. probably a flatter revenue stream moving forward the last several quarters. the good news is, they beat handling the mac side. what it suggests is expectations were the iphone 6 plus might start to -- at this pad, you're seeing mac -- >> and tim made a comment on the phone that he's just as happy if people are buying mac. what's the difference in margin differential between a mac, a laptop, for example, and the ipad? >> that margin, that differential probably starts to close. i think on whole, you know, at this the ipad margins have been whole overall. >> tim made a comment on the call that got him some attention, which was when the

iwatch finally does arrive, in terms of how those numbers and sales numbers will be broken down, that he doesn't plan to issue them, if you will, in an individual column so you can see it clearly. he says he's pretty much in the other category, with all sorts of other stuff. he says he's doing that for competitive reasons, but there's been questions about -- do you think he's trying to tamp down expectations or do you think he really is worried about what samsung and google and everyone else are going to think? >> it's a good question. i think that did raise some eyebrows on the skaul. i think the reality is out of the gate, it's going to be a small segment and probably not big enough to report. but it will be interesting to see if they actually break out the unit. if they start to succeed, which we expect they will at some point they start to break that, i'm not reading too much into that. >> and he does it ahead of time. if you do it before you have any idea what the expectation res going to be, it's one thing.

the ones who pulled it, like a walmart or a home depot or something, they're always good in the period of bad sales numbers. so pulling information when things aren't going well. >> will, your expectation as an analyst, what are you modeling for the watches? >> as we look over the next couple of years, we're looking close to 10 million unit s witha slow launch, starting at 10 million and growing gradually from there and reaching 20 millionish in the '16 time frame. >> really quick, impasse, saw a lot of people using it already. >> that's right. we got out and tested it last night, and it worked seamlessly for us. i think that's a nice opportunity. i think it's a revenue driver for them. >> how much iphone 6s and 6 pluses do you think will be out in the ecosystem by let's say

june? obviously, it only works on those phones. does it work on a 5s? i think it's just 6 and 6 plus. >> well, the key is going to be the 6 going forward. i think there is some backwards compatibility. i tried it with 56 plus last night. we've used it with the 6. if they can sell 64 million, you know, this december quarter, which is what we're speccing, you'll be up to 150 million plus. so that will help. >> thank you for joining thus morning. appreciate it. >> thank you for having me. coming up, more concerns about a global slowdown. china's growth falling to a five-year low. levels not seen since the financial crisis. find out what's dragging china down at this point next. and then five dow components getting ready to roll out results. will the numbers push and pull the markets this morning? as we head to break, here is a look at yesterday's winners and losers.

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it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable. >> do you understand? >> yeah. >> no. >> good morning. we don't like when the futures are up? people at home are going, something must be wrong.

should i sell? should i call my broker? listen to that music. it's foreboding. it's danger. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. in the headlines this hour, a busy morning for corporate earnings. these five dow components are set to possibly report results that nobody knows. >> listen. >> oh, that's better. whew! there we go. anyway, i'm expecting some good results now from travelers and united technologies. and then who doesn't love coke? have a coke and a smile, coca-cola. verizon, which brings you a lot of data through fios. and then a happy meal report at 8:00 with mcdonald's. this is much better. they left this stuff in from last week. >> from yesterday. the ibm trouble. >> maybe that was it. >> we complained about this music yesterday. >> oh, we did?

that's not -- try that. also out this morning, september existing home sales figures from the national association -- should i just say realtors because everyone puts an s. in there? >> yeah, realtors. >> everybody does. >> you shouldn't, though the. it's like nuclear. >> and the biggest takeover deal officially is dead. abbvie, $65 billion takeover of shire was scrapped. so now other companies will just come here and buy us. >> i would think that if you love america, you can love this -- >> i should love this as much tax money as the government can get, i should be ecstatic about. >> this is a substantial

american company and you would like them to remain a patriotic member of our -- >> patriotic? you think that giving -- we should give the government extra money, an nd rue, we should. >> china gdp coming in at its lowest rate since the financial crisis. let's get more on all this from eunice yoon who is live from beijing. for us and for her. eunice. >> hey, guys. on wall street, you guys have your bulls and your bears. but here in china, he like to have you have your panda huggers and your dragon slayers. these days, you see a lot more economic growth for the third quarter came in at 7.3%. this is the worst number that we've seen in years and a lot of people, in fact, more and more people think we're going to see a further slowdown. what is the problem? the problem is the weakness in the property sector. the problem is the energy

secretary we shall there's a lot of debt in the system and excess capacity that a lot of economists are worried about. the government put on its best face. it's expecting positive changes in the real estate sector. a lot of that is due to their targeted measure. it also was very optimistic and confident about employment and the entire employment picture. they said it's very stable. and the reason why all of this is important is because it tells us authorities here are still comfortable with the current level of growth in the economy. and that is, in turn, important, because it means we're probably going to see china continue with targeted measures of stimulus snid instead of anything dramatic. so, anyway, guys win wasn't sure if you guys were panda huggers and dragon slayers. >> i am definitely a panda hugger. i don't know about these two. >> i'm a panda hugger who wants to be a dragon slayer. >> i like the meaning, they're animated. but i don't personally think you

cod teach a panda kung fu, personally. >> you did a great job. find what you are good at and using that to your advantage. i'm skeptical of the praying mantis. >> who was the bug? >> lucy lu. why do i know all this? anyway, eunice, thank you for joining thus morning. emerging markets being hit with a lot of the turbulence we're having here in the united states. msti is down 10% over the last two months. but the question now is how will the wind things in the dollar impact the performances in the weeks to come? joining us now is jeff bennet, head of emerging markets equity strategy at ubs. jeff, what do you think? will everything that we've been through in the last couple of weeks, does that make the eme e emerging markets more or less attractive?

>> i think it makes them more attractive, especially in the short-term. because, actually, what's happened since the beginning of october is emerging markets have been a little bit out of the limelig limelight, to be honest. we said our big sell-off in september. if the dollar has flattened off a little bit in october, and we've seen most of the negative news in october coming from the developed world, particularly from europe and, of course, we had that one-day tremendous sell-off in stocks partly on the retail sales numbers in the u.s. i think you have to be a little bit on the sidelines lately. i think there's a buying opportunity here between now and the end of the year. >> i guess you have to be specific when it comes to that. emerging markets, that is a pretty broad loss. look at places like russia, india, chiend na. which places specifically do you think of buying opportunities and are there other markets you would steer clear of? >> certainly. we think if you expect a rally at the end of the year, some of

the risky markets would do relatively well. but some of those are looking risky, indeed. brazil being an obvious case. no one is going to take any additional betts. russia looks very, very weak because of the sanctions in the weak economy and their deteriorating levels of resrves. oil is a big negative for russia. we like korea, taiwan, and partly because they have leveraged to the best powers in the neighborhood which is the u.s. economy still. we also like mexico for the very same reason that it's closely tied to the u.s. economy. and we made a call at the beginning of september so that we have october, it's been a good call. we like that market. it's very cheap. it fell back sharply earlier in the year. we think the economy is doing relatively well. >> you're not worried about what's happening with turkey's neighbors and syria in particular and impacting normal

life there, as well as the economy? >> i don't think it will impact the economy, to be honest. clearly if we got into a major conflict, i think that would increase the risk of investing in the economy. we think the economy is going to be relatively munl to that situation. also, the currency fell a long way. we think it's fair value now and the market is cheap. so we're playing, really, more on the up side based on a strong corporate sector and a strong domestic economy. >> you can look at some of the domestic economies for the emerging markets. i would think that the federal reserve and any of these for the market. we've heard the central bank in india complaining for some time about what the federal reserve has been doing in terms of ending qe. he's been complaining snap that leechs places like oind ya in a real lurch. we know last week what changed the momentum here was the potential fed speak, the idea

that it brings that rough year to q4. that's not likely, though, and what most are saying is that they don't expect that to happen. we expect higher rates next year. if that is the case, how does that decision affect the emerging markets? >> that's an enormous question, outline. a lot of ramifications from it. what's interesting is this sell-off was triggered by worries the fed might move sooner. now that we've kind of gone the other way, there's some talk that it's either delayed to the fed's move expected in june next year or of qe4. how quickly the fed does move would be important. what we think, however, is that what really matters when the fed starts moving, not just the fed moving itself, what does it do to the u.s. dollar? if the u.s. dollar strektsens on the back of the fed beginning to raise rates next year, that is typically bad because it sucks money out of the emerging markets. but if we get what we've had in

the last two or three years through the dollar being softer, that isn't quite so bad. so to a certain extent, it will be in the context of what the fed does. needless to say, we're watching that carefully. and the timing of fed's first rate move will be important for next year if that's when this occurs. >> and that's going to be the big decision for markets around the world. thank you very much for joining us today. >> thank you. >> lucy lu was the snake. >> you're right. >> seth rogen was the -- >> was he the orangutan or whatever that was? >> seth rogen was the praying mantis. >> who was the monkey? >> i don't know. but the preying mantis, couldn't he just squash it? >> you guys are all way bigger than i thought. >> couldn't you just pull its arms off inspect then it can't do anything, right?

>> who is the monkey? >> former pimpco adviser mohamed el-erian, he will join us. is he heading back to pimco? his take on bill gross's departure, the future of pimco and how investors can keep their money safe in this market and how i should stick with the bengals. author vicki ward is set to join us. liar's ball is about the -- it's an inside look at the drama behind the sale of the gm building. as we head to break, a quick check off what's happening -- >> jackie chan was the monkey. >> who? >> jackie chan. >> we know someone of -- that was easy for him. when change is in the air you see things in a whole new way.

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welcome back. the futures at this hour are up. down ten on the fair value for the dow, up 71.2. >> the singing. >> yeah. >> wti is trading at 83.19. >> oh, god. you know, i'm ready to just get rid of twitter. >> why? >> this guy says i'm advocating tearing a praying man's arms off. is he joking? >> praying mantis. >> i don't know whether the guy is -- is deliberately just a --

>> yeah. okay. coming next, "vanity fair's" vicki ward is going to join us. already she has one flattering review from, guess who? donald trump. he's calling the book very boring. his beef and vicki ward has a response. back in a moment. and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

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over the next five years, we'll see a huge revolution when it comes to higher education. instead of having 500 people sitting in a lecture hall, those are classes, those interlevel classes, those one-on-one classes that can be taught over the next 25 years, employers will begin to accept that as legitimate credentials. you're seeing huge changes take place in the way that technology is interrupting and disrupting higher education. cnbc is the place to be over the next 25 years to watch this happen. >> welcome back to "squawk box."

the fierce battle over one of the priciest buildings in america, the general motors building in manhattan. it is the subject of a new book out today called "the liar's ball." vicki ward exposes what she of the building. donald trump already coming out swinging on this. on twitter he wrote the book was, quote, poorly written and very boring. i'm going to disagree for now. joining us now to share her side of the story and tell us about her book is vicky ward. and we were just discussing if donald actually liked the book, that might -- >> well, i think the biggest insult would have been silence from donald. so the fact that he acknowledges he's read this very boring book, i'll take that as a compliment. i have to say, andrew, that most people who read this think that it actually is very fair to donald. and i tried to be very even handed with everybody. but i actually think there are

some insights into donald in the book that would surprise people. he was quite a human boss to a man with troubles. we get to see donald doing what he does for a living. we see him building. we get him being obsessed by the architecture. >> and the history is he owned this building for a period of time. >> co-owned the building. the bulk of the money came from a partner steve hillbert who ran the biggest insurance company at the time. good for donald, he put up a fraction of the money. steve hillbert put up the bulk of the money. >> but the main story is about harry. and how should we think about him? >> i think harry maclar is a tragic, shakespearean character.

harry comes from nothing, arrives in new york. using leverage to try to amass a real estate portfolio. is successful but leaves a stench in his wake. there are buildings in the 1980s that get knocked down in the middle of the night, the gas is still on. banks are wary of doing business of him. but he still wants to make it to the big leagues. in 2003 out of really nowhere, he won the bidding war for the gm building with a rather daring view. he stapled a $50 million check to his offering bid and in the 30-day closing period, he actually switched banks. so there were two closing rooms. wachovia, deutsche bank. and people still thought, well,

he's overpaid. he hadn't. he went on to negotiate with steve jobs and put apple's most famous store in the world there. >> there's a great story in this book about how he actually tweaked the sign of the apple store. >> yeah, he did. >> what was the tweak? >> the tweak was steve jobs had said i want a cube in the middle of the plaza. >> this is the first time apple had done those cubes. >> absolutely. and harry thought it was too big. he's never going to believe me if i just tell him. so they all assemble in the plaza outside the building. they looked at steve jobs' model and went, oh, it's too big. and harry said, a-ha. and inside there was a smaller 30 foot model. and they went, that's perfect.

and that's what we're going to do. those were the golden days. and i call it paradise in the book. he was riding high. and the created a billion dollars worth of value then he made a risky bet and he had a short amount of time to repay a debt which he had personally guaranteed. >> that was his undoing. he's 80 years old now? >> he's 80 years old. the reason he's a tragic figure is that his family had made him -- he still would have tried to hold onto the building. but his family to whom he'd given a lot of money and assets made him quit. and that was really -- he had come to identify with the building. >> now he's trying to come back. >> and now he's coming back. >> he seemed fine. >> he does seem fine he sings a lot. cracks a lot of jokes.

yeah. >> that's something, yeah. >> anyway, congratulations of the book. the book "liar's ball." thank you for coming in. >> thank you for having me. >> you're surprised donald was human to an employee? >> he says the book was not bad to me, but it should have been great. he says he doesn't -- he said to me he doesn't like talking about the general motors building because he wished he still owned it. so i don't know. these guys all have very big egos. >> they do. he's great to his friends, the donald. anyone you talk to, they will tell you that. >> yeah. and he was very, very decent to me. >> very loyal. >> so i'm really not sure what the problem is. >> like you said, you'd rather have him say something than not say anything at all. >> thanks for coming in today. >> thank you. there is a parade of results expected from five dow components today.

we've got travelers, united technologies, coke, verizon and mcdonald's reporting in the next two hours. plus the perfect guest to have it all in the middle of this volatility. muhammad el-erian. keep it here. "squawk box" will be right back. act i. scene 3. open port twenty-two-oh-one-seven

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liably fast internet comcast business. built for busiss. welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin with

becky quick and joe kernen. our guest host, muhammad el-erian. we are expecting five dow components to report over the next hour. >> let's look at travelers. they're coming in with third quarter profit of $2.61 a share. compares to $2.27 the street was looking for. the revenue also beating estimates. and the chairman and ceo is talking about how this is strong underwriting performance across all of our business segments. basically saying that the writing insurance premiums are fair policy so they're not losing on what they're writing. it does look like it's beaten on the bottom and top lines. >> but you never know. we always have fun with that. so many different things that go into so many moving parts. but just because it's -- insurance companies with

assumptions and actuarial assumptions or premiums and all, it's almost impossible to ever get it right. that shows punch. what do you have? did you look at it? let me see what i have on it right now. yeah. i got it up about 42 cents off. just on the bid. and then higher on the ask. also beating estimates this morning and looking like a significant is united technologies. the company earning $1.82 for the quarter. that must be the adjusted number. excluding certain items. that is compared to estimates of $1.81. continued expansion of profit margins and strength in its building and businesses. i don't know why, you know, the person that writes this should -- obviously we should put in the revenue number and compare that to expectations. i would want that information if i was at home.

i have travelers up here right now. >> yeah. the revenue expectation is $16.16 billion. >> i saw a sales number. >> 16.17. >> in line with expectations. we're talking about things like helicopter, engines, otis elevators, and they've got the individual breakdown for all of those. the company backs a fiscal earning per share of 6.75 to 6.85 for the year. and we are right at 6.84. >> if we look at the futures this morning, these are both dow components and it is helping things out. up by triple digits right now. utx shares on my board look like

they're indicated up 102.50. the bid was up $95 after closing at $93.20. >> okay. so we're definitely -- results for the current quarter at 22 minus 204 is 182, right? okay good. by the way, if you're watching it and talk tho muhammad about this, 2.21%. so higher yield. never thought i'd be hoping for a rate to go up. but the market place is being crushed as they look at the 10-year -- when the rate got down. and then oil, we never thought we'd be in the business of oil prices to stabilize and go

higher. but we were last week. because that was indicating the stress on all the different markets. fwoo $83. >> we didn't get it through the holiday season. >> let's look at a couple other headlines at this hour. apple posted better than expected earnings and revenue. 16% jump in iphone sales. ipad sales however, they declined by 13%. told cnbc he still seeds ipads as a potential growth driver. that's the weakest level since the 2008 global financial crisis. and beijing will need to avert a sharper lowdown. directv customers are missing a few kpanls today. no longer carrying several turner broadcasting channels after the companies.

dish removed -- are you ready for this? cnn, hln, cartoon network, and several others. >> wow. >> so laying down the gauntlet. there it is. >> not quite getting rid of like a big playoff game or something in the nfl. i don't know, has there been a big outcry? >> the cartoon network. >> you're going to hold your tongue. >> i am. october has been a wild ride for the markets. lost 3% over the last few weeks. many say this kind of volatility is not uncommon. joining us now for the next hour, muhammad el-erian. former pimco ceo and co-cio. he's also one of our esteemed "squawk" masters. i could use a lot of adjectives.

esteemed is one. i mean, you're eloquent. you're -- i mean, dignified. >> what are you setting me up for? >> nothing. would you ever go back? >> no i'm really happy with my life. other than the jets. >> does that make any sense to you? >> nothing but upside. >> so you'll never say anything about that. were you surprised when bill left? >> i was surprised. what i wasn't surprised about, joe, is there's a very solid team of people to step in. each of these are known -- these are people i work with. you have a couple of winners. you have incredible people that

delivered performance. what i wasn't surprised at is the ability to have people to step in. >> let me ask you one question. you're talking about arguably the greatest fixed income manager in history. was he still or had he -- what many people thought, had he sort of jumped the shark in certain ways? >> a few weeks ago, few months ago i thought he is a brilliant investor. and he remains a brilliant investor. >> for someone who thought bonds had peaked three or four years ago, that might have been the biggest miss of his career not knowing we were going to stay in this period. >> that's his job. to see something someone as

stupid as he couldn't see. >> this is going to speak to the volatility. a few months ago you had a bet doing. >> do you remember that bet? >> i am shocked it went below 2%. i think anything is possible. >> at the beginning of the year -- >> everybody was talking about 3% at that point. >> so this covered 90% of investors. do you live in interest rate space? no you get pushed out. or do you live in overvalue ed risk space? and investors go back and forth and you get enormous volatility. we have a good number out of

china. we have good earnings. and we have policy makers continuing to reassure. so we're going run to the overvalued space for awhile until we get news and then like we did last week -- >> do you believe the fed officials that were saying they could do qe 4 if we needed it. not that we did. all those things, does that make you think we're not going to see rates raised by the middle of the next year? >> i do not believe we're going to delay the exit from qe-3. nor do i believe we will see qe-4 any time soon. what we will see is low rates for longer. more aggressive policy guidance. >> what about zero rates? >> we will say here longer than we have otherwise. and we will have aggressive markets. i do not believe we change b from exit for qe-3. >> qe-3 doesn't do it for me.

it was basically qe-infinity. so we need another name for q qe-3. it would be six, seven, or eight at this point. >> but you're not going to get it. >> we just need a new name. it doesn't summarize it. >> people call it qe-infinity? >> it was. this is infinity plus one then. >> you'll say infinity plus one. >> you can do that. you know there's a time space continuum that curves around and that's why you can go in a black hole and end up with matthew mcconaughey. >> can i go back to bill gross on this? >> because that's the tabloid issue you can't get past. >> it relates to the mind-set of an investor like bill. i wanted to ask actually not what's happening at pimco.

but bill as an investor in bonds going forward with janus. and the psychology of somebody who extensively has gone through a rough time. would you invest in somebody who has -- i don't want to say been broken but at some point there was a broken moment in all of this. and what happens to and then the pressures that sort of arrive on your shoulders at that point. does that make you better or does that make you worse or does that make it just more complicated? >> i can't speak for bill because i haven't seen him for awhile. but i can tell you the bill i know is someone who is anchored by three things you hardly find in an investor. strong fundamentals including economics. a really good feel for the market. and strong bond math. that is what has made him so successful. but i can't speak to recently because i haven't seen him. >> let's go back to what you think is happening right now on the continent and do they

finally qe? >> in europe? absolutely. >> how do they convince germany to do that. how do you convince france to stop, you know -- >> do different questions there. one is will the ecb do something en thoi they don't believe it will be effective. we will get more qe but it will not help fundamentally the european economy. to your second question, the structure reforms we need, won't get those for awhile. so this is a low growth equilibrium. just think of what jegermany di. we're in october and they revised a number. >> you know, we've heard from ibm yesterday.

jenny rometti won't say much. but we've heard from weak factors in other areas. ncr warning that the semiconductor mie ro electronics was a huge warning earlier. are these small blips in a world otherwise doing okay? or is there something you need to see some trend. >> stow the ibm news, i was watching you yesterday and looked at the statement. it was a frank statement about how difficult it is for a company to adjust to a world that's transforming. ibm is all about adapting to a world. and it's changing because of mobility and social media. and if you are in that space or near that space and can't adjust quickly, you're in trouble. yesterday i came up by train for washington. and i looked at the lines for taxi. i'm not going to stand in that

line. in four minutes hi uber car come get me. this is transformational. >> you can look at legions of companies. >> look at our sector. i'm working with argue start-up payo payoff. again, using the combination of the internet and media. there are plenty of sectors getting disrupted. some more quickly. others more slowly. but that is, you know, adjusting to these transformations are key. >> a 13-point drop in ibm with those comments would have been a lot more -- would have caused a lot more damage to overall sentiment. didn't cause any damage at all yesterday. >> it didn't because of the loss week. >> i still don't think eibm -- it's more of a service company.

>> the positive side of ibm is they reinvested themselves. >> now they need to do it again. and the jury's out. maybe the jury isn't out. maybe it's back. i mean, they might not be able to do it as easily. thank you, mohammed much more from you throughout the hour. do you like giants or royals? do you know the singer lorde? she has a song called "royals." it's banned by law for the length of the series. they banned it in the city you can't play "royals." for me that's a tough one. i guess san francisco is god and i'm a national league -- aren't you a national leaguer? i don't like designated stuff. but they've had a lot of riches,

the giants recently. >> we've got to run. >> this is the song right now. >> our guys are great. this is the song. >> why you got to run? >> you want it to play? >> if you're on radio right now, just begin the song. coming up, more big results from coca-cola and mcdonald's. but first has the market opened up for business travel? we've got that when we return.

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welcome back to "squawk box," everybody. we've been watching the futures this morning. after hearing already from two dow components this morning you can see it's helping with the dow. right now futures indicated up 113 points above fair value. also let's take a look at the shares of those two dow components that did report so far. travelers earning $2.61 a share. that beat estimated with revenue also above expectations. the insurer was helped by better investment results and lower catastrophic losses. the ceo saying they've been getting the right premiums. also united technologies beating by one cent for earnings.

revenue was very slightly above forecast. that stock right now up by 1.5%. big question, are the skies going to remain clear for the private jet business? phil lebeau joins us with that story right now. phil? >> thank you very much, andrew. i'm joined by ken ricky who is the chairman of flex jet. we're in the mockup of a g-100 gulf stream. one of the many jet flex has just bought. this question, has this market fully recovered from the recession when it comes to the executive corporate decline? >> the market decline 30% in 2008. the overall market has creeped its way back. for us individually the market is back to where it was in 2008. we've seen about 6% growth year over year. about 15% or 16% of market share. so i think that reflects some of the consolidation.

i think we still have a long way to go. but the consolidation has helped. and also we're seeing tremendous growth. >> so who's flying right now. and especially international. >> well, there's huge demand internationally. people ask me all the time who are on the planes. yes, it's all of the above. it's -- there's people have become accustomed to a certain convenience. they've been used to that domestically. now as their needs have gone more international. i think i've seen the needs become more international since 2008. but as that's happened, they want the same as they had domestically. >> i think there's a misconception that's still out there. people simply want to fly from point "a" to point be, "b" in a corporate jet. the ceo and the executives need to say in the office in the air. >> they absolutely do.

when we fly the airplane, having them being connected, having the wi-fi is the most important thing. >> they love the chairs. >> they want to have a nice dinner. but being in touch all the way around even on long distances all the way around the world which we are capable of doing is important. and the other thing they want to do is they want to go fast. if they have a 4,000, 5,000 nautical mile trip, we're seeing the demands for people to save an hour or 30 minutes. >> time is money. you used to follow the airline model. not anymore. you're shifted towards if you can get there faster, people will pay that price. >> we get to give you more time in your life. that's what they want. they want to go fast. >> real quick, are you noticing that the individual, the entrepreneur, is that market starting to come back? >> it's starting to come back. that would be at the lighter oend end of the market, but we are seeing that.

>> ken ricci of flex jet. one of the aircraft they have bought 50 of these and they are going to be in demand when they start being delivered. back to you. >> okay, all right. thank you, phil. speaking of private jets and the like, that's what this young woman is talking about in that song. everybody likes krissal, we're not caught up in your love affair. we'll never be royals. so they're not allowed to play it in san francisco. coming up, waiting on results from verizon and coke. plus the futures are even higher. "squawk" will return in a moment. when change is in the air you see things in a whole new way.

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welcome back to "squawk box." front and center this morning, travelers reporting thifrd third quarter profit of $2.54.

also chipotle mexican grill, shares falling after hours. a drop of sales from current double digit sales. and then the number of cars recalled on potentially defective air bags rising to nearly 50 million. the air bags manufactured can rupture and spray metal shrapnel into driver faces and chest. earnings reports are hitting just -- >> i haven't seen them yet. >> we got verizon. >> verizon's on it. looks like 89 cents. let me see if i have the

estimate yet. >> the estimate was for 90 cents for verizon. >> okay. >> i don't have the actually numbers yet. >> so 89 cents. let me see if there's anything in here. $31.59 billion which is right in line. just a little bit above expectations. wireless retail postpaid arpa, 160 -- i'm sorry. 161. and the postpaid churn 1.5%. fios tv customers up 114,000. >> looks like 89 cents came in. they do talk about how they're looking at least when it comes to new connections. they added 1.5 million new connections. which was up from the third

quarter. it was higher than what analysts had been suspected. still that's a miss. comments from the chairman and ceo saying they have great confidence heading into the fourth quarter. they say they're continuing to deliver consistently. continued healthy customer demand for wireless and broadband services. you said the fios numbers already? >> yeah, i did. i'm looking at -- because they give an adjusted earnings. 77 cents. normally we'd use it adds justment. >> they are calling it a penny shy of expectations. >> okay. yeah. all right, good. let's go to our trading block. we are talking oil and currencies this morning. right now 46% of all u.s. gas stations are selling fuel for less than $3 a gallon for regular. and aaa says it could fall further. crude is down about 10% over the last month. hear to break down the energy

trade is senior international strategist at wells fargo. kathy lian is a cnbc contributor. samir, did you have any idea that over the last six months we would be here almost below 80 at one point? >> i think below 80 is a bit of a surprise. we were telling folks back when it was 108 when there were supply fears that oil didn't deserve to be trading up there because growth is still a bit sluggish. and demand were fairly in balance. we've had people come to the high 90s. in our opinion, this is an opportunity. >> what'd you miss? the strength of the dollar? the weakness in germany? what do you think was the wild card here? it couldn't budge above 90 with

all the geopolitical stuff happening with isis and worry about supply coming from the middle east. had so many things that should have gotten oil above a hundred. and it looked sort of top heavy didn't it? >> it wasn't the dollar we missed. we've been calling for a higher dollar all year. it goes back to libyan supply. rebound probably a bit faster. and what's going on recently with the saudis. basically saying we won't be the only adult in the room anymore to let other people take market shares. i think that was a surprise was them being more fed up with being the only one to cut production. so that's probably the biggest factor that caught people off guard. >> they messed it up. >> coca-cola now. tell you about those numbers quickly. looks like coca-cola is coming with with comparable numbers. 53 cents. that would be in line with expectations. the actual number is 48 cents and that's a comparable number that takes things into effect

including comparable currency neutrals. you need to look at the outlook because this matters. the company warning about these head winds. obviously currency with the strong dollar. that's got a big head wind. it's talking about how they continue to respect currency exchange rates to have an unfavorable result on 2014. they're looking at things including spot rates and their existing hedge possible. they now expect a seven-point head wind on the fourth quarter of 2014. they're looking at currency being a six-point head wind. they say that's at the high end of the income. they expect to be below their shared growth target. >> didn't hurd -- >> they're not giving a specific number with this. >> 11.98. and estimates 12.119. so that's below. >> looking at the global case

volume unit, that may be below too. i think the expectation was for worldwide unit case volume growth of 2.2%. looks like it came in 1% in the quarter and 2% year to date. >> why aren't we using 48 cents? >> this is what they're called. >> no, no, no. i'm not buying that. >> okay. they're saying -- >> depends on what analyst. >> actual number is 48 cents zplp analysts know about the dollar exchanges and things. >> if they know about it then they'd be looking for -- >> i don't know why you would add that in currency change. >> i don't know. i'd like to hear a call. >> i would too. and so many times if it's 20 -- how many analysts are we talking about? we're talking a lot of analysts and maybe ten of them do and ten of them don't. but i don't know whether you're able to say we'll put the currency back in. they earned 48 cents.

>> the outlook is significant here. >> it's down like a buck 43. let's get back to kathy. sorry for the shortened edition here, but we had coke come in. and it's good you're here. this is all about currency translations. what about the dollar? we heard el-erian say about qe in europe. will that keep the dollar strong? >> in the new term we've seen a bit of a peck in the dollar. we'll see oil down to $75 at lowest. we got the meeting next week. we've heard a lot of commoning words from officials that

suggests they're going to down play the need for immediate rate hike. i think you'll see continued adjustments. it's not something unique to coca-cola. currency translations have always been a big factor in corporate earnings. and the strong dollar is going to be a head wind for many corporations. you'll see more and more of that. and we have seen it through the years as well. so there is a story here. in the long-term, i don't think even if we get a bit of a near term peak in the dollar, it's going to benefit earnings all that much. the fed will be one of the first central banks to a raise rates. even if it's towards the end of december 2015. and that will continue to put a strain on some of the corporate earnings. >> i just wonder if we put off the rate rise, if the fed puts it off whether that mutes the strong dollar. you say we're counting on that

along with europe going into a qe phase. maybe we've seen the best levels of the dollar already. >> right. that's why i think we could see a short-term selloff in the dollar. and get a position properly because wier also going to see a bit of additional weakness in the euro. especially with the market talking about buying corporate bonds. maybe next quarter we could see support from a pullback from the dollar. the federal reserve is going to be the first to raise rates. so the dollar uptrend story isn't over. >> big question to coke and other companies is do you post hedge at this point. where are you on the debate whether lower oil prices is good news or bad news. the consumer now has purchasing power. but those say it's bad news bautz it's indicative of how weak the economy is. where do you come out on that issue?

>> we're in the good news camp firmly. i think the lower prices portend for a brighter future in the growth trajectory. i think it's a bit of both. it was just yesterday if you look at what gasoline prices are. an additional $600 into the pockets of households. it caused at least a temporary boost. so from our standpoint, it's indicative of the current sluggishness. >> all right, thanks. thank you kathy and samir. 5 cents is not currency. >> they're saying it's currency neutral. >> but the items, the 48 cents, the items that are backing out -- >> you have to get the release to see.

impact compare tyly. they shouldn't tell you to see reconciliation of gap. >> so it is 53. when you're including the effects of currency. so that's already in it. >> what they do is on the front page they tell you it increased 56%. >> it did. because there are other items that you are able to -- >> i'm trying to look where they beat volume growth. >> if you're trying to say we're putting back in the adjustments from the strong dollar, i understand. but in this case -- >> i've gotten to page ten and not to the gap statement yet. >> so there's something else that brought it down to 48 that you can't exclude. >> with the unit case volume trying to figure this out. it was for an increase in america. looks like it was down 1% there. in the pacific region, it was for up 5%. looks up 2%.

overall that case volume was a little light. >> i saw two things in the last week. one is it takes -- you got to run four miles to work off one high test coke. and the others, there are a variety of health effects that seem to be prevalent in those with lots of sugary drinks. >> water and sparkling water seems to be doing the best. when we come back, we're going to have some instant analysis of coke's results. also get some health warnings on those drinks. >> don't drink sugar drinks, andrew. not the big gulp. >> and then the cold war to mcdonald's. 40u67 did that hurt the company's bottom line? i'm going to try to get joe a 16 ounce drink. >> i love them.

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like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics. coca-cola reporting just moments ago. the revenue was slight sli breaux and the bigger issue is going to be the outlook. it's worried the outlook will be below what it previously had been expecting. shares of coke trading sharply

lower. stock down about 2.5%. that will have an impact on the dow futures. joining us with reaction is john faucher. john, what do you think of this so far? what jumps out at you? >> yeah, i think our expectations were on the quarter specifically that the global macros were going to create a difficult environment. and we were below consensus on volume and revenue. it's been a difficult environment out there. coke isn't able to perform the way they want to. >> you think this is something? the company seems to be thinking these headwinds are going to last for a i while. you think the same thing? >> yeah. we're seeing this across most of our companies coming in light. and so what i think we're seeing is he headwinds are going to be around for awhile.

both company specific and industry specific. you have to cut faster. >> the encouraging being the cost cutting they're going to be taking on? >> yeah. there's not much that's encouraging in the underlying fundamentals of the quarter. although latin america wasn't as bad as feared. >> what's your price target on this stock? it's down sharply this morning. >> we have a price together in the mid-40s. we have been more cautious on this name because of the global macro head wind. so from our standpoint, i think investors need to be patient with all of these big multinationals. either simply not a lot to get attracted from a fundamental standpoint right there. >> be patient. does that mean if you own the stock, hold onto it. or hold off and wait to buy it? >> is yeah. i think if you own it now, you can hold on. i think coke is working to get the plans in place to survive in this difficult environment. i think the market will be

encouraged by that. you need to expect until earnings growth really starts to grow high single digits, it's not going to take off. it's not quite cheap enough for me to get excited. >> what would be cheap enough? >> i think if you're looking at something closer to the $40 range, there you feel like you're pricing in more of the headwinds that are facing the company right now. >> david winters was quite critical. what do you think of management? >> you know, i think as we look at the restructuring program that's coming out today, it's a sign that coke management is beginning to realize as you said that these headwinds are going to continue. none of these big multi-national consumer companies have been able to grow revenues at the same rate they did before the recession. and everyone needs to understand this is the new normal. i think coke is finally beginning to come to that

conclusion. and takes a little less revenue. you see them going out and doing some of these partnerships. if they start being more aggressive without a different business model, then i think they're going to be fine. >> thanks for joining us today. >> thanks for having me. >> mohammed. you're here with the new normal quoted. takes us back. ahead, we have stocks you need to watch ahead of the opening bell. and is the wild ride over? why investors could be spooked before the end of the month. check out this futures. coca-cola coming out and missing -- not missing expectations but lowering the outlook because of the headwinds they're seeing. dow still up 88 points. s&p up 13 points. nasdaq up by 34. "squawk box" will be right back.

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welcome back bb everybody. today's guest host mohammed el-erian, post pimco ceo and co-cio. what do you expect to see? >> if we need markets to consolidate in the middle. instead they go one way or the other. that makes fed officials nervous. because they have excessive risk

taking. and they don't like down days either. so what we need is a period of consolidation. the trouble is the marketing won't stay in the middle. either discouraged by low rates and going to high risk taking or switch it around. >> here's what i don't get. why didn't they allow -- only down 6%. you're not even in correction territory at that point. why did fed officials get nervous with just a 6% decline? >> because the policy depends on keeping valuations high. >> it's an impossible task. >> but when valuations come down, you worry about overshooting on the way down. therefore you've got to stop it from coming down. that's why they get nervous so quickly. >> as i mentioned, that's an impossible task. if you're waiting for that. maybe they should stay silent and stay out of it for awhile. >> then the valuation will come down too quickly. they want to keep valuations up here so the fundamentals can

validate. >> so they're going to keep ripping this band-aid off one hair at a time. >> correct. and the question is can the market stabilize or swing one way or the other. i'm worried it will swing one way and then the other. >> do you agree where they're talking down the market but also propping it up? >> i don't think they have a choice because the policy mablgers are silent. and therefore the fed is carrying the burden of policies without the -- >> you mean a dysfunctional government? >> yeah. we have three branches of government. >> it's the congress. i don't want to do the things that the executive branch wants to do. that's not dysfunctional to stop an executive branch from doing things i don't agree with. >> we're not even doing the things that both sides agree on. >> who put off immigration reform? >> what i'm saying is even the

things we agree on -- >> this knee jerk and this hack dysfunctional congress said gosh we'd be doing so many great things if it wasn't for congress. it's the dysfunctional government. and the white house has plenty of blame. >> but with the popularity of -- >> what's the popularity of obama? it's about 30% at this point. how do the people viewing the path of the country look to you right now? almost 70% on the wrong track. >> yeah. >> we got plenty of problems. not just congress. >> do you think anything's going to change in 2015? >> no. i think we're going to get the same out of washington, the same out of the policy makers, and the issues with the private sector. i don't think we can stay in this middle. >> can i ask you a question? when we had the last election,

we said we have to wait two years, get through 2014, then the whole world will change. all of a sudden this new opportunity will emerge for real reform to take place. and now it feels like, well, we're here, elections are almost upon us and if you ask what's going to happen after the elections, now nothing is going to happen. >> it will be more dysfunctional. >> it will be more dysfunctional. and then wait until 2016. and who knows what's going to happen then. have we decided it's just never going to work? but i would think that you would argue as long as it doesn't work, that's a good thing. >> no. that's not what i argue at all. there's things in terms of tax reform that we need to do. there's all kinds of things that we should be doing in terms of, you know, cutting back on a lot of overregulation. there's a lot of things. i don't need to explain the differences between where the two parties stand on doing all these things, right? >> so, joe, the important thing is it's not just a u.s. issue. if you look around the world,

the political system cannot keep up with the realities on the ground. it's not responding fast enough. and the key correction is whether the private sector can compensate for government. >> it seems to me you'd be arguing to unfedder the private se sector. >> and enable them to respond better. >> mohammed, thank you. when we come back, we're just minutes away from mcdonald's quarter. we'll talk about that and more when we return. from fashion retailers to healthcare providers, jewelers to sporting good stores, we provide financing solutions for all sorts of businesses. banking. loyalty. analytics. synchrony financial. engage with us.

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mcdonald's shares are under pressure right after the company is reporting numbers that have a lot of things in them at this point. the estimate was for $1.37. when you include -- if we were just to include all the items the company's reporting $1.09. however, the significant decline according to don thompson results -- and it's a significant decline from a year ago is from a higher effective tax rate, unusual events in the operating environment in asia

pacific. and underperformance in the u.s. which is the company's largest geographic segment. >> it looks like u.s. comps were down 3.3%. that's a startling number. the comp store sales in the u.s. down 3.3%. from negative guest traffic. so they had fewer people coming in. >> that's global, yeah. >> that's in the u.s. >> we have the ceo saying short of our own expectations. >> that must be the same as -- that must be the same as global then. global's down 3.3%. u.s. is down as well. so 26 cents due to an increased tax reserve. 15 cents due to the estimated impact of the suppliers issue. and 1 cent due to the impact of those -- remember when putin decided i'm going to answer your

anxiouses with -- acting like -- with implying that mcdonald's isn't healthy. >> my guess would be the analysts probably included some of these -- some included some and some didn't include others. >> a year ago $1.40. i take that back. $1.52. >> earnings per share would have been relatively flat compared to last year. >> when you take the supplier issue that you know knocks it, to take the shutdown in russia at another, i think some analysts ner considered it -- >> exactly. the company would probably like to exclude everything and analysts would say -- it's an art. it's not a science as to what you include. >> i am confident by the end of the day you won't be able to say what the analysts estimates were. some will include some numbers, others will include others.

>> that right there tells the story. the idea the guest traffic, negative guest traffic in the u.s., third quarter sales down 3.3%. that is significant. that's been one of the markets they have been seriously trying to turn around. that impact in what happened with the asia pacific, we know that's out there. we know that that's something other competitors have struggled with too. but in the u.s. there were other competitors that were sustained competitive activity. you wonder what's happening to the mcdonald's customer. >> yeah. where's the futures now. >> yeah. let's take a look. we have five dow components that have come in. utx, travelers, verizon, coke, and mcdonald's. at one point before we heard the last two, futures were up triple digits. now the dow still indicated higher but just 50 points. >> which is not like the other?

>> travelers and etx. >> i'd say ibm, coke, and mcdonald's all have problems specific to their own -- >> corporations? >> yeah. >> although the strong dollar, you wonder how big of an impact it has. >> that's true. but we know for a year now that mcdonald's has been grappling with things like that. >> do you want a company like this? do you want a company that's -- >> it depends what you use the shares for. >> then they say they're going to revamp their marketing approach to link national messages around food quality, brand transparency, and people initiatives. that's not exactly why i'm going to mcdonald's. >> i don't know whether they need -- a 3.7% yield before the increase certainly will cushion the blow in a 2% interest rate environment, right? >> it makes it more attractive. >> that's what i mean.

>> i think they increased the dividend by 5 cents. is that correct? >> 5%. 85 cents per share. >> gets it up above. >> when the yield for the s&p was higher than the 10-year note. and that's when people turned around and said wait a second. maybe it's worth it to take a risk if i'm getting paid that. >> mcdonald's went through a tough period when, you know, ceos had some -- stock was is $12 or $13. it wasn't that long ago. so it's tough to navigate when you're a fast food company in this health pc environment and everything else. let's talk apple. 34u67 better than expected earnings yesterday. handily beating expectations and the ceo tim cook telling the street demand is off the charts

for the iphone 6 and 6 plus. not just here. but in china as well. shares of apple are up indicated to open about $2.31 higher. then there's ibm shares tumbling. here to break it all down, managing director at ubs. is text -- is ibm still a tech stock? >> i recently saw a post that argued that peter seal was saying that it's not. he was even arguing maybe apple's not in terms of in ibm you're betting against the technology and silicon valley start-ups coming to disrupt you. it's been a cash flow machine. but they're going to take multi years to figure it out. >> will they figure it out? >> they have historically.

they're the only tech company that made it through each wave. they almost went bankrupt but were pulled out. i think they understand what's going on now. it's just hard hard to turn the tanker. they're going to survive. but it may take awhile. >> how long have you followed it? you've be on it for 15 years or so. >> more like 20. but yes. >> think about eastman kodak. remember westinghouse? i mean, you can't just assume that it will also be here because it deserves to be here. they need to get some things right. >> that's correct. we have the top market caps over the years. it's amazing how much it changed. you have a short competitive advantage periods. but again they do have a lot of software revenue.

they've got good customer relationships. there's worse positions than ibm. the rate at which they're moving is too slow. i think jenny has talked about that. i think they will come out of the other side. >> what duss the other side look like? what does the entire company -- how are you valuing the other side of this company? >> well, they're getting out of hardware businesses. but the way they deliver those is changing. clearly cloud is a major part of that. arguably a year or two late. so they're still catching up. they're making long-term bets like wattson moving into africa. again, i think you look out a few years in terms of hardware architecture. >> but total value. you look at the stock right now and say it's horribly overvalued or fairly valued?

>> i think if things completely fall apart and it goes the digital equipment route it's over-valued. it sells at about ten times earnings. >> what about hp? i think the same thing. i don't think watson's jepty earnings are going to keep that afloat. >> some argue they should be making large acquisitions. cutting back on the purchases, buying back other companies. maybe -- there's a lot of technology companies out there that wouldn't do anything for ibm. then some of the new guard where they have to get more ae gressive. >> how long does apple got? >> that's a good question. they're a chief stock. the stock's up a bit pre-market. but it's like why isn't it up more? looking out to fiscal 16. the bigger this cycle is, the tougher to compare next year. i think you've got to get conviction it's becoming more than a hits business. i think that's hard to argue right now. to me it's still --

>> it's a hit business. and there's no more inventions left. i don't know whether you realize that. >> i don't think tim cook would agree with that. we are bullish on the watch. but he's talked about apple working on things that people aren't even speculating on. >> like what? >> well, we don't know. >> what else? after the watch, what's next? >> that's a good question. wearables i think could become a big category. >> why? i know my heart rate. it's about what it was the last time i had it checked, right? >> well, blood levels. the next generation to watch could be different from a health standpoint. >> what are you monitoring right now on yourself? andrew monitor's everything. >> i'm monitoring your heart beat. >> how's it going? it's like hannibal lecter when he's biting that nurse's tongue

off. not even moving. >> real quick because we have to go, what do you make of the fact that tim cook suggested he doesn't want to break out the watch numbers. does that mean you're going to lower expectations for what the watch sales are going to be initially? or do you think it's for competitive reasons he hasn't called. >> i think we're at 24 million units the higher end. i think over time they would break those out once they're meaningful. right now he wants to hide what it's doing. there's going to be a lot of competition over that point. >> why isn't it higher? you put any valuation on it and it's trading at like 60% of what everything else trades at. it makes no sense unless there's something that people just -- and it's been that way for awhile. that's why i think they should spend time buying back shares. >> there's an opportunity here. >> all right. you were at merrill for a long time. where'd you hang your hat for

most of the 30 years? >> both morgan stanley and merrill. >> you're like me. thank you. we appreciate it. >> thank you. when we come back this morning, verizon unbundling cable and the iphone. plus is the burrito market about to drop? never. and as we head to a break right now, look at five of the big reports out this morning. these are the dow components who have all reported in the last two hours or so. two of them in positive territory, three in negative territory. "squawk box" will be right back. financial noise financial noise

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welcome back, everybody. a lot of earnings reports out this morning. there are more to come throughout the day. dom chu joins us right now to take us through the numbers. >> let's recap what happened with harley-davidson. that stock is roaring up by about 10% in early market trading. 69 cents beat the average estimation of 60 cents. harley was helped by stronger u.s. sales of its motorcycle.

there's a positive one there for you. u.s. consumers. on the other hand you've got america's biggest government contractor. they're headed lower. that's lockheed martin. here's the thing. sales were $11.1 billion. just missing expectations. but here's the concern. this is its ninth straight quarter of declines. that's what happened when the government is cutting costs. a notable downside move a yesterday a chipotle. best beat in some time here. revenues also better. expecting same store sales growth to slow to single digits in 2015. and we'll end on verizon, america's biggest telecom company. narrowly missing for profit. people were expecting 90.

it did add more wireless customers than expected. a narrow miss, but a large cap company to pay attention to. >> yeah. what did that say there? 50 cents? >> down slightly. we're going to continue to talk about verizon -- thank you, dom. we're going to break down veriz verizon's latest quarter. mike, going through some of these numbers it is a miss but you've got to be happy on the revenues side. >> parts are a good miss. they've got stronger editions and higher quality. so looking at subscribers at 457 versus us in the street around 378. and the handset not being the o'er priced per month tablets. the weakness i'd say to some degree on the top line is more

on wire lines. seeing weakness in both enterprise and small business. >> you know, one of the things you just mentioned, tablets. we heard yesterday from tim cook, apple not selling as many tablets. yet verizon giving credit to the tag let -- market. the idea is to get those tablets, take them on the streets and get video and get higher data usage. verizon has been aggressive with the $10 per month for tablets. but again they've had a strong quarter here as well. >> you said you're concerned on the enterprise side and small business side. is that a verizon problem or does that say something larger? >> it's something we've been tracking for some time. on the enterprise side, the carriers have been saying let's hope for a better economy and

have been through a couple of cycles and not had real improvement there. so our view is continue migration of product and systems into ethernet. small business we can debate there what's going on. i think the cable companies are having great success in taking revenue away in the small business market. >> and last but not least, the fios numbers. >> they came in good. they've been talking about weakness on the video side. the video side hit 113,000 net additions. and broadband is strong. 160,000. >> if the whole world goes over the top, do they make any margin on the actual video service. >> to be fair it's probably a bit of a sloppy transition.

that's being said they bought intel on businesses. so the video market themselves, the margins are quite low. if they can get revenue, that's going to be important. >> all right. okay. mike, we're going to leave it there. thank you for helping us through this. >> thank you. coming up this morning, we will introduce you to the world's largest spider. this is a picture you have to see to believe. plus, the stairway to a lawsuit. did led zeppelin steal a song from a band called spirit? i bet you can guess which song we're talking about. in the meantime take a look at the futures. this morning after all the components the five we expected before the bell reported, still looking at the dow in positive territory. up 65 points. and the nasdaq up by 36. "squawk box" will be right back. cute little guy, huh?

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welcome back. a lawsuit claiming led zeppelin plagiarized "stairway to heaven" moved forward after a move for dismissal failed. why now? a suit claimed the band stole the song from randy california founder of the band spirit. now his heirs are suing for

credit and royalties to the iconic rock song. >> a lot of hair back then. >> in the plaintiffs' complaint, it says that randy california deserves writing credit for "stairway to heaven" and to take his place as an author of rock's greatest all-time song. so now it's coming out it was randy california. it's like 40 years old. isn't it? >> the idea it's his heirs doing it and not him. >> exactly. >> also let's check out this picture. a harvard university entomologist taptured this picture. take a look at this. this is a south american goliath bird eater spider. that's right. it's a bird eater. probably called that for good reason. according to the guinness book of world records it is the

world's largest spider. it has fangs up to an inch. it spits out hair with microscopic barbs on them that get caught in your eyes and other membranes. that can be very painful and itchy. although it doesn't really eat birds, it will puncture and slurp bird eggs. >> not poisonous though? >> you know, i don't think you need any extra stuff nap guy is crazy putting his hand next to it. >> oh, they are venomous. i've seen larger spiders in middle earth. >> all the ones in the hobbit. >> thankfully we don't live in middle earth. still to come when we return, what do fruit spreads and helicopters have in common?

plus what will $70 million get you in the private jet market? phil lebeau unveils a new jet that's ready to take off. take a look at u.s. equity futures. we're looking up, by the way, guys. dow looks like it would open up 60 points higher despite mixed news this morning. in a world that's changing faster than ever, we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

welcome back to "squawk box," everybody. here is what's happening now. shares of coca-cola under pressure this morning. it's per share profit matched estimates but the company warned headwinds impacting its bottom line for the year. that stock is down. another missing by one penny. verizon did add 1.5 million new connections during the quarter. but that stock down by about 1.25%. and shares of mcdonald's are slumping today. the latest quarterly results

were probably below when you factor everything in on many items. revenue was a big shy of estimates and global comparable store sales fell 3.3%. mcdonald's says by all measures, its performance fell short of its expectations. for more on mcdonald's, let's talk to an analyst peter saleh. he joins us on the news line. what was the key thing here that was worse than people thought? because mcdonald's problems have been well discussed at least on this show over the past year or so. was it actually worse than we thought? >> thanks for having me on. yeah, i think it was a little bit worse. you know, there's a lot of noise in the earnings numbers, but i would tell you the u.s. numbers are down definitely worse than expectations in the month of december which is the only month

that has not been reported. you can factor in at least 250 basis points of a menu price increase in there on a year over year basis. so i think that continues to be a thorn in their side. >> okay. so in september, global comps -- im u.s. comps were down 4.1. that was worse than the average for the quarter. and then also what did you say? it was cheaper so it will be down that much. it had to be traffic was actually down. not just the pricing was cheaper. that's your paint? >> the point here is in their comp you're in higher menu prices. >> higher year over year. so it would be down that much. okay. i see. it meant that the traffic had to be even worse than you were thinking. >> correct. >> why?

>> well, i think they're still a losing share. when you look at companies like a chipotle and fast casual that are gaining share with higher quality food. i think the millennials are moving in that direction. and mcdonald's just isn't resonating with that younger crowd. >> yeah. everybody's talking about september was definitely. and they've been aware of the problem. in july, june, july, august, they were trying to deal with it. and it got worst in september. that must have people worried they don't really have an answer. >> yeah, i don't know there is an easy fix for a company of this size on the food quality or on the food side. not very easy to fix that overnight. it takes a very long time to do. >> is this a time for long-term that people should enter the stock? >> i would say not quite yet. i don't see a turn yet in traffic whether it be in the u.s. i don't see a turn in traffic in europe. they still have a lot of issues

in asia pac. and earnings numbers are still coming down. so i'd be a little bit more patient and wait for at least some stabilization in the traffic numbers on a global basis if not in the u.s. >> if i was a technician, i'd say 84 or below looks good looking at these. that's a multi-year low back in 2012. and we're still up at 80, almost 90. peter, thank you. >> thank you. all this recent volatility leading to plenty of buying opportunities in the markets particularly when it comes to individual stocks. that means it's the perfect time to check in with one of our platinum portfolio managers. joining us is john rogers. he oversees about $9 billion in assets under management. he's also the former chair of president obama's advisory council on financial capability. john, thanks for joining us this morning. >> good morning. >> let's get a look at what your three favorite picks are right now. the first one in lazar. has you liking this stock right

now? >> i think lazar is extraordinarily well managed and diversified. so we really love the fact they have the restructuring business for tough times. they had the investment banking operations that are doing really well. and of course they've got their investment management business that focuses on international markets. that's actually become over 50% of the revenue. or a big part of the problem over 50% of the profitability of the business. so lazard is a good investment. >> when did you think this was a good buy. >> we thought it was a good buy when it was in the $30 range. but at 14 times next year's earnings, the stock is still extremely cheap. and people really undervaluing this great brand and franchise. >> how -- what sort of multiples do some of its competitors trade at? >> it depends on which ones. it depends which part of the company you look at.

aditionally sold at a higher premium to the s&p 500. they are so consistent. i think people haven't realized how important the investment management business has become at lazard. i think it's helping to differentiate themselves from competito competitors. >> we've looked at consumer products companies have have struggled thorpg. namely coca-cola and mcdonald's. you have one that you think is a good buy. and that's smuckers. >> it's so much fun to go to orville, ohio, and meet with the smuckers brothers. a well managed companies. but they don't do just jellies and jams now. they have jif peanut butter, folger's coffee. a lot of its peers are selling in the s&p 500.

>> are you worried about higher prices or anything like that? maybe the health of the american consumer. >> i think the consumer is going to be fine. i think as the economy recovers, people will be spending more in supermarkets. i think the only thing is coffee can be volatile. it's a commodity at essence. that does have some quarter by quarter volatility because of that. but it's so well managed, so well diversified, we think it's going to be able to please the consumer for the long run. >> this is a play you have on the oil and gas industry. but it's kind of a play that's often an ancillary play. >> it is. bristow is the worldwide leader when it comes to providing helicopters for the industry. you need to get workers out safely and quickly. they have the major brand. and they're terrific worldwide. also search and rescues have become more important. a lot of governments are

outsourcing that work and hiring firms like bristow to provide the products they need and provide the helicopters to be able to get out there and search in e the oceans when someone's lost and needs to be rescued. >> okay. john, thank you very much for joining us. let's talk quickly about some of your old plays you liked. western union, janus capital. you still like those stocks? >> well, igt has been in a transaction, so it's done well because of that. that's off the table for us today. but we think janus is very well positioned. we think the positions that they are already taking to diversify their product line have better performance in their core products. just sets the stage for this bill gross announcement that was shocking and surprises. but very positive for asset flows at janus. and finally western union, we do think it's a very, very cheap stock. people are really down on it. with long-term we think it's got a great influence worldwide

though. >> okay. great. thank you for joining us. >> john, you know, figures out -- pimco's got 3 trillion, janus starting with 12. that's a good idea. >> i see opportunity. >> and for me, smuckers buys a peanut butter company, that's all i need to know. >> perfect. together. >> you believe -- you think pepsi -- you want coke to buy the chips. >> when smuckers bought jif you didn't think that was brilliant? thank you, john rogers. next, ceo of home services of america on mortgage rates with the fed rates and getting existing housing numbers. also speaking of housing, here's a look at the home builders over the past year. sector's up 17% over a one-year period. "squawk box" will be right back.

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welcome back to "squawk box," everybody. it has been a busy morning. we've had five that have reported. helping the averages. verizon missing by a penny. coke and mcdonald's have had issues of their own. it plays out to the dow futures being up 58 points above fair value. s&p up 12 points and nasdaq 35.

existing home sales out in just over an hour from now. this number, though, has been disappointing trending downward. while on the bright side, fixed mortgage rates falling. here to walk us through the ups and downs of the housing market is home service of america's ceo. good morning to you. >> good morning. >> help me with this. first-time home buyers with, that market just completely dead at this point? and what do we do to revive it? >> well, it's not completely dead. clearly the challenge is for particularly first home buyers is the challenge of getting a mortgage. and that's been a constant problem for the last couple of years. i think what we're seeing when we look back at this start of the recovery two years ago, we were seeing a large percentage of the home purchases being transacted by buyers -- by investors and private equity.

the good news is we are getting a more normalized mix of buyers. they are users and they intend to occupy the home. >> do you believe the private equity guys have created an overhang on the market? there was a debate that the blackstones of the world had bought up so many single family homes they had cornered the market. and as they try to sell this stuff over time if that's what they decide to do, it's going to create this bad overhang on the business. >> no, i don't believe that at all. i think they have bought those distressed properties and they're fully rented. and you know, people need shelter. and what's happening given the very challenging credit standards and mortgage market is that people are opting to rent either single family homes or the distressed homes that were purchased or apartments. and at some point in time when the mortgage markets loosen and, you know, the credit standards get more normalized, we see that

those people will move into, you know, purchases of homes. >> to the extent that we've all been surprised at the direction of interest rates, how has that impacted all of this? >> well, clearly interest rates at these very low levels are almost becoming normal. and it's a great opportunity for people that do have the credit and do have the down payment. you know, we are seeing purchases. as i said, i think what is really positive is the mix of business that has changed over the last 24 months is that we are seeing discretionary sellers. people that their home has some equity and they've decided to trade up or sideways. and discretionary buyers get moving into the market to own an occupy a home. and these low interest rates are a boom to that and certainly help people, you know, with -- manage their monthly expenses by

a lower interest rate than what we've experienced. >> you've spoken out about the sort of mortgage process. i think describing it as broken. we heard from ben bernanke he had a tough time refinancing his mortgage. what do we have to do to change or at least improve the process? >> well, i think we have to bring common sense back into the market place. i think what chairman bernanke's experience and his statement last week, how can you understand the wisdom or the logic of former fed chairman not being able to qualify for a refinance on a relatively small number given he's in the 1%. that doesn't make any sense. and i think, you know, now factor in the average american that doesn't have that high profile, does not have the

ability to, you know, to pull any strings. the process is to mechanize. it doesn't allow for common sense to enter into the mortgage qualifying process. and the standards are just too high along with the down payment. i think if we got back to the type of mortgage, you know, industry and process that we had prior to the boom and prior to lowering the standards, i think we would see that defaults were de minimis and frankly people made commitment to pay back their mortgages. >> thank you for joining us this morning. >> thank you. and when we return, jim cramer from the new york stock exchange with all the numbers we've gotten this morning. here's a look at the big names which have reported. more on these names and some others. harley-davidson also posting sharply higher. and tomorrow on "squawk box," quicken loans chairman and owner

of the cleveland cavs dan gilbert. that's starting at 7:00 a.m. eastern time. "squawk box" will be right back. and new blind spot monitor and a 2014 top safety pick plus rating. cost of entry? a fortune. until now. hey sarah, new jetta? yup. can i check it out? maybe at halftime? introducing lots of new. the new volkswagen jetta. isn't it time for german engineering?

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the 60 cent estimate. harley was help bid stronger retail sales in the united states of its iconic motorcycles. i don't know how -- is that luxury? it's not. it's a dream buy for people that aren't necessarily buy for peopt aren't necessarily luxury. >> for certain people it's a luxury. >> in 2008, that was one of the ones that got hardest hit. >> it's a discretionary item. >> but it's not like a private jet or something. >> no. >> you don't need to be a royal. >> you have to be doing pretty well. >> it's to certain degrees. >> let's get down to new york stock exchange. cramer must have owned a motorcycle in his life. >> i do like them. i go out with my buddy haley in summit. he's got a bunch of harleys. way like about this harley quarter, they did a bunch of launches that are just doing incredibly well. this may be more of a technology company than we think.

some of these things, the roadster, project rushmore. it reads like a fantastic semiconductor company. >> harley-davidson is a technology company, ibm is not? >> ibm is a share buyback company. that's what they do, they just buy back shares? would be good if they innovated. they have watson. come here, i need you. this is an amazing quarter. >> he won a lot of money on jeopardy. >> polaris and harley. asia pacific was up really big. didn't they close for business this quarter? sales up 12.8%. 7% gain in latin america. i don't even see them on the globe any more. so harley-davidson is something we make that the world takes. kind of like trenton. >> i like it. i like the symbol. it's good. okay. so we had mcdonald's, i say we knew mcdonald's had issues. maybe worse than we thought.

we knew coke had issues, too, didn't we? >> coke, this is totally no coke/pepsi. i am floored. coca-cola put out a bad quarter. it's a bad quarter. we are restructuring, we are restructuring. this is one that maybe it's like you can restructure dog food but they just won't eat it. >> do you think buffet should sell coke and ibm and buy harley? >> swap out of coke. he'll never do that. ibm, i don't know. if he is reading over that conference call, he is thinking to himself, you know what? i'm going to stick with this another quarter because maybe this is just ramen east recognizing the palmisano game plan to buy back stuck. it took great courage to admit it. maybe he gives pass on the next quarter. wow, ibm, the best thing about ibm was they have a relationship with apple and introducing 16 new products. they have something in security.

they buy a lot of companies. they have no social, no mobile, no cloud, no interactivity. every one of those will say they are up double digits. the base of what they are up on is so small. is it cumulus cloud, i've got to get a weatherman. this is a cloudy story. >> how about verizon? >> the ads are good. the penny misses. the one that dazzled me last night, no one talks about texas instruments. texas instruments, micron, sky works solution. texas does have some apple. these quarters are remarkable. i think we put behind microchip. some companies are doing really well in the business of tech. ibm is not one of them. i question whether it is tech at this point because -- on the call, it is open rebellion on that call. you guys are a second rate -- i

can't take it. they are so mean and horrible. they were bullying apple. ibm. ibm was a love affair. they are bullying ibm. >> apple is a love affair. >> i felt bad for ibm. i almost shed a tear for ibm. it was kind of like you felt like wow, how could you pick on them like that. >> would you buy the stock? >> ibm? no. >> okay. what are you kidding me? >> so i just want to make shedding a tear. >> the parts aren't worth more than the whole. your piece today was great. my sympathy for apple comes from the fact you have guys who are analysts who are very good guy. >> are you going to watch the world series? >> i love the royals. >> do you know where lourd got the name for that song?

she saw a picture of george brett signing autographs and came up with the song "royals." >> do you remember the pine tar incident with george brett? we've got to go. >> we don't want to be royals. crystal? >> no. when we come back this morning, a horse on the loose in new york city. plus, find out what $70 million will buy you in the private jet market. ♪ there's confidence...

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what can you get fore$70 million in the private jet market? bombardier unveiling a new jet at the national aviation conference. is that a challenger? what is that, phil? >> no. it's not a challenger. it is the global 7,000. >> global express. >> our photographer is going to take us on a little tour here. consider this your eye candy at

the end of "squawk box." what stands out at the end of the global 7,000 we are seeing the first time here in the u.s. wi-fi operations, joy sticks to the side. what they consider a proper galley. if you go towards the back, you notice this is the first business jet that has four cabins. four cabins within the area. there is the business area we are watching right now. oh, by the way, full connectivity when flying around the world. then you move into what they consider the dining area. then finally, in the back we want to show you, it's got its own bed, a suite. if you are flying from beijing to washington, you can take a little nap. just a little eye candy all for the price of $72 million. >> that competes with the gulf stream 650, i think, right?

>> they would tell you that it is better than the gulf stream g-650 because of the range. when you're looking at this price category, it flies up to 17 people. >> take care of my plane. >> that's too many. >> see you back at hq. we've got to run. >> thanks for joining us. now it's time for "squawk on the street." >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. after the first three-day win streak in a month for the s&p, futures suggest we may make it four. nearly half a dozen dow components reported earnings this morning. ten-year yield back above 22. crude oil looking for stability. our road map begins with a slew of earnings this morning. sales light at coke