wti is back below 79 a barrel. helima, is that because as much as the back and forth, the terrible story around khashoggi, the threats by saudi arabia using oil as a political weapon, is it that envin toinventories o high, that it won't matter yet >> it won't matter yet there are fears weighing on the market, but the saudi oil minister also walked back the oil weapon threat. i don't think people now are believing saudi will take 3 million barrels off the market we have to see how this story plays out. right now people are focused on the demand side. >> rising rates, cooling stock market not good for demand. >> also the whole macro selloff. that is weighing as we get further out, get a turnaround, i think then we'll look at fundamental issues right now we're in the negative spot >> back to the saudi picture for one second i heard people say look the president is taking iran on. he doesn't want to take saudi arabia on, too even though the situation is obviously gruesome and horrific. >> also he invested a lot of poli

so don't worry about the red on the screen wti crude above $76, above 86 yoef overseas hadley gamble joins us now as we countdown to the iran sanctions taking effect next month hadley what can we expect? >> brian, it seems as if even though there's a lot of speculation over whether or not this donald trump doctrine is working when it comes to sanctions on iran, folks i'm speaking to have said it's effective so far we're month out from this implementation of sanctions on iran oil trading at four-year highs as we inch closer to the higher dollar marks, some traders are already speculating we could see $100 a barrel by 2019. this comes off the back of a variety of factors you have bottlenecks in u.s. crude. you have the questions over whether or not when the sanctions come to the fore whether they will be iran, china, the relationship with india as well, whether or not india and china will step back and not buy iranian crude. that's what we're seeing at this point. and big questions over whether or not the saudi/russia agreement on output will have any effect there you already heard ove

sectors right at the top we have telecoms and oil and gas oil and gas seeing a bit of a bounce this after wti posted the worst week last week it was down 4% on the week that was the worst week since may. the developments in saudi arabia and tensions with the international community has helped given as the spot price gets a boost right at the bottom we have financial services down 3/4 of a percentage point again, trade is here i want to talk about saudi assets as well as i mentioned, we've seen a bit of a bounce in the sector. crude is trading 81 again. we've reached 84 at the highs. came down 4% up half a percentage point .2% for crude. saudi arabia is on to something. this is the currency pegged. they have hundreds of billions of dollars reserved. it looks today investors are getting jittery. we're trading a little bit weaker for the saudi real. this is the weakest bubble we've seen in more than 18 months or so finally the saudi index after a big decline yesterday was down about 4 or 5%. it's seeing a bit of a boost this morning up about 1.6% as the market looks perhaps to the de-escalation

francine: looking at oil, wti is falling. let's get to our guest, john sfakianakis, director of economics research at the gulf research center foundation. you know saudi arabia like few people do. what will they say in the report? there is now an investigation. is it a serious investigation? of course it is a serious investigation. i think the fact that the secretary of state is in riyadh and is in discussions with the king and the rest of saudi arabia is quite instrumental in defining what will happen next. i think data will be shared from both sides to see exactly what happened. then the next step forward. their relationship has to be maintained. it is a very important relationship. it cannot be dropped just because of this event. onncine: what does it mean how the international community will take this. how can saudi arabia actually ?espond to criticism john: it is not going to be easy. saudi arabia has always been criticized. begins with a lot of shortcomings, a lot of handicaps. saudi arabia needs to explain to the world

under $70 barrels of wti. ine: the political situation is not impacting oil prices too much. curb itsontinues to production, the industry is lower to compensate for a lack of output. have the pricel going back to $85 over 12 months. gam has some very specific issues. considerably,own but with regard to hedge funds and alternative investments, do you see this as a good time for you to get involved? talk to me about the links between u.s. rates on the rise and hedge fund performance? funds are one of the best-performing asset classes during u.s. rate rises. we think it's quite an interesting time to be in the hedge fund space. the market dispersion is quite high. results, youthese can see the spread of the performance is increasing. that allows for hedge funds to benefit. matt: i will bring out the ea function. it's still early days. we only see 72 companies so far reporting on the stoxx 600. if those -- of those who reported, the financials have done very well. it's been a tough year, for them to say the least. what do you make of the financials? caroline: we have a lot of dif

saying oil could be a problem for the consumer, this could hit global growth, 100-dollar oil, brent or wti. >> that is an issue. cheryl: it is on the table. >> it is an issue. each dollar oil goes higher, more wells come online. we'll be able to pump more. to steve's point i want to weigh in on the emerging markets, it has been deadly mon for last 10 or 12 years. i look at these countries they're not shareholder friendly countries. you touched on it, china is classified as emerging market economy. kind of ridiculous. emerging markets etf, 32, 33% of etf. not surprising with them in a bear market that we are struggling at this point. cheryl: steve, we haven't seen these kind of levels in the 10-year for seven years. this could make fixed income to your point value but fixed income bond investments more attractive. we're not seeing it yet but i think there might be a little bit of a move in that direction? if you're an older investor to be clear. people do need a little bit of safety. >> sure, last 10 years, most individual investors have gone heavily into bonds. while it may be very nice, i

. >> wti up nearly 50% over a year chevron is up 6% exxon's up 5%. >> it's a defensive way to have energy exposure and that's why i have that bar bell approach on energy if i owned all of transocean they have a lot of beta and that is every day it takes your -- it's a distraction, if you will. chevron is a quality blue chip name that has lagged >> 12-month target they go 142. >> they take conoco phillips from a buy i think conoco phillips is in a sweet spot there's positive momentum. i think that continues to move higher i don't know if the play is you're going to take some of the strong gains and success you've had in conoco phillips and put that into chevron. there's an opportunity for chevron to show the marketplace. i like conoco phillips and i'm surprised exxon mobil was not mentioned. >> which trades the most with the price of oil let's say you think 85 or 90 is where we're headed some are dividend plays. >> the stats >> of the three conoco is more levered. you want to own -- marathon, hess >> they do trade with the price of oil but with a significant lag because the projects they g

a bit of softness coming through in wti. pointing lowers along with u.s. futures. bloomberg markets, the european open is next. ♪ ♪ >> good morning and welcome to "bloomberg markets: european open." we are live from our european headquarters in london. i'm anna edwards alongside matt miller in berlin. asian stocks sell across the board and u.s. futures are down with most of europe. a drop in the pound may support ftse stocks at the open. european equities start trading in less than 30 minutes time. ♪

another play going on as oil is charting higher is wti trading at a pretty good discount next to brent. it is down because of a bottleneck in u.s. production. this might continue. it might look like 2013 levels. anna: i will go with just enough. brexit, brexit, that is all the rage. thank you for watching. you can find all the charts at g tv . surveillance is next. francine: italian assets suffer a blow. we speak about it shortly. oil pushes higher. brent cracks $84 a barrel. about aed to concern global supply crunch. will boris johnson make a bid to be prime minister? we are live at the tory party conference. welcome to "bloomberg surveillance." i'm francine lacqua in london. these are your markets.

believe and yet it's all p/e contraction all year i'm surprised how poorly it acts given we hit 75 in wti and still the energy is not coming to life. >> there's definitely a skepticism around the staying power of higher oil prices but, you know, the fact of the matter is is that the geopolitical situation would lead you to believe there's a staying power to it. and to your point, carter, you know, the composition of energy in the s&p 500 index continues to be near all time lows so it's 6, 6.5% versus 10% average. you can get a big rally and we think that's part of the story. >> are you worried about the input costs going higher we know where the dollar and the labor is trucking said -- >> credit is more expensive. >> financing all this debt and then the inability to kind of, you know, borrow to buy back stock couldn't you see a legitimate eps downgrade for 2019 between now and the end of the year >> you could but the counter to that is that valuations in aggregate are already okay i mean, you have had -- you have had multiple contraction in 2018 a couple of turns. if you're still going to

oil itself here domestically wti is approaching $75 so i'd like to hear what the president will say about that. to your point, buybacks are coming once again. we had a nice handoff from september to october it was a quiet period and basically, as i said before, sideways was the new up. you had other names. you had this dispersion participate. here come the buybacks, the earnings the momentum is clearly in place to the upside. whatdefeats that again, midterm elections >> calling out stocks by name. frequently he'll talk about auto sector and things like that but he talked about harley-davidson by name. he talked about newcorp. pulling out individual names >> guys in the back, please, can you put up gm, ford, boeing. >> leer. the deal with canada, this is an autoparts maker. you look at leer or johnson controls or axle, any of these those are all moving on this deal >> gm, which you own, was at a 52-week low last week. >> that's not because of canada. i know there are people out there who will say the supply chain going through canada and mexico -- >> of course it does is it perceived to be

another trade that is happening, at the end, the spread between wti is widening. we are continuing to see a chart -- it chart upwards. chart this morning. let's get your first word news, juliette saly standing by with a global outlook. juliette: u.s. president donald trump looks to be preparing for economic war with china. clearing the decks with disputes of other traders. he struck a last-minute deal with canada and mexico, signed a trade agreement with south korea and convinced japan to begin economic negotiations. said they are in no hurry to settle the trade war. forecast forhe global growth. the managing director warned that trade wars and tighter credit are darkening the outlook. i. lagarde: six months ago pointed to clouds of risk on the horizon. it is not pouring, but there is a bit of a drizzle. because today, some of the risks have began to materialize. indeed, we find that growth has plateaued. juliette: u.s. supreme court nominee brett kavanaugh is facing new questions about drunken behavior after claims from a former fellow yale student. chad ludingto

back to oil.get wti trading around $72 a barrel. arabia as saudi threatens to retaliate against any u.s. punishment over the disappearance of journalist jamal khashoggi. joining us now is chief oil analyst. great to have you with us. thank you for coming in so early. whatone is talking about saudi arabia could do to retaliate against any u.s. measures. talk about whether that means weaponize in oil. let me take you to this chart that shows saudi and russia have nothing on u.s. crude in terms of production since 2010. if saudi were to use the oil markets to retaliate, what it actually have any meaningful impact taking this chart into account on oil prices? >> first and foremost it is very premature. on theirat this says official website. again, there has been no direct mention of the word oil. that is how the markets are interpreting. i think the big thing is that the u.s. still imports about one million barrels of saudi crude oil. i think that is the space we need to watch. then the question is how much does europe import. i think t

wti at 7481. oil heading for a fourth weekly gain. you have u.s. job data today to williams to and john joins us for an exclusive interview after 3:00 p.m. u.k. time. let's get a check of those asian market moves. here is juliette saly. juliette: certainly this tech selloff hurting asian stocks, which are down for a fifth session in a row. you have seen the hang seng weaker by 0.4%. the taiwan taiex is being hit the hardest. all those apple suppliers and also tech suppliers in japan. the asx bucking the trend. higher for a third session. let's look at some of the players. asian tech stocks at a 15 month low. lenovo, one of the worst performers. jpmorgan saying you should short lenovo for six months. it has fallen the most since 2009. screen holdings in japan also a laggard. samsung is doing well. it came through with strong chip numbers. was higher by almost 2% in the early sessions. turning out to the bloomberg first word news. the u.s. senate had to a make or break procedural vote on judge brett kavanaugh as lawmakers digest an fbi investigation

up by 1.5% this morning wti pulling back to 73.59. >>> nobel economic prize just been awarded literally minutes ago now to william nordhaus and paul romer he won for technological integrations into long run macro economic analysis. hold your tongue, joseph. >> need we say more? >> congratulate those people. >> that's a perfect -- >> the other guy won for endogenous economic theory, which is the idea that economics -- >> perfect. >> -- what you choose to do as a country and policies matters for your economy on a morning when they've been granted the nobel, it's a time to celebrate you >> apple's top security maker aid is that they had no idea he said apple has repeatedly investigated and found no evidence for the main points of the report published on thursday the article says super micro allowed for back door transmissions to china app apple's letter follows statements by the department of homeland security and the u.k. cyber center they have no reason to doubt the denials. blockberg said it stood by its story which was based on a dozen anonymous sources. one of apple's former senior la

wti heading for a weekly loss. .6%,e showing brent off 76.42, back and forth when it comes to oil and opec and the rhetoric. denver pressure today. a lot of breaking news, deep into earning seasons in europe. just coming through on the bloomberg, first quarter euros,d eps 1.51 estimate 1.44. we've got a beat for bas s. growth for industrial output fell short of forecasts in the third quarter. third-quarter sales coming in at 15.6 one billion euros, estimate 50.61 billion. it's the adjusted number you want to focus on, 1.4 7 billion euros, estimate 1.5 5 billion euros. adjusted ebit is a miss for bas the expectation was they might disappoint, third-quarter adjusted ebit number is a disappointment. let's move on to cement and talk about lafargeholcim because we have those numbers coming through, as well. basically there is progress for the divestment target of 2 billion swiss francs. 2018 recurring dark growth of 3.25%. if we take a look at for your revenue, lafargeholcim sees revenue up 4-6%. it did see 3-5%, a little bit of an upgrade. recurring ebit, 1.8 7 billion for us -- swiss fra

we are looking at crude higher, and wti. keep an eye on tv . of course, you can follow the show and all of our charts and also ask the guest of question. this is bloomberg. -- guest a question. this is bloomberg. ♪ 6:30 am in london, 1:30 in the morning in new york. tech lead to rebound on friday and it led the selloff yesterday. u.s. futures pointing higher. nasdaq futures up .6 percent. we did see muted gains in asia as well. let's check in on the broader markets. here is annmarie hordern. >> in asia, stocks just this hour turned positive across the board. japan leading the way, up .9%. the csi in china up slightly. we are seeing center volume -- thinner volumes in asia. they are grappling with geopolitical tension. alongside this, they are looking for corporates, whether we will see stronger growth or not. the fed will be in focus tomorrow. we have the fomc minutes and the futures in london pointing towards a writer start. i want to look at iron ore. we heard from rio tinto. for said they are on track a record annual shipments which follow

brent and wti up 1%, sitting around $81 a barrel for brent. copper as well as gold has been having an interesting bit. thursday we saw huge optimism with the bully and, something we haven't seen for some time -- bullion for some time. saudi arabia saying they might retaliate if the u.s. does impose sanctions on the area. that could move the oil price higher. we heard the likes of the head of the state owned arab news saying it could wreak havoc on the global economy. we could see oil prices close to $200 a barrel, which could be unlikely. some say let's bring up the board as to why. increaseddi's reduction, they are shooting themselves in the foot if they actually do so. this chart shows it is not so much about the saudis or russians, but also what is going on with u.s. shale as well. the yellow line is what we are seeing with crude production in the u.s. that is surpassing saudi arabia and according to the red dotted line, forecast to grow even more. that could provide cap for ceiling to the price of crude moving forward. gold.r chart, lookin

crude rolling over. 1%.have wti off over going to turn to automobiles. autonation sells vehicles than 360 retail outlets throughout the country. it gives us a read on where the industry is. it announced third-quarter results and the comparable sales missed estimates when it comes to new vehicles. we welcome michael jackson, autonation chairman and ceo. welcome. good to have you. looked at these earnings, it seemed to be an extension of what we have seen. vehicles whileew used vehicles are the future. michael: good morning. it is a pleasure to join you. 1.24 is a 24% improvement in eps and we are grateful for tax reform. it gave us a fair tax rate. it will be healthy for the economy in the long run. we talked about it years ago. create anes would affordability issue for the american consumer around new ourcles and we embark on brand extension strategy and a big part of that was preowned. consumers look for affordable alternatives and one of the ways to address that is to get to a different price point. we have nearly new vehicle vehicles coming off lease

wti in focus. opec's future plans remain a little unclear. to be honest, there is some ambiguity. phil joins us down at the cme. movements the kind of down to the ambiguity? >> yes. one would expect that with the dow jones up over 200 points, we would expect a rebound. the fact they haven't tells you that two different things are going on. rotation been a sector out of oil, and it looks to continue its path lower. should break through the 200 day average. we seef concerns as weakening demand from china. brent crude was down over 4% last week. if you look to the supply side of things, opec is really going to step up in different areas like saudi arabia which has increased production. it looks like they are not going to halt production anytime soon. they have grabbed a lot of market share. is not exporting anything. if you look at our imports, we have rallied for two straight weeks. look at the five-year stockpiles that were higher than that average. crude oil prices look like they got a lot of pressure ahead of themselves. how much of this is a dollar story? we sought play out on s

wti overnight fell nearly 5%. taking a look at other laggers in australia, worleyparsons falling to an 18 month low after the country raised 1.8 billion aussie dollars for a chemical resources unit. asx 200declines on the today, this as the company faces condition from tougher rivals. >> earnings in japan as well, 200 companies announcing this week. >> when it comes to names reporting today, linecorp -- bloomberg intelligence expects line's third-quarter numbers will demonstrate the struggle for operating profit as investment picks up. buys, seven holds, one sell calls on the stock. switching the board to check on sectors like machine makers. more pain could likely be ahead for chipmakers after texas instruments warned demand is slowing. optical fiber makers with quarterly results failed to impress. u.s.t's head back to the to get details on the earnings season there. the theme playing out as a result from caterpillar and g.m. thesegetting tough for big industrials. caterpillar was one bellwether we were looking o

. -- wti's, $12 behind. the downturn in oil -- what are you doing? dwight: it is hard to understand what is happening in the capital markets because commodity prices are coming back for oil. markets are still hands off to a large degree. equities are still down somewhere between a third and 50%. credit is hard to find. the banks are inside their cell protecting themselves. we see opportunities to put capital to work that are unique energy has. erik: as a lender, do you think there is a stronger likely of -- hitting $100 or going back to $70? dwight: forecasting is a difficult thing to do. it depends what happens on political disruption. heart of what you see in britain today is political disruption around iran. it depends. i would bet more towards $70 than $100 that is more my nature and what i do for a living. it did not do good for us to go to $100 so we watch that carefully. >> alex --erik:alix, you know him well. interesting. coming up, we are going to look at earnings that could give us into how industrials did in the last quarter. this is bloom

you have brent crude and wti, just coming back a little bit. falling back a tad, not helping very much. 7.1%.down korea seven, 5.5% lower. look at one of the biggest dollars, z te. the stock is down 6.5% on state share 2.2%. we did see this down because of the story about hacking taking place in motherboards being effective. this is bloomberg. ♪ ♪ paul: 11:29 in hong kong. i am paul allen with first word headlines. the people's bank of china cutting the moment -- the amount of cash reserve people must hold. lowered reserve ratio one percentage point which billion. total $175 china's bond currency holdings fell last month as trade tensions dealt with concern of capital outflows and further you on depreciation -- yuan depreciation. the total people killed in an earthquake has risen to 173. to arrive as government considers mass graves because of the number of victims. it liquefied the soil in many areas, swallowing whole villages and making it unsafe to operate heavy machines. south korea will offset any -- saudi arabia will offset any losses

. >> so how much of that is in the market already at these elevated prices wti at 73. how much more upside do you see? >> i think there was some confusion in the market. there have been a number of reports out there, wire service reports indicating that the trump administration is actively considering waivers but, again, when we talk to administration officials say they, a, they're not waivers, you have to make a significant reduction to get an exemption and these exemptions will be few and far between so i'm not sure the market fully appreciates yet how serious the trump administration is about trying to get iran to zero china will remain in the market as a buyer, india will make purchases at some levels but it will be a big hit to the market in terms of iranian barrels off. >> sort of a -- it's a bullish view on the price of oil, michael. do you agree as far as how the price is reflecting what happens with iran's production >> i do think that what halima said is accurate as we move into the next month and a half we'll continue to see barrels come off of the market th

access its gotten more information than you have there you go >> jim, oil services not playing today, wti still below 69, target extricate and the case of khashoggi. >> people do not want to touch these stocks and halliburton is at its low why is that? i think people feel that -- i don't believe that >> they're talking about the wells that are not as productive that's a big issue hal halliburton is vofred involved u.s. and we have to see if colorado can drill the only good is vf is moving its headquarter to denver. i looked at real estate and boulder. >> of course, you did. >> the tech boom is shifting to boulder because it is cheaper. >> they exhausted austin and now they're moving >> yes, they are moving. p polares is up at four. >> that's what's happening >> polaris i thought it was a good quarter but maybe on the conference call they mention china in some way or form. it is incredible to me how negative these calls they all read the same don't worry about china. they have china? it is their north america volume up one verses up 13 a year ago >> that was like holy cow, they're playing

wti crude hitting the lowest level since mid august, now tracking for the worst month since july, 2016 among the names leading lower, anadarko, hess, marathon oil, down more than 20% from recent highs. back downtown to you guys. >> thank you keeping an eye on energy trade. >>> later today on "closing bell" facebook earnings. we are all over it the stock down sharply since the last report when it shocked the street, predicting growth would slow and the ceo of tapestry, an earnings winner. >> a big afternoon. >>> apple's new product launch continues. we'll get live coverage from that event and analysis. the s&p going green for the year, but dow gains t mocualst in half. "squawk alley" is up next. life was tough in cuba in the 60's. my mom was fired from her job, so she started making cakes to support us. the first account that we opened was with bank of america. since then, we have grown exponentially. to me, food is love. and i think food brings people together. everything in life is about giving back. you're only as good as what you leave behind, when you leave this world. ♪ >>> i am

check things out, wti down by 37 cents. that does it for us today. make sure you join us tomorrow >> okay, hi jim, hi carl, "squawk on the street" is next ♪ >>> good tuesday morning, i am carl quintanilla with jim cramer and david faber at the market stock exchange the dow s&p failed to hold those gains on monday. goldman sachs and black rock and unh and j&j is all beat. rally on italy and 10-yr yields 16 futures point to a higher open after strong earnings from some of the largest u.s. companies. a key question is the market cheap. >> the third quarter continuing to impress with strong results of the peak earnings, johnson & johnson and united health this morning. >> pot stocks surge, cannabis recreational legalization tomorrow stocks are opening higher after yesterday's decline on goldman sachs and black rock all better expected larry fink weighed in on the markets following last week's sell-off >> if you like equity and everything felt great, you have to like them more today. the market is actually adjust to this fear. the market is adjusting to

. >>> oil prices were up in choppy action this morning, although wti is down for the moment the tensions between the u.s. and saudi arabia are growing we're live in riyadh hi, hadley. >> secretary of state mike pompeo is on his way to riyadh within the hour, we expect him around breakfast time tomorrow and it speaks to the critical point that u.s./saudi relations have reached over the last 24 hours. earlier we heard president trump making some comments going through everyone's mind is how much he's learned from this conversation, let's listen in. >> mike pompeo is leaving literally within an hour or so, he's heading to saudi arabia, we are going to leave nothing uncov uncovered. the king firmly denied any knowledge of it. he didn't really know. maybe -- i don't want to get into his mind but it sounded like me that these could have been rogue killers who knows? we're going try to get to the bottom of it very soon but his was a flat denial. >> the president say that there could be any number of reasons including rogue killers that led to the disappearance of jamal khashoggi two weeks ago.

we mentioned oil with -- wti and brent trading. vladimir putin says he agrees with the president oil prices are too high but that he is okay adding such oil prices are to some extent the result of the u.s. administration, i'm talking about sanctions against iran, political problems in venezuela and looking at what's happening in libya if you want to find the culprit of who is guilty, you should just have a look in the mirror this as saudi arabia's energy minister says the kingdom will look to raise production by nearly 11 million barrels a day. questions remain about production capacity and the future of iran joining us is goldman's global head of commodities research, jeff curry welcome back a lot of headlines today take putin's take for one. he thinks $65, $75 is a decent range. there's reports the saudis and russians have talked about boosts last month. how much of this is going to move things? >> there's two imbalances to look at, what is happening on the physical market and what is happening on the financial markets and what's

than estimates so up about 15 cents since the report came out but a huge drop yesterday in with -- wti so the momentum is to the down side on the u.s. side, 10.9 barrels a day, still on the high side so supplies are still there the concern when it comes to crude is alongside the stock market will demands start to slow down? >> a little pop today, up almost.75% jackie, thanks >>> when we come back, we'll take you live to the white house as the president steps up his attacks on fed chairman jay e dow is down 25 points. "squawk on the street" will be right back >>> welcome back to "squawk on the street," i'm sara eisen with carl quintinilla and david faber live as always from post 9 at the new york stock exchange. >>> volatility continues to rock this market. it's been a theme for the entire month of october john ford is out west looking at the big move out from texas instruments as semis are on pace for their worst month in a decade brian sullivan has a check on energy eamon javrs jav javers is folloe president. first, let's start with jon. >> texas instruments down over 4% after a reven

wti crude is $74.72, up by half a percent. >> thank you, seema mody elon musk calls the s.e.c. the short seller enrichment commission in a tweet. former s.e.c. chairman harvey pitt calls that tweet juvenile, narcissistic and stupid. but does he think the section should tear up its settlement agreement with musk as a result of it? harvey pitt joins us next. and the dow dropping sharply for the second straight day and nearly 500oi pnts erased in two trading sessions stay tuned, "power lunch" will stay tuned, "power lunch" will be back after this break. it's not what champions do. it's what champions don't do. they don't back down. they don't settle. and they don't quit... except for cable. cable? oh you can quit cable. because we are cougars and we don't quit!! unless what?!?!?! [team in unison] unless it's cable! quit cable and switch to directv and get the most live sports in4k more for your thing. that's our thing. 1-800-directv >>> what you are seeing is the markets as we stand. the dow down by 277 points near the lows that we've seen far today. the s&p off by a percentage po

wti had a 75 hand him. 76 hand him a 71 handle right now the vix has pulled in ten handles right now. so i think a lot of things we are hyperventilating about last week are calming down this week. right in the head of earnings week we will hear from companies. they will report right when their stocks and indices are sitting at the port level. i think that's a better place to be i think right now the mark is in a much better place than a week ago. two star earnings. >> gentleman, thank you both for joining us larry glazeer and art hogan from b. rhymely the dow retired by almost 400 points. >> we will get larry's kids on next time. >>> to the bond market, rick santelli is tracking all the action at the cme. hey, rick. >> hi. if you look at the month, it tells you everything you need to know basically, we've come off our high close of the year 323 we've gone sideways. this could be the fourth day in a row, we settle in a closing rate you pick 315, 316 if you look at a two-day dollar index, we have been spending a lot of time thinking how traders think 95 is technically significant. look

could affect prices at least wti spread. benchmark in europe and benchmark in the states. we're doing well. our economy is doing well. i don't see oil, it will struggle because of all the other things out there. we're not seeing commodities rally period, or at least as much as we like to see them. we want inflation. i am not worried about running away from us anytime soon. connell: you mentioned calls from people saying this whole thing went off the rails whatever, we would be 100, 200, there was mention of that before. whole theory was based on relationship between the united states and saudi arabia because of the khashoggi killing, just basically being destroyed. you know, since then the saudis basically came out and said, lissen well pump extra oil as counterbalance to iran. that is the rear view mirror, that near concern? >> they will try to buy our friendship. maybe they can, right, at the end of the day? there are reports from multiple different sources maybe the king will have to get rid of the crown prince over this. maybe that is their way out. the crown prince is

. >> despite that, wti did well as did brent. what's driven it in the last couple of months and can that continue for the rest of this year >> generally speaking demand has been good for oil and the demand is huge. it's $100 million barrel a day market ultimately what'salso been driving things which is less positive is iran the fact is when you get into a very risky oil market and the market is clearly pricing geopolitical risk here, that's not good for stocks. it's almost as if the oil price is getting out of control and will lead to a dumping of the price over the spike it's been a struggle to get people excited about oil stocks. >> $100 is obviously a flashy headline >> yeah. >> everybody is wondering if we should be talking about that number again. >> i joined mezuho in may and we immediately started talking about $120 a barrel. there's not enough supply, too much demand and the market will balance itself by encouraging supply which isn't possible because the oil is in government held, difficult places such as venezuela and i

wti, trading or $75 a barrel. shedding 90% of oil production in the gulf of mexico. this year asd 20% volatility surged on uncertainty over a potential supply crunch. how likely is $100 oil? joining us now, executive director at the iea, fatih birol. last month, and he warned the oil market was getting tighter. where is it now? and i very tight now, think what we have been seeing since march, tightening of the oil markets toward the end of the year, is unfortunately materializing and this is not good news for the global economy. in fact, not only the oil, but coal and natural gas are going up, and i can tell you that it looks like expensive energy is back. expensive energy is back at a time -- a bad time when the global economy loses momentum. in majorcrises countries and trade disputes in countries. a high oil prices not good news for the global economy, both for importers, consumers, but i believe also for the exporters. if not today, tomorrow. francine: you think it is tighter than a month ago, correct? fatih: definitely so, because demand is still strong and we h

wti falling about 10% in october. that's its worst month in two years and the s&p energy sector. it also dropped a little bit more than 10%. no coincidence there the reasons that oil dropped concerns over global demand. supply concerns. they seemed a little bit overdone, and the dollar, it's been slowly creeping higher. that, of course, pressures oil prices let's take a look at some of the stocks the etfs first the xop and lih and oip, down 20%. big oil, conoco, exxon, chevron, month to date, single digits, hess saw an 18% drop in october. oil services, baker hughes, schlumberger, 15% to 20% lower on each of the stocks this month. the pipelines, however, lower, but by a little bit less some hope there that bailedouts wi -- that buildouts will continue guys >> now let's move from oil and energy to energy josh lipton here to wrap up a month to forget for most technology investors >> that's right, brian so a lot of green today but a tough month certainly as you said for tech investors. even with today's gains. nasdaq got hit hurd, worst month since march and faang names taking it on

wti crude oil is trading below $60 per barrel. this weekend, russia suggested it may keep output at current level. opec ands days after allies signaled they can cut output in 2019. welcome emmanuel ibe kachikwu. he has previously served as executive vice chairman of exxon mobile in africa. you received a number of awards and you have been made an honorary citizen of the united states. when you look at the price of oil, it has been volatile. what has been going on? >> uncertainty is everywhere. onare keeping a tab instability and prices. havenk the problems you our civil strife all over the being able to reach the typical capacity we have and how much of that it can cover. francine: what are we misreading? what do you see for 2019? are we putting too much emphasis iran and venezuela shortfalls? minster kachikwu: i think so. we have the capacity to fill some of the gaps you see. overestimating a sudden drop in production of supply. you have abovek $77 now. aboutne: we're hearing some kind of green field that opec would do with non-o

at $75 for wti and 80 field dollars for brent, this is a difficult position. francine: is there a price to perfection here? if it goes higher, maybe it will hit demand. to $95 maximum because the market will readjust itself? >> there is a redistribution of income around the world, so there becomes a point where it becomes painful for oil consumers. the hint to oil consumers globally tends to be more negative than the gains come in because the producers don't spend all the money they are making, so we get a slowdown. this is coming at a time where the global industrial cycle has peaked. pmi's around the world have peaked. they are stable, but not rising. goes, as the global cycle this is a good place to be. if you have been looking for further incremental improvements this year than last year, that was always going to be tough because last year was pretty good. now as not revealed plausible to go to a better place from here. saying not the same as the developing economies are about to rollover. i don't think they are. markets, especially in europe, were looking

i think we're going to betweenfinitive split the major benchmarks, brent and wti. the global market is going to remain tight through the fourth quarter because of what opec has been thing, a lack of spare capacity. if there were to be a disruption thany, there is no more 700,000 barrels a day they could be brought into stem a price increase. there is disruption in nigeria, in libya, in venezuela. we have a market that is tight not just because the oil market has low inventories but because the natural gas market has low inventories not just in the u.s. there could be a cold spell anywhere. we have either the winter weather or disruption. tom: i have got eight ways to go. politics of europe always comes back to russia is the hydrocarbon provider, a provider of heating oil. where is that discussion now? he control the thermostat in european homes? edward: to some degree, he does. europe is moving to put in liquefaction, liquefied natural gas. remains tied to russia on the oil and gas side. europe isosition for that russian entities want to export material and they do

commodity prices are four-year high crude, wti just broke through $75. i don't think they had much choice but to continue to raise rates, so i don't -- did they cause this i think so, and i think the real thing, the next shoe to drop is that we're going to find out that higher rates, monetary tightening, energy costs is going to lead to an economic slowdown, probably much more severe than what wall street was anticipating. >> so you agree with the president? you think the fed caused this? did i just hear you say that >> well, i think they had no choice i don't think they're not doing what they need to. i think they're doing the right thing. we need to moderate this recovery right now, scott if it's going to continue if we can moderate it, slow it down. >> dow 500 as we're having this conversation. >> i want to point this out, guys one of the drivers here, we are seeing, you mentioned jim, this idea of an absence of a flight to safety. we are seeing that now we are seeing yen gain some strength, the treasury yield now below 3.14%. it was pushing 3.25% a h

us.line and peter stay with donald trump still does not like the price of oil, even after wti falls. in an attempt to side with american farmers, the president is starting to list -- lift restrictions on gasoline containing up to 15% ethanol. i want more. i don't like $74. more, i have to do whether it is through ethanol or other means, that's what i want. i want low prices. i am ok with it. francine: crude prices shot up over the past few days, hurricane michael holding a fit of daily production the gulf of mexico. joining us now is our leader of european oil coverage. welcome to the program. the president keeps on tweeting. i don't think anybody said "guys, we got this." but he is also tweeting because i is putting out less barrels. james: yes. francine: where is he going to go? even if opec is pumping more, they are not getting ahead of the sanctions. they said wherever the customers come from, they will provide. but they are looking around and at the sanctions, and people are just worried about supply. they are not worried about the preemptive action, which is what trump seems to

of capital and building up capacity >> so ed, in the last three months, the price of oil looking at wti, the u.s. benchmark, is down 3%. if you look at the s&p energy sector, it is down 12% so why are energy stocks taking it harder than the underlying commodity? >> i think that there is definitely some fears around how energy may play longer term. there is a lot of talk about alternative energies creeping in to the sector. i think that the bigger issue for oilfield services is is that we really haven't seen a lot of pricing power yet. and that is compounded by the fact that we now have a slowdown in the u.s. frac market. ultimately i think we will see a reversal in that when pipeline capacity comes into the permian. although admittedly we have fears long term about north america in terms of a bit more constrained growth potential so we've actually recommended that investors focus more on the offshore centric names we think that is where the better growth potential is longer term. >> jim, give me a couple of your top picks. >> halliburton is trading where it was when the u.s. recount was

if anything, seeing the difference between brent crude and wti, our standard. that might widen. brent crude trade a lot higher then it has been. we don't see anything taking off like we saw, you know, the tech stocks of the 90s or say the oil dipped about 10 years ago, 140, 150 bucks a barrel. nothing will run away. economy is doing well. we'll get out in front of it to be planned. i don't think anything will last a long time. stuart: at the top of the show this morning, scott, i asked for some slack on the grounds i had to talk about italy and italian banks. turned out, in the middle of the night it was a big negative for us and our money. now it turned into something less than that. what is this about italian banks? should we really be concerned here? >> well, a little bit because of what the knock-on effect would be going over the pond. but really the to simplify it, they're talking about what% of gdp their deficit will be. leave it to the italians to argue between 2% and 2.4%. really? that is what it came down to, there is talk if they had their own currency they would be in

says really matters crude has an equity market sell-off a warning from saudi arabia about oversupply wti down 1.1% at 5659. >> cash in the trash waste management reporting earnings yesterday it's a down market, off about three-quarter of a percent and joined by jim fish of waste management people want to know what the core business is i know what it is. that's where the real core business is. >> i've said this before, after your doctor and lawyer, is your trash collector. all you need to do is see when there's a strike or event or something there's no trash collector, you see pretty quickly who's important in your life that's what your main business is, those dumpsters? >> we talked about how strong solid waste is >> strong. because we're generating waste in the economy >> part is pricing and we're able to raise prices >> what controls that? >> prices is somewhat of an andy dote for inflation the fact we can offset inflation with price increases is part of the use of it. part is great customer service if you're differentiated you can raise prices and part you do not. >> do you remember,

stronger dollar and curbed oil prices we don't think wti spends much time above $70 on average in 2019. >> that five, okay, is it equal to and even a little bit higher than overall growth of the u.s. economy? so companies maintain their profit share and they even grow it a little bit if you do five that's what you do >> yeah. that's right and you would expect that just because of the retention of earnings >> so that's good five >> yeah. it would be concerning if we drop below that. but earnings growth should still support a nearly 18 trailing pe as long as the 10-year treasury doesn't exceed 6.5%. >> are you looking at -- >> we do both. applying some business cycle analysis to the portfolio is helpful in how you build out your sectors and holdings. >> where do you come down on that >> we'd still be in the 10% camp for earnings growth next year. above 20% this year. a lot of that due to the tax cut. we'll still have fiscal stimulus capex spending is now doing well look at the payroll numbers as well what we're seeing in the stock market right now, we're pricing in a slowdown which is to

first as we head to a break, check out oil prices right now wti at $71.91. stay tuned you're watching "squawk" right here on cnbc what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. >>> president trump not backing down on his tough china trade policy >> i have a great chemistry, also, with president xi of ch

check things out, wti down by 37 cents. that does it for us today. make sure you join us tomorrow >> okay, hi jim, hi carl, "squawk on the street" is next ♪ >>> good tuesday morning, i am carl quintanilla with jim cramer and david faber at the market stock exchange the dow s&p failed to hold those gains on monday. goldman sachs and black rock and unh and j&j is all beat.

months to digest this iranian news this is priced into the market hence a speculative bubble run up to wti high 70s correcting that bubble and now in high 50s -- >> here is -- >> my question though as internal report that was released that said opec was having trouble expanding their production and up wondered if you could go into that a little bit for us. >> that is interesting because again, with the united states greatest oil demand we have ever seen, the iea said in august global supply of oil was at an all-time high, and opec supply was at a nine-month high because we had increased output out of the saudi arabia, out of iraq out of nigeria out of libya that compensated for significant losses of oil coming out of venezuela, and iran, that is not to say this will be an overhang to the market i am confident market regardless of internal report market spasmodic us over summer that it is capable of handling the current situation. >> sounds like you think oil going lower we will check back. >> thank you. >> we've got final thoughts when we come right back. (beeping) experience the lexus rx

down to $67.52 for wti >>> merkel commenting. after the elections, we cannot continue business as usual this is a turning point. those elections for the coalition government she takes responsibility for what happened since last year. angela merkel says the government has lost credibility. i believe we need to turn a new page as a result i am not seeking re-election for her party as party chair. >> she will also not be seeking for her post -- >> this is my last term as chancellor let's go to annette ta standing by what else? >> reporter: yeah. it's a big surprise that angela merkel has actually decided to announce her, yeah, sort of gradual departure from politics as of today. she's calling it herself a risk. because never before was the role divided being a chairman or chairwoman of the party. and being the chancellor of germany which might actually render her tok be a lame duck as the chancellor in germany. for europe that means nothing positive because there is clearly a power vacuum if she is seeding power it remains to be see

check it out, 68.68 for wti. we're going to drill down on the factors. >>> first, check out the trading picture in europe right now. germany's flat but france is a little higher, 0.4% ftse flat, too stick around, you're watching "squawk box" right here on cnbc. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ ♪ ♪ daddy, mommy's on the phone! hi! how are you guys? ♪ >>> welcome back to "squawk box. futures now down just under 50 points 47 and change. on the dow, nasdaq, down 14. s&p down just under 6. treasury yield, they were just about under -- they are now, under 3.2. 3.198. joining us now, the fixed income strategist at merrill lynch. and u.s. trust and john kilda, former partner at capital. a cnbc -- disock d-i. was there anything in your motion, john, on oil, we saw runup that we saw disruption in the gulf, now it's coming back down, from michael, i'm talking about