Transcripts For CNBC Squawk Box 20240714

The two year note at 1. 496 and then lets show you what is going on overnight in asia as i mentioned, these tariffs going into effect today, youre looking at a mixed picture there, the hang seng off just marginal the shanghai composite up just a little bit we are monitoring Hurricane Dorian and well take you live to the path of dorian in a few minutes but we want to talk about hong kong and whats going on there, the protests continue here lets get to chris with the latest theyre now in their 13th week in hong kong and this last one has already been the most violent over the weekend we saw battles between police and protestors who turned out to the streets by the tens of thousands. First very peacefully and then things got violent and some of them threw bricks and bars at Police Police responded with a volley of tear gas. A water cannon and something that we hadnt seen before putting blue dye in the water in order to identify protestors afterwards and things got uglier when he chased a group down into a subway station and hit them with pepper spray and according to Amnesty International they even hit innocent bystanders all this while beijing is we trust usaa more than any other company out there. Sendisen sending ominous signals to hong they give us excellent customer service, every time. Kong saying the end is near for our 18 year old was in an accident. This protest movement. Usaa took care of her car rental, however they didnt say exactly how that end was going to come and getting her car towed. About. So everyone is worried that they all i had to take care of was making sure might respond with drastic that my daughter was ok. Measures if i met another veteran, and they were with another Insurance Company, i would tell them, you need to join usaa meanwhile, the protests are because they have better rates, and better service. Were the gomez family. Were the rivera family. Still going on theres thousands of protestors gathered in front of the central were the kirby family, government in hong kong. And we are usaa members for life. Thank you. Get your Auto Insurance quote today. Now to trade with the latest round of u. S. And china imposed tariffs overthe weekend. Issuing an official complaint about the United States. With the wto, eunice joins us now. Fill us in on everything and anything that you might be hearing behind the scenes if there is anything. I know its been awhile since we spoke. Seems like ages. Joe, im coming to you from a town where its christmas 365 days a year. This is the eastern coastal city of yiwu and its known to make roughly half of the world christmas decorations. So they come from all over the Consumer Financial Protection Bureau releasing the results of a pilot study called planning wor world, including the United States, who end up selling all for tax time studies sorts of artificial trees and it was launched in 2000 and christmas ornaments and the buzz here has been that for the most showed that simple messaging part this year theyre doing okay that orders have been priced and encunning customers to use their prepaid card increase the likelihood that they would end up doing so. Shipped already. But what theyre worried about for more on the study, we are is next year they think that orders could drop by as much as 10 joined by the director of the Consumer Financial Protection Bureau good morning good morning. So tell us about these prepaid cards. What do people have to do . Also people are worried about so what h r block did during the tariffs that are going to come into place in december. The 2017 tax season was send an because this is such a low margin business, the talk here email to some of their prepaid has been about how are they card customers and just had a going to survive so there is some flexibility in simple message that says you want to save here is how you can do it. They added a savings feature to the way manufacturers are the prepaid card to let people thinking and theres been a lot of talk save money along with their tax about where they can move time refund. Production within the country typically do most people that in rural china for example, not i assume most people dont save enough and they get the cost there to set up a factory is about a tenth theyre hit at tax time, they dont realize what they are getting hit by this is the opposite saying when you look at the land alone compared to here which is situation. On the coast 73 of people actually get a tax so another way that theyre refund and for 40 of the tax filers, talking about here is selling to new markets. That is the largest influx of so what i found interesting is funds that they have personally. That a lot of manufacturers that so their version of savings we have been speaking to said that is at the least the time that only 10 to 20 of their to save. And so the opportunity to really sales go to the United States. Think about that given what you they sell a lot to europe and a deal with throughout the year in lot to latin america and theyre terms of other emergencies or not only thinking about issues that come along, building extending their businesses there but also looking for new markets that habit of saving when you know that you are about to get in the middle east as well as an influx again of funds, it is Southeast Asia now looking forward, there isnt a good time to have that as a lot of optimism about the something on your mind confrontation that theyre seeing between the u. S. And when we say people mostly spend their refunds, are we china. So because of that, theyre assuming that they are not thinking that because of the paying down debt when they are next one to two years theyre spending those refunds going to have to make some of this study didnt answer that the changes and also shorter term workout with some of their particular question, but there customers in the u. S. Exactly is definitely i think the how theyre going to be splitting some of the tariffs. Spend message is loud and we its a low margin business so want to get that saving message out there as well. Theres been a lot of concern a great study with a randomized here about the cost being pushed control study of those that got the message, those who did not, on to their books when they feel and savings results were there that at the end of the day the if you put the thought in peoples minds, they will actually take action with it retailers as well as the empowering them to do that customers are going to have to share in these costs and that is what the savings tool did there were other people saving im sure as a result of tax time just in terms of what is who just didnt take advantage happening with the september of that particular feature meeting and the overtures going but it is still a great reminder so that is one of the many back and forth, body language, insights that if you fweek in your view, who wants to deal things, you can change behaviors more after we try to figure in a meaningful way. It out every day we have a different notion about who needs it more. Why has it taken so long for these insights to make it into where are we right now pl city or mainstream . That is an excellent well, i mean, youre asking question i would say this study perhaps the way the chinese look at it gives you an insight into it we started conversations with h or the way i see it in the and h block in 2015 and now four Chinese State press, a lot of the rhetoric that we hear here is that the u. S. Is the one thats going to buckle and needs this deal more because of the years later reporting the politics that is at play with President Trump also eyeing what results. They had an average of 105 is happening in the stock saved eight months later markets. That his concerns about the economy and the potential for a a for those who make under 50,000 a year, that is a Great Recession and that because of nest egg and something that will president xi jingping does have help them get through a financial crisis what did you worry about most more staying power and we talked these days for consumers in terms of your day to day job about this last week theres a when you think about the risks big anniversary coming up. That are out there for the public it really is a buyer beware and october 1st and because of situation from the front end of that there isnt a lot of room things fo that we cant be there with consumers all the time there are a lot of scams its weak and so that it would be willing to continue to eat a i was talking off site with lot of the tariffs someone today, in terms of things to be aware of. And were actually taking enforcement actions, but we they try to find other ways to cant be everywhere with everyone how do you feel about all of survive. The stock market that you the online new entrance into the just mentioned, you need to tell people over there are actually not far from the highs savings, robo advisory game . They are a great opportunity again to make people think about the president might be ready for this, take action on it. Another round to add another 10 but not without some risk. Since were talking taxes, on when the market gets back to where it was, i think he feels would you ever i dont know if you know my view on this. Emotions boldened that here we advocate for a single card, just go again and well try to pay your taxes, it comes from inflict some more pain. The government, you dont have yeah. When we said how many days until to do anything the end of the year. I know it is antithetical for certain parties about doing that creates a lot of this do you know what im talking uncertainty. Thats what a lot of the about . I want to make it easy im probably against it manufacturers here are worried i know you are against it no, this would just be a simple card, you pay your tax, it is about. Done, the government effectively theyre not getting as much help sends you a bill so you dont from the Chinese Government as have to so majority of you would think. The government has made a lot of announcements about how theyre americans going to help but in actual fact they havent seen any money and, without a affordi iforwardins in fact, one manufacturer said its actually gotten harder for them to get some loans because how do they see you . Some of the banks have said that is im with you. Thank you well, youre working now with for more on savings tips, youre working with u. S. Check out cnbc. Com invest in companies and u. S. Companies are a risk so were not going to hand you that loan you. It is an Education Initiative so that is something that that cnbc is doing focused on theyre dealing with here and another point is that its been improving americans money knowledge in the areas of weakening but the people that we savings, spending and investing. Talked to here said that they still see a floor for how much is weaker it could go on the one hand its going to be helpful and the government can i get some help. Watch his head. Appears to be helpful in some way. At the end of the day the government has reasons why it im so happy. Wouldnt want to weaken that much further they said theyre getting limited help in that way as whatever they went through, well. I was informed that Something Like 460 days of the election, they went through together. Welcome guys. Life well planned. Or 480 days from the election. See what a Raymond James Financial Advisor can do for you. Thats not that far often. The first nominating like three or four months off thats a big debate where everybody is finally together. Et cetera only 10. My mayor is going to be there. De blasio youre a new yorker now. Ive never spent a night here are you trying to get me to pay taxes here i have never spent a night here. I thought youre now i have never slept over here at an apartment trying to bring it out on air. I thought you were going to have an actual coronary because you set up the llc and everything. Lets talk about the hurricane now. Lets move on. Under a state of emergency Hurricane Dorian batters the bahamas. Jay gray is in the projected path of the storm and joins us now from savannah, georgia. Hey, right in the middle of that projected path if this storm decides to move at this point right now it continues to linger over the bahamas and you have to feel for so many there that have taken a beating for more than a full day it looks like at this point its going to mirror the coast or move up and could make landfall in North Carolina sometime late in the week. Here we have seen evacuations in place. Sandbags also blocking where they believe the water is going to go. The port is closed most of the businesses are closed here. Everybody prepared and cooperating it seems except for dorian at this point it does begin to move which the National Hurricane center says it will later today. Wed likely see the storm off the coast here just because this thing is not going to make landfall, its going to be close enough to the shoreline and its still going to cause hurricanetype conditions and strong winds, heavy rain, storm surge in some areas. Beach erosion could be a problem as well. A little time left for those that want to prepare or evacuate. A lot more coming up on and the window should start to squawk box this morning. We have elon musk making a trip to china and winning over government officials there to close into the afternoon get a break from tariffs well discuss what it means for the company as it gets ready to open a gigafactory there and we should also talk about the walling street journal oped coming up, well tell you about those tax credits. What is happening in parliament also hong kong and your money, that could move the market the how violence protests in their next couple of days. Financial hub could make or and take a look at the biggest break a trade deal with china. Premarket winners and losers in and were closely monitoring the the dow. Latest forecast for Hurricane Dorian which is currently churning in the bahamas but now expected to move up the east coast this week, shifting travel and other industry expected to be impacted by the storm the latest all coming up you should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. And even explore whatif scenarios. Wheres gate 87 . Dont get mad. Get e trade and start trading today. Welcome back to squawk box this morning ipo news just breaking on smile direct club. Hey, thats right smile direct club setting a price range that it plans to market shares to investors they plan to offer stock between 19 and 22 a share that implies an ipo size of more than a billion dollars, about 1. 2 billion at the midpoint of the range. And this would be one of the biggest. The market cap at this price elon musk traveled to china range is about 8 billion at the and he returned with a tax midpoint that represents nearly triple break. He met with their transportation minister while visiting teslas new gigafactory being built. The 3 trillion valuation they garnered about a year ago. It pushed shares higher on todays amended filing kicks it friday here to discuss tesla, managing off and will go around the country meeting with investors to sell stock. A large ipo to look at, kick off dwrekts a september. What is the biggest question. Director at hoppenheimer and company and also so this is good, a 10 tax that foreign a lot of people are looking vehicles face, but also china at how this direct consumer will increase auto tariffs model looks in terms of overall in december, so this is a small offset, no it is a small victory, short regulations. Term for them in terms of some so each state that they operate of the near term shares. Ultimately what they are doing in, the appropriate approvals to is ramping up capacity in china where they will avoid all of do so. They operate such as that they these taxes. Have a group of orthodontists and that is where they could see real benefit from that that they work with and dentists relationship they work with and they pay and so this is a nice to have those orthodontists and dentists and small positive but not a huge deal. Does it looks like the model to be apart of their network and 3 production by the end of the then but they need to make sure that they have the year will happen it looks like they will important Regulatory Approvals start. We havent expected real volume. To do so. Leslie, thank you we are watching the pond this just modest test runs. We think that they will get that morning falling below 1. 20 to this year. You know, next year is a really the lowest level important year for them as they move into a year where they need opponents of Prime Minister Boris Johnson want to pass toshow the operate leverage that they promised the street. And craig, youve been legislation to force him to bearish tesla for a long time. So what are you going to say delay the eu. About this tax break that they theres no circumstances in are get something. I have to give elon credit. Which i will ask brussels to this is an environment where were seeing u. S. And chinese delay. Were leaving on the 31st of tariffs put in place left and october, no ifs or buts. Right. And here he gets a reprieve from we will not accept any attempt a 10 tax credit to go back on our promises or treatment very much like a scrub that referendum. Domestic chinese automaker that is a big deal a group of lawmakers plan to so i agree that it is minor from try to seize parliamentary time a financial standpoint, but it on wednesday to pass legislation shows that they are approaching that would force johnson to ask things correctly and it also shows that there is for an extension if that happens, johnson in the Bigger Picture actually indicated he would take steps to green light out there, you know, hold an early election. A good potential outcome as we joining us now is julia, the look for constructive ways to founder of macro policy work with partners does this make you more bum lish on t bullish on the tesla story knowing that his relationship in perspectives just overall, well start china looks to be a pretty good welcome as our guest host, but one . If you look at the longer term for china, the fact that youre torn, youre torn they will be paying 323 million youre neutral. Torn. A year in taxes after 23, that youre torn between dovish Central Banks versus recession shows that they are looking at a concerns in the trade war. Fairly serious ramp in china yeah. This is what you talk about they are expecting a fairly all the time. Absolutely. Serious ramp youre not sure which way to go. He has done bhauone basically w look i think the market is a buy because of the yield that it said that he would do. Might not be at the trajectory offers and i think the real that he wanted, but i think the thesis right now is were well probably see some success likely to stay in this low with a couple hundred thousand Interest Rate environment for longer and if you look at the cars out over the next few years. And that would be a big deal, s p 500, 60 or more of the that would be positive and it will probably end up being their stocks offer dividend yield most important market. Thats greater than the ten you sound like you are getting more positive on tesla year this is like a weird, wild world are you . Fundamentally this year i think that we need to see what happens with the takeon launch. That we lif in ave in. So our advice to investors in these Uncertain Times is look that is next tuesday for a sustainable dividend yield already 20,000 announced orders there. Where you can meet your income you could see porsche do very requirements and youre protective on the down side but in terms of the s p 500 from a much what it did with the cyan price perspective its hard to say. Dont fight the fed. We have a very accommodative central bank policy. Orders there doubled for a we have accommodative central couple years so could be interesting. Banks all over the world but we policy question for you. Also have trade friction we have companies in paralysis subsidize my electric are car, please as you know for so long, elon musk said once the subsidies mode it forces us into these yieldier went away, it would help tesla and hurt everybody either because the 200,000 car limit areas of the market. Which was the subsidies roll off yield curves. After 200,000, tesla has had what are they telling us . Inverted again, also for that, now they are asking for the next 400,000 cars. About a month now, we have been and elon musk has jumped on explaining this time its board for that subsidy different. So many different ways does that make sense and should its always an uncomfortable we be subsidizing these cars i do. Thing. It is uncomfortable. If we are going to facilitate a so the latest in the journal, technology change, there needs to be support. Bonds big swings amped up by a journal says that this has Market Strategy and just simply been going on for 30 years saying that all of these people, though all the institutions that need we are studentinare supporti yields, theyre on auto pilot across all sectors and they scoop up bonds because what is fascinating is how slow thats what their preexisting the Auto Industry has been to risk models and investment actually invest in this change and actually fulfill this. Do you think there is hedging strategies toell them t something fundamental that is beyond just about either the do. Technology itself or about the its not signal. Cost of is that true . Does this not is there a i think the technology is recession being worked out by harder then people give it the bond market . Credit for and the cultural issues in terms well, it certainly is a of innovating and then the fact warning signal i dont think theres anyway that they are playing the field. They are hedging their bets with that you can look at it any other way. Hybrids and other technologies the fact that people are so they are not committing comfortable with those and tesla has done one thing Investment Strategies tells you right in committing to one something about the Economic Technology and Going Forward in environment and we can look at the Economic Data and the global that and even though it is hard short Economic Data, the u. K. Pmi, and term, over the long term i think that it will pay dividends all are looking recession nary right now they reached we have a lot of Political Uncertainty from brexit to china 200,000, so what is the math on and the u. S. If we extended it by 7,000 per thats only going to intensify as we move closer to the vehicle for the next 400,000 in. Election here. Tesla is just margin at this that reinforces the paralysis. Point. They really dont have serious competition from a products perspective. So for them to get the tax credit is just pure margin for they can see it now them i dont think that makes i of course the large global dont think it is a mistake for supply chain businesses can see it most clearly but yes even them you said there is no competition. Smaller businesses now can see no competition maybe if you are talking about straight evs that what are the prospects for are in this plauarticular area growth where am i going to get my but that assuming that the buyer growth its harder to see the one area of strengthening is doing it for all these the consumer, thats the bright reasons, wants an ev, a high end spot and we have had many luxury ev. Sure but recessions over the last ten high end luxury, only place years. I think it is mid range we had an industrial recession it wasnt really that many. In 2015. In 2015 but they were strong luxury it is not high end enough to carry us through do you see that type of scenario no, the 150,000 playing out where we could see a manufacturing recession. If you polled a tesla owner so without a doubt were and said did you buy this car because it was an ev or did you already there globally and the buy it because you just love the car, you love the handling us. Is moving in that direction. All the other features, what percent would say it was because it wasev they havent overborrowed, i think that is the fundamental question i think it is false to try to separate if. Overleveraged, that is the hope of avoiding a recession. They can buy because it was an ev and what should we not sub city die, anyones pie in the sky idea of transitioning to what its offset some of the global head winds the future should look like . Its still a possibility should we subsidize all wind i think its a clear possibility im not forecasting a recession power if it never becomes why are you laugh something. Because were subsidizing the oil industry i mean what industry sthoont we yet. No one ever forecasts. S shouldnt we subsidize they go there. Cant subsidize everyone. Just not the ones that you like thats what they will be and think that not just me telling us too. They go from 30 to 40. Im saying we need to innovate in the economy and support that. Pretty well in innovating in okay. Its still 60 that you dont general, right yeah, it has dundone decent get one. But you can go to europe and they also accommodate central look at Certain Energy that has banks. Theyre doing something to been sub city ksi look at Certain Energy that has been sub city ksdized over ther offset. That has an impact on market shoobts have been. To the earlier point, you sentiment and thats an important piece of the puzzle. Yourself said that if we had a do you think thats a further subsidy, it would just function of china or a function mean gross margin for tesla. Of the election or how are they so that is not a need. But it is helping the interrelated its both it is not driving demand. You answer the question. If you poll the user, how much does it the ev component none of moving sourcing to other regions of the world you have paralysis mode in terms people buy them because tesla is making great cars of where do i set up my new plant and every day theres a i agree this is just something that helps tesla on the margin Different Number about tariffs i personally hate subsidies. Its an environment where its i dont like picking winners and really hard to plan anything to losers from a federal subsidy or the future. State subsidy. Even before the trade war inglett the free he market intensified we were seeing a slow down. China has been the engine of Global Manufacturing theyre seeing growth slow on a decide there are buyers at a range of structural basis and thats a price points from 25,000 or reality that companies are going to have to grapple with and 225,000 and this market is real and growing and lets the market reorient their Business Models work all right craig, kocollin, thank you. Towards. All right coming up, protests in hong thank you. Coming up, were going to kong turning violence again. Talk. Jobs weak it is jobs weak in america and well discuss washingtons response to the situation and well get you ready for fridays very big number. Checking out the futures at this hour, we continue to trade lower, but were not down 200, the Small Business report, that is next. Back in a moment 195 or so on the dow 60 on the nasdaq and a little over 20 on the s p 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. We saw the most violence protests yet over the weekend in hong kong. Reporter good morning. Thats right and we are now in the 13th week of these antigovernment protests here in hong kong they dont appear to be going anywhere in fact they are only getting more violent over the weekend, we saw more clashes between protestors and police, police pulled out a water cannon, shot protestors with blue dye, first time that weve seen that. It is to mark them so they can be identified later. We are talking about tens of thousands of protestors who turned out to the streets regardless of a ban that the government had imposed things got a little ugly they threw molotov cocktails at welcome back to squawk box it is a very big week for the police, Police Responded with tear gas economy leading up to fridays in fact they chased them down in on to a subway station at one jobs report. Kicking it off today, the small point, hit them with their batons, sprayed them with pepper Business Report being released spray and got some innocent joining us to go over it is marty who is ceo bystanders according to Amnesty International. And ominous signals out of to the extent that your report beijing, the Central Government is going to help us discipher there saying that, quote, the end is near for these what we may hear later in the protestors now, they didnt specify you how week, help us with it and tell the end is going to come about, us what is happening. They just issued this statement through the state media these are businesses under 50 organization so now everyone is wondering are they going to resort to drastic employees. Down about 1 from last year measures meanwhile protestors, they keep still seeing job growth but less and i think what its telling us turning out to the streets by the thousands. Is that Small Businesses in they were out there today, they will probably be out there particular are a little bit cautious because of the tariff tomorrow before we let you know, what is it like day to day in terms of the business that is just issue. They also run out of pricing happening around the city, the control. Theyre a little bit more banking community, all of the cautious about that. Different industry that is its a tough labor market to there, are people going to work . Is it business as usual or not hire you think its a tariff really at all . It is definitely bad for business story. What do you think come the end the Tourism Industry has suffered not to mention the airport, that of the month given the new was a key location of the tariffs that were going on today . Protests recently. Now our Research Shows that they used luggage carts to the majority of Small Businesses create barricades and battering are not impacted by the tariffs. Rams so its mostly that its a tight both to fight with police and to snarl traffic to and from. Labor market those businesses, small we saw passengers and travelers businesses that are impacting by having to get out of their cars, push their suitcases up the expressway because traffic to and from the airport was china. It does have some impact on completely gridlocked. Them. Hourly wages, what happens . And this is all to get the wages were up about 2. 6 over attention of the Central Government here and get the Central Government to stop last year. The larger businesses when you bowing to pressure as they see it from beijing. Okay. Get up closer to 50 employees, chris, thank you for that report joining us now to discuss theyre pretty consistent with you china trade and washingtons what we have seen. They are seeing wages rise for response, judd gregg, former new these Small Businesses because they have to try to attract the hampshire governor, heidi employees in a top market but i also see you have owner only heitkamp, and cnbc 2rcontributo. Businesses and theydont give themselves wage increases, particularly in a tight economic market. Were showing a map on the i know she throws that around screen in terms of where some of more than the senate thing the growth is taking place south remains first among judd, youve written about we know what the Democratic Party regions in employment growth the west leading regions in stands for, but you are wondering what does the Current Republican Party stand for in Hourly Earnings growth terms of the deficits are pretty why is that . Youre seeing more minimum large, there is tariffs, wage increases in the west and protectionism, a trade war so in your view with what is you have to in the west. Happening in hong kong right now, what would a classic in the west it averages around republican do to try to give 11. 50 11. 50 in the south it averages around 8 still so you still have lower wages in the south but more people and youre attracting a little bit more job growth, particularly in support to president xi, not construction and leisure and s give support how should we behaving there and how is rd doing . I have to admit im not an hospitality. If you want a job, tennessee expert on hong kong but it is the top state for Business Growth and the best top wage, illinois remains the top state for wage growth. Thank you. Thank you. Coming up, the shake up at should be we are people who want to pursue freedom and have the saudi aramco right to speak and do what they what the Management Change believe is correct in their government and if they are shut down by an immediates to the ipo. Plus a tariff fall out, what the autocratic government, we should new round means for apple. Stand up, obviously not and as we head to break, heres militarily, but say listen, we a look at fridays s p 500 have ways of not dealing with winners and losers you that can hopefully influence your decisions and use those ways but as a very plaque matter, this is not a situation where i think that we will have much influence if the Chinese Government decides to use military force senator, i dont think how you think that we should be, whether we should be more strident about warning or whether it is a delicate situation, you dont want to through the at t network, edgetoedge intelligence necessarily, you know, incite gives you the power to see every corner of your growing business. Something where you are being pointed out for the reason from finding out whats selling best. Things deteriorate what is the right it is a fine line. To managing your fleet. But historically as smaenator gregg said, weve stood for to collaborating remotely with your teams. Peoples right to speak out, we believe the world gets better giving you a nice big edge over your competition. When those rights are exercised across the globe and if we stay silent, there is thats the power of edgetoedge intelligence. Some complicity to that that i think doesnt speak to American Values and what we hope will happen in i can. Terms of the future of global the two words whispered at the start of every race. Order. Liberal democracy across this every new job. Globe is under daattack and if e and attempt to parallel park. Allow erosion at every step, especially in a situation where electrical current buzzing people are trying to take a step each new draft of every novel. Forward, but the options are typing clicks limited. I mean, you can condemn the the finishing touch on every masterpiece. Actions. I dont think that you can newborn cries simply say it is none of our it is humanitys official twoword war cry. Business i think that it clearly is our business it is the worlds business words that move us all forward. And if something is done in hong the same two words that Capital Group believes kong that is horrific in the have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Vain of continue in continue ma talk to your advisor or consultant square, i think we have to stand for the right of people for investment risks and information. Ontospeak out. Were attacking china for their trade policies but they also have Human Rights Violations and all this on the backdrop of a trade are war and when the president says president xi is a wonderful man and hes reasonable, if things were to go south as you said, how do we enter into a trade pact at that point with someone that like what happened i mean should we stop buying oil from saudi arabia it is hard to take economic interests and juxtapose them with human rights interests. Well, i think that we have to be careful with sanctions. All right judd, what i think that you have an issue of purity of purpose the simple fact is this is a very complex world china is 1. 3 billion people, that gives them a billion more people than we have. They will be our competitor and hopefully somebody we can work with for as far as our eyes can see. And from a Domestic International standpoint and so there has to be a nuance to how you approach the government like that they are an autocratic government they did have Tiananmen Square we got past it, but we certainly didnt do a whole lot to mitigate it relative to pursuing human rights rational policy is required when you are dealing with a country that is a billion more people than you have and they will influence World Politics so i dont think there is any clear path here. I think you sort of continue to welcome back stress the fact that we are for youre watching squawk box live people having the right to say from the Nasdaq Market site in what they want to say and have freedom and have Liberty Times square. Good morning, u. S. Equity but recognize that we dont futures at this hour were back influence this situation in a in the red after last week we significant way. Isnt that the key issue what rebounded from the big red we had the week before. You just said, which is that there is no clear path but were still, what are we if chooif were if china were to intervene him two or three off the highs of tearily, we would have a clearer path but in the interim with china before. A big shake up yesterday. Not intervening and protests the oil giant replacing its getting more violent, isnt the chairman with the head of the right thing just to sit back Public Investment fund im not sure what the u. S. Or this move seen by some as a way anybody else could do at this stage other than watch this and try to figure out the multiple to further prep aramco for an scenarios out there. Ipo but others are surprised given they have no experience. I think we can make it clear hell still remain the saudi to the chinese that military intervention would create a Energy Minister but will no massive disruption in our relationship with china. Longer oversee resources that is that should be made very clear separated why understand this one. So that if they pursue that ill tell you what the issue path, they know that there will is originally the idea was to be a significant price to pay. Signal to the country and to the obviously we have this trade war going on with china, but there world but somehow this was a is dramatically more things that separation, this was now going could happen senator, i agree with you, to be a more industrial or but the question i would ask business focused endeavor. Then is what do you think the options are for the chinese to having said that, the head of solve this the Public Investment fund is as the options for the chinese are to allow hong kong to continue to govern the way that they agreed to be governed when intwined as the saudi government they separated from england and as the chairman of energy. Became basically a protector to china. They all work for the there is a Clear Authority that government im not sure what the signals was defined was going to be left were supposed to mean. With honk do you thing kong and Hong Kong Government has basically backed down and allowed china to take people out of hong kong into china to be its all connected on it. Prosecuted and do a number of other things which are not consistent with that authority i think this is probably so i think that the answer here about who is in and who is out is that you have the hong kong be government say were going to meaning who was in favor as act within the context of what was the agreement when we separated from england that would require the opposed to the idea. Chinese government to its being spun to the compromise heidi heitkamp, do you think marketplace. That is possible meantime, we have a lot more i think that china is coming up this morning desperate to become the dominant apple among the companies effected by the latest round of economic power you cant do that by alienating with your actions the rest tariffs on sunday. Ahead of the expected world. And i think europe will react. Announcement of the new iphone stay tuned youre watching i think Central America and south america will react squawk box on cnbc as they look the what a at synchrony, chinesedominated world would were changing whats possible look like if 2 going it is goino every single day. Oppress people but what does changing whats possible that is not a good look for the mean anyway . Chinese moving forward in their goal to become basically the dominant economic power in the well. If you run a business, world. It means a lot. So we have to speak with the for starters, unified voice. We provide you with Financing Options and i know ive said this over and over again for your customers. Alienating our allies in this that way, you can help them very tough fight with china has buy the things they love instantly not been a very successful and pay over time. Policy for this administration and that turns them into serious fans. It is time for everybody to come back together and talk about hang on, what the world is going to look theres more. Like when we engage with china, want Customer Insights . Weve got those, too. Not just on trade, but on these we use data to show you what your shoppers issues of human rights have already bought there are also huge human rights so we can tell you what they might consider buying next. Violations as it relates to the Muslim Population in china that and you can offer them is really going untalked about the perfect products. And so i dont think that we can that ceo gets it. Look at china economically without looking also at their from adding unique capabilities to your companys apps domestic policies that are in to bringing you loyalty programs, our technology and Financial Solutions fact we have contrary to western are changing whats possible in all sorts of ways. Democracy and western values so, how can we change and i have to agree with whats possible for you . Heidi there. I think she is talking like a republican used to talk, like we used to talk as a party which is that we build alliances. That was the eisenhower, regan theory the America First isnt good in the long run and leaves you pretty much alone. All right we have to end it there. Senators, thank you. Senator heitkamp has an oped in the last year, of cybercrime every second. Out entitled protect pensions when a criminal has your personal information, for you for millions of they can do all sorts of things in your name. Americans. Criminals can use ransomware, spyware, or malware you can read that at cnbc. Com invest in you to gain access to information like your name, coming up, is the president taking to twitter and urging your birthday, and even your Social Security number. Automakers to leave china and bring production back to [announcer] thats why norton and lifelock america. Senator gary peters of michigan are now part of one company, providing an all in one membership for your cyber safety joining us to discuss. And were tracking Hurricane Dorian as itusiness impact is that gives you identify theft protection, device security, a vpn for online privacy, and more. Straight ahead and if you have an Identity Theft problem, well work to fix it with our Million Dollar protection package. There are new Cyber Threats out there everyday, so protecting yourself isnt a one time job, its an ongoing need. Now is the time to make sure that you have the right plan in place. Dont wait. [announcer] norton 360 with lifelock. Use promo code get25 to save 25 off your first year and get a free shredder with annual membership. Call now to start your membership or visit lifelock. Com tv by 2040, that number will be over 9 billion new tariffs went into effect sunday night among those thats exposed, apple. Great to have you with us. This round of tariffs impacting apple is a much smaller slice than what could hit apple come the 15th. I dont think its going to have a big impact right now. They delayed some things to december so it avoided the christmas rush also this year, there were some tax changes in china earlier this year that would benefit them so theres been a little push and pull obviously the tariff stuff had been pulled. If im buying a watch do i see any price increase, who is paying inturn theres no price increase theyll announce new products and theyll set pricing for that product and youd have to imagine that apple would take that into consideration when they set the price usually what apple does is they set the pricing on the launch of new products and its very rare they change it here we go again, a you new one of the things they change week, a new month and another earlier this year was china when big plunge for futures as new they did price reductions. The whole thing was the tariffs take effect. Product announcements on and were getting a better picture of the storms impact on september 10th was that a way to businesses and ubers wrong turn. Keep asps high and introducing as the companys stock hits and you alltime low, well pin down new products that they could introduce at a higher price . The Tipping Point when the story thats possible started to change. Whenever you have new apple final hour of squawk box begins right now events, theres very little about what actually gets announced. Theres a new camera on the live from the most powerful back not much more but we will watch one because of the tariffs and city in the world, new york, this is squawk box. Apple seemed to have taken a welcome back to squawk box more flexible approach. Here on cnbc im joe kernen and along with Andrew Ross Sorkin and melissa lee. Is there anything that i becky is off today should be excited about. Our guest host me ham mid he that event was like the super will air know whom miho eleria. I havent gotten one comment bowl its not that interesting the last couple of years about the new set. Shows it is all about us this is the issue right now and has nothing to do with air knn theres not a lot of incentive i havent gotten one comment about the new set. Shows it is all about us has nothing to do with could do it anywhere. To buy a new phone this year and this is your set. I expect a check in the mail. We got positive a couple of months ago on very early ahead do people come in and of next years 5g cycle sterilize it when were done i hope so thats where its going to be figured youd say that. Interesting. So nothing interesting in terms of this phone. Anyway, lets look at futures you might alienate customers down but not out can i say that further because the price is much higher on this. Down 226 points. How does this set up apple for big week in terms of rebounding the Holiday Season last Holiday Season apple had a last week after that couple of pretty dismal one and it also scary days the prior week before saw weakness in china. What were seeing so far is a that remember, hard to keep it all place where pmis are in contraction and the retail sales straigh just one tweet away from Something Else happening in july are down 11 probably and two year ten year is still how does this factor in . The next six months are going inverted a piece in the journal today to be a difficult six months for about it is the rise of the them thats very widely expected at machines, it is people doing things based on stuff that they this point meaning its in the stock do at certain points spending on price. Theres no surprise to investors. There were not very high where yields are and it may or expectations to this product may not you said that while launch and perhaps the tougher ago, it didnt necessarily mean time as you go into the calendar what is interesting about the technicals, in the old days it First Quarter of the year. Was about outgoes and look at the outgoes focusing on twitter now and but i think people understand looking for words. That now and at some point our and then starting to move markets and then people get view upgraded the stock two sucked in. So this market gets amplified by months ago was that we these technical factors. Understand we have that but even if you are an difficult period coming and everyone understands it and our view is we would rather be early Insurance Company or if you have assets where you need to deploy on the call rather than late on them for whatever reason, and it the call and again, the biggest cant be in stocks, do they swing factor here is potentially really have any choice not to what happens with the trade buy u. S. Bonds situation. Thats impossible to predict. That kind of explains why we in terms of the september 15th tariffs, how does that hit still have people buying 30 year eps if it does at all in your bonds at under 2 . Model . We dont know just yet and again, i think right now its way too early to even kind of yeah, germany all time low of start putting that into numbers minus 73 basis points. So of course we will at trankt because between now and december people and if you buy into my thesis we could have and we probably will have a couple of dozen that the dollar l. Get stronger tweets between now and then that and stronger, you get the yield might change things. I get that but if youre and currency effect. Getting positive on the stock shouldnt you have an understanding of what the worst Case Scenario impact would be . Sgla. A number of big stories we got to see what happens. Today. Smile direct club has filed an what they do with pricing on this particular launch and understand how much gets absorbed by suppliers and by updated statement for its ipo, apple themselves and again, when they plan to offer at 19 to they set the prices on september 10th, that will tell you whats 22, implying a value of more than 1 billion. Going to happen for this entire and values the company at about cycle because its rare for them 8 billion, nearly triple year to change prices. But they did it for the last ago lows anyone here wear invisaligns cycle. They changed prices, right we had a big piece last week they did it in china and some other emerging markets which was on this. I was like in shock because we very unusual for them. One of the things they talked about it for like 15 minutes. It is a huge business potentially do is just not change prices at all and absorb is it it is and now even dentists are doing it which is creating a rift. Them so much cheaper than the or one of the things interesting with apple too is margins on though done t iphones have already come down rt orthodontist things pretty considerably and thats probably giving them flexibility but they are upset because with pricing tests are trying to get in on part of the positive thesis as you go into next year is more this so you would have been a big compelling phones. Asset for this conversation. They probably have some my pearly whites. Flexibility to put some price for me, i was thinking about increases in for a 5g phone as well which could start to move different parts of the world that it may or may not be the margins in the other direction. Why are margins coming down market for it. And then i was thinking of my giving it more flexibility in price . I would think it gives it less. In this particular year, for own teeth. This year, the cost of the do you think i should . Phones is not going up sure, why not the cost of the phones most it is so easy. Likely come down things like memory prices have did Lauren Hutton come down which gives them some cost benefit when you go to next year, the did madmadonna, letterman . It is a signature at this 5g phone the pricing will go up again but the other problem that point. You are so perfect, i dont apple has had which is something that the 5g phone will fix next even notice my teeth year is the Biggest Issue is not the prices of the phones other news to tell you themselves and the fact that about, hong kongs leader says people are buying fewer of the that shes never asked the high end phones and more of the Chinese Government to let her resign low range phone which is is the biggest driver of margins for the city chief carrie lam made iphones. So more people buy the the comments following the most equivalent of the 10s and the violent protests weve seen. Police used tear gas, water max as opposed to the n minus 1 cannons on demonstrators it was the 13th straight weekend last year. Thats a big factor in asp as of pro democracy protests. And listen to this one, twitter well as margins for iphone and thats whats is going to happen now says the account of jack next year. You have to get past the next 6 dorsey is once again secure. To 9 month period. You have pressure. Last week his account had been when you go next year at least you have several things lined up hacked, the hacker sent out a that could act as a positive variety of tweets including some racist messages. Catalyst. They say that it stemmed from a do you think youll ever have Security Mobile Service royer. So intrigue about what that means. And yet another escalation in the u. S. china trade war over transparent s transpare transpare the weekend. Transparency apple of course has given the countries hitting each other with a new round of tariffs. Much less disclosure right now Kayla Tausche is joining us with so even asp and units on iphones the latest and those new tariffs from both the u. S. And china went we have to guess ourselves now too. Into effect sunday it makes it difficult to figure further escalating tensions that out. Chris, thanks for coming by. Between the two countries and calling into question whether thank you. Coming up, investing in times of volatility. Those inperson talks will in well talk to power player and fact happen later this month find out where he is putting officials held a call thursday money to work. Night in which china claimed as we head to break, heres a progress in halting fentanyl quick check on whats happening shipments according to three in the european markets right sources with knowledge of the now. You might imagine theyre in the call red. Servicenow put our workflows in the cloud. And china again asked for relief on tariffs but without that, china is fighting back launching a wto this changes everything. Complaint lowering prices on consumer goods on appliances and youre right sir. Everything. No not everything, easing traffic rules that i mean youre still blatantly sucking up to me gary. Restrinkt purchases of new are brilliantly observed, sir. Cars meanwhile here at home, labor always three steps ahead. Leader one time supporter of President Trumps trade agenda six steps ahead. Sixteen. Said that support among his members is faltering so many steps. You done . I think that it is a good thing taking on china. A million steps ahead. Unfortunately, he has done it the wrong way. To take on china, there has to be a multilateral approach servicenow. Works for you. One country cant take on china to try to dry up its overcapacity because they just send it through you in other ways President Trump firing back tweeting yesterday that thumka likes it until the cameras are organization no wonder unions are losing so much all right thank you, kayla what did you make of what is happening here i dont know why it is a surprise if you look at the u. S. Domestic situation politically, if you look at the chinese, both call for escalation of trade tensions we get the occasional cease fire but were also a cancer fighting, as we did when President Trump said that the talks were going hiv controlling, to take place at a higher level, joint replacing, and depression relieving company. But that is just a temporary from the day youre born cease fire we never stop taking care of you. The underlying dynamics is for escalation and what does the timing there . When didwhen i needed ton . From thjumpstart sales. N do you short everything . How do you play that build attendance for an event. I dont know if you want to short when you say escalating, what help people find their way. Does that even look like fastsigns designed new directional signage. So it will be more tariffs on both sides until we get to the. And got them back on track. Get started at fastsigns. Com. Election i look at this why do you say that until we get to the election . You think it plays well. Because i think that the chinese made a fundamental and very unusual strategic mistake right up front they didnt follow the example of canada and mexico in understanding that the right thing to do is diffuse tensions quickly. And because they waited, in the u. S. This issue went from being just about economics to being about economics and National Security and the minute that happened, it makes resolution much more difficult. So now the chinese are looking at this having made the mistake and for them, the most obvious thing is wait until the election and there was another piece over the weekend that . Of President Trumps closest advisers arent even looking at this a s an economic issue, tha it is a National Security issue. And we had steve bannon on, it is like we need to counter this threat now or the question though politically, because it can cut both ways, there is a base that might say there is a National Security issue and we support you on that front. But if the economy turns south as a function of all of this and it gets articulated as a tax on americans, then you might have a different view in Trump Country if you go silos full of grain rotting because were not exporting them, that doesnt help probably either right . I mean some of the farmers that were on board, slowly you are seeing those numbers slowly going down at the same time, why do we assume that the chinese if that is your calculus in terms of what the chinese are operating under, why do we assume that it is only going to be a tariff retaliation on the part of the chinese . Oh, no i feel like people here assume that it will be tit for tat, they will run out of stuff to put tariffs on and they have a whole battery of potential welcome back to squawk box tactics that they can use. Absolutely. U. S. Equity futures are about and there has already been a ton where we have seen of nontariff restrictions on what would you call it both sides a pretty good week last week companies are facing all sorts it kind of feels like a monday after a three day weekend but of difficulties right now. Its manageable. What is that absolutely and that is why another element of this, even if the peace was its not even a percent, right its definitely whats declared tomorrow, i bet you happening. The yield curve is inverted. That u. S. Companies would pound is at multiyear lows below continue to look about diversifying their supply chains 120. Lets talk investing in times of that this is a permanent change in how people think about globalization and that is important. Because we are used to looking investing in tennis as well as at Financial Markets in terms of esports. So good time to have you on given what is happening, nadal i a globalizing world. Guess, a bit of a scare. Right now even slow motion former champion, cilic, right . Rewind on the globalization process. And want to continue another yeah, cilic is tough. Political democrat poe nencompo but you showed why he is in top form yeah, those last two sets, story, President Trump taking on General Motors and its relationship with china on 62, 61, whatever friday saying it is not as and not everyone knows about strong as it once was and your involvement i think in team accusing gm of having movez tennis and are you trying to make money or is it just your love of because gm has never moved a tennis combined with, you know, factory from america to china. Being a venture capitalist want to bring in a lawmaker who yeah, i love the sport. I think it is a great sport, a has a unique perspective, great sport for kids michigan senator gary peters is and anyone can play it here Homeland Security committee and and male and female. Serves as commerce and joint so im a big proceponent of it committees good morning to you. Senator, what did you make of ive invested in team tennis 12 that tweet and what do you think the American Public should years and we bought the think . Washington, d. C. Tournament earlier this year which just well, the president continues concluded in august. To put out these kinds of tweets so it is a great sport and instead of really having a i do think that there is some coordinated manufacturing Good Business opportunities in policy my focus is how do we make sure the sport as well. I know you want to be close that we can make things in to the businesses and stuff, but america, that we have a strong and vibrant Manufacturing Sector were not seeing that kind of youre a ball boy he at tat the tournaments or i actually was a ball boy help from the administration we need to be focused on some of the areas that the government oh, you were. Can be really helpful in the all right. Industry and then the tournament was one thing that i see here in michigan as i travel across the potentially going to leave the state, folks are looking for town skilled workers that could be and so actually i had a meeting with the ball kids this year before our finals and they said working in our plants. We cant be in a situation right one request, they want me to be now where we have tariffs by a ball kid again next year so i agreed to do it tweets, we have disruptions, we and someone chichled in that have folks who dont really have they are trying to get aarp to any certainty as to what the future is going to hold. Be a sponsor so maybe well do that next it is creating a very difficult year i love those kids because Business Environment here in they want that ball can you michigan and political question and i dont know if you had an opportunity to heart imagine if a kid is like not conversation we were having at the table moments ago. Which is the idea that the trump that into it and he is fairly going over i mean that would be snl administration has really maybe. Determined that this battle with actually a great way for china is as much a National Young kids to be part of the sport and get up close security battle now as it is an it really did inspire my love economic one for tennis having that do you believe that . Well, certainly we do have to involvement. And actually a lot of people both pros like Roger Federer was be concerned about the chinese nep are a competitor and we need to hold them accountable and if we enter into trade a ball kid what do you have to do to agreements with china, we have make tennis even more popular to make sure that the rules are some if you could change actually followed. Something about the game right but we also have to understand now, what would you do one of the great benefits of that when you have robust economy, that is National Tennis is all the traditions in security having a strong u. S. Economy is it i think if you really want to make it more widely appealing, directly tied to our own youd probably change things up National Security as well. A bit more, maybe make it a bit and that is why we need to have shorter, maybe the sets a forwardthinking economic policies that understand the complexity of the world. The sets shorter. If you are looking at tariffs, yeah, the matches a bit that is certainly a tool that shorter. Create more big moments wraern you use when you are putting fewer big moments. But im not sure that i dont together a sxre len scomprehens think the sport will ever decide to do it International Strategy but the president seems to think and one of the things that makes it great are these epic battles that it is a strategy by itself. That everyone falls in love that has never been the case and it wont be in the future. With what are you hearing from so that is the ball. Your constituents when it comes there are times when it is to these tariffs i think people are going to just a dominant player versus start feeling more of them someone who doesnt have a if you look at some of the chanchan economic studies that have come out, now with these new tariffs chance but you never know going into place, it will start latest is Taylor Townsend. Hitting consumers. It could be as much as 1,000 yeah, she is great. Per household. And ill tell you, 1 240ud p 1,r there is an amazing next household is a big hit and that will ripple through all sorts of industries here in the country generation Taylor Townsend beat simona senator specifically when it comes to the Auto Industry, halep. And it was so tense china announced that it would be at the highest levels, it is increasing tariffs on u. S. Autos one of the great sports and one by 20 to 40 . Of the great businesses big evee how should we think about that most cars are built on the ground there is a and so may not face the brunt of this tax greatest events you will see the u. S. Open is the highest what sort of impact are you anticipating in your district . I attended annual sporting event in the world and so the sport is amazing. Face the brunt of this tax what sort of impact are you anticipating in your district . And it is very strong globally certainly with general and i think that the key is just motors, most that they produce to grow it throughout the year there are ones that they sell in and make more events big china. So that wont have that impact serena ranked eighth but although ford motor also sells probably going to win. I dont know why she is eighth cars from the United States, and djokovic now withdrawn from they export to china as well every major with an injury at so it will have some impact. But i think it is the overall some point did that look the other night impact throughout the supply like he was fine the match chain that were worried about and the kind of disruption and before that, but then he wasnt really uncertainty that this creates his shoulder had been bothering him the whole week really doesnt make for a very and when he starts doing drop healthy economic environment and i think that you are shots, he never does that, he starting to see some of that chases well, lets get to the slowdown in the Manufacturing Sector broadly may be a leading indicator ipos do you wish gm the cars that yeah, we have two minutes it is building in china, buicks, here tell me we have peloton cadillacs, i think four plants coming up, a whole number of big or so, codo you wish they would ipos on the docket move them back to your state would you buy any of them . Absolutely. Depends on the price. Absolutely we would want those cars made fair answer, but here in the United States and it depends where they come. Exported to china. I mean, that really is the that should be the goal. Answer for me to these companies. These are really amazing there is excess capacity with businesses and it really depends on that manufacturing sites here in the United States now. Wed love to be able to do that. Before. So is wework an amazing but i think that we will need to have a comprehensive business manufacturing strategy coming there are elements of it. Out of this administration and a a lot of people look at their policy in order to make that reality. Maybe gm didnt specifically s 1 and says there is stuff that move one that was in production makes them anxious here to there, but they build yeah, i think that is a fair plants and automobiles in china. Point. And even as a customer, we have they did. Been a customer of some of our businesses that we work in that yeah, they built those plantd n rates you get relative to what you can get in other places china. Some cars are coming back. Makes you wonder a little bit it is a big market. I understand it, but gm has a about the core economics but they have a huge platform. Lot of problems. If they told more cars here, it is growing like crazy maybe it wouldnt be such an and they got to get capital to important market for them and they got to give people the cars continue to field the growth they want. Once again were back to that peloton im a peloton user. Ten years after the bailout. Right and we want to have more of would you buy the stock those cars, we want to try to i hate to say it, if really depends on the price these are great, great bring back more of the production from mexico as well businesses i prefer to get involved earlier to the United States i think most of us are in a companys lifecycle than at disappointed that the new blazer this point you are a spat guy, special is being built in mexico wed love to have that in the United States. We need to have that continued purposes vehicles. What did you make of the rich focus of filling plant capacity hard branson transaction around with cars that are being built here in america. Virgin galactic . Before we let you go, we were i think that it is actually a having another debate last hour really interesting use of the about tesla and evs and specifically there is an oped spac because it would probably in todays wall street journal access the Public Markets as talking about the subsidies that well it is also pretty early have been made available for evs business, so it would be hard for it to go public the 2r5 decision al way. That roll off or get h a alved and so i think that they will engine rate a lot of interest in it a deal that gets done because after the first 200,000 cars are typically there is a vote that happens . It just depends on how much of the proceeds they need to sold it has rolled off but the have to close because you can industry is asking for those to close them if you dont get all the proceeds be continued for the next the vote will happen the question is how much of the 400,000 cars would you be in support of that . Proceeds they will end up i am supportive of that we want to continue to ramp up production of electric vehicles getting. He proce and to bring them to scale proce. Proceeds for themselves we have legislation to do that no, because investors can ask for their money back often you dont get 100 of the the evs will become more cash in trust, you get some but you still close the deal with less but interestingly spacs, now economical and be able to be sold to a broader section of there are 18 billion of spac in america. These subsidies have gone on 75 vehicles looking for yields for 30 years now you are seeing ev production so it will be a very robust part of the Capital Markets for a catching up from a technological long time. Mark, thank you so who is going to win in the standpoint when we move to selfdriving mens, federer vehicles, those will all be evs lets hope for federer and as a well, electric powered. But you need to be able to scale up and mass produce these cars not rafa final that takes substantial hard to bet against rafa, but investment right now these cars are more expensive, you cant get to just a rafa federer final. Scale. But when you get to scale, the Market Forces kick in and you it will be an amazing weekend. Become very competitive and have a much more competitive product. Should federer have gone with but you have to get to scale nike hard to turn down 300 and getting to scale is often difficult with a new technology. Million for ten years when you fair enough have three or four years left in it is a longer debate. Your career. Senator, always love having you. Thank you, mark thanks for joining us. Coming up, it was a wrong thank you for joining us for the turn, companies coming off a big hour coming up, mohammad elerian Second Quarter loss. And still recovering from some arguably deeper corporate will help us make sense of the issues when we come back, well talk to current volatility a journalist who has been and speaking of volatility, check out futures as we head to looking very closely at when the break. The dow opening 218 points narrative around uber changed and what it can do to get back we p00 giving up 25 at in the right lane. The open stay tuned what do you look for when you trade . I want free access to research. Yep, td ameritrades got that. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. Futures down 223 now, 67 on the nasdaq, s p indicated down 23 points this morning new mobnth, new tariffs a number of factors affecting uber has consistently made headlines since it shot to markets. Well break down the latest. And elon winning over prominence recently its big ipo didnt live up to expectations at least so officials in china what it means for their decision far. Were now only getting some of to stick with its gig ga bafact the firsthand accounts detailing their rise in a new book out today, super pumped, the battle there. For uber and Hurricane Dorian, well it is a fabulous book i will say tell you what it means for business and industries in its as to myself ive read it path as this second hour of squawk joining us is its author mike box begins right now. Isaac. It takes you all behind the scenes of the past, i dont know, decade live from the beating heart about ten years, yeah inside the room, you really of business, new york, this is feel like you were there with travis through all of the squawk box. Good morning and welcome machinati machinations so here is my question back to squawk box here on having now studied travis and all that he brought to the organization and the sort of cnbc hard driving mentality and now u. S. Futures at this hour, equity futures nothing to get too excited about in terms of if you are long, but we are pulling derrick in that role brought in back a little on the tariff that hard chargingness which situation, new ones that were might have helped the company added over the weekend was thought to have not and that you needed somebody else but manageable down about 200 there is now a new narrative points, nasdaq indicated about saying that you might need a 67 and the s p down 23 or so hard charging you know, a two year and ten year are travis kind of guy on the other inverted and the british pound side do you believe that . Based on their own situation and i mean, i think after 2017, the new Prime Minister, pound at a multiyear low recently which was like explosions going here is what is making on around the entire building headlines. And just everyone needed people smile direct club has filed an to chill out for a minute, dhar update the statement toward a planned initial public offering. The maker is planning to offer stock at 19 to 22 a share. Seemed like a good pick. It values the company at about he was just very steady as she 8 billion nearly triple a year ago levels boeing could face further goes ceo i think that that has kind of delays in restoring the grounded worked to calm things down, but 737 max jet to service some folks are kind of questioning whether he is maybe boeing is facing pushback from too chill if that makes sense. International regulators who say that the jet maker has not like maybe some of the early provided it with enough details employees really credited travis about its proposed software with this likability to drive a fixes. And twitter says the account fire inside of employees in the of jack dorsey is wont again company. And i think that when you have competitors in all of the secure markets around the world, that the hacker sent out a variety of tweets including some with is something that you might need racist messages. So you write the following, twitter says the problem stemmed you say this is a former from security oversight by employee i believe you are mobile service provider. Quoting, is uber going to be an back to school, back to amazon, a company that work were past labor day now dominates, or another ebay want to get a look at some of what do you think the answer is . The market moving factors. Look, they love to call themselves an amazon right now Steve Liesman is here to discuss the big week ahead for the fed just because bezos for years jobs numbers on friday, but trained the street that you can go on razor thin margins or even negative report negative eunice un with the trade front Quarterly Earnings and still be okay and im coming to you from a uber is not exactly an amazon shop in a part of china that is quite yet. Last quarter they lost some 5 known as a Christmas Village billion although some of that because this coastal city makes was like one time charges. And they have a long way to go roughly half of the worlds to still prove that this platform thing that they are christmas decorationdecorations. And manufacturers have said that doing is really more than just for the most part the christmas their core ride hailing industry has been spared for business have you talked to travis this year anyway, a lot of the since this book came out orders have been priced and because he paints i mean, shipped. But what they are worried about travis, there are moments when with this weekend tariffs and he looks great, but then there more tariffs hitting in are moments where travis looks december, that next year is terrible going to look bad. No. Some of them have said that they he is not he did not anticipate that the orders for participate or cooperate next year could drop by at least you do have a chapter, 10 . So this is a low margin business spoiler alert, toward the end and with the confrontation with where you run into travis. The u. S. They think not going yeah, it was in a comedy of away for another 1 to 2 years, a errors that is my life i ran into him outside of the lot of people that were talking courtroom when they were on vero to here said that they are trying to find new ways to survive this situation. And i said it would be off the record, but there was this moment before he went into the courtroom and was like ready to ready to go inside, ready to just give miss side of thihis and he always looks like he is ready to fight for that next thing. That is what he is doing in his next startup you reported aggressively for the times throughout so what was the big surprise for you in reporting for the book . I think that the funny thing is that everyone i spoke to really has this sort of mixed feelings about travis. Like as problematic or complicated of a person he is, he also took the company very far in the early days. There is a big argument for would this company be the same without him, could we have even built it they are looking to try to find incumbent sort of that wouldnt other ways to move away from the let other transportation players trade war. In, would they have still been okay. Eunice, thank you for that there without travis so i really think that everyone has mixed feelings about him as investors will want to watch a a ceo. Couple other Economic Data does dara need a bit of travis in it numbers coming out this week judging from the last Earnings Call where he sort of let the Steve Liesman is here to tell us narrative pervade that there was about it it is a big data week capped not a path to profitability. By a jobs report that will tell and especially when you compare to lyfts call which happened us about the effects of the trade war on the economy and how the day or two i days prior, much the economy may be slowing people were more comfortable overall. Fed speak and market with the lyft story. Yeah, it is really hard expectations whether the fed will cut Interest Rates at the meeting this month because lyft is just by nature a take a look at the wall. Smaller company, it is not ism manufacturing and fighting as many wars as uber is construction spending, well across the whole world talk more about that in a and the wonder is do you need like a war time ceo all the time second and wednesday now a prime if you are going to be across multiple continents. And i dont know i think that it is weird because i think that we kind of forget indicator for what is going on in the world, one, two, three, the trauma of 2017 and how gnarly it was under travis g but there is a case for maybe he g five fed speakers. And thursday we get adp, it is needs to be more of a fighter. And we cant let you go delayed because of the holiday without going back to the amazon remember it is not wednesday and productivity along with versus ebay. In three years time, you have to factory orders and powell will speak from answer this question, is it more switzerland. Take a look at the expectations. August estimates, nonfarm 149, ston amazon or ebay in three years time three years time . If they can pull out from beyond that may be down because of the big revision that we had just a ride hailing business, if bls said in the year ending they can do food delivery well, march 2019, there was 500,000 if they can do bikes a scooters, fewer jobs or about 41,000 a start making money is there Something Else that month fewer jobs created we dont even know about yeah, what is that other next average hourly wage was pretty row ducts. Good retail delivery . Payrolls adp expected at 135, like i dont know. I dont think that they fully just the private sector. Know quite yet i want to look at that ism payments is something that they are sort of dab link into. Number that is not in contraction so i would look at that. Maybe if they can pull that off, look at the white line, that is maybe it is the next stochb. The overall number and that is still above 50 at around 52. Amazon a big maybe. Were looking for 51 and change and it is called super today. But export orders, that is pumped, the battle for uber. Contracting along with the out today. Import orders. That is an effect of the trade congratulations. Uber Digital Currency war perhaps on what is happening do you know if they are in the United States along with they are part of the libra. Global economics they dont need their own at the moment mar the kets then that is not going anywhere, so waiting for the fed to react by maybe they should have their cutting rates in september and own. Coming up, new details out this morning on smile direct clubs october. And january. Hotly anticipated ipo and it is and april . Ive got 100 basis points of an important month for Central Bank Decisions around the world. Will the fed and others make it cuts built into the forward a september to remember. Between now and april. Well talk about what is at stake when squawk box comes right back it is not a little bit, it is a when did you see the sign . Full percentage point. Which would bring us down to the low ones does powell speak on friday before or after the jobs report . I think it comes after but the speech will almost certainly be written before that need to check the time on that because it is probably gmt so check with me in a half an when i needed to create a better visitor experience. Improve our workflow. Hour attract new customers. Here to discuss the markets, thats when fastsigns recommended fleet graphics. Sarah keterror at causesway yeah, and now business is rolling in. Get started at fastsigns. Com. Capital management, and our guest host for the next hour, Mohamed Elerian that is a genuine smile. Were only as good as our la last nice offensive i told you that there would be some spots here three above 500 . We are. Anyway, ill start with you because i think that i can understand easily what you are seeing here. If you have one thing to tell the value as opposed to growth and your day will come, recession or no recession . My colleagues and i believe value is already priced in it is priced into something horrendous look at the banks trading in europe at half book value or less they are pricing in at i crisis akin to 2012 eurozone crisis or even 08, three to four times as much capital look at the Energy Stocks globally, they are crushed weveryone, looknk isntat your phones. The design thinking, the digital engineering, and it is mid single digit pe security, blockchain, and we will be first to market multiples. You could take any value portion of equity markets and find that yes. They have already discounted the when we do we launch . Worst brexit, they have unfortunately, in 2 or 3, discounted the trade war markets are amazing discounting hours. Mechanisms in that respect why the delay . So this has to be a great time to buy value and you get yields cognizant is helping banks use Digital Technologies is it is ironic that european at scale to advance speed to market. Stocks, so many of the great value stocks are yields that are 5 or 6 from companies with plenty of free cash flow, but Hurricane Dorian is now a the bond yields are negative in that part of the world category 3 storm the hurricane is stalled over the bahamas and continues to among the value stocks pound the island chain with rain and high wind. U. S. Cities and towns are now getting ready. Contessa brewer is joining us now with more. Will the dividends get paid my fingersrossed that it just s is the question, do the companies have the ability to cover and grow the dividends so if the market were to offshore i feel awful for the grand enter a bear stage because of a bahamas, but what is the latest on the track the track is that it is recession, youd still be able supposed to stay right offshore, to buy value right now even if but the problem is this storm has been highly unpredictable as were facing that, we dont need you know to worry about buying now and in fact the National Hurricane center says that just now it has started moving at because you think even in a 20 overall correction in the s p, mile per hour. You just so florida is bracing for absolutely. Dorians impact with hurricane price discovery is an important conditions expected by this tool evening. Mandatory evacuations in place and it has sort of been in counties in florida, georgia, abandoned. But finding companies that have South Carolina seaports closed. The financial strength rail Service Suspended u. P. S. And uber have suspended thats what we do at causeway. Service in some places those companies can weather the almost 1400 Flights Canceled airports in orlando, palm beach storm. We sold them hold their ground through the 08 crisis and ft. Lauderdale closed right and melt downs happen. Now, though ft. Lauderdale is considering reopening. That is what markets are miami remains open supposed z to do we just havent had one for a in the bahamas, the storm is still lashing the islands. Long time. And even if you own a bank at least five dead the impact so severe, initial that you think is financially strong one, are you comfortable estimates are 13,000 homes gone. That there is no there would be no knockon effects if you saltwater is filling wells, deep in a recession from a infrastructure Commerce Bank or Deutsche Bank xhun ca communications, power line, road ways just devastated and the exposure they might have freeport is the industrial to unknown things like center, it got slammed derivatives or what not . And tourism of course it is a systemic crisis would be a main driver of the bahamian problem but seems very unlikely economy. And were waiting for a clearer given the level of capital picture to come in onc certain things to avoid. You mentioned a couple but there are great ones out reestablished to see the extent there like unicredit and italy of the damage. But an analyst puts the impact of canceled cruises at 5 cents lit is are consider italy is considered to be a basket case, but companies are per share across cruise lines. Getting rid of bad debt and to universal is open today, disney will close early, both closing a water park start returning capital to share seaworld, Kennedy Space center holders. It is certainly not priced into a bank like that trading at 40 and lego land closed of its book value. Well watch the impact on they are almost giving to you on agriculture in florida and the a silver platter carolinas. I saw firsthand the cotton crops but the time to buy wont be that got damaged last year by after we have a recovery Hurricane Florence and so what will cause this . And again the real damage at this point looks like it could just having rates stop falling be the storm surge coming in along the coastlines they cant fall forever and they it is just hard to predict where never do this storm might have the most what do you think, mohammed impact for the United States contessa, thank you i dont disagree that if you look at valuations it is coming up, how different did the markets look at the end of compelling you can look at emerging markets the month versus today versus the u. S. , it is even more some key Central Bank Decisions are coming and well layout what compelling but that has been true for a that could mean for the markets while. If you say what did we learn the and your money this is the family who wanted to connect. Last 24 hours before we dive into the fed and the data, we learned two very important things one is the u. S. Is influenced by what hassed in the western world. The yield is all about the rest of the world, it is not about us so we plus take into account the rest of the world. Second thing that we learned is that it is now a complete circle between bad economics and messy politics used to be bad economics con m contaminating politics now weve seen it in europe, in asia, it is bad economics impacting politics, messy politics undermining economics and next thing you know, global recession probability goes up. So the only thing i have is not whether it makes sense or the time, it is when do you put the trade up because these macro taxes are power testimony. The keys to put that trade on when the pain is acute because when we know that we are going into a recession, the value stocks will start to discount the recovery. This was very much true in late 08, early 09, we saw stocks tremendous performers then and we expect that they will be again. And did you see talking about only the fed can save us, which is another conversation from the and find inspiration in new places. One that i want to have, which is that there is all kinds of leading them to discover bodies buried in the debt were woven together by the moments we share. Market, very much the way that everything you need, it was you now, i think mr. All in one place. Kohn is a bit of an alarmist in expedia. Some of these regards. That said, we know that the banks look pretty good and that is a part of what our guest over there is talking about. However, it is the nonbanks banking operations that i think are the things that keep regulators up at night there are hedge funds providing financing. They are designed to create private lending ono different companies. Penk pensions are in these hedge funds. How much do you worry about the bodies buried in the ending market that are leveraged that create a problem if there is weakness first im really glad you are saying regulators worry about this because it has taken them a long time to realize and 14i69 fr shifted from the banks to the nonbanks you are citing the tip of the iceberg. Proliferation of etfs on liquid assets overpromisely liquidity to the end user and so my question, if that blows up, what does it mean . What does it look like the good news, it is not in the banks. European banks could be the safest place to be. Remember one thing, when you overpromise liquidity and it is anything that they cant touch you see it over and over again so contagion is in the market. All right mohammed will be with us until 9 00 are you sure i am. Welcome back to squawk box. Here are some of the stories gepd depends how i free thr. Investors might be talking about today. Chinese Telecom Giant huawei is treat him. Accusing the u. S. Of launching coming up, well get you up cyberattacks against it. To speed on the hurricane it says the u. S. Is using every dorians path. And when we return, a new warning from beijing after a tool at its disposal to disrupt weekend rally in protest its business it is instructing law when it comes to your customers expectations, enforcement to menace its employe employees. This following news that the u. S. Is probing several new alleged incidences of alleged intellect al property theft. And volkswagen wont be excluded from seeking government contracts, this following all the dieselemissions scandals that we saw in the past few years. However, vw will be required to install a second u. S. Official at its german headquarters as another monitor of those activities and rbc Capital Markets has raised its price target amazon theres one thing you can be sure of. Shares to 2600 a share from theyre changing by the nanosecond. 2200. That will be that would be a big Market Cap Company thats why cognizant created a unique engineering approach that would be a socalled big cap. Well over a trillion dollars at to design and build new digital products. 2600. Rbc bases the call on optimism learn how cognizant softvision designs experiences surrounding amazons new prime one day shipping initiatives and engineers outcomes. Shares are down this morning, cool. But up almost 18 this year. And a long way from where some people want to be short at 1,000 because of government regulations. And Steve Liesman is here so welcome to september, folks otherwise known as a huge month for some of the biggest Central Banks around the world and 34r leamr. Liesman is joini with the latest. It is a global downdraft in Interest Rates expected to pick up speed this month. September 12th European Central bank meets their expected to ease in one way or another and followed by the fed, followed by doj and bank of england, bank of japan with the European Central bank and fed, it could boost the yen and that could pressure a cut. Mark carney will likely hold fire until he knows how the uk ends up exiting the european union. And at jackson hole, carney talked about the impact of brexit Business Investment is actually running almost 25 Percentage Points below its previous trend businesses in the uk have quite reasonably said wait a minute, im going to wait until if they have any exposure to europe, because theres always another team looking to punch one in. A spectacular touchdown grab either up stream or downstream, they have decided to wait and see what are the new rules of with nfl redzone from nfl network on xfinity, the game going to be that is part of what is you get every touchdown from every game happening world wide, people are on sunday afternoons, all season long. Sayingwell, okay, ive got exposure to chinese supply chain watch every breakout star, or u. S. , let me see where this every heartpounding running attack, and every big time defensive stop. Settles out. Here are the differentials in global Interest Rates. Sundays were made for football on xfinity. China at 4. 35, they have room to thats simple, easy, awesome. Cut. U. S. At 2. 125. Add the Sports Entertainment package for nfl redzone. Carney has three quarter cuts to click, call, or visit a store today to learn more. Use. Emerging markets have been in the action on a big way. This from a reuters story, 37 emerging are market Central Banks they looked at met 14 cuts in august, seventh straight month of net cuts from emerging crystal delklei is joining s markets. Guys, what we dont know, the central bank is easing, should be a tail wind for investors it is still a fairly well formed eye, that means clouds tops are still there and this is still a category 3 is it enough to overcome med wi headwinds from trade and other winds at 120 Miles Per Hour and economic it should be a tail wind but stuck over grand bahama pounding it is not. Because it is just not freeport and you can see the difference effective anymore. Just not effective anymore. Here with our radar picture. I think that is partially it no longer is looking quite as solid as it was yesterday true i think that what we dont want because it has been parked over to do is try to figure out how the same area churning up cooler true it is waters, so it is starting to in other words, not do it. Weaken and that is doctor were i think that they will do it until they feel like the risks seei why were seeing the winds drop down a notch. Of what is happening in the bond it does not mean that we are in market, in the lending are the clear. Market, in the banking system, you can see that this is especially an outdated track, overcome whatever gains you may but the latest track that well get from easing. Get to in a moment will show off steve, stay with us that we are looking at trends lets talk more about the feds big month ahead and different that will have it riding up the kinds of pressures it is facing. East coast but lets look at the biggest joining us now is chief threats so we can look at the regulatory officer at cls and concerns moving forward. Former new york fed official, this will be riding up the east coast, so florida, biggest threat will be storm surge we are looking at about 4 to 7 and also joe laforna and of feet for georgia, biggest threat also course our guest host, mohamed storm surge issues around 4 to 7. And then for the carolinas, we ar the elerian in terms of what the fed will do, how much do you think that it will be influenced by say concern now that there could be what the ecb does days before a clipping along t especially near the outer banks that and it is ironic because we were just talking about how where in additioly the next globalism and n. Trade in trade rolled back or at a stand still and yet globalism everybody is influenced by everybody right now. Which tells you the importance of the Exchange Rate because this is where they influence one another, it is what happened to the Exchange Rate the fact that the dollar has been appreciating. The fed will be sensitive to it. The ecb moves, and the euro sliding which it has been moving very, very slowly, but fed will probably respond to that because to try to ease financial conditions so again, even though globalization is maybe being rolled back, still economies are connected through the Exchange Rate and that is what you are seeing here. So should that factor into what the fed does . When they sit around the table, should they say hey, ecb did x, y and z they wont put it in those words, but it will be in the back of their mind and it will be influencing them and they will be thinking good it faboutr those reasons. So joe, lets say europe, eu does some sort of stimulus plan, how could that impact what we see here the Exchange Rate is the channel through which Monetary Policy can influence things. I agree, you dont want to wait to see if maybe if it is not effective in case the economy slows more and fed may not talk about it explicitly, but the Exchange Rate is a big issue emfx, the dollar is extraordinarily strong, and i think that the fed should cut rates 50 if not more but Exchange Rates are something that impact things commodities are priced in dollars. Dollar has been strong and that causing Global Growth to be softer why should the fed have this weight on its shoulders . It shouldnt. I think we all agree that the fed will cut, and that 1,000 points of rate cuts priced into markets around the world already. 1,000 or 100 . No, no, for the fed 100 for the world, 1,000. Wow and we all agree that currency plays a major role in this because no one wants currency to appreciate where i think that we will disagree is separating the economic effects from the Financial Market effects there are three take their yoes. One is the fed is effective in both it boosts the economy, i dont think that would be great. The other extreme is that the fed boosts neither anymore it is ineffective. And the middle one, it boosts asset prices but not the economy which is where weve xwaen and it matters where you think we are going from here to here i think we are and i think that there is real cost in delivering on what the markets expected doesnt mean the fed wont do it, but we have to be more aware of what bernanke said. It is about benefit, cost and risks and weve entered the cost and risks world. But if the fed didnt cut or disappoints, asset markets led by stocks will sell off. So they are stuck. The proverbial rock and hard place. But is it you can in a lose lose situation. So whether you pick the lesser of the two evils. I think that i would alter the question a little bit. We may be deglobalizing, but we are by no means deglobalized okay we are seriously in a world that is dwra matticly interconnected. And we were really just beginning to understand those connections. You ask a fed official or anybody who runs a model how much do they factor in Global Economic weakness into the u. S. Gdp. Nobody really knows. We had some estimations in 2017 that maybe you cut half a point off. The other aspect of this, you may have Central Banks easing together, at the same time you have finance ministries pulling apart. And extent to which europe and the u. S. Can act together or in concert with each other to make sure that we dont have a currency war, it is unclear. Remember you have the president urging the fed to use the Interest Rate as a tool to value the currency which is the opposite of the g20 statement that was made in the middle of the crisis, we shall not use our Interest Rates to value our currency. Did they say shall . They did not say shall. You quoted them making it i did not do this sounded like it came from god. It was a commandment. They all got together and said we aint doing it. Just dont hype it. We saint doing thiaint doins and ive said this 100 times the president has this way of making stuff that we dont want to talk about sort of apparent, kind of like taking the band aid off the wound. It is true as you use your Interest Rate, it affects your currency so i guess i throw the question to dino, can they all figure this out together as Central Banks, will they they have a chance every two months, they get together at the lovely meeting, g7, g20, no shortage of avenues where they could. But i think that the truth is ultimately there is domestic interests that matter. And they will be looking at their own Exchange Rates youre right about the impact that the Global Situation has on domestic forecasts if you go back to fmoc transcripts from 20, 30 years ago, they didnt factor it in at all. You look at them now, it factors in a lot you look at the speeches, they factor in. So even if the world is becoming deglobalized, still it matters for policy and for the Exchange Rate, it matters for confidence channels, it matters for investment cross border. So whether they say it or not, it matters what the ecb, it matters for what the fed does. All right we have to go, guys. Thank you all so much. We want to hit headlines from Chinese State media, vice premiere says china firmly opposes the trade war, it is not good ifor china, u. S. Or the worlg world. He hopes to resolve the issue on the basis of equality and mutual respect. Futures coming off the session lows just a touch, but still indicated to open lower on the s p by 16, nasdaq by almost 40 coming up, well get you up to speed on the breaking ipo news this morning from dental Technology Company smile direct club anchors everywhere cited and then well talk about the biggest opportunities in the tech sector with ann winblad that is all ahead. What a time to be alive. The world is customized to you. Built for you. So why isnt it all about you, when it comes to your money . So. Whats on your mind . We are edward jones, a 97yearold firm built for right now. With one Financial Advisor per office, were all about knowing whats important to you the one who matters. Edward jones. Its time for investing to feel individual. So servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Some big ipo news out on dental tech company smile direct club leslie has the latest. Reporter hey melissa, were here at jpmorgan, the lead un r underwunde underwriter for that ipo executives are upstairs doing a teachin with the jpmorgan sales force, so that they can all be on the same page before hawking the deal to investors. And there is a lot of shares to be sold in this offering 1. 2 billion at the mid point of the range. Valuation around 8 billion. Guys, that is nearly triple the one that they received in their latest pli latest private round last october. Represents about 19 times their 2018 sales of 423 million and this will be the latest test of investor appetite for that direct to consumer model smile direct club offers teeth alignment products at a fraction of the cost of traditional orthondia, all done online and never captured a sizable Customer Base in the five years since they were founded, about 700,000 smiles they say that they have fixed. But in that time frame, losses have widened the executives here will have to make a convincing case to investors that the market for tele dentistry has still room to run. All right leslie, lets smile. How we doing you think look at these teeth this was braces these were braces, yeah high school. Not cool not a cool look for me back then. Is there a pain freeway to get your teeth bleached . Does anyone know that . Thats a good question. They do offer bleaching products have you not seen a new thing on instagram. I had it done. It is a tray, that is it is laser light on your mouth i had it done to me and whatever they asked me, was telling them the troops are over there, theyre hiding behind i gave up i was it was so have you had them you . Had it done . Nobody will admit it i didnt have it done, obviously, because i wear a yellow tie brown tie for my yellow teeth it is very difficult to sit through that for a couple of hours. Even the crest things i think strips . That i did years ago. Yours still look good youre a young man. Like ten years ago. Young man all right lets get out of here. Thanks too much about us. Thanks, leslie an hour from the opening bell on wall street. Lets focus on stocks, tech stocks as we start september sectors in the lead for the year up 28 since january 1st joining us now to talk, shes finding opportunities in tech is ann winslet, founding partner, we had someone on pretty savvy earlier and just saying, you know what, forget growth, just buy value. If there is a recession or slowdown these are already discounting it and just dont deal with any type of growth do you look at macro things like that or always in your own universe with tech and always find something that is a good buy there . My own universe is tech those are the companies i know it is the dynamics with customers that i know from our own investments, we talked to the customers a lot on what is driving their longterm strategy and thats why i think tech is still really a good investing area you know, you were we used to talk about get to a trillion first and they all did. The ones that you thought would, that might get there before apple, eventually got there, theyre not all still there, obviously. Everybody has touched that market at this point and the top five, are there some you think are better positioned and we know who were talking about, the microsofts, apples, am amazons, et cetera, facebook. I think the top three are amazon, microsoft and alphabet google. They are really the Cloud Infrastructure players it is like buying the modern operating system you cant operate your Company Without picking one of those cloud vendors and Cloud Infrastructure we saw last quarter that in the Cloud Business although it is not segmented that well for any of those companies, but it looks like over our growth in that sector their business was for each of them was greater than 40 , 75 for microsoft and this is not a winner take all market either for you wont just pick one cloud platform, youll probably pick multiples. So all three of them are the leaders in the Cloud Infrastructure area. Fourth company in that sector would be alibaba they also have a cloud platform. So i think those are really four interesting picks because you cannot run your enterprise without buying the Cloud Infrastructure from one or more of those companies. When i look at the individual companies, like you, i get very excited about what is going on, and about the opportunities. But when i look at the environment in which they are operating, there is a massive political backlash going on, just started the International Environment is becoming trickier. How do you balance these things . Well, it is challenging when you look at innovators today, if you look at any enterprise in the world, they all are fundamentally Core Software in almost all of their products so it is hard to stop this train. It is a really fast moving train. And these are modern trains. So if you look at Companies Like microsoft, amazon, google, or even the next set of application and infrastructure vendors, like cloud strike or sales force, you cant imagine an enterprise operating without them and theyre not going to operate just once. It is not install the software and move away. These are longterm integrated relationships on the cloud with these vendors. And it is how you interact with your customers, your suppliers, your employees, it is all software so the backlash is it is a lot of dramatic theater around the companies, they, you know, for some of them, there are large penalties, there are also large treasuries here. These companies are also the companies that are doing the research and development for the world essentially in future markets like mobility, wearables, and ambient computing, ai learning you have to look beyond the macro environment and just focus on this is where innovation is happening. Yeah. Youve been whenever i ask you for the next big thing, you have given me that and it is kind of, i dont know, never excites me enough, but thats where it is, it is all cloudbased and extension, there cant be another social media or another search or another it all has been invented already. I dont even know if we need a Patent Department anymore. Thats why venture capitalists invested a record amount last quarter, again because we think it is all invented. Never has. Give me something sexy, though i want to get excited about flying something, i dont know flying autonomous drones, got anything for me . Jetsons . You know, i dont have any jetson stuff for you you and i know who the jetsons are. But i think if you look ahead to morevironment, not just speaking to alexa or siri, i think were going to find in ten years that we wont notice technology as much you know, were talking about nascent markets like wearables and home computing, that will change a lot. Yeah. I think and i think youre right. We have a way to go with ai, when i see what i see the most obvious things dictating to siri and she comes up she or it, comes up with stuff, so simple what i said we got some work to do with the ai, i think. I dont know anyway, thank you. And thank you. The cloud cocktail parties, best thing to talk about the cloud. The cloud. Cloudbased this. Were getting you caught up on all things going on this morning in Market Action get you prepped for the eng opin bell so much going on were back in a moment lower carbs. Lower calories. Higher expectations. Corona premier. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. From the day youre born im off to college. Im worried about my parents retirement. Dont worry. Voya helps them to and through retirement. Dealing with todays expenses. While helping plan, invest and protect for the future. So theyll be okay . I think theyll be fine. Voya. Helping you to and through retirement. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Oh thanks to our guest host, mohammad elerian. I need more time to thank you. I cant thank you enough thank you. We wont see you tomorrow. Join us to see the return of squawk on the street is next and andrew will be here too. Good tuesday morning. Welcome to squawk on the street. A good Labor Day Weekend im Carl Quintanilla with david faber, mike santoli, cramer has the day off. Dow is down 200 as a new round of tariffs takes effect on the u. S. And china side. Big week ahead with ism in an hour, jobs number on friday, powell in switzerland. Europe is red an