New york stock exchange. The u. S. china trade war taking a bite out of apple, now on pace for the worst day in over a week as the white houses 15 tariff on a new batch of goods goes into effect over the weekend obviously, a big story for the markets. Apple products expected to be hit this time around include the apple watch, air pods, the home pod, imax, and some beat headphones for more on where the stock may go from here, were joined by an apple bear, Pierre Ferragu has a sell on the stock, a 170 target. Also with us, apple bull, daniel flax, whose target is, daniel . Carl, i cant give you a specific target, but what i can say is that while the nearterm environment certainly remains sluggish with iphone and clearly theres a risk in terms of higher prices from tariffs impacting demand, we see a lot that we like over the medium term and i say that because the iphone install base is continuing to grow the company has opportunities to show additional growth with Newer Services like tv and gaming when we look at the wearables market, the apple watch, even with the tariffs, we think theres a lot of innovation. And so if we pull it all together, the ecosystem remains healthy, we think apple is delivering innovation and its customers, its partners, the App Developers are benefiting from being part of this, which ultimately we think will create shareholder value over the next two to three years is your call a tariffrelated call not really. My call is simply that apples main issue, and i agree with dan, its a nearterm issue the next couple of years, is that the average iphone user actually loves her phone so much that she doesnt want to change it for a more expensive and not much better phone so apple has to go through this very difficult time where its user base is growing, its true, but theyre replacing their phone less and less often. So the way apple has been managing that very well has been by being very aggressive on promotions, on pricing to encourage people to renew their phones earlier than later. You can do that if your cost base is coming down. So price have been coming down in the last six months it has helped apple taking prices down much faster than usual. 7 to 8 faster than usual in the last six months. If prices kick in, prices are going up and there will be a squeeze. Apple cannot take prices down anymore, or apple will have to suffer a lot pierre, i love the courage of the sell call. Just like last time, when you had the sell call, the stock dipped down, but then it popped right back up. So i wonder, first of all, how much of this is a longer term issue with apple stock how much of it is, you think, this is just a little rough patch that apple is going through . And then, youve got the 5g cycle thats coming next year. Eventually, people are going to start Pay Attention to that. Maybe the Services Businesses do business than some people expect isnt there the risk that apple starts trading on that stuff instead of the iphone . Yeah, so, i think, youre framing it right five years, as dan says, the ecosystem is in place, people maybe love their phone less than they used to in the past, and the ecosystem ties are very strong so i think the business is, it isnt like a fundamental issue the real question is how is apples right to make money evolving if you cant make as much money on your phones in the past if you have to change the way you make money, selling more watches and more services, that creates a transition and what i have visibility on today is that transition and that transition, is extremely painful for the very reasons you mentioned. We are heading we are today at a very low level of demand. Very difficult to challenge that we are heading into a very weak cycle. Because who is going to buy like a 1,200 iphone that is not 5g knowing that the next one is going to be 5g that transition is going to be painful. When we have the low of the transition, and remember what i did in february of last year, then there is the possibility to look further away and see what kind of upside we can see in the stock. Yeah, dan, to that point, the fact that 5g is a 2020 story for apple, and the fact that you are so bullish on the company, expectations seem to be pretty low for this next iphone iteration which we are expecting to happen next week. What are you thinking about it expectations are low, morgan. I think people are expecting theres likely to be an additional camera and a faster processor. But we think, though, that the bigger story is around the integration of the hardware, the software, and the services that ultimately is what helps to differentiate the User Experience and helps the iphone stand out from the other products so, whether its a 5g variant late next year perhaps or whatever might come down the road, ultimately that innovation is whats critical and if we look at the history of the company, we, all of us, i think, here, remember the ipod, right . And so apple has reinvented itself so it is not a story without risks, but where we look for innovation, were finding it areas, for example, with the watch can enable them to move into areas like health care, with the ecg, the electrocardiogram app. So if the devices and the services are adding utility to their users lives, certainly there are more Payment Options that can make it affordable. We think thats important, over the medium term. So i know we dont have any tariffs on iphones, at least not until december, based on whats planned right now. But where you do look at where the growth is coming from in addition to services, it is watches and wearables like air pods, those are getting tri tine as of this past weekend, how do you factor that in it will be a hit to earnings. I think the market will look past it if it is clear that there is innovation in the new watches that come out, be it Additional Health care or maybe sleep functions that add utility to users lives. Theres little doubt that it will raise cost, it will impact demand but i think for those who want to look further out, as we are doing, we see opportunity here if there is liability, regarding tariffs, pierre, is the Balance Sheet, is the put thats implied by their pace of buybacks in recent years, is that still in tact because a lots been made of the slower pace of buybacks, some among all s pers year on year . Thats a good question. I think the change in behavior around the Balance Sheet and like the Financial Stability of the business relates more to whats behind the tariff situation. Because the tariff situation, at the end of the day, its going to make potentially look terrible, a very difficult time in terms of product cycle, china, thats my call. But in the long run, its no big deal its like, 10, 15 higher costs from china its a new opportunity to look at arbitration costs from other countries, rethinking your global footprint in terms of manufacturing. This is the ability to work through and for a company like apple, it doesnt present a lot of money the real issue around these tariffs is actually the impact on the macro and i think if you see apple being more careful today, thats probably because the macro is concerning them. The risk that there is a tariff war gets us into a recession is really what probably worries the management today well be looking for commentary from the company on that front next print. Thanks, guys, good debate. Well see where it goes from here, dan and pierre well, Hurricane Dorian beginning to move up the southeast coast today, following its severe destruction of the bahamas over the weekend Contessa Brewer has the latest from hq. Contessa hi, there, morgan Hurricane Dorian was just downgraded to a category 2 storm, but it is so slow moving. And its a powerful storm, even so moving at a mile per hour. People in the bahamas have really been enduring this for more than 24 hours with unprecedented wind, storm surge, punishing rain Public Officials have asked those who need rescued to text their location through whatsapp, which is now owned by facebook they are reportedly receiving more than 2,000 rescue requests. Flooding remains a challenge, roads washed out, communication, power, water lines destroyed the deepest Container Terminal in the region is on hardhit grand bahama island. Its a major container hub for the eastern seaboard and sea ports are closed here in the United States, too despite the forecast shift that keeps the storm just off the coast, it has a big impact on cruise ships that are normally docking in ft. Lauderdale and canaveral, jacksonville. Impacted a 5 cents impact on cruise stocks. The port of charleston will close tomorrow now, remember, we saw this last year during florence and closing down the port is a daunting operation thats the file video that youre seeing there, when we were on site last year a major rail line in Central Florida servicing sun rail, amtrak, csx is shut down csx headquarters are in jacksonville its under mandatory evacuation orders the Company Tells me it has set up alternative work sites and its keeping close track of this storm when it comes to real lines in georgia and the carolinas. All right. Lets talk insurance the reinsurers began feeling pressured last week. Renaissance and everest could have notable exposure, but with the change in forecast, those stocks have rebounded today. Renaissance is up more than 4 , everest up 3. 5 . Well keep our eye on those. Carl very comprehensive. Thanks, contessa our Contessa Brewer. After the break, rbc takes its target on amazon up to 2600 following a deep dive into the companys oneday shipping initiative mark mahaney will be on next to talk about that. Major averages, not too far from session lows everybody really watching the tenyear at 1445 were back in a nn mu i dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. Amazon to 2,600. That is the latest call out of rbc, reiterating its outperform rating, out with a new note this morning on the companys oneday shipping plans the analyst behind that call, rbcs mark mahaney, joins me now. Mark, good morning good morning, jon so if im reading this correctly, you expect oneday shipping to have a big impact, 100 to 200 worth of spend for the average prime household. Also, prime additions. A, whats the magic of one day that you think will push people in that direction . And b, who does that come from does that come from the drugstore that people are now running to because they need something within 36 hours . Okay. So, yeah, look, lets step back on prime they launched this first in 2004 this is the Biggest Initiative since then, not in terms of price, but in terms of speed of delivery and what weve noticed in seven years of survey work of u. S. Online shoppers is that an increasing percentage of people want their products next day or same day so amazon is starting to give it to them. They announced this earlier this year in april. They said it would lead to accelerating Revenue Growth in the june quarter it did we think it actually will continue to lead to acceleration of Revenue Growth, especially as its rolled out globally over the next year or two its that big of a catalyst, or what we call a gci growth Curve Initiative and it will do it in two ways. It will boost the appeal of prime. Youll get your packages next day, not two days, three days. So we think prime adoption will increase more like 60 in the u. S. , but we think prime adoption will rise and we think well see greater spend per prime household. People buying more frequently and probably getting more into some of those household products, consumer packaged goods products and some loose grocery products we think thats the win for amazon fundamentally and for the stock. So, then, where do you expect to see the bigger impact when you talk about household goods, nthat sounds to me like daytoday needs, versus key buying periods like holiday, like now prime day, back to school which is one day going to have the bigger impact on jon, probably the first one, which is that the products that you and i think about buying for households that we need, you know, pretty quickly, we dont want to just get it in the mail a few days from now, a parcel a few days from now, those products, those Consumer Household goods, those will be increasingly part of the amazon basket but theres also a play here, when we come into the Fourth Quarter this year, were all procrastinators. The closer that we can purchase things to the actual winter holidays, you know, christmas, et cetera, the more the appeal of amazon. And it creates this bigger and bigger gap between the capabilities of amazon with its hundreds of Distribution Centers and the capabilities of other retailers. Even those that have been selling online for a few years nobody can match the delivery capabilities of amazon i want widens the mote around the company. Yeah, to that point, mark, just to dig into it a little bit more for years now, weve been hearing about whether amazon is going to become a fierce competitor to fedex and u. P. S. And the other Delivery Companies out there. And certainly, even now, you could compare amazons footprint with those companies and its still just a fraction of the Global Infrastructure thats in place. That being said, the amount of money amazon has been spending the wall street journal put this together really well in a report last week, that shipping and fulfillment spend last year was nearly 62 billion versus 5. 5 billion in 2010 the question for you, as amazon spends all of this money on delivery capabilities, is it an amazon for amazon story, or do you think it would apply that aws model longer term . I think thats the right setup i saw that journal article and i thought it was spoton amazon is clearly building out the capability and has been doing this for a while and will continue to do it, because this is a multiyear investment bet, to take on directly the likes of fedex and u. P. S. The difference with amazon, however, is that theres another bigger win here. What theyre trying to do is incentivize retailers, vendors, manufacturers to sell on the amazon platform. They refer to this as the fly wheel impact so prime becomes more attractive, because the delivery is faster, more consumers will sign up. Because more consumers are signed up, more vendors, manufacturers, retailers will want to be on amazon, because thats where the customers are you will therefore incentivize retailers to sign up for whats called fulfillment by amazon, where you just send your inventory to amazon and theyll pick, pack, and ship it for you. So theres this fly wheel thats picking up will they take on shipping with amazon, the likes of u. P. S. And fedex. I think thats inevitable. It will happen over time but i think the bigger win is building out amazon marketplace. So mark, what do you do with shopify then shopify is now bigger by market cap than ebay. Its argument is, hey, amazon is not going to rule the entire world. Give small and medium businesses especially an option lots of different ways to reach the customer that stock has been on a tear. Are you bullish on that . Is it either or here well, im going to punt on shopify. I dont directly cover it, and i think what theyve been able to do is really impressive and exceptional. But the pitch that retailers are not going to be willing to sell on amazon, look, i think retailers want to get in front of consumers wheres the largest marketplace of consumers its increasingly and obviously at amazon. And especially as you make the amazon prime offering, both the consumers and retailers, more and more compelling. So thats really the win here for amazon and for amazon shareholders. We said this was a win for fba, for swa, shipping with amazon, fulfillment by amazon, and for amazon shares. Thats why we raised the price target to 2,600, using the same forward Free Cash Flow multiple or the ebitda multiple that the company has traded at over the last several years even though its been an outperformer this year, i think there are a few things that are underappreciated this is one. Big call with that big investment on oneday shipping markmahaney, thank you thank you, jon. The first trading day of the month starting in the red with the dow down triple digits currently down about 387 points right now. Here are the names dragging down the index the most in todays session. Boeing, goldma ao n,ls caterpillar. Were back after a quick break ur workflows in the cloud. This changes everything. Youre right sir. Everything. No not everything, i mean youre still blatantly sucking up to me gary. Brilliantly observed, sir. Always three steps ahead. Six steps ahead. Sixteen. So many steps. You done . A million steps ahead. Servicenow. Works for you. I felt completely helpless. Trashed online. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. [spokesman] if youve tried colleg group cheering shed, snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. Welcome back to squawk alley. Another round of tariffs going into effect over the weekend, sending stocks plummeting. The dow briefly losing more than 300 points earlier in todays session. Investors and chief executives now looking ahead to the next round, which is set to take place in middecember. Joining us now is the ceo of Baby Products manufacturer, evenflo, whose Parent Company is chinabased good baby international. Thanks for joining us today. When we had you on back in june, one of the points you made in terms of these potential tariffs was that evenflo is in a position to mitigate those risks where car seats are concerned, but that production for strollers is a different beast given the fact that tariffs on those types of products have been pushed back to december, how are you thinking about that now . Well, thanks for having me, morgan first of all, on car seats, let me update that a little bit. At the time, we spoke about my supply chain and were working very closely with suppliers to mitigate the impact of the potential tariffs and limit the cost to increases that we see to the u. S. Consumer. Whats actually happened, though, is with the implementation of september 1st tariffs, its caused us some implications now so we actually pay 15 on products that we bring in to help support our production in ohio, but yet if you bring in a full car seat, you actually dont pay a tariff on it so interestingly, now as an american company, were disadvantaged because of the tariff situation so, weve got to work through those issues on strollers, were still hoping to get an accommodation before the december 15th tariff goes into effect. So in terms of the car seats and the fact that there are components that are getting tariffed right now, what does that mean in terms of cost is that something the company absorbs or are you pushing tha out in the form of price hikes were trying very hard to absorb it. Were looking at every opportunity we had and i started at 6 30 this morning with a variety of things that were considering were really trying to make sure we dont pass it down to the american consumer. Trying to limit it as much as possible youre right in the midst of it, it seems, with, youve got a factory in tijuana, one in ohio, you mentioned, and i think Something Like nine in china so between nafta and the unraveling of that and then the trade tensions between the u. S. And china, a lot of challenges longer term, as youre planning what to do with where things are manufactured, do you expect anything to be different in five years . Thats a good question. Were certainly looking at alternatives everybodys talking about vietnam. Certainly, were considering that but we also think the tariffs are going to be something that over time is probably going to work themselves through. So we dont want to rush to make any changes unless we truly understand the landscape and i think working through the tariffs will be the fuirst challenge for us evenflo sells products on amazon there have been a number of reports over the months that amazon has been pushing back on vendors that are looking to increase prices due to tariffs whats your experience well, all major retailers want to make sure they do the best they can to protect the consumers and we work with them. Amazon is no different than the other partners that we have. We understand their position and respect it and doing everything we can to mitigate the impact to the american consumer. I believe your parent, go goodbaby international, is bade in hong kong thats correct. Actually, shanghai, but were traded on the Hong Kong Stock Exchange okay. Okay so how do the tensions, if at all, happening between hong kong and Mainland China affect your opportunity to operate the broader business and i guess im talking about your parent, which is a layer or two above you. Weve seen absolutely no implications so far. Its business as usual, as far as the u. S. Is concerned as i mentioned a few years ago, chairman song gives us the latitude to make the decisions we need. So certainly we use components coming from our factories in china. But the Hong Kong China tensions have not impacted the business at all uptothe. And lastly, i want to get your take on the health of the consumer here in the u. S i mean, certainly, unemployment remains low. Weve got gas prices that are low. You have Mortgage Rates that are low and spurring more refinancings right now what is your expectation for Consumer Spending here in the u. S. And how is it affecting evenflo . Weve seen demand continue to be strong. You know, were fortunate, were a regulated industry, so theres a requirement that families have car seats for children so that helps us stay a little bit above any kind of consumer upset. But so far, weve seen demand be very strong. Jon chamberlain, thank you for joining us today my pleasure thank you. Markets in europe are going to close momentarily its been a crazy day in parliament in the uk lets get to dom chu all right so, carl, what we have right now is a situation where european markets, they were under pressure, closing near their worst levels of the session, but not as poorly as we are here in the United States, on the heels of that data showing that u. S. Manufacturing activity actually contracted last month for the First Time Since february of 2016 still, though, like you said, the big focus today is the amidt increasing prelim uncertainty across the pond. Just this past hour, uk Prime MinisterBoris Johnson has lost his majority in the lower house of commons after a conservative lawmaker defected to the liberal democratic side of their particularly Party Johnson is threatening to call now snap elections next month if parliament moves to thwart that Nodeal Brexit scenario and seek another extension from the european union, to kind of continue those negotiations. Now, the pound fell to below 1. 20 against the u. S. Dollar, earlier on that was, by the way, its lowest level since october of 2016. And that british currency is now since recovered on growing hopes that many members of parliament can deal a Nodeal Brexit, but its still down 5 over the course of the past three months. There is that growing Political Risk coinciding with french investigative data on the uk economy overall. The companys manufacturing recession are contracted to the fourth consecutive month in august, posting its sharpest month fall since 2012. So if you take a look at all of that in aggregate, jon, what we have is a scenario where the uk situation is driving much of that european action well keep an eye on that vote coming later on this afternoon as expected, jon back over to you guys. Thank you, dom. Now lets get to sue herrera for a news update. Good morning, jon good morning, everyone heres whats happening at this hour Vice President pence meeting with irelands Prime Minister in dublin a bit earlier, he began the second day of his twoday visit to ireland by meeting the irish president and his wife at their official residence also in dublin the taliban defending its suicide bombing against an International Compound in kabul, which killed at least 16 civilians and wounded 119 more this just hours after a u. S. Envoy had said that he and the militant group had reached a deal in principle to end americas longest war. Thousands of protesters continue to gather at hong kongs tamar park in front of government offices, this as a citywide strike reached into its second day protesters shouted slogans, made speeches, and held antigovernment banners. And for the first time, the u. S. Preventative Services Task force is recommending doctors offer inhibitors like tamoxifen to help reduce Breast Cancer the drug should only be given to women over 35 with a Family History of that disease or to those with previous benign breast lesions and you are up to date tha thats the news update this hour back downtown to squawk alley. Guys, back to you, jon all right thank you, sue and when we return, smile director club kicking off its road show this morning its just the latest in a long list of ipos debuting this year, sfwlu but is there a better way to the Public Market . Our next guest thinks so investor andalti panr cofounder joe lonsdale joins us on the other side of this break stay with us fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Should always be working harder. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, td ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. The rush continues with smile direct club kicking off its road show this morning our leslie picker is in new york with more. Leslie reporter hey, thats right we saw the smile direct Club Executives leave this jpmorgan lobby where they have been Holding Meetings with the sales force. They headed over to citigroup. Those are the two lead underwriters for this deal those meetings with the sales team encompass getting on the same page to decide how exactly to market this deal to investors, as they embark on their road show to meet with investors and sell about 1. 2 billion worth of stock now, im told that their plan in terms of marketing is to focus on this idea of better is better this idea that they can offer teeth alignment products at a fraction of the cost of traditional ortdontia without striving for perfection, but closing that front gap or an easy cosmetic fix that they might need the way that it works, they are given the model or impression they can take of their teeth at home, or they can do that at a smile shop or at a cvs or walgreens where they have partnerships after they take those impressions, theyre connected to an orthodontist, a licensed orthodontist or dentist in their specific state that orthodontist, of course, maintains that liability any kind of malpractice that gets involved, that is the responsibility of the orthodontist and then that orthodontist pays smile direct club for helping connect them with their customer now, im told the road show schedule is as following theyll head to boston tomorrow, before heading to the west coast, l. A. , san francisco, later in the week before returning back to new york next week ahead of listing day and theyll hold Group Lunches here in new york city im told that theyre prepared to answer questions about their total addressable market, how they see that playing out over the next few years what the barriers to entry look like for teledentistry also, theyre prepared to answer questions about their smile pay financing product that they offer for people who want to finance the cost, which is about 2,000 for those teeth aligners, as well as questions about unit economics. Now, this morning, the Company Revealed an amended s1 1. 2 billion offering size, among the biggest of the year so far. Also, theyre seeking about an 8 billion valuation at the midpoint of the range, which would be almost triple the size of their latest private funding round from just 11 months ago. Guys all right, leslie thank you. And were going to stick with upcoming ipos. Our next guest is invested in several companies that are considering debuts this year, including pallen tiantir and wih he says there may be a better way to go public palantir cofounder, joe lonsda lonsdale, joins us now joe, good morning. Good morning. So in recent days, we had this oped from sequoias mike moritz on this topic also, ive been trading some messages with benchmarks bill gurley about this same thing they say the Current System is broken theres too much money being left on the table, and its too, just, oblique. Companies dont really get to see how this works its like ticket scalpers. And you agree. Whats better . You know, most of what we spend our time on out here, obviously, is the next big thing. Whats going to be 100x in five years. But as you mentioned, a lot of our ipos are coming up ive only been through a few ipos myself and bill has been through a lot more bill gurley said, the banks are taking advantage of us he gave the Warren Buffett example, where if youre playing poker for 30 minutes and dont know who the patsy is, theres a good chance youre the patsy they make a really good point. I think we need to be careful on how were doing ipos i think the banks are taking a little bit too much off the table here so whats the alternative is it the direct listing and doesnt that work better fo that are well known, that maybe dont need to raise cash as part of an ipo process . Well, the point they made is even if youre doing a direct listing, you can still do a big fundraising right before the direct listing, and then do it and with prior markets these days, thats not too hard. The thing that really struck me on this whole thing is these banks are taking advantage of people, because theyre giving bids at 26, maybe, to be filled, but the bid at 35 is not friends with the bank, so it doesnt get filled and so i think this direct process option seems a lot more fair when an ipo rallies by 50, 60 , that means the company got screwed, and i dont think well be putting up with that as much anymore in Silicon Valley. The flip side of that, joe, this idea of a Company Getting screwed, and i realize success is in the eye of the beholder. A company thats going public wants to be able to raise as much capital as possible, but the flip side of that is, if you see the stock rally once it goes public, you have all of those public investors and retailer investors being able to get in and have access to that potential growth as well isnt that a good thing . I think its definitely a good thing for companies to go public earlier and for Retail Investors be able to take advantage and make a lot of money over a period of time as investors i dont think its a good thing for the stock to go out of the price that doesnt reflect the market price and therefore, for the insiders in the bank to take advantage of the employees of the company and people who have been billing the stock for 12 years the thing here is, we build these companies for 10 to 15 years. Were focused on building the companies, not focused on the ipos the way the people em new but the people building it should be able to get full advantage and full value can we have it both ways . You mentioned that a company can raise a big round right before a direct listing thats a way to have getting money, particularly in this environment. But some of fact that that private money is available is the reason why companies have been taking so long to go public in the first place so can we have an environment where companies both go public earlier and are able to raise the kind of money they need to survive and thrive as a Public Company . Well, you know, right now, theres a lot of private money available, youre right. And i think that actually gives you a lot more optionalty. But it does give you the optionalty to raise a lot and goes public in a way that reflects the market price. So i think youll start to see us figure out how to have it both ways. And frankly, the big banks, theyre coming around, theyre all pitching us recently saying, were teaching you how to do direct listings. So they get it theyre saying the right things. They realize theyve been taken advantage of for too long and theyre not going to get away with it going forward. Joey, i want to shift gears a little bit open gov. Which is a firm you cofounded, just raised another big round of funding we did. I know you also cofounded palantir as well weve been very focused on all this jedi competition and all the controversy thats been swirling there in general, how big do you think the opportunity is for Tech Companies and for startups to work with the government and whats at stake here whether it is dod or some of the other opportunities to bring government tech into the 21st century . Thats a great question im really proud of open gov. Were working with over 2,000 governments. Thats more at the municipal level. I think the biggest opportunity is definitely on the defense side and its kind of ironic. Silicon valley was created in part to defense funding. Yet so few people here are working on Defense Companies today. Were building new companies we have great new companies theyre trying to build and its still not very popular in Silicon Valley i think you should see a lot more of the best technologyists working on what i would call patriotic companies. Companies working for our troops in the field joe, i know its not a huge universe out there as far as vcs and investors. Its relatively tightknit, but still, 20 getting together, called by bill gurley to talk about this issue seems a little bit unusual how unusual would you say that is and do you expect real change to come out of it during this ipo cycle . You know, theres a lot of history of an ecosystem where people get together and talk about the right way to do things out here but, you know, in my lifetime, no one had ever brought together people to talk about ipos and talk about how that works. Usually its a policy question so i think it is a sign. I think hes had a couple of these gettogethers. I think hes bringing together, you know, the majority of these preipo companies to talk about this issue in a few weeks. And i think you are going to see some big changes youre going to see some pushback and companies that might have only gone through this once in their lifetime, figure out what the rules are and how to push back against banks that are going through this 50 times a year and probably have a little bit of an unfair advantage in terms of the dynamics there all right some things happening here joe lonsdale, thank you. Thanks. Well, more on todays tripledigit selloff coming up, with the dow down 322 points the s p also dow21n points right now. Were back after a quick break woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Im scott wapner are we primed for a september stumble . More evidence today that the trade war continues to hit the u. S. Economy, so what does it all mean for your money as a new trading month gets going plus, several important calls today, including a chip name getting a big bump at one firm got those details. And noted wall street watcher William Cohen is here with a major warning. Hes going to join us on why he says only the fed can save us. Its all at noon on the half carl, see you in about 15. Okay, scott well see you in a bit thats what he says all right well see you in a few minutes lets get over to the cme group in the meantime and get the santelli exchange. Hey, rick. How can i carry on after that only the fed can save us were really in trouble, arent we, guys when it comes to todays numbers, obviously, the ism for august was really shocking to some, but it shouldnt be. We all know that the trade issues are having a negative effect on anything industrial manufacturing. But nonetheless, the market had a swift response, as it should last time we were under 50 was january of 2016. All right. The entire Treasury Curve is guns hot right now the entire Treasury Curve. Which means, when i look up at the board, i see 144 in 2s 132 in 5s, 139 in 7s 193 in 30s should we close here these are all new cycle low closing yields, for this move that has been goinging on f inia number of years. The other news is that the dollar has given back some of its gains, but its still up on the day. But the important thing is that the dynamic of rates doing what theyre doing, domestically, globally, and reserve Currency Holding so strong, you can shadow box whats really going on behind the scenes there is a huge demand for dollars. And its not going to change and it really makes the mission of the fed nearly impossible if the feds our only recourse, we are in trouble, and im not making fun of the fed. This is one of those rubiks cubes issues that needs to be solved as jim and bianca and i pointed out, another gettogether. With the leading figures in central bankers has to occur something has to be done and our central bank cannot get enough leverage in any of its policy tools to address what is being exported in the form of negative rates and thats just the tip of the iceberg. Corporate rates, at the beginning of the year, started out with a total accumulated amount of about 20 billion negative rates now its over 1 trillion. This is getting to the point where its flashing yellow real quickly now, if we look at a tenyear chart going back to july at 2012, because thats the big bubble bottom. 138, 137, july of 2012, july of 2016 and we are getting precariously close in the mid140s to testing it but to me, its almost defate complete the fact that were getting this close most likely means were going to slice through it. And even though there may be congestion, this is not a pattern that looks very aggressive for any type of serious bounce morgan, back to you. Yeah, and certainly one not just for the bond market to watch, but for equities and Equity Investors to watch as well, rick thank you. Still to come, lift the tariffs and restart trade talks with china now thats the latest from chamber of commerce ceo tom dohunoe. He joins us on the other side of this break dow is down 302. Stay with us we put our latest technology and unrivaled network to work. The United StatesPostal Service makes more ecommerce deliveries to homes than anyone else in the country. [horn honks] man this is what i feel like when i wear regular shoes, cramped and uncomfortable. We can arrange a little upgrade. Which is why i wear skechers. Wide fit shoes. They have extra room throughout. Theyre like a luxury ride for my feet. Try skechers wide fit shoes. Amid escalating u. S. china trade tensions, our next u. S. Guest is asking for talks to return quickly in an oped he said the biggest mistake our leaders can do now is stoke uncertainty joining us is tom donahue. Good to see you again. Glad to be here you write withdraw the additional tariffs that were scheduled to go into effect today, this month and december 15th why write this when its clear this would be a nonstarter for the white house . When we talked about it, when we wrote it, we were hoping that the white house would think about all of the talk about recessions, difficulties with the fed and so on and say, you know, china has fundamental needs. The u. S. Has fundamental needs, if we move these tariffs back, planned for the 1st to the end of december, wed have a couple of months to come back to the table. China had pretty much indicated their willingness to come back to the table i think we would have been much better doing that than continuing to ratchet up of who has the biggest threat available at the time. Its all going to be paid by American Companies and American Consumers between now and the end of the year. We should do better. Tom, are you saying that you think of the two sides that the u. S. Is the more intransigent of the two . The more stubborn . No, i think its your turn. Its my turn its your turn, its my turn we hear a lot more about what people in the u. S. Are talking about, people in the white house, folks in congress, members of the press than you hear about whats going on in china because you only here what they put out for our consumption. But it is clear they have serious questions about their own economy. It is clear that their banks have had challenges. It is clear their own markets, their own manufacturing are in trouble. And together i think we can look at our mutual problems and maybe make some solutions. Tom, what would the passing of the usmca do to instill more certainty . It would demonstrate that congress, who i believe have enough votes to do it right now, theyre going to be a little adjustment, lighthizer and nancy pelosi are fixing a few things if we came up with a good, strong vote on that, it would give us a great step forward wed have a new and very good agreement with the three countries. It would drive our own economy mexico and canada are now our largest trading partners weve done it all. We just need to get the congress to finish the final approval if we do it, it will be a positive deal. Both parties have had people vote for it. Which is good for the upcoming election i think it would rub off on what were doing in china tom, it feels to me, at least for the first time that i can remember, like uncertainty is part of the strategy on the u. S. Side it often is on the other side. Being unpredictable, do you think that can be sustained longer term . If so, is it going to necessitate a change in the way your members think about how they run their business . Think about it this way, uncertainty leads to eventually no good. If you want to see what we have to do to keep people uncertain, i dont think the end result will be at all unacceptable. I would rather see us do the canada mexico deal i would rather see us go and talk to the people in the senate, both parties who have come up with an infrastructure bill, only half of it, roads, bridges, light rail, that we might be able to move before the end of the year. If we did that kind of thing, i think everybody would have the feeling something positive is going on remember, much of this is being driven by the relationship between 20 democrats running for office, the president and his colleagues running for office, and and the media picking it up and consuming it. If we took the three positive things we talked about and substituted that a little bit for all the politics were hearing, i have a view that people would get a little more confidence and the whole issue is get the invests off their seat, put their cash back in the deal, and work hard to try and find the workers we need to carry it forward. Tom, if you think its in the realm of the possible even, thats news. Its a good oped. Everybody should look at it in the Washington Post from a couple days ago. Thanks for the time. Look forward to seeing you again soon were back in three minutes. Stand up if you are First Generation College student. crowd cheering stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent, but it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you dad. [man] i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. uplifting music i mean, if you havent thought abfrankly, youre missing out. Uh. The mobile app makes it easy to manage your policy, even way out here. Your marshmallows. Get digital id cards, emergency roadside service, even file a. Whoa. Whoa. Whoa. Whoa. Whoa. Whoa oops, that cheeky little thing got away from me. My bad. Geico. Its easy to manage your policy whenever, wherever. Can i trouble you for another marshmallow . The dow down 329 a lot of that is boeing today on this journal report that the grounding of the max could last well into december and disrupt travel season. On the flip side, pfizer, p g, walmart, j j the only names positive multiyear high for the dollar, its industrials, energy stocks, financials leading the losses for the S P Still Holding 2,900 lets get to the judge and the half thank you, carl. Im scott wapner the september selloff, stocks in a sharp decline, more evidence the economy is worsening where your money will work best. Its 12 noon this is the halftime report. Stocks sliding on the first trading day of september are markets on thin ice . Getting defensive, why it may be time to start shorting growth stocks. The fed under fire a scathing new oped saying the economy will be staring down another financia