Transcripts For CNBC Worldwide Exchange 20240714

The early trade after posting massive losses what the ceo is telling cnbc. And caught in a glass case of emotion a surprise mystery guest making the rounds all over late tv last night. Its trending on this august 9th as Worldwide Exchange begins right now. Good morning, good afternoon, good evening and welcome from wherever in the world you may be watching. Maybe at 2 00 in the morning in san diego, founded in 1909 by the germans. Any way, it could be the chart of the day whipsaw action in shares of uber after what could be described as a disappointing quarter. Ubers 2 2. 5 billion Second Quarter loss was larger than the total losses last year, all year for all but three companies in the s p 500. Only ge, kraft heinz and Newell Brands lost more money last year than uber lost in the Second Quarter. That stock being punished. Not as down as it was, but down 7. 5 right now to under 40 per share. Well have much more on uber coming up. A developing and important story. Thousands of protesters rallying in the Central Terminal at Hong Kong International airport theyre trying to get the worlds attention and stating their demands for a full withdrawal of chinas extradition bill and retraction of their movement as a riot among other demands. That airport connects the city to more than 220 global destinations and serviced 74. 7 million passengers last year so heres how things look on this friday. Stock futures are down about 78 points nasdaq and s p futures are down as well. All this comes after what has been a wild week of trading. Now, the dow, s p and nasdaq all in, all just about 3 away from clocking into fresh record highs. Futures indicating we wont be near that. As long as the s p 500 does not close down more than 0. 2 , or it ends higher, the s p 500 will end the week higher, which seems amazing given mondays big losses the bond market maybe has been a bigger story than stocks yield remaining steady at 1. 7 the twoyear at 1. 6. That yield curve between here and here just 0. 1 around the world, japanese stocks, they rose in kind of a shocker. Japans Second Quarter gdp coming in better than expected the First Quarter revised upward china had a key inflation metric which fell in july for the first time well see the Chinese Market down japan up well get more on china a minute in europe, uk gdp came in at 0. 2 the worst quarter since 2012 and if you are counting at home, in your global rate race to the bottom, a less familiar name, one yooweve probably never tal about, peru, their central bank cutting its key rate, not the start of a large easing cycle, but the peruvian currency is called the sol, the peruvian sun. So we had new zealand, thailand, we had peru and others cutting rates. Here at home invests bracing for the end of what could be a rocky and wild week of trading so what is to make of all the volatility and what is driving trading now . Joining us now is james liu. Good morning its been a crazy week in your mind what is the most important thing driving u. S. Stocks and global stocks right now . Good morning, brian its been a seesaw of a week for investors. If you look at monday, that was the worst day of the year. Then yesterday basically the third best day of the year so you had this seesaw back and forth in the marketplace the biggest challenge is many issues facing investors now from the fed to trade wars to the u. S. Dollar and other Central Banks and the gdp reports were getting, a lot of these issues have become intertwined. Before the question of the fed versus trade talks were fairly separate, now its basically effecting one another. So this creates an additional layer of uncertainty for investors who have basically priced in the fact that the fed will continue easing over the next year. It felt like on monday, monday we had that massive drop. It seemed like it was sparked by chinas currency and how it fell below 7. 1 to the u. S. Dollar is it chinas currency the hong kong protests, is it our fed . What is driving equities on the shortterm basis it appears to be the headline the china currency devaluation and pegging it past 7, thats something that was unusual, but i think it has to be viewed in the context of the trade talks this is different from what we saw back in 2015 when china had to devalue their currency because of the economic story and the fear they would have a deceleration and a hard landing. Thats probably not the case today. Its really just about the trade talks and retaliation there. As long as ultimately we get some sort of trade deal obviously that deadline has been pushed well beyond there doesnt seem to be an end in sight there i guess maybe in the meantime theres respite to the increased tariffs. September 1st is around the corner but those headlines can change on a daytoday basis for longer term investors, we need perspective here despite the trade headlines. The u. S. Market is up 17 this year were not that far from making new highs. And actually since the beginning of 2017 were up over 30 . Its important to have perspective. I think youre making a really important point, which is context. Its i know the market tanked on monday. Weve come back this week. But to your point, the nasdaq up nearly 20 this year the s p has done well. We have room, i guess, to wiggle, do we not . We have room for earnings estimates to come down, for the markets to come down, and still have a pretty good year for stocks i think thats right. The economy is still strong even if it has decelerated. A lot is made about the fed and the fed put and this insurance cut. I think the challenge is that this is a party thats gone on for a long time. If its slowing down its because the guests are tired, not because the fed needs to refill the punch bowl. The biggest challenge is the fed, its a credibility issue do they need to cut rates in september. The challenge is that the fed lost control of the yield curve. Theres question if they had any control of it over the course of this cycle to begin with the market is saying yes, the fed will cut rates 100 in september. We look at the economic data, the yield curve is flashing yellow right now its not yellow or red still yellow right now. Were about ten basis point spread between tens and twos were still not in inverted yield curve territory yet. Yeah. But clearly its flashing very quickly, rbi at the end of the show, we asked viewers will we be in recession in the next 12 months what do you say . We say no a lot of crazy things can happen between now and then, but we think its a good time to be invested james liu, thank you very much thank you back to your stock of the day. Thats uber. Investors bracing for heavy losses at the open after what could only be described as a very weak quarter. Weak, indeed. Shares down about 7 today the company reporting a loss of 5 5. 2 billion in the Second Quarter. Thats compared to 878 million a year ago the bulk of that includes costs related to its ipo but excluding that, ubers losses were still about 30 worse than in the First Quarter. Revenue growth slowed to 14 to 3 3. 2 billion ubers Ceo Dara Khosrowshahi saying 2019 will be the peak investment year and losses should come down over the next two years. He says theres no doubt that uber will eventually be a breakeven an profitable business bookings from the ride hailing business topped estimates, but revenues from uber eats fell short. Khosrowshahi says uber eats still has room for Significant Growth but he doesnt expect the business to be profitable any time soon. Thats not what investors want to hear. Ubers report catching a number of invest off guard after lyft posted a smaller loss and raised its revenue outlook. Uber shares down 11 since the ipo in may ubers ceo will be on squawk on the street at 9 00 a. M. Eastern. I cant wait to hear what jim and dave have to say to dara that quarter, as we pointed out, they lost more money in three months than all but three companies in the s p lost last year generally investors will be okay with that if they see the growth trajectory in your revenues, but if your revenues slow at the same time, that raises alarms for people thats going to be a bigtime interview. Well see you in a bit when we come back, new tensions in the u. S. china trade war, this time over huawei a live report from beijing next. There is good, there is bad, then there is ugly theres one stock not named uber that investors cant sell fast enough later, amy zhang of alger is back on Worldwide Exchange with a new round of her best investing ideas. That is an interview you cannot afford to miss thats coming up as Worldwide Exchange is just Getting Started at 5 11 on a friday morning. Dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. Na blend of quality probiotics. And fermented whole food botanicals, expertly curated to naturally support your gut health every day. Go with align whole food blend. From the pros in digestive health. Hong kong may be the most important city in the world right now for your money one of which is we continue to watch the currency war risk out of china the central bank lowering again its official yuan midpoint for a seventh straight day they pegged it at an 11year low. It is right now at 7. 05 thats what the yuan is trading at against the dollar. Eunice yoon joining us from beijing, china with more on this side of the story. Eunice thank you very much traders are talking about how 7 is the new normal. This morning the Chinese Central Bank set the value of the currency at weaker for the second time this week. It was at 7. 0136 to the dollar still stronger than what the market had expected, this afternoon the bank posted on its social media account a fresh interview with one of its official officials, and in this state tv interview the officials played down the yuans movement saying the fluctuations are Market Driven and repeated that m fundg so the yuan would remain stable. So there are fears here that the government wants to keep the yuan around this level, around 7. We also had some weaker than expected inflation data out of china overnight as well. How is that playing out in the markets in well, the deflation concerns that weve had in china before have now returned. You mentioned inflation figures, they were for july and they showed that prices contracted for the first time in three years, but the cpi was pushed higher by surging prices of vegetables as well as pork. So china has been battling a bout of african swine fever and chinese manufacturers have been cutting prices in order to try to expand market share thats been hurting profits. Theyre also worried but theyre seeing a weakening demand. Theyre also dealing with falling prices of oil and other raw materials. Policymakers here are in a bind. On the one hand, if they could loosen policy, which is what a lot to of people expect to try to lift the producer prices, but then that could just make things worse on the consumer side yeah. We talk about numbers all the time on this network 0. 2 , 3. 9 lets put it in human perspective. You showed food costs up 9 year over year. Pork, hogs, because that swine fever up 27 year over year, all while the currency deflates against the u. S. Dollar. Thats a bad combination for the average chinese citizen. The middle class, the working class citizen in china, theyre spending more on food. How is that playing out if at all in the countryside when you go out to eat, do you feel it . Do you see it . We were just actually at a market talking to people about this people are theres uncertainty now. Generally people feel uncertain about how the economy is going also when they ge to the so to e supermarket, theyre seeing pork, an important meat for the chinese, those prices are rising higher and higher. Right now its not so dramatic theres some people and vendors who say it has not been affecting their purchases that much, but the expectation is that the government here doesnt totally have the swine fever under control. And that will just keep pushing Prices Higher later this year. That may be the biggest story were not talking about until now, food costs up, currency down, bad combination for the average chinese worker thank you very much. Still on deck, dark clouds for dropbox, reporting its sloeft u slo owest user growth since back in its ipo were back after this. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. My bladder leak underwear. Orried someone might see so, i switched. To always discreet boutique. Its shapehugging threads smooth out the back. So it fits better than depend. And no one notices. Always discreet. Theres brushing and theres oralb power brushing. Oralb just cleans better. Its the one inspired by dentists. With the round brush head. Oralbs gentle rounded brush head removes more plaque along the gumline. For cleaner teeth and healthier gums. Oralb. Brush like a pro. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. Welcome back lets check some other big tock stories. Dropbox, that stock down 5 , reporting betterthanexpected Second Quarter results, but the file sharing company posting its slowest user growth since the ipo last year. Dropbox paid user growth has declined despite the Company Offering a try to buy promotion. Cbss Second Quarter profit and revenue beating forecasts, results helped by subscriber growth for its streaming platform including cbs all access and ad revenue for the ncaa mens basketball tournament the company declining comment on merger talks with viacom. And shares of Amarin Pharmaceuticals are down today, down 22 company says the fda plans to hold an Advisory Panel meeting to discuss whether the label for its Heart Disease drug should be expanded that means the fda will delay its final decision three months. Amarin off 22. 8 straight ahead, recession warning signs and the global rate race to the bottom. Yet another central bank joining the club in the global easing cycle. Who did it, what it might mean for the markets and your money is next. And later on, aside from chickfila, perhaps no fast food chain has more of a cult following than taco bell and now fans of taco bell have a new reason and a new location to celebrate over the weekend its the tacotel and well tell chgerernabout it when worldwide exan tus. Otion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Lets check on the mornings other top headlines, for that we go to Frances Rivera in new york just six days after that mass shooting at a walmart in el paso, an armed man showed up at a walmart in springfield, missouri causing chaos he was detained until Police Arrived and arrested him the suspect had a loaded weapon and over 100 rounds of ammunition no shots were fired. Yet another shakeup for the Trump Administration sue gordon, the Deputy Director of National Intelligence has resigned her decision came after President Trump named a new acting head of the Intelligence Commission announcing it will be joseph maguire. If your last name is green, here is an opportunity to save some serious green mr. And mrs. Greens can book a free ticket on Frontier Airlines this month the airline hopes the promotion will highlight the companys environmentally friendly focus back to you. Too often in the media we throw the word hero around but that firefighter in missouri, hero when we come back, too fast and too furious perhaps. Uber investors bracing for a wild ride. A 5 billion loss in three months that stock down 7 right now what the ceo is telling cnbc coming up. And she manages one of the Top Performing funds in america and is making a dramatic return to Worldwide Exchange. An interview you cannot afford lgsmyhawith aer a zng coming up. 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And ubers loss. The Ridesharing Company turning in a rough quarter the stock getting punished now and no your eyes are not deceiving you. A classy guest, san diego, appearing on all five late night shows at the same time that really got out of hand on this friday august 9, 2019, youre watching Worldwide Exchange on cnbc. A little jazz flute to kick off your friday. Welcome back and good morning. Im Brian Sullivan heres how your money and investments look were exactly halfway through the 5 00 a. M. Hour stock futures are down right now 75 points. Nasdaq and s p down as well. If youre keeping score at home, what a week. Monday a nearly 1,000 point loss for the dow. We ended up down 757 we came back we went down again heres your tally. We are actually higher by 0. 2 on the s p 500 now so if today ends either up or down less than 0. 2 , well actually end this crazy wild week higher on that major average. What wont end the week higher are bond yields. The benchmark tenyear note sitting still at 1. 7 . Your big corporate story, the big stock story, the big business story of the day has to be uber. Right now uber stock is down sharply, 7 , after Quarterly Results fell short of wall street estimates on nearly every metric growth at its core ride hailing business slowed during the latest period. The ceo telling cnbc he sees this year as the companys peak loss year, and that by 2021, losses should come down. Joining us now is joe calina trading at webbush securities. Ill ask you a question that you may not want to answer youve been doing this a while, i presume. Have you ever seen a worse quarter by maa major publicly traded corporation in your career definitely not in the second print. Ubers only been a Public Company for a couple quarters. For them to come out and do what they did last night, its a disaster im surprised the stock is not down lower it did rally off the lows. There was hope on the Conference Call last night. Dara was upbeat. Like you stressed in your comments earlier, hes saying we think 2019 will be our peak loss we should be, you know, be towards a clear path towards profitability by 2021. Thats a lot of hope you see the 5 billion number. The core service, the ridesharing business, adjusted revenues were flat year over year they missed the top line by 3 latin america, their second engine of fwee geography of gro was down and their number one backer, softbank, is still throwing capital at competitors across the world in ridesharing and food delivery. The story is murky i think the frustration with the Conference Call last night, you listen to it, he scooted around a lot of questions you used the right word, the s word, should a lot of should. This should be our peak losses we should be more profitable a lot to of shoulds. Do you believe that . Do you believe the worst is behind uber . No. In my track record, when you see these companies and after a quarter like that, and obviously theres been skepticism, just over the overall business given the heavy promotional environment. Lyft was very reassuring last night. They cut promos by 40 thats what caught people most off guard with the uber print. Here you go. You have lyft, arguably viewed as the second tier company in kind of the ridesharing battle, and uber the leader came out and completely missed it across the board. I dont think they deserve investors to jump on the hope train that this is the time to buy the stock. You can be patient here. I would rather buy it when theres a turn in the story and a more visible clear path to profitability. I dont want to offend our audience by saying what they know and dont know, but maybe people dont realize is you get in an uber, you pay the driver 12 bucks the driver makes more than that. Uber and its backers and the public investors are subsidizing the ride they have got to get to a point where when you, joel, or i, or any of our viewers get in that car, we are paying for all or more of the price of the ride. Its not a complicated business. Do you think theyll get to that point . Well have to pay 20 or 30 more to get in an uber to make it profitable. Will we do that . Thats time will tell. I think younger generations are shifting away from car ownership. So the future, whether its 5, 10 years from now, theres probably more competition coming to the market, whether its elon musk with tesla. We heard him pump up robo taxis, god only knows how far that is out from being a reality competition wont go away. They still need to fight to gain riders like you said, to jack prices 20 to 30 , there will be a Significant Impact especially in the major metropolitan areas that are investing in infrastructure they have a long road ahead. Arguably maybe the biggest ceo interview of the week, maybe the biggest of the year is coming up in the 9 00 hour today with ubers ceo. If you had one question for dara, joel, what would it be basically how do you see the ridesharing landscape evolve in the next five years . And actually be more and get more details on their path to profitability. He really waffled around a bunch of questions last night on the call i think investors at the retail institutional side, they deserve more clarity from the ceo of this company, which is a big part of almost everyones life daily life how will they, you know, adjust the model where they can actually show results, they had more leverage and have some pricing power. Its a company we all use all the time as jim cramer said many times, a Great Company doesnt have to be a great stock. Joel, great stuff. Thank you very much. The warning lights may be flashing that the american and maybe the Global Economy is heading towards a recession. The yield curve, the spread, the gap between the twoyear yield and the tenyear yield is launching closer to being inverted meaning the twoyear goes above the tenyear on the yield. Invest often give that special attention. Its often preceded by recession in the last 40 years lets welcome in frazier first question is this do you think well get the inverted yield curve in the United States . Good morning its possible afteral a all wee only nine points away from that becoming a reality i dont think that on its own is a game changer i think were already in an environment where people are talking about and well aware of yield curve inversion. More disappointment out of earnings, earnings revisions and changes to outlook at the corporate level combined with the lack of progress on the chinese trade war negotiations will compound this are we misreading bond yields we assume it means the world will head to recession given the negative yields around the world especially in europe where you are, is the bond market simply telling us theres nowhere else to go is it a recession sign or a lack of other places to invest . I think compared to previous cycles, the Government Bond area is much more of a relative value game than it used to be. More of a global game. So the levels of Government Bonds in europe and in japan have much more of a consequence on what you guys will be experiencing in america. That said i think if anything its more the equity side thats not fully reacting to some disappointing Earnings Data and political headwinds that were facing globally here im surprised that you have not seen more of a reaction on the equity side to what the yield curves are telling you i think a lot of ways that companies are likely to defend themselves as earnings deteriorate involve cutting dividends, cutting back on Share Buyback programs, selling noncore assets, things like that, which are not great for the equity stock price in the shortterm whats the most important thing youre watching in the world right now, frazier so, i think one of the most interesting things is if you look at the low end of the fixed income space, the low end of the high yield market, its having a horrible time. Thats because no amount of monetary or fiscal stimulus is enough to keep some of these essentially structurally impaired overlevered companies from having to restructure so you have an unusual scenario where even though total returns in mostly everything i look at are positive year to date, the lowest part of the market is continuing to have a horrible time were continuing to spend a lot of time trying to understand that i think you are likely from here to see default rates tick up and subsequently lower recovery rates than in the past a real pleasure to have you on Worldwide Exchange. Thank you very much. Coming up, well, being a hall of famer in one sport does not guarantee youre good in all sports and basketball legend bill walton proved that last night. And then are you tearing your hair out over the College Selection process for your kids . Dont worry, the Princeton Review is here they have their new rankings, best colleges, best career, best food well bring you that list on Worldwide Exchange. Welcome back stock futures are down 92. Losses accelerating a bit. Shares of mat tetel dropping sharply. The company saying they received anonymous whistle blower letters. Mattel said theyre launching an investigation into what is brought up in the letter but its not detailing those issues to investors you have to let us know whats in the letter. Yelp shares getting a pop. The company posting betterthanexpected quarterly numbers and it said it made changes to how it works with customers so it can increase revenue without adding people to the sales force. And blizzard did not release major new titles during the period, but new call of duty installments are down this fall that stock down 1. 5 its time for your mornings top trending stories Bertha Coombs has those. Good morning good morning in a few hours the first ever guests of the Taco Bell Hotel will be waking up. The Palm Springs Hotel officially opened yesterday. It boasts taco bell food offerings as well as tacothemed decor. Guests can swim in a taco themed pool with hot sauce floats or good to the salon to get baja manicures. The hotel is a limited time installation and will only run through this weekend im told they were sold out like like in an hour that your only choice of food i guess ill take the combo burrito usually thats really good at 2 00 in the morning. This is my favorite story. Will ferrell as ron burgundy made history last night appearing simultaneously on all five late night shows. Favorite animal meerkat favorite article of clothing . Brass knuckles. In addition to cracking up jimmy fallon and the audience, fallon also appeared on jimmy kimmel live, conan, the late show and late night with seethe miers. He stayed in character as burgundy the whole time promoting the ron burgundy podcast. The thing about that is that 60 of the time its right every time talking about the cologne its one of those lines that you just its the only time legally i can say sex panther on the show, referring to something that was referred to in a movie that is one of my favorite movies all right we could do lines forever. You have to see this video bill walton is a hall of famer in basketball, but in baseball, not very good. He threw out the first pitch at last nights rockies padres game it didnt exactly go well. But he got a second shot at it and then it was right down the middle its interesting Michael Jordan was pretty good at baseball. Bill walton is 72 and has had a lifetime of foot andknee problems he was way over not good. Not good Bertha Coombs, thank you very much that got out of hand parents of all you High School Rising seniors or juniors or sophomores, listen up with the college hunt in full swing how do you narrow down your kids options the Princeton Review can help. Theyre out with the annual publication, its big. The best 385 colleges. They have profiles and rankings to assist you. Joining us is the editor and chief at the Princeton Review. We do not have time to go through all the different categories i spent a lot of time at clemson in college it was ranked the best for Career Services. How come you know, over 83 of the 19,000 clemson students will use the center for Career Services on campus. 73 have an internship, coop. So theyre getting jobs upon graduation because of the things theyre doing. Not only a great football team, but if youre looking for a job coming out of college, clemson does a good job. It answers and soothes the fear for so many questions for collegebound students and parents, will they get a job after college. Clemson is doing that. What im sure you track searching on your website. What do people care about the most is it pure ranking of best school what do people look for when theyre looking for a school i so appreciate that . Best food they are looking for things outside the classroom. At the beginning theyre looking for a couple things. They want to make sure its a great environment academically, Career Services and financial aid. Bowdoin does that well. Theyre giving out 48,000 what does it cost its 65,000. Its more than that certainly. But this is free money that students dont have to pay back. They do a good job with that. Best science labs, s. T. E. M. Is important. Lehigh, the former engineers now mountain hawks, maybe they should go back to being the engineers. Lehigh is a special place theyre combining those science makers with entrepreneurship majors lehigh has been leading the pack. And the students that love their schools, im a little bitter, because i think Virginia Tech used to be up there, but vanderbilt the students love the commodores contagious with energy. Virginia tech is close on the temperature of that list, but vanderbilt students have been naming themselves talking about student appreciation and pride i cant i have to do this. Virginia tech, go hokies, quality of life, 94. What are you talking about blacksburg is one of the most beautiful places why do we rank so low . We need to do more in financial aid. 77th i hear you. Number four or five on best campus food. It wasnt like that when i was there. Good to see the hokies near the top. How many of these schools do you go to . I visit probably 50 a year, we survey a third of the schools in the book. So 140,000 college students. Appreciate it. On deck, facebook fighting to get back into the News Business then beating the street, one of the Top Performing Fund Managers in america over the last one, three and five years, algers amy zhang is back with new ideas for you. Every day, visionaries are creating the future. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. Ecommerce deliveries to homes mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Heres your stat of the day. 58 of revenues from u. S. Technology Companies Come from outside the United States. That makes tech vulnerable to a trade war. The rest of the s p 500, just 39 of its revenue from outside the country. Its not easy to find an Investment Strategy that works in up and down markets, but your next guest has done that amy zhang is a Portfolio Manager from alger she is regularly ranked as one of the best performing Fund Managers in america. Last year we profiled her as the number one performing Portfolio Manager. Thanks for coming back on. Thank you for having me you are still ranked near the top. Make the case for small caps as a whole. Are you still bullish on the group . Absolutely. Clearly now front and center everybody is worried about a trade war. I think small cap is very well positioned its largely insulated from the tariffs, and because were very u. S. Centric bulk of the revenues from the u. S. And minimum supply chain exposure as well also, you know, Interest Rates are still low. So its very its a great tailwind for Long Duration assets small Cap Growth Companies, small mid Cap Growth Companies so thats actually very favorable. Again, i still believe this is a stock pickers market. Thats what you do better than anybody out there last year your results proved that you bring in these unique ideas. Avalaro, tax is boring but Sales Tax Software you think its sexy its necessary, Mission Critical and thats sexy for us when a company does that so we started investing in avalara very early on. We followed it when it was a private company. They have 15 years of operating history. But its a Cloudbased Software company thats a leader in the area of automation of sales Tax Compliance sales tax is very complex and tedious, laborintensive, theres no margin for error. The company has a strong catalyst with south dakota versus wayfair ruling meaning now that individual states can collect taxes. That goes right into their business exactly, based on the economic nexus, so remote transactions can be taxed regardless of whether the merchant has a physical presence or not in the state. Thats a huge tailwind its early the last 12 months revenues is 323 million. Its a billion market opportunity. I know we have an obesity crisis in the country. I dont know if we had anybody ever recommend Planet Fitness before yes its a differentiated fitness concept. Its the largest gym operator. We like a concept thats portable and gives consumers a great benefit. 10 a month, you cannot beat that thats the basic membership. That is high value and low cost. You can go to, you know, the black membership which is 21. 99, which gives you spa privileges, guest privileges, and you can work out anywhere. Its a rare concept that a company has that has unit growth and comp growth. Its targeting 80 of americans who dont have gym membership. 80 still dont have a gym membership yeah, their competition is getting off the couch. By the way, 85 or whatever of us own pets, spend on our pets, thats why you like idex labs. Yes, pets are considered members of the family, especially in times of uncertain macro events, we take comfort in our pets idexx is the leader in pets diagnostics. I love it sit tight. I want to do something and come back and get a final comment from amy zhang its time for your morning rbi we asked on twitter, will we see a recession in the United States in the next 12 months . Its random and interesting. Half of you said yes obviously the other half of you said no. I guess well have to wait and see. Amy zhang, youre buying these small caps, theyre exposed to the economy, how would you have responded to the poll . Do you see a recession in the next 12 months personally i dont think well see a recession in the next 12 months, but its on the horizon. Well have that. Thats why we invest in exceptional small mid Cap Companies that can triumph in an economic cycle, they can do well in good times and bad times. So those, because they have powerful secular drivers and idiosyncratic drivers that are Company Specific for example, idexx, thats recessionresilient sales tax, probably recession resistant to a point exactly companies will want to make more sales, its more important to stay compliant Planet Fitness, again low cost, high value, and they could gain customers if the recession hits, because theyll cancel the more expensive and go cheaper absolutely. I like it youre coming out with realworld picks one of the Top Performing Fund Managers, amy zhang, thank you. Stock futures are down 110 the selling has intensified. The wild week may continue well see you on monday. Squawk box begins right now. Good morning it has been a wild week on wall street its not over yet. Futures pointing to a lower open well talk about the weeks big move in the ten year yield. And uber shares are getting crushed. That after the Company Posted a loss of 5 billions in the Second Quarter well show you what tubers ceo said to cnbc. And huawei saying its immune to a crackdown by the United States and well tell you why. Its friday, august 9, 2019, ask, sqas squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning welcome to squawk box on cnbc. Were live at the Nasdaq Market site im melissa lee along with Andrew Ross Sorkin joe and becky are off today. We have two great guest hosts this morning savita is joining us from bank of America Merrill lynch and guy ad adami. Fired up to be here what is happening to you . Do you feel a Different Energy in the room i feel love. I dont know what you attribute that to. We are best to move on. Lets move on u. S. Equity futures, andrew mentioned huawei, its because of the story out of