Of the New York Stock Exchange carl and morgan have the morning off. And were going to begin with tech bracing for tariffs now just days away from going into effect on september 1st trade tensions between the u. S. And china not slowing down, as the wall street journal reports that u. S. Prosecutors investigate new allegations of Technology Theft against huawei. Acme capitals heene nada and kevin dilanian, of course, both join us here at post 9 happy preLabor Day Weekend. Good morning. Heenne, you were a protough stance gen china when it comes to ips and other things. When it comes to these tariffs, september 1st, december 15th, are you pro this approach . Does it depend if it gets nearterm results . I think the tariffs are going to do some harm in the nearterm. I think youll see pricing increases in the u. S i think youll see trade tensions worldwide globally. But i think the longer term impact is actually much more detrimental to china than it is to us. Whats happening is Tech Companies are moving their supply chains out of china, into vietnam, malaysia, even mexico thats actually good for those countries. So over time, the Tech Companies are going to adapt to the changing supply chains china is going to be losing jobs its going to lose manufacturing capacity thats where the big impact is thats where our hammer is in these trade negotiations is that the measure, who gets hurt worse whether it actually helps. Well, i think the longer impact, what you want to have, you want to have an equal Playing Field for Tech Companies in china thats the goal, i believe, of these tariffs. Kevin, who do you think is suffering the most from this i think what were seeing is that u. S. Companies are already suffering. You saw cisco talk about recently in their latest earnings that they were actually being deinvited for bidding from chinese contracts in china. And we also anticipate, you know, december 15th, we see that there are a bunch of tariffs that are scheduled to go into effect, which will impact things like video game consoles and telephones and computers theyre u. S. Sellers of these, both on the retail level and on the brand level, who are actually going to feel some of the pinching but is it fair to say that some of the Chinese Companies will be feeling this more . Huawei, for example, perhaps feeling things more than apple is uh i think i go back to dons question, like, is it is it were here where everyone agrees is a pretty high risk of recession in the economy and were applying a sort of really unpredictable approach to trade negotiations, which is affecting Consumer Sentiment and Business Sentiment more broadly. And so, the question of who is hurting more from a trade battle, you know, is kind of an academic one on some level, given the conditions currently is there a risk that the longer this trade dispute goes on, we see kind of a bifurcation of technology across the world, where you have countries that use the technology from china, the splinternet, ive heard that term used before and is that a big problem for the long run in terms of our Technology Development as a society . I think we really need to think about that we just did a big indepth report on chinas investments in africa and what you see is that china has invested on political and business levels, economic levels infrastructure in Africa Africa is one of the fastestgrowing markets in terms of population growth, Economic Growth i think its hard for American Companies to expect that the african countries, if theyre faced with a choice between china and the u. S. , in terms of internet infrastructure, in terms of technology service, in terms of all of these important categories, that theyre going to go with the u. S i think that there is a very strong risk that that market is much more captured by china at this point than people realize and that china is just one africa is just one example and hany, that goes back to the pain threshold question, i guess. Its like the slap game, at a certain point. Both people end up pretty bruised, but given that situation in africa, given that huawei continues to sell around the world, is this a situation where either you end up erecting barriers to the internet, which really devalues the network overall, or you have to solve this one way or another. So at acme, were looking at tenyear trends. We want to invest for ten years. I look at science and innovation part of whats happening in the world. The u. S. Still has the best sciencetotechnologytoproduct on the planet. We are cornering the market with whats happening with censor ss and nanotechnology and quantum computing. I think as we look towards the future, if those technologies dont have a global Playing Field in trade, well be in damage were not going to be able to sell our products. Thats the longterm thats the real reason why this trade war is happening well, speaking of Premium Technology and heavy exposure to china, apple announcing it will unveil its latest iphones. They didnt say it was going to be that, but we know, in just a few days, september 10th josh lipton joins us from San Francisco with what we know about the event so far josh so, jon, by innovation only, thats what official apple invitation says. This years event will take place on september 10th at the steve jobs theater, which is locketed at apples headquarters they are in cupertino, california starting at 10 00 a. M. Local now, this is the event where ceo tim cook doestypically take th stage along with other executives like phil shiller and Jeff Williams and announces new iphone models. As always, apple is tightlipped about whats coming, but the company is expected to announce three new iphones. Reports suggest a successor to the lowerpriced 10r and two pro models, upgrades to the iphone x xs and xsx in addition to phones, the company also usually unveils a new apple watch at this event, even as the iphone franchise has been under pressure, with iphone revenue declining 12 in its last reported quarter, we know wearables have been a bright spot for the Company Apple has now sold an estimated 80 million watches apple might also talk more about some of its new services at this event, too, like appletv plus, its new subscription streaming service. Apple hasnt said how much thats going to cost the reports do suggest that the company is at least considering 10 a month and apple ark arindicated, its new subscription gaming service. This will be the first big apple event post johnny ives so in that sense its different. Were expecting a whole slew of products coming out but also the shadow of tariffs. What is the financial significance of this i dont think this event is a big deal at this point every year, basically, apple in september announces new iphone refreshes, basically and you just have to follow bloombergs reporting on this. They consistently predict accurately what apple is going to announce. And theyve laid out in great detail what we expect apple to announce but they dont predict pricing, which i think is the big question mark this time around are they anticipating tariffs . Do they price higher memory configurations higher . Thats a fair question. Im not sure i anticipate a lot of changes in the general framework for apples pricing. Apple is a luxury goods company. And its phones are a thousand dollar at this point theyve reanchored us in that price. And things we believe will come as updpragrades to the iphone ae better cameras, faster processors, slightly better screen i dont think it matters whether johnny ive is here or not or tariffs are coming or not. I think november is when we expect the appletv plus service to launch. You know, it was just mentioned. And i think in some ways, knowing that services are this is an incremental these are incremental Refresh Services that are so critical to the company. In some ways, thats almost more interesting than the september event. And hany, upgrade cycle have said slower and slower by the year is there anything apple can do thats innovative enough that can really encourage people to upgrade their iphones thim around that have been sitting on therapy hands previously i think youre going to see better optics and some interesting 3d sensors. You might start seeing some ar, augmented Reality Technology being built in so i think its all going to be incremental. The thing to watch with apple is the services they put on top of the hardware systems thats really where i think they can really leverage the Subscriber Base they have. Thats where they can make a lot of money kevin, what about huawei, on the flip side . Are they going to be able to go ahead their own upgrade launches with new phones or not theres some question, because theyre now effectively cut off from android upgrades and are building their own operating system and, you know, the reports that ive been seeing suggest that there are some challenges with that. And so there are some delays so i dont know what the latest is, but i think thats a really good question. Is it a benefit to apple or not really its a kind of not quite such a like for like i dont think i think they play in different parts of the market, on the margins, you know, particularly outside we were talking about outside of the u. S were talking about huawei, handphones apple is in a very high luxury category huawei, a lot of its strength is in lower margin phones so im not sure thats going to impact apple hany, are you surprised that ar kit hasnt gained more traction apple for a couple of years now has been beating this drum on augmented reality and how ios can power that forward and this harry potter game didnt really seem to move the needle i think ar and vr are a long ways away from becoming reality. I havent found anything that compel to invest in ar or vr there are some interesting btob aspects, like understanding what pipes are and what systems are if youre wearing glasses, but i think its a long ways from being smer technology. Give it five to ten years. I feel like industrial is the market failure for so many of these. Like when google glass goes industrial, like, its not going to make it lets turn to Amazon Amazon and its Third Party Sellers. Just days after an investigation revealed over 4,000 unsafe, mislabeled, or straight banned products on the amazon site, senators are asking Ceo Jeff Bezos to crack down. Our deirdre bosa has more on amazons third seller party problem. Jon, the three senators, richard blumenthal, ed menendez and and markey are asking amazon to remove illegal, deceptive, and deadly products and answer a list of questions as to how did they get there in the first place and how do you make sure more products stay off the platform they asked bezos to respond by september 29th and amazon says it will. This touches on a bigger Third Party Seller issue for amazon. Amazon has been touting the strength of the small and mediumsized businesses on the platform that now make up more than half of all sales this is sort of an indirect way of defending itself against antitrust scrutiny by saying, listen, we actually help smaller businesses look how much theyre selling through us but, these sellers also represent a threat if amazon cannca cannot adequately monitor their products in the wake of the journal report that found thousands of unsafe, banned, or deceptively labeled products on amazons platform, many were taken down but we looked this morning and we found a number of misrepresented items still up on the site these teething toys, have a look, theyre advertised as fda approved, but the fda does not approve toys same with this eyelash serum only one brand, latisse, is approved by the fda, yet this brand on amazons site falsely claims to be amazon says it spent 400 million last year on consumer safety and compliance. A day before the journal investigation was published, the company said its saving 15 billion on tools for Third Party Sellers. The question is, though, guys, is this enough to stem unsafe products on the site and stem the backlash, which doesnt seem to be going anywhere anytime soon back to you. Deirdre, thanks kevin, this is a wall street journal report that i found fascinating on multiple levels it reminds me, maybe we should call it vertically integrated anarchy. It reminds me of facebook and youtube. This argument that you can have this huge growing community that you dont necessarily police and it will sort of end up okay. Is that ending is this now a risk for amazon or the fact that facebook and youtube have been allowed to do it does that just sort of mean this will blow over eventually . I think the wall street journal reporting was great and they rightly compared amazon to a flea market, where there are lots of sellers, its kind of chaos, you dont necessarily know what youre getting and its amazons challenge now to actually police that. What is different now is that were in a moment where there is a lot of scrutiny about the tech platforms, including youtube and facebook and amazon. And i think like, you know, my view is that this 2020 election is actually a really deciding factor on how these companies weather this sort of scrutiny. I think if we had president warren or president sanders or another democrat who was really to the left, we could see amazon coming under really close scrutiny and have to change some of its practices around things like that. So it reminds me a lot of similar situations that alibaba faced years ago inside china, where there was a lot of fake goods being brought on the system and they spent hundreds of millions of dollars trying to police that. It is a problem at any marketplace that youre going to have, whether it was ebay or offer up or some of the other companies. But was that not meant to be more enticing to consumers, rather than regulators and politicians forcing them to do so the number one issue for Tech Companies today, its an invisible force that few Tech Companies understand and are starting to face, are regulatory pressures. Im on the board of draft kings. Its gone from zero regulations to everyone on the board being licensed and bonded. Regulatory pressures on Tech Companies are going to matter and thar goieyre going to conto be a big part of the entire cycle. With that said, do you think that the tech giants of ten years ago now look like these platform models . There are inherent tradeoffs here, right . Youve got Tech Companies that are able to skill very quickly as a platform model, because they dont necessarily have control over the products that are sold on their site but on the other hand, then you have to spend a lot of money to patrol on that site, and not and having more control is inherently more expensive and more detrimental to margins. So with that said, as you look at the companies that are kind of coming of age now, do you see Tech Companies that will have that platform characteristics, or is that a thing of the past for any retailer, curation is the number one thing you have to be good at curating and allow Third Party Sellers on your platform. To be able to scale the size that amazon is scaling to, you have to have Third Party Sellers, but you have to be able to curate those properly but thats the tension, isnt it because apple has taken a different tact they said, yes, were going to vertically integrate, but also be really stringent about whats on the app store, for the most part it seems the vertical integration that amazon and some others are doing, they want to handle logistics, tightly control that and deliver, but it seems like their policing of whats actually on the platform in terms of quality, in terms of accuracy, runs behind their tight logistics. Can that last forever . I think thats exactly the right point to make. That there are two models. And effectively, apple approves every single app thats in the app store. Whereas amazon has much more lax supervision of the products, at least, that are listed by different sellers. And the journal investigation is really a good example of that. If i were amazon, i would throw a lot of money and a lot of pr at this. Because all you need is one child who dies because their parents purchased a product that said it was fda approved and they are suffocated or Something Else really bad happens. And i think that theres a risk of a Broader Consumer concern and shifting from amazon as hany has said, lots of retailers and platforms like ebay and alibaba and others have faced this issue over the years. Its not an issue thats unique to amazon. But theyre kind of in the sp spotlight for it now and i think its pretty serious for them to get ahead of it. Yeah. High stakes, guys. Thank you. Hany, kevin, thank you weve seen some steady selling in the last 30 minutes so much so that markets are lower, only down about 0. 2 . For the s p, we were higher than half of 1 at the open yet we are still hher r igfothe week as a whole, and lower for the month of august. Much more on squawk alley, still to come. Automatically goes intoyouh a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, td ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Welcome back we are well off the highs of the morning. The dow, s p, and nasdaq now all in the red as the new chinese tariffs are set to go into effect on sunday joining us here on set, bob pisani and mike santoli. Bob, lets start with this last 40 minutes of selling. Running out of a bit of stream after a strong bounce the last couple of days the problem is, all of these rallies, even in august, feel very tentative, because no one knows what side of the economic divide youre supposed to be on. Are we supposed to be on the side that theres going to be a slowdown thats coming that seems to be the prevailing paradigm but what how far is the slowdown is it a modest little slowdown globally, or do we go into a more serious recession and earnings drop 10 to 20 . Or do we get a resolution to the trade disputes and things kind of calm down and earnings are up 5 to 10 in 2020 this is mike and i were talking about this earlier you could drive a truck through the bid ask on the earnings estimates for 2020 theyre much wider than normal, and thats making everybody a little crazy, trying to figure out where we should be right now. And weve seen that play out over the course of this month. Very big moves, often in the same direction yes, absolutely on a daily basis, it has been a market trading almost as one many days. What we did do yesterday is close exactly where we were a week earlier the market has been trading a little bit mechanically, technically. We got very oversold and i do still think that the direction of kind of rotation is probably in favor of stocks right here, just in the very short term the b of a, Merrill Lynch kind of bull bear indicator, which is a composite of positioning and sentiment. So that doesnt get to what bobs talking about, which is the big fundamental story thats going to drive the next phase here so i think were kind of figuring out if on a preholiday week, three days of no trading, we have tweets and headlines that we might expect over three days and weve already kind of gone back to the upper end of this monthlong range maybe thats why were just backing away a little bit here do things change in september at all august is kind of known characteristically for having lower liquidity, a lot of people out on vacation and enjoying their time away from the screens a bit. So we have tended to see a little bit more reaction to every nuance of this trade debacle. Does that change in september, where more people are kind of paying attention more people are trading, more people are back to work . I think it would change in the sense that there are people trying to position for the Fourth Quarter that is something that happens, putting more real money in place. September hasnt been a great month. Its not as if it directionally helps you out. Because historically, if that matters, its been week. But i think were dealing with the same issues, leading up to the last month of earnings season dont think more liquidity is necessarily going to save you in a down market. It wont yes, it can exacerbate moves a little bit, thin trading on either side, the rallies can get a little bit more extreme. But if people feel that its very uncertain and the outlook very uncertain, youre going t move very quickly. Is it a down market its not a down market. At the worst, we had a 5 move now were 3 off of the historic highs. Were not even in a garden variety of correction. Its an interesting dynamic here, actually your hole how wide your aperture is tells you what the picture looks like right now because literally, 29 hur00 is r we ended august of 2019, but thats where we are right now. Weve been in turmoil several times. You had a 20 decline in the Fourth Quarter may, you actually had about a 6 or 7 little pullback. Basically the same magnitude in august youre right, were just kind of wobbling not too far below the lines. This is one of the reasons that the risk is to the downside with only 3 off of the highs, even if youve gone nowhere for a year, youre still close to the old historic highs so the earnings are basically flat for the year. Youre still dealing with close to 17 times forward earnings, still a little bit on the high side so anything could if we were down 10, 15 below here, it would be a lot easier to see rallies on the upside, because people would be wanting to buy lower. You notice the rallies this month, they have been rather poor on the volume the downside moves, though, last friday, we had huge volume all the big etfs had twice normal volume. People were out selling for sure on those down days on the up days, the buying enthusiasm is not as strong, because people are looking at this saying, should we really be buying the lot the same thing from a different angle, so, were at same level the s p was a year ago. Tenyear treasury yield a year ago was pushing 3 youre half that right now you obviously have this flattening out of Earnings Growth last year the fed still had another two hikes in it and this year obviously youre cutting. If you want to create a bullish story around that, thats what you do its just relative valuation in terms of things look great longterm treasuries are up 10 this month youre going to go a long way before you ever see a month with longterm treasuries up 10 and s p down, what, 3 right now its a very unusual mix. Bob, mike, thank you very much see you both later and stocks have lost steam this morning, reversing earlier gains. Here are the names dragging down the index in todays session cisco, microsoft, nike rba ia nuwee ckn mite sily. Thats what happens in golf and in life. 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. Hurricane dorian expected to hit the florida coast over the long Labor Day WeekendKaitlin Mcgrath has the latest back at hq caitlin . Dorian remains a strong category 2 hurricane, but it is expected to strength, expected to become a category 3 later this afternoon and in the evening. Right now, those sustained winds still at 110 miles per hour, moving to the north and west at 10 miles per hour. Now, thats slower than it was earlier this morning and that indicates to us that it is taking a more westerly turn as we head throughout the day today and certainly into the weekend. So well show you that latest track, as we head through your long Holiday Weekend continuing to moving directly west over the bahamas as we head through the sunday and monday hours, but notice it does look to approach florida for a landfall later tuesday morning, now at 8 00 a. M. On tuesday morning. The storm is continuing to slow down, looking to approach florida as a category 4, poi possibly a category 3 early sunday morning beyond sunday, there is still a lot of uncertainty, so dont focus so much on the timing or the track, but just that the entire state of florida does need to be prepared. Well give you a look at the latest updates here for dorian we are expecting that rapid intensification as we head throughout the rest of the day today and into the long Holiday Weekend. And that slow motion, that does not bode well as we look towards a possible landfall on tuesday think of florence, think of harvey that prolonged really heavy rain causing potential inland and shoreline flooding as we do see that approach to florida as we head throughout the day on tuesday. Thats the very latest on dorian back to you. Katelyn, thank you very much. European markets are about to close or just closed seema mody joins us with a breakdown of todays action. European stocks off the highs while the euro continues to drift lower, drawing fresh criticism from President Trump in a tweet over the last hour. The uk, the biggest laggard, down 5 . German stocks down 1. 5 . France and italy faring a bit better particular weakness in the Financial Sector the European Index falling 7 in august its really been a combination of negative rates, undercapitalized balance sheets, and renewed political worries in italy. Italian banks make up a fifth of the index. This will be an Important Group to watch ahead of a highly anticipated European Central bank meeting next month. One bright spot in european has been retail, interestingly enough the european retailers have managed to post gains for august, compared to a 6 decline for the u. S. Retail sector one standout has been shares of h m which has gained 11 the fast fashion retailer has taken steps to reduce inventory and store expansion to further bring down costs and shares are ending higher on the day. Leslie, back to you. All right, seema, thank you so much. When we return, wework, peloton, smile direct club, we break down the outlook for those coming ipos and the winners and demeth renso oerect buts, next stay with us welcome back to squawk alley. Brazilian president says that his son, congressman and foreign minister are in washington to discuss possible u. S. Aid for brazil this is amid devastating fires in the Amazon Region members of a local tribe were left trying to put out the wildfires after the areas Fire Brigade Service was cut. The u. N. Secretary general says no country or economic sector will be immune to the impacts of climate change. Antonio gutierrez made the comments in japan at the seventh annual International Conference on African Development take a listen. Is it abundantly clear that climate disruption is happening now and everywhere every week brings us news of more climaterelated devastation. And climate impacts are only going to increase in severity and frequency. And a massive fire in utah has forced evacuations of hundreds of people the socalled gun range fire started early this morning and at least 300 homes were under mandatory evacuation as crews worked to bring the flames under control. Two homes have already been completely destroyed and that is our cnbc news update at this hour. Lets get back to squawk alley. Jon, ill send it over to you. Thanks, rahel meanwhile, were getting some breaking news out of united phil lebeau has that in chicago. If you will . Jon, as expected, United Airlines is pushing back when it plans to begin flying the 737 max again. United, along with american, still planned on flying the max, at least it was on their schedule for early november. Now united says it now plans to bring the max back into the schedule if its certified to fly again by the faa the new date, december 19th. Now, whats interesting about this, guys, is thats right before the big christmas, end of the year holiday rush for people traveling. Theres going to be big demand ill be curious to see when they bring it back on to the schedule on december 19th, if they bring it back then, how many people are going to say, sure, i want to get away. Packed planes at the holidays, but im okay getting on the 737 max. Thats the new plan from united. December 19th. Phil, would there need to be further capacity from the other Aircraft Leasing companies if it doesnt come in by december 19th would that be a much, much harder week or two to fill thats already a hard week to fill for the airlines. Theyre already realizing because of tighter capacity that for them, they would love to have more planes not just united, all airlines would like to have more planes and remember, united made the move earlier this year to buy, and i think it was like 17 or 18 used 737s. Those are going to be coming on the schedule at the end of this year and they made that move because they were like, look, demand is out there. Not just in the u. S. , but worldwide, we need planes to fly people and so this move by united, and if the planes do come back by late december, this is going to be huge for the industry in terms of getting muchneeded capacity phil, was there any reason why they would say december 19th, if they didnt really mean december 19th . Why they would need to kind of draw that line, even artificially just, i dont know, i dont know the industry like you do, but it seems like two weeks later would be a lot easier. Yeah, jon, you just cant flip a switch and say, hey, you know, lets say the faa came out and said, planes good, you can start flying it again, it would still take many, many weeks for all of the airlines to update their schedules, to get their crews in position. Not just pilots and flight attendants, but maintenance crews, all of the people who need to be in the right place at the right time this takes a long time logistically so for the airlines, this is about as close as you can cut it look, the early november date that united had eliting up to today and american still has, almost nobody in the industry thinks that this plane is going to be ready to actually start flying customers in early november it just takes too long so, december 19th feels about right, if this plane is certified by the faa early in the Fourth Quarter to return to service. All right, phil, thank you so much a big year for ipos is set to get even bigger with a fall ipo lineup, including names like peloton and despite the market volatility, ipos are still outperforming the Broader Market so far this year, but can it continue joining us now, the head of west coast tech banking at jeffries, cully davis. Thank you so much for joining us today. So for those who believe the market is topee, look at the ipo performance for some of these recent tech deals and say, this is the poster child for kind of bulblicious signs out there. Do you believe that theres enough investor demand to pay up and pay decent multiples for these deals that are coming down the pike in the second half of the year sure. Hey, leslie. I do you know, this is these are the kind of years that tech investors wait for weve had the benefit of a large number of highly anticipated Companies Come to market, many have already come. A lot are to come still this fall and investors, you know, they chase whats working and tech is the bestperforming sector so far this year. So despite the fact that multiples are high, particularly software multiples, were seeing historic highs, alltime highs for some of these recent software ipos. But in general, investors do chase what works and tech is working right now and a lot of these names are very, very wellknown names. How does the recent volatility play a role here . Because historically, and the ingredients for a successful ipo market would include low volatility are you having conversations with companies that are looking to go public and how are they kind of thinking about the recent activity, as they look forward to their ipos . Sure, yeah, volatility is not the friend of the ipo. You generally want markets that are calm, that are easy to anticipate you know, investors like to use those calmer markets to try to Value Companies that have, at this point, have no kind of public history so volatility is generally not a friend of the ipo market i would argue even though volatility has increased right now, its not at levels where, you know, we shut down the ipo markets for sure you know, trading desks love the volatility trading desks thrive on volatility and when we have a quiet market, were right in the middle of kind of a Holiday Season right now for the markets. So i think people are kind of waiting standing by and waiting to see how things look post labor day, when all the traders are back in their seats. And volatility doesnt help the markets necessarily, but were not at levels that shut it down by any stretch at the same time, youve seen kind of this bifurcation on performance in terms of Tech Companies going public on one hand, you have the zooms of the world, the crowd strikes, beyond meat, if you could call that a tech company, pinterest and so forth are doing incredibly well. And on the other hand, you have names like uber, lyft, jumia, are there any lessons that investors can take away from the companies that have performed well in the first half of the year that might indicate successful performance in the second half of the year, and also any lessons they can take away from those that havent done as well and have kind of turned off investors that might indicate some weaker performance for certain types of companies in the second half of the year sure. Yeah, we have seen a little bit of a barbell you know, on average, tech ipos are certainly up and trending above the general indices. You know, there are a handful that have traded really, really well, the names you mentioned like zoom and crowd strike and some of the Software Companies and ones that have struggled i think if you look at the kind of Business Models that have done the best, software always is a very active tech sector and software Business Models are very well understood by investors. And youll see companies that have really, really large Market Opportunities spending a lot of money to capture market share. Those types of companies, if theyre a software business, investors just have a lot of confidence that the kind of steady state model is one that actually drives profitability and has lanes of kind of margin output that they can count on. So youll see Software Companies generally get bid up quite a bit, because they are safe havens and they are Business Models that are very, very well understood the ride sharing names like lyft and uber are obviously spending a tremendous amount of money to drive market share and really build their business but those Business Models are not yet really understood or proven theyre really new Business Models and so Companies Like that, while theyre amazing companies, have the burden of having to kind of prove out the model. And really dont have a Historical Context for investors to rely on so theyve struggled a little bit more in this kind of environment. It will be interesting to see if wework is seen more of a proven model despite the fact that it has such sizable losses as it launches its debut as soon as next month. Thank you so much for joining pups. Thank you markets are just off their lows the dow back to positive, s p just negative, nasdaq down 0. 4 . Squawk alley continues on the other side of this break but first, rick, what are you watching today you know, im watching the calendar thinking, what a wild august its been in the markets, specifically Interest Rates. U e big number, 21 yowant to know what it is . Come back after the break. By consolidating your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. Im melissa lee. Heres whats coming up on the halftime report. Closing the books on a wild august should you stick what whats working right now . Well have our september stocks strategy and shares of ulta tanking the Investment Committee weighs in on this one and shares of lulu lemon are up more than 50 this year. All of that and much more top of the hour on the halftime report. Wilf melissa, thank you very much. We look forward to that. Meantime, lets get over to the cme in chicago for the santelli exchange. Rick good morning. Thanks, wilf you know, we have a lot of wild months ive been doing this a while, traded a while but boy, this august really, in many ways, takes the cake. First of all, for all you kind of interesting technicians out there that look at strange things, and ive always thought, technicians, you could overlay astrology, theres a lot of wild areas of technical analysis. And many people will roll their eyes but i will tell you this that anniversary dates are considered very important for those who follow the teachings of wdgan inadvertence dates we had an anniversary date in august the first treasury future was born in august of 1977 and august sometimes get wild. Anniversary dates get wild and this one is no exception if you look at the following chart, i hope were showing, its the monthtodate of 30year bond yields. We settled the last day of july at 252 the low close was 195. We had intraday levels down as low as 191 if you really want to get pick, about 56, 57 basis points. If you look at it, you know, 60 basis points, humongous. And when you consider it as a percentage, which i never like to do, its even more humongous. And by the way, that 21 was a president. And you know what it is . The month of august, according to the Financial Times and others, has seen an uptick in the amount of negative yields. 3 trillion of an uptick, just in the month of august, which takes you from 14 to 17, which is basically 21 increase in one month. Think about that so when all of the yield curve studies come out, i say, think about the foreign inflows, because that was another statistic. Theyre strong in the month of august i dont think thats very shocking, actually, because the whole world is running away from that evergrowing pool of negative rates so the bastion, the oasis that doesnt and here we are and not only the inflows into the treasuries, which is easily documented, just by looking at that chart, but the other inflows are in stocks as well, and that mix sense i guess the negative thing here is and this is my opinion, and if people want to refute it, they can this is beyond the scope of the Federal Reserve this was created in many ways by policies, policies of central banks, but our central bank in particular isnt going to be able to do anything with these na tsunami of inflows and im not sure its a bad thing. Its only a bad thing if you calibrate your policy, the things that are affected by it, in which case you should probably pause jon, back to you thank you, rick santelli. And still to come here on still office plans in disney and netflix following a summer slump. Well explain after the break, stay with us so, every day, we put our latest technology and unrivaled network to work. The United StatesPostal Service makes more ecommerce deliveries to homes than anyone else in the country. It has been a disappointing summer at the box office toilets done 6. 5 . That hasnt stopped netflix and disney from ramping up big autumns. Julia boorstin has the story from l. A. Reporter jon, there were some megahit movies, but the box office is down about 9 from last summer, leaving a high bar to close the gap with last years Record Box Office performance. This fall there are three key things to watch. First, disney is expected to continue to dominate the box off after drawing 36 of with five of the six top movies of the year coming up it as frozen 2, maleficent, and star wars. Theyre continuing to build on the franchise successes. Netflix will put ten of its movies on the big screens the irishman and the king. And also trying to use the films to draw more subscribers to its service. These films will be on the big screen for a limited release, less than a monthbefore theyr available for streaming. Also just in a handful of theaters, more of the independent theaters avnet flicks failed to secure deals with the big theater chains such as amc and cinemark. The industry is warricking very care theres to see films which are not part of a big established franchise will succeed in bringing brought audiences, the performance of films such as ford versus ferrari could impact future investments in this kind of standalone film, plus little women and tom hanks a Mister Rogers will be a broad base of audiences. Disney and universal to you control over half of the ticket sales this year, so it will be interested to see how some smaller studios perform, and if theres an indication that they get snapped up as we continue. More about the box office and how netflix, would you they didnt tie up that deal with amc, in fact, amc adam aron will be here at 4 00 p. M. Dont miss the rest of squawk alley, either, which runs in a couple minutes just another reminder of the value youll find at fidelity. Open an account today. After the backandforth between the u. S. And china on trade, one industry is fighting back eric explains from flushing. Reporter its a Beautiful Day here at queens, the trade war, the tariff ward, u. S. And china, its been getting a lot of attention, talking about major companies, bills onof market cap the tennis industry is also effective. September 1 there will be a tariff on tennis balls the Biggest Company that will get hurt, penn tennis. They may millions of balls every year in their factories in china. They have to figure out how to pass those costs along or move to another facility, but wilson balls are made in thailand some of these other competitors, they factories in other than Southeast Asian countries, so thats something the tennis industry is washington, the president Jeff Williams has been lobbying against congress, saying look, this was not the intent of the trade ward 18 Million People play tennis every year, it affects 100,000 workers that are somehow involved in the tennis industry. If we could get an exemption on the balls and rackets, september 15th is another 15 on tennis rackets. Its going to be interesting tennis is an industry, they also care about what happens with the tariffs. Back to you guys. Interesting to watch. Eric chemi, thank you. That will do it to us on squawk alley. Lets get to scott welcome to halftime report. Im melissa lee in for scott wapner it was an august to remember it is 12 noon and this is halftime report. Announcer its been a wild roller coaster ride this month should you stick with the stock that is worked shares of ultimata tanking right now. The butty klain getting a slew of downgrades. Should you buy on the drop its our call of the day the slowing global economy, one of the top concerns for the fed. Is another rate cut in the cards . The Investment Committee is ready to go. Halftime report starts right now