Transcripts For CNBC Squawk On The Street 20240714

And a beige book road map begins with hong kong, brexit and slew of International Trade data stocks set for a sharp rebound at the open. Recession risks with Global Economic uncertainty rising, well get the latest tea leafs from the fed later today. And the nfl blockbuster, the Dallas Cowboys agreeing to a mon monster contract extension with ezek yell Ezekiel Elliott. Investor sentiment, a lift on news from across the pacific carrie lam making it official she has withdrawn the controversial extradition bill that sparked months of protests and impacted the economic climate. Some protest leaderes say demonstrations will continue, though, unless other demands are met, including calls for greater democracy, some of the protesters are asking for a complete review of police behavior, no indication shes going to give them that as well. I would say finally to this, right . They have been protesting now for 13 weeks this was one of the core issues that set it off. They have other demands, but a lot of people in the market, the notes this morning are looking at it as china blinked and thats kind of the theme today. Were sort of walking off the edge, the british pound is higher as Boris Johnson, the in prime ministers enemies go after him against the no deal brexit and so thats providing a little relief to the market as well risk remains, including the fact that there could be a new election there likely and the fact that Global Manufacturing is slowing down. Were reeling and reading the notes that showed it under 50 and what that tells. Is it an indication that something worse is coming for the economy or just a slowdown in manufacturing, which was also confirmed in the trade numbers today. In china, the market pmi highest since may. Thats making the headlines, of course, over there there are a lot of people who predicted that the impact of the trade war would meet the u. S. With a delay and if you look at the two lines, essentially what has happened in terms of survey data well see how the hard data comes in the ism number first contraction in three years as sara said had gotten peoples attention yesterday. New orders, particularly weak, 47. 2 new export orders, 43. 3 worse since the recession then we have new data on the trade deficit this is what happens when you start a trade war. You do see the trade gap decreasing 2. 7 for the overall gap our imports fell and imports from china were down 2 in july from june. Exports down 2. 7 . Thats the biggest trading partner, thats what happens when you put up walls like tariffs. Right and canada our biggest trading partners, one of our largest always worth remembering, we talk about 300 billion in additional tariffs that number is coming down perhaps not as quickly as President Trump would like, he does seem to also like the revenue that is coming into the treasury from those tariffs taxes. And you get a tale two of economies in these numbers because our overall imports in the u. S. Fell, but there was a much bigger decline in imports of capital goods, computers, machinery, and that sort of thing. The imports for the consumer goods rose, which speaks to the strength of the u. S. Consumer which continues to be sort of this dichotomy in the market and the economy. Hong kong is where the news is happening this morning. Lets get to chris in hong kong with more on developments we got overnight surrounding that extradition bill chris . Good morning. A major shift for carrie lam, the embattled leader of hong kong who just a short moment ago announced that she would withdraw this extremely controversial extradition bill that sparked this protest movement, already three months ago, thats driven hundreds of thousands, sometimes more than a million protesters out to the streets because they have been terrified that this would give china license to pluck them and take suspects of crimes to the mainland for trial where the judicial system is much more opaque however, it is really too soon to tell what impact this is going to have on the protest Movement Overall investors may be thinking this is the time to see the end of this protest movement, need to keep in mind that they have got other demands, they want carrie lam to resign, they want amnesty for the 1,000 protesters arrested over the past three months they want an independent investigation into alleged Police Brutality there is still a lot of factors floating around here when you go to the chat rooms, that these protesters use to organize, it is leaderless movement, they cast their vote anytime a major decision needs to be made. Right now the consensus among the chat rooms is this is not enough it is all or nothing we want all of our demands or were going to keep turning out to the streets this is too little too late. Back to you guys. Thank you very much, reporting from hong kong joining us now with a closer look at how well this impacts the markets, Fidelity Investment director of global macro yourian timer and jim lowell the characterization of the global hot spots cooling off a little bit today, and maybe better data coming from the likes of china as carl mentioned, how much is this good for in the markets the markets are caught in a cross current. Look at the markets from a Glass Half Full perspective. All the negative headlines, trade, global slowdown, everything, the market is only a few below the highs all you need is for something to go right and the market could rocket to new highs. Thats the optimist view the glass half empty, the market is in denial, like october of 07, where the market kept going up despite all the negative trends going around us my sense is somewhere in between the fed needs to step up here, feed the market if you will with what the market needs, which is more liquidity, lower rates. And it is likely to deliver on that in september. As you mentioned earlier, pmi is below 50 and, you know, and the yield curve is inverted. So the fed needs to act here and step up. And i think as long as the fed does that, and we see any kind of moderate improvement in some of the fundamentals, i think the market stays in decent shape but for now, you know, Third Quarter earnings season is coming up in about a month and were probably going to see a few more downgrades before earnings season starts so at this point, i dont think the market is going to be able to get out of it, late cycle purgatory if you will. It is kind of the debate on the fed, jim what he characterized, he said the market needs a rate cut. Yield curve is inverted. The market is craving more liquidity. Thats the bullard view versus the roesengren view where do you fall . I fall in the latter camp, i dont think the fed needed to cut rates when they did. I dont think the fundamentals would drive them there yet i think our fed may be clipping more towards trying to be proactive rather than reactive i think thats dangerous, they need to remain data dependent. I think it is more reminiscent of 1999. The diververgence between larged small cap performance, growth and value stocks, between the International Markets and u. S. Is about as wide as i think it has been since then. And back then, dont forget, as we went into a fairly mild recession, what we saw was the large cap market selloff dramatically and what is currently overlooked, Small Cap Value names came to the delivered positive returns i think the investors need to definitely make sure that their income needs are being met, investment goals are well aligned, the portfolios arent chasing this relentless momentum into large cap Growth Stocks there are better values to be had. And they will serve you better when this market does in fact take a downturn. You mentioned income, both utilities and real estate sectors in the s p closed at record highs yesterday is that still the place to go despite the kind of valuations in a well diversified portfolio, they can play a role. You need to be very selective. We certainly think shortterm bonds, cash, we know that some investors are reaching out to gold, we dont view gold as an investment, more a tactical trading opportunity. But we think the best investment you can make in gold is that buy and put it around the neck of someone you love in terms of the overall market place, we think that this is a time where active management comes to the fore. We definitely think that just buying whole markets in terms of index funds is a risk mistake that we dont want our clients or any investor to make. What is your strategy here for navigating through this choppy market . Well, as jim mentioned here, diversified portfolio remains paramount. You take a simple 60 40 portfolio, and over the past couple of years since the s p made its initial valuation peak in january of 2018, that simple 60 40 portfolio delivered all the upside of the s p, but only half the downside. And so to me, a 60 40 or some variation there of remains a fairly bullard proof strategy because if things get better, the s p or the stock side of the portfolio will deliver and if they dont, the bond side will deliver and so thats been a very winning strategy. And i do think that combination of some of the bond proxies or stocks that have quality and dividends combined with maybe some of the secular growers will continue to be a good sort of barbell strategy and, you know, as downtrodden as em is, especially with all of the trade tensions, em, i think, looks interesting here, just from a contrarian point of view. And if the fed does ease more, which i do think is likely, that will put some that will take some of the pressure off of the u. S. Dollar and that will allow the dollar to weaken a bit and bring em to life as well that would be my recommendation. It did happen the last time the fed cut. Thank you very much. Jim lowell, good to see you as well getting some breaking news this morning, involving Googles Youtube business ylan mui has the details good morning. Reporter good morning, guys. Google will be paying regulators 170 million to settle accusations that youtube repeatedly violated the law that protects the privacy of Children Online now, under this agreement, google will pay 136 million to the ftc and 34 million to the new York State Attorney Generals Office in addition, youtube must set up a system for content creators to designate their videos as designed for kids. The ftc said this is the first time any platform has been required to do that. And it will conduct sweeps of youtube in order to ensure compliance now, the law does ban sites from tracking kids and then targeting them with behavioral advertisin without the explicit consent of their parents. In the complaint, they said hasbro and mattel were some of the chief offenders on youtubes platform in a statement, ftc chairman joseph simon said the agreement will force youtube to change the Business Model and that, quote, there is no excuse for youtubes violations of the law. However, the two democratic commissioner at the ftc have dissented from this agreement, they voted against it. They said the dollar amount was too low, should have been in the billions, not the millions but it doesnt go far enough in changing youtubes Business Practices and there is no good way for the ftc to ensure that google is indeed complying with the law. Still, guys, the ftc did note this 170 million penalty against google is the largest it has ever collected under this privacy law. Back to you. Interesting google faces so many different investigations, you got an antitrust probe from a lot of state ags, not clear how many, and it may be unveiled fairly soon you got the Senate Holding a subcommittee hearing on the 24th, examining concerns late to acquisitions of Nascent Digital competitors. It goes on and on. The Irish Government is examining whether or not they fed personal data toed aer ha e advertisers. It is not going to end for this company anytime soon in terms of, a, the investigations and perhaps the fines that follow. Reporter thats right. This is really happening on a number of fronts across a number of issues involving google i think it was also interesting that in her dissent democratic commissioner slaughter said that she hopes that state ags will continue to fight on this particular issue, childrens privacy, calling on the state ags to perhaps file their own complaints, launch their own investigations into google over this issue and perhaps receive an even bigger fine. There is widespread concern among consumer advocates that this fine basically amounts to a slap on the wrist for youtube and for google, considering the amount of advertising revenue that kids content does bring in. One of most popular sites on the web for kids does the punishment match the crime in this case thats hotly debated but now we know what the structure of the settlement actually is. Well look for some details later this morning, thank you for helping us break that. Ylan mui in washington when we,bac come back, wel talk football with jerry jones at post nine as his team agrees to that reported 90 Million Contract extension for star running back Ezekiel Elliott the highest paid rb in the league take another look at the premarket, average move for the dow, 239 points. And thats much like what well get at the open when were back in a minute. Introducing the first of its kind lexus ux and ux f sport. Also available in hybrid all wheel drive. Lease the 2019 ux 200 for 329 a month for 36 months. Experience amazing at your lexus dealer. Well get some relief for stocks ahead of the open what about bonds lets head to the bond pits. Rick santelli in chicago rick good morning. If you look at a two day of 10s, we moved up a bit. Consider this, first of all, yesterday we settle at 146, a fresh low yield close going back to the summer of 2016, a little over three years and the other key issue is the next chart this is a twoday of bunds even though were up three basis points from that new low close for the cycle, bunds are up five basis points from the minus 72 low close. They settled around minus 70 theyre up five basis points they did have pmis improve i think thats part of it. But it is very interesting to see some buoyancy in the eurozone rates, especially with the notion that on september 12th, were promised at least the whisper promise is for mario draghi that hes going big of course, this comes before he turns over the reins to christine lagarde, which in many respects brings more politics into the central banking situation in europe between the countries that are involved in that group in the eu and, of course, brussels tens minus twos, a spread with more attention in the last couple of months, maybe than it should that will be left not future to write the history on whether that becomes a sentinel signal or not it is worth noting we have seen some steepening. One week chart of tens to twos were flirting with three basis points at this point some of the word levels were down minus five, minus six intraday finally, the dollar index, here we sit, around 99 9860 the high back to may of 2017 was right around 98 1 2. Even though today is a big giveback, a third of a cent at this point, it is Still Holding what was other than last week the highs going back almost two plus years carl, back to you. All right, rick, thank you very much. Rick santelli. New york fed president John Williams speaking in new york on a day where were going to get a ton of fed speak Steve Liesman is watching that that thanks very much he is prepared to, quote, act as appropriate. Theyre phrasing it, to support growth of the economy, job growth, inflation coming in at the feds goal of 2 he said the economy is in a favorable place, talking with the dilemma that the fed has been concerned about risks and uncertainty in the economy among those risks, Global Growth, trade uncertainty, brexit, hong kong, argentina, debt crisis, all of them the economys momentum is already somewhat less robust pause of a downgrade to gdp and the downgrade of the level of employment by 500,000. Low inflation, he says, repeating some of the is the problem of the era the number one goal is keeping the expansion on track but he says they must maintain a dependent data dependent approach we had this before, everybody agrees the Economic Data not too bad. However, all the risks out there and where the fed guys differ is in what they want to do about it bullard talked about cutting 50, rosengren yesterday from boston talked about holding the line. Williams kind of in the middle, but seems maybe more inclined to also cut and just so you know for your information there, we got 100 chance of september cut. But a 14 chance by one measure and 7 chance by another of a 50 basis point cut. That still seems to be a very minority stance that is out there in the market, carl. Steve, not just rosengren, bullard, not just williams now but this oped doubling down on the fed to not enable the president s trade tariffs. Thats out there too. I think the fed is i guess cringing is probably a good word they dont really want to be in this political fight you know, it is funny, carl, if the fed wanted to Say Something politically, they might have said it. Instead, what they did is come out with a strong statement, kind of disavowing dudley when it first happened. So it is pretty interesting that thats going on. You do not hear the fed guys saying that, except to say, look, this is a very bad card that we have been dealt that were going to deal with, with the question being that count on the trade war to go on and to cut preemptively for the potential of impact on the economy or do they wait until those impacts show up. We havent heard a lot about how yesterdays ism manufacturing decline is affecting their thinking, but i think it has to be working in there, the idea you have the first decline in three years, and that the export numbers really fell through the floor. I dont know if you saw this, we talked about them yesterday, the lowest export index in the ism since the financial crisis, which is a number and a record you do not want to aspire to. Yeah. Were glad we have you with us, steve, to make sense of it all, especially days like today Steve Liesman, well see you in a bit. When we come back, stay tuned for our interview with Dallas Cowboys owner jerry jones here at post nine to discuss the business of football, the extension for ezekiel and the nfls 100th season, take another look at the premarket as futures are up on this hong kong withdrawal of the extradition bill were back in a minute ive been a caregiver for 20 years. No two patients are the same. Predicting the next step for them can be challenging. Today were using the ibm cloud to run new analytics tools that help us better predict and plan a patients recovery. Ultimately, its helping thousands of patients return home. Youre watching cnbc squawk on the street. The opening bell in three and a half minutes there is a lot to cover today. We have talked about hong kong, Boris Johnson and the uk the china data, the ism. The dorian recovery continues as at least five deaths as were looking at what some are calling a humanitarian crisis in the bahamas today. In terms of corporate news, starbucks, goldman conference, guiding 2020 eps quote below the ongoing growth model of 10 plus theyre not going to give us official guidance until october 30th you have to believe, david, this reflects at least some pairing of expectations in china well see. Thats the way it is being taken by the market. They are at a conference this morning as you said. They did come in, not with their official guidance, but with a number to your point that is below what is typically promised by the Company Initially the selloff was actually more. Well see how the stock performs once we get the open but when it was met, it was met with some selling prior, of course, to the open. The volume not that low. Maybe we should mention that the stock is up 80 in the last 12 months. A moon shot really so far this year delivering higher same store Sales Numbers under kevin johnson. Largely it has been a story of exceeding expectations, right, for the year. Very well received given the numbers they put up in terms of Comp Store Sales and growth in china as well, which there had been some fear about retailers in focus, got a number of results, American Eagle, 39 cents beats 32 comps a little disappointing up two. Looking for up three but they do see the Current Quarter below estimates, 47 to 49 street at 53 that stock is going to get hit at the open as well. The ceo and the release blamed a delayed back to school season, overall American Eagle has also been one of the strongest retail performers at least if you look at the comps did you see the numbers for aeri, the lingerie more friendly to todays consumer kind of bras and underwear, comping 16 the overall comp at 2 , less than expected. And the stock is coming off on a those missed expectations what are you watching . The defensive sectors will be the biggest thing to watch that led the charge yesterday, down day, well see if we get more of a cyclical folk us thats who is beat up in august. Thats who the bulls are looking to for confirmation, the transports for instance, which underperformed yesterday, the russell which had been sort of a serial underperformer in august, to see whether there is some sort of light at the end of the tunnel to the volatility that we saw in august and the, what, 200 plus point moves that we have seen every single day in the dow over the last few weeks. Yeah. You know when is going to surprise to the upside is michaels, another retailer, which beats by a nickel at 19, revenue also ahead expectations for comps, a drop of one managed to eek out. 3. With that michaels is going to open up better than 20 . Just gives you a sense of how dampened expectations have been for retailers with at least some exposure to china. Lets get the opening bell here, the s p 500 at the cnbc real time exchange. Big board, comp stock resources. And you see Dallas Cowboys owner jerry jones, talking to him in a minute, at the nasdaq, Investment Fund sutter rock capital. Keep an eye on the corporate stories we covered so far. Also, watch tesla, porsche is out with what some are dubbing the tesla killer called the take hand 90,000. Four door sedan. They reports suggest it will be profitable at launch and they have 30,000 deposits so far. I think zero to 62 in less than three seconds. Well see how much this does to get volkswagens hopes of becoming the largest ev seller in the world. Looking at the opening gate here, we have every sector in the s p 500 higher so it is one of those continued days where i remember mike santoli last week did a chart about how everything is moving in unison in lockstep. You have all of them higher today. And we have seen this pattern, all lower, all higher, macro news is dominating, you mentioned hong kong, you mentioned the sort of fed speak in the air i think after that ism number, especially what we saw in the bond market, which was steepening of the yield curve on hopes that the fed was going to be pushed into more stimulus, a Research Note at Renaissance Macro saying they should cut 50 basis points, market is not expecting it, let them surprise the market, we have more ammunition to do so. We have the lower manufacturing numbers and inflation is barely budging and global slowdown story is still there. I dont know. Financial conditions, i mean, have they gotten that tight . A few points from all time highs in the markets with the big week for corporate debt issuance and spreads. We had a big deal out of disney in many parts, deere, i think apple comes this week as well. If you were truly seeing recessionary indicators you see it in the credit market thats the counterargument apple has been particularly good through the years timing the market. I can remember previous lows where they issued enormous amounts of debt. They are returning a good amount of cash to shareholders as we know through buybacks that continue as well it is interesting to see their treasurer, whoever it is, good feel for the debt markets in terms of getting the paper out there at the right time. Every dow member is higher. Want to quickly check on walmart and kroger, adjusting their gun policies in the wake of the Mass Shootings that we have seen. Kroger following walmart, saying asking its customers not to have weapons, basically, in the store to carry weapons walmart taking it a step further, kroger had already done this last year, stopping ammunition sales for assault style rifles and handguns. Two deadly shootings at its stores in last month have prompted some action here. Kroger trading up a percent. People are still continuing, especially for walmart who says the moves will reduce its market share of ammunition to about 6 to 9 down from 20 currently. There is the kroger statement, asking customers to no longer openly carry firearms into our stores other than authorize Law Enforcement officers were joining those encouraging our elected officials to pass laws that will strengthen background checks and remove weapons from those who have been found to pose a risk to violence companies are stepping it up. Very interesting. Interesting time to see sort of Companies Making choices in terms of what they think are best serving their stake holders, which is a word i think were going to hear more often mcmillan saying there were a lot of people walking into test the open carry laws and that was concerning to some customers at walmart when they made the decision to ask people to refrain from doing so. It is a delicate balance. I think it is why we have seen walmart act on this issue. They have taken steps before, but clearly this is going to be seen as one of the bigger ones i want to get to i want to mention tyson foods also down not too much they did lower they lowered the guidance i think what they called shortterm challenges. One time issues, like, i dont know, commoditiy ies Derivatives Trading and that sort of thing coming out yesterday after the bell they didnt really say anything longterm about demapndemand, a for me look at the stock, it has been a very, very strong performer. One name not as strong a performer as many had anticipated, a deal announced a month ago, i wasnt here to cover it at the time, important one for pfizer and mylan, the transaction somewhat complex, that combined the off patent branded and generic established medicines business called upjohn, remember the old upjohn at pfizer, with mylan, reverse morris trust so the effect it would be mylan shareholders would own 47 , and pfizer 53 pfizer shareholders know what happened there the stock declined rather dramatically in fact since that deal was announced. It is low multiple business, exiting what is higher multiple, so it didnt have that effect of creating value in the sense of youre moving out a lower multiple business. The hope, of course, is that the combination itself will set both pfizers business and mylans business on a new course the reason i mention it this morning is because mylan is now going to become more aggressive in terms of communicating the benefits they see from the deal that they feel perhaps in this first month of trading since it was announced had been missed by their investor base. That is being led by its executive chairman robert cory, a man who built mylan over the last 17 or so years, as well, in terms of starting to address shareholders about what they feel are some of the perhaps things that are being misinterpreted by the market what are they going to be pushing . The idea that the combination itself is really a new company for a new age. And, in fact, is not necessarily a generic competitor has only 25 of its overall sales in the u. S. And of that only 15 is actually in the generics market. Worldwide sales, and in china, theyre talking about having the scale they really need there to compete as well, given the combination of the two businesses they assumed an 8 multiple going in, thats how they negotiated the transaction, got the Exchange Ratio or the 43 57 split. That seems to be something of a frustration at this point. These are early days, of course. Got to go about creating a Shareholder Base for the new company. It is worth noting that at the present time youre talking about mylan trading at about 6, 6. 4 or so times 2020 estimated ebitda based on total enterprise value versus the likes of teva, a debilitating company, trading at a higher multiple or sun or perego or hickma the idea is lets try to explain to investors why this multiple is in our opinion depressed. What is most interesting is the idea that theyre moving from the netherlands. Remember, the shadow of mr. Corys resistance to tevas potential takeover of mylan a number of years ago continues to hang over the stock price and perhaps over his own reputation. That and a number of other things and but perhaps no longer deserved well see. They are now talking about shareholders and being a shareholder focused company, given that they are now reincorporating with new directors, in delaware, new governance, new ceo, pfizers gentleman coming over to do that but worth noting, mylan shares up a little bit this morning as they sort of try to explain the story. Well have a lot more on it, perhaps one day more cory join us carl, over to you. All right, david, thanks. To seema mody. Good morning, carl. The u. S. Market on track to erase yesterdays losses in response to some pretty good global data and that news that the extradition bill in hong kong will be withdrawn the dow leaders, coke, pfizer, united tech, and Goldman Sachs all the names traded lower yesterday and our high with the exception of pfizer down half a percent. Look at the hang seng, the hong kong stock market, back in positive territory for the year. But still down about 8 from its june high. The dollar weaker now, which is helping oil move to the upside lets get to the data, august pmi from around the world have come in relatively better than expected, with the exception of the uk and the hong kong the average manufacturing pmi reading rose 0. 2 points. Italy, france, germany, spain and the eurozone as a whole beating and improving versus july coming off a low base, China Services improved. So thats the story. Overseas, specific earnings names to watch today, arts and crafts store operator michaels beating estimates by 5 cents on the bottom line, a jump in comp sales and shares up 20 . Its market cap still below 1 billion. Also keeping a close eye on shares of box, starboard, value disclosing a 7. 5 stake in the Cloud Service provider calling shares under valued, shares of box down 35 in the past one year. Back to you. Seema, thank you. When we come back, Dallas Cowboys owner jerry jones will join us here at post nine and interview you do not want to miss, given the news about Ezekiel Elliott today. Dow futures suggested a slightly bigger open. Were up 200 points. Back in a moment did you know that americans that bought gold in 2005 quadrupled their money by 2012 . And even now many experts predict the next gold rush is just beginning. So dont wait another day. Physical coins are easy to buy and sell and one of the best ways to protect your life savings from the next financial meltdown. 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Gold is now on sale at prices unseen in years and this year could be one of the greatest goldbuying opportunities of all time call now while vault inventory remains. As one of the largest u. S. Gold coin distributors in the country, the u. S. Money reserve has proudly served hundreds of thousands of clients worldwide. Dont wait another minute, call now to purchase your American Eagle coins at cost for the amazing price on your screen. The nfls 100th season set to kick off in just one day. Who better it talk about that than nfl hall of famer Dallas Cowboys owner jerry jones, who is with us here at post nine, after ringing the opening bell at the nyse. Thank you for coming by. Great to see you. Well, it is great to be here on the floor of the Stock Exchange i feel like im having breakfast with George Washington and right down the street from many of the great names of our history. We were talking off camera, today is the day with news with your two loves, which is football, and exploration and production lets do what comp stocks is buying here. First of all, the way i bought the cowboys was my career and the money that i earned from being involved in oil and gas exploration. Particularly gas and comp stock has one of the best positions of leases relative to the cheapest place i would say in the world to get gas to the market. Im a big believer in what natural gas is and ive always believed that the time to get involved is when things are low thats the way i bought the cowboys. Cowboys were losing a million a month. And i bought 15 of the cowboys from the fdic. A lot of people dont realize that before that, i had had gone in the oil and gas business when it was low and geologists were going to work selling shoes. Ive always been a little contrarian in my approach to things so this is the time to do it in the natural gas business and ive spent roughly a billion and a half dollars over the last probably 36 months investing in oil and gas. What do you think it is going to take to turn sentiment around on exploration and production . I want to through comp stock, i would say look at what we have been doing, look at what ive been doing. I understand some frustration with investors thats not whats been happening to me. Ive taken millions of dollars and invested it since 2017 and ive turned that into two and three times my money and were doing the same thing with comp stock and they have done a great job with covey park and acquiring a lot of leases. These leases are right in the pathway to the great markets of the gulf as far as natural gas is concerned and so that whether it is a ball team, or whether it is a piece of land in north dallas in this particular case, natural gas, that gets my attention. We want to make it clear, you put a lot of money in here over a billion at this i have. As far as over the last 40 months, i invested over a billion and a half in gas, gas prospects, drilling, producing wells, and continuing that kind of aggressiveness, in my mind this is the time to do it. It is very important that you keep the cash, keep up with the drilling or how much is dependent on the price of the actual commodity starting to trend upwards, even if we stay where we are, you believe any commodity, any commodity has market sensitivity on the other hand, natural gas for energy is our cleanest fuel, plus we have opened up since 2016, we have opened up the markets of the world to natural gas. Thats why im here. Someone asked me are you looking at the waiver wire so we can make sure we have our roster put together yeah, and at the same time, im looking out the other corner of my oil to find a good place to drill oil. Speaking of rosters, what is signing zeek mean . What does this extension mean for the team, for the season, for getting past the division, all of that . I just turned my pockets out upstairs it means im 100 million lighter as of this morning but, seriously, zeke has been arguably our best player, im not trying to be unfair to anybody else, but hes an incremental part to our success. Were glad to get him booked in. Glad to have him on the team he plays a position that has some pretty interesting dynamics to it. Because running backs are short lived. Although we had what i considered to be one of the top five greatest ones in emmitt smith. And emmitt ran the ball for 13 years. So you dont have to have a four or fiveyear career to be a running back on the other hand, zeke allows us to create such problems for the defense that then we can open it up to our passing, open it up for dak prescott, have to have guys on defense to get those guys the ball. Can we say that zeke is better than emmitt ever was . No, i dont want to say that. Zeke wouldnt want me to say that but i will say this, they both have a lion heart. And believe it or not, Bill Parcells used to give lectures on just how lion hearted a running back has to be their continually taking the pounding they continually have to gather it up and go some more who could forget against the new york giants emmitt smith running with a knock down shoulder to win that game when we had to win it, to go to the playoffs, that ultimately led us to a super bowl zeke has a big heart now, hes got a thick pocketbook too. This is the firstnine figur contract for running back. And what do you say to those who tell you youre overpaying. First of all, i would say that anybody whether youre talking about that kind of money, were all overpaid. If you really wanted to look at it that way. For what he has done, how hes worked, how hes utilized his skills, then hes in the marketplace of where we are and pro sports and pro football. What do you think it will take to get a streaming nfl deal for games that are tenpole games, like sunday night on youtube, amazon, something beyond what we have seen already so far i think that were in such a world of change, if you will, on how we present our games you know, when i first got involved in the nfl, content to me was what is in a popcorn box . It was popcorn the word content, what is that well, content, is as it turns out, is about what goes on that television you know, the nfls interest culminates in the Fourth Quarter of the year. No other sport has its hot time. Thats christmas and thanksgiving thats when you want those Decision Makers in front of that tv set then we have natural breaks. Theyre called huddles theyre called stoppages they are not intrusive, so that we can put many messages up there at the same time then more importantly than anything, the nfl, and im talking about content, on or off the feed, in season or out, there is a soap opera going on every day. Its constantly on the forefront of attention and interest. And those contracts have greatly added to the value of your franchise and to the value overall of the nfl im curious how you view the next one coming up cbs is a couple of years away. Do you think there is going to be a lot of competition from players we havent typically seen in terms of securing those rights well, i think this. That we have a history of a collective bargained agreement that means the players and the clubs agree on how much dollars, what percentage of dollars are going to be there. For almost the last ten weeks, about every monday or tuesday i have been in chicago or parts nearby negotiating with the Players Association about our future Labor Agreement we all know it would be better to get something done now than two years from now when you could possibly have work stoppages because this would allow us to have a great platform of continuity, an agreement for years that we can go to the networks and address this streaming address what our game is going to look like on that tube. Thats why were doing it. Thats why the players are doing it were all working hard to get a deal done. Still nfl ratings have been a little soft in recent seasons. I mean, do you think that you can grow broadcast Television Ratings in the u. S. . Its such a misnomer that our ratings are soft they are the hardest thing there is, a in all of television view. In general, all television has depreciated. The viewership if you will, it has gone to the handheld, its been to other areas. Of course, the nfl wants to be a very substantive part of the alternatives to the Traditional Television screen. But on the other hand, a funny thing happened the more the percentage of fans or the percentage of viewers watch all programming, the more valuable the nfl has gotten because we are where you can get the guaranteed highest percentage of the Decision Makers in this country so just the opposite the idea of where we are with our viewership is so much stronger than when i got in the nfl in 1989 or when fox came in in the early 90s. Were really in a very strong position and time. Do you think were past the kneeling controversiy and would you have done anything differentably looking back i think we all recognize the social issues. I would have never dreamed when i got involved with the cowboys that i would be dressing bullying or addressing the social issues. But then i stop and think about it if we are going to get up and ask everybody to look at us, when you turn away, wait, wait, get back over here, look at us if we are going to ask this country to look at us, then along with that comes the responsibility when we get it done, we have all those eyeballs, when the country says help us out a little bit on social issues, use those platforms to help us as a society. So i have a different view, lets say, than i had 20, 30 years ago when i first got involved where i think that we are is that we are evolving in our understanding. We have always, the cowboys are where we are Everybody Knows where we stand but, on the other hand, what i want to be sure that everybody understand is how interested we are in helping that First Responder be safe. How interested we are when we have unjust, if you will, unjust circumstances that really are unfortunate. We want to have the nfl be a part of making sure that were doing everything we can to help those areas. Now, if you could solve all these problems, youd be god you cant do that. But what you can do is try we have a lot of visibility. We have huge numbers of fans we want to use all of that to help these social issues where we can. There are also Health Issues. Andrew luck retired last week at 29 he cited pain and injury how worried are you that people start walking away because of Health Concerns . I just want to be sure that we talk about the whole story. I had a long career through college. I played for five years in college. So i am very aware of the kinds of Health Issues that after you have done that, then when you are 77, which i am, how you feel how you walk how you think. One of the most concussed players that have ever put on a helmet in the nfl is Roger Staubach he is my age together we are building one of the greatest Real Estate Developments right now you can have my point is there are a lot of examples where those lives that played this game have actually, as they have gotten older and older and older, there are a lot of examples of people who didnt play tgame, men and women, who have limitations just the balanced story. The facts are, as far as health is concerned, nfl Football Players are the healthiest group on the planet. Nfl Football Players we are talking cardio. Were talking they air condition makes sense. They have kept themselves in competitive condition all that time but as a group, the healthiest group on the planet. Jerry, please come back congratulations. Stocks responded to some of our comments as well. Thanks, guys. Well, lets ring the bell and buy some. Jerry jones, here at post 9 when we come back we will continue to watch the market deu dows up 153. Well check in with rmfoer fed chair greenspan when squawk on the street comes back see thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade that good wednesday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen and david faber. Markets responding to some relief regarding hong kong as they withdraw this extradition bill the dow gains 167. Our roadmap for the hour, hong kong, brexit, International Trade data, stocks rebounding. We will break down whats behind todays rally. Former fed chair Alan Greenspan will give us his thoughts on the market volatility and fed. And porsche announcing the first fully electric vehicle we will have the details next. Stocks rallying with carrie lam announcing withdrawal of a controversial extradition bill that led to months of protests and impacted the economic climate there. Some protest leaders say demonstrations will continue unless other demands are met, including calls for greater democracy. The reaction was very strongly positive for the henning ang se hong kong stock market, carrying into overseas. I guess the hope is between the capitulation from hong kong, ie china on the extradition bill which set off these protests 13 weeks ago along with back to school, things will clear down the market was eying the sayings, situation, a negative between the u. S. And china and the Global Economic slowdown story whats it going to mean for the u. S. And the u. S. Economic data . The sensitive manufacturing sector, we saw the first contraction yesterday. Next up well look for the Services Number on thursday and see if its impacting the bigger part of the economy. In other words, that uncertainty about trade. We saw it in trade data today in terms of lower imports of Capital Machinery and lower exports to places like china. We know whats happened to Consumer Sentiment Morgan Stanleys point this week is all that is standing between us and a recession is a weaker consumer if they belie what we have seen out of u michigan and conference board, we will see retail sales have been holding in there we know that. Seems to be very few signs of a weak consumer. Is there anything you can point to mixed signals lately. We have to watch the numbers because we have seen a dip we can also see that very sensitive to the stock market and we saw august as a very turbulent month. So well look for that i think the other thing standing between us and a potential recession would be stimulus, which is coming from all sides of the world right now the ecb expected to do more. Boj members talking about preemptive action. Fed membetalking about surprisie market with a cut. How much can Monetary Policy step in to prevent a slowdown on trade . I dont think anyone, including federal chair jay powell, knows. The big q for investors this month is going to be action from global central banks, including the feds Interest Rate decision of course, not the only game in town around the world. Take a look at some of the others joining us is the longtime former fed chair Alan Greenspan. Alan, good morning. Thank you pleasure to be back. Where should we start i guess since we are in the month of another fed meeting and getting a ton of speakers today, maybe you can throw your two cents in and tell us what you think the fed should do. I tell the fed in private what i think they ought to do, and thats the last i hear of it what about this notion of the economy weakening potentially recession risks picking up how do you see the u. S. Outlook for the rest of the year strangely enough, its going to depend in large part on the stock market because we underestimate the wealth effect on the economy in this type of volatile stock market moves, it has an impact which i dont think weve fully understood nor measure correctly. Overall, the economy seems to be sagging. Longer term, of course, i have made the point that with the entitlement surge as we age in the population, were draining gross domestic savings from the economy dollar for dollar, the data show, and that implies that its undercutting Capital Investment from which is heavily financed by domestic savings the problem at this stage is that its not clear where the markets are going, but lets not rule out the fact that they are in and of themselves critical factors. Eco mcrick analysis says a 10 rise in the s p 500 has a 1 effect on overall gdp. That is not a small number no, its not. What about the trade war and the tariffs and the fact that we are starting to see it more prominently feature in ism weakness and manufacturing weakness in this country how much do you think that is slowing the Global Economy and how much do you think its a headwind for the u. S. . Well, i think its, first of all, its a major global issue i dont think this thing is caving in, so to speak, but that its eroding and its weak i think is unquestionable. I think its important to recognize that if we get major stock market adjustments, we are going to feel it in the economy with a very short lag. So, i mean, do you think the prospect of i mean, i saw a headline that you were talking about the idea of negative Interest Rates potential wily happening in this country. Do you think thats something possible if so, what would it signify well, first of all, what it signifies is really that the World Population is aging and that people are recognizing that they are dying off at a much later date than they originally contemplated when they started to save. As a result of that, there has been an endeavor to pick up fairly quickly the u. S. Treasury 30year yield is terrifically useful, i would say, offset to the other things that are going on in the market. Its a realtime asset and the reason, one of the reasons the gold price is rising as fast as it is, you know, 1,500, thats telling us essentially that people are looking for hard basically resources which they know are going to have a value 20 years from now or 30 years from now as they age and they want to make sure that they have the resources to keep themselves in place. That that is a clearly fundamental force thats driving this, but we dont know how far it will go how far, chairman greenspan, do you think it could go to saras question and others have pointed this out as well given negative rates around the globe on 16 trillion in assets. Do you think it could visit our shores as well well, its hardly likely that its been for example, take a look at japan. You can see quite visually as the population goes down you see it pretty much throughout the world its just a matter of time before its more in the United States and i think the issue sheer is watch the 30year u. S. Treasury yield. Thats going to tell you whats happening. Although you said in recent days that its just another number, doesnt necessarily mean its something symbolic other than its below zero can you expand on that yeah. In other words, basically, we are so used to the fact that we dont have negative Interest Rates, but if you get a significant change in the attitude of the population, they can take they look for coupons. As a result of that, there is a tendency to disregard the fact that that has an effect on the net Interest Rate that they receive. The buyer is a 30year treasurys now looking for that 30year guarantee, they are paying for it upfront other parts of the valuation process. Chairman greenspan, i would like to come back for a second to this idea that you introduced of the wealth effect of the stock market and how important it is in terms of gaging where rates should be. Do you think the fed is appropriately sort of measuring the volatility of the market and or the wealth effect or lack thereof at this point in its deliberations about future policy i would assume so they know whats going on much better than the rest of the world, frankly so i find it very difficult to believe that they are not on this with some degree of analysis. What do you mean they know whats going better than the rest of the world . Sorry try that again what do you mean they know whats going on better than everybody else that is a question right now about who knows best for the fed. Is it the president who is calling for easing is it the market that is pricing in more aggressive easing . Is it the fed itself its the fed itself let me say this. Once a fed governor gets appointed by the president of the United States, whomever that may be, and then gets essentially voted positively by the senate, it is very difficult short of major malfeasance to get that person out of that office there has never been anybody in the history riff of t the history of the fed ho has basically been essentially taken out of office for malfeasance. I dont think there ever will be so you think the chances of the president somehow replacing fed chair powell are nil yes. I assume you have read dudleys oped from a week or two ago. He has another one out today he reiterates the fed should not enable the white houses trade tariff policy. Is he over his skis . Could you imagine yourself ever riding Something Like that sorry who are you referring to former new york fed president bill dudley. Well, no, he is a very good economist. You have to understand that people have differing views within the fed but what makes the fed a very Effective Organization is it comes together, it has an extraordinary sense of where the economy is going having been there for almost 20 years, it doesnt matter who is chairman it doesnt matter who is in particular positions but the overall effect of the Research Operations within the Federal Reserve is nothing short of impressive. Chairman greenspan, do you think central banks, especially those in europe and japan right now, have the ammunition and the tools to fight another slowdown and potential recession . Think they are going to have difficulties largely because i think equity prices are going to adjust more than we have had over the past. Remember, we have had, in this we have had a very sharp change in the attitude towards the 30year treasury the 30year treasury we thought was going to stay up in the 3 yield area, and its come down quite unexpectedly because there has been a change in the attitude, the time preference, so to speak, of the population towards seeing that they are going to live longer lives and they are going to need to finance those longer lives well in advance, like now sounds like you are saying the idea of ultra long paper, which has been floated in the past couple of weeks, could actually happen . Sorry ultra what ultra long paper. 5100yearold debt. No, i never heard of it but this is going in a direction. In fact, if i thought about it, i would say its inevitable that one of those someplace in the marketplace, which will try to hedge on something thats extended beyond what we see now. T it sounds awfully bizarre, but so did the 30year treasury under 3 and finally, chairman greenspan, come back to equity markets, which you mentioned a number of times, are you concerned . Are you forecasting in some way some sort of a correction in equity markets well, remember that we are now in a period where, if you were a you are probably getting a little nervous the way the market is behaving these markets are now so sophisticated that its other than the general view that there is a bias towards always being invested in common stock or other forms of equity, i wont get into the reasons, but its a well known phenomenon. I think aside interest that, its an economic or financial policy and i find it very difficult to get to pick something out of the market that it does not already know a lot of people, chairman greenspan, would take issue with your assertion that the fed knows best considering, you know, the fed missed the Housing Market crisis. I mean, the fed has missed recessions in various periods of time and even this Federal Reserve chairman has really pivoted to easing in a quick way following the markets. So how would you respond to some of that criticism . I would basically say remember that there is nobody who calls the market correctly all the time but having watched the way the fed functions, of course i said almost 20 years, as an organization, its the best i have ever seen and i have been around for quite a long while this we know. Dr. Greenspan, good to see you Alan Greenspan joining us to talk about the markets and the fed. See you next time. Interesting to get a sense of where his radar is truly focused. The 30year, change in sentiment there. And stock prices as you said, glowing things to say about this tick fed. A Strong Defense there of the feds independence, of its credibility, which is important at a time right now where people are saying that the fed is politicized. Even bill dudley, hayes clarification of his controversial oped today said there will be questions at the september meeting if they cut rates about whether they are trying to ac wquiesce to a president or the market how many years have we passed national exuberance . 23 years. Its interesting the market will determine how we head into recession or how the economy does because there is a clear economic link in how the stock market does yeah, interesting how often he came back to that thats why i mentioned rational exuberance a little early. When we return, watch out tesla. Porsche announcing its first fully electric car the details next as we head to break the Top Performing stocks on the dow quk t see wleading the way. Sawonhetrtill be right back ntelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Porsche unveiling the first fully electric car, the taycan phil lebeau with a special guest. As back drops go for a new car reveal, doesnt get much better than this with Niagara Falls behind me. This is the eye candy today. This is the new Porsche Taycan goes on sale later this year thats when deliveries begin a member of the porsche board of directors. First off with the vehicle, why do you believe this is right time for an allelectric porsche . I think we work very, very hard, four years of development with a lot of complex issues i believe even more complex as we initially expected because main challenge was not just to make an ev, another ev, but to make out of this car a true porsche. Able to transfer the soul of a 911, a 718, a cayenne, into this car. We are very proud. I had a chance for a test ride at your facility in atlanta. 0 to 60 in 2. 6 seconds the handling, the feeling, the acceleration of a porsche. Some people look at the price tag that you announced this morning. 150,000 thats the base model of this. They will say, wow, thats pretty rich. Is there demand at that price point . Its a good value. A good value at 150,000 . We are starting top down. We are showing the top models. We will bring more affordable models in the future we wanted to show what we can do that sustainability doesnt mean sacrifice. This car has a typical porsche performance. We can have excacceleration we can have the power output in a constant wait. We wanted the driving dynamics driving with all of the features you know from the 911. The rear axis steering and all that. How much did you benchmark tesla and the model s or any of the tesla models in saying we know that they are successful when it comes to electric vehicles we have to make here is that we have at least what they have and then snom. Frankly, we are getting this question very often. Here in this case we really focused on our sales we have clear goals. This was just bring all the tradition into the future. All the racing spiare its, the racing in le mans in this car. When you drive it, you can say i feel it, i smell it. It drives like a Porsche Tesla i think deserves a lot of respect. They have created a lot of attention on the ev market i think the ev market is getting to a turning point for us it was more important to concentrate on what we wanted to achieve and make it a real highperformance sports car. Do you expect most of your buyers to be previous porsche owners or take away some tesla owners we are very excited about the first without insuring the car, we reduced to 20,000 people worldwide being interested in the top models i think it will continue as soon as we have revealed this car and interestingly, we have seen that 50 of this interest are people not known at the porsche brand. Do you know how many are tesla owners i dont know. We will see. We welcome them. From your perspective, last question here, and i think sara has a question for you sara, do you have a question well, i thought she did. Let me cask you, why do you believe the time is right for electric vehicles to take off not just here in the u. S. , but around the world i think if you look at everything happening at the moment in north america, in europe, you are seeing a turning point for customers who want to drive, to be able to understand what sustainability can mean to change the world, to contribute to that. Infrastructure has made a lot of improvements so not to be concerned in having this fear, not to find a charging point this has changed this is changing very rapidly in north america. You think its accelerating yes, absolutely so the turning point has changed. The train has left the station its coming. Board member for porsche on a very big day, guys it starts at 150,000, but they believe its going to be very successful not just here in the u. S. , but around the world guys, back to you. Thank you when we return, former dominoes ceo Patrick Doyle, his first interview since leaving the company on the heels of a big announcement his partnership with the Carlyle Group and much more on the u. S. Consumer squawk on the street will be right back dows up a 151 ne student gets lt behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Stand up if you are first stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Testif do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Was in an accident. When i called usaa, it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family and we plan to be with usaa for life. See how much you can save with usaa insurance. Good morning everyone. Im sue herera here is your cnbc update at this hour aerial footage shows seasons of utter devastation in tarts parte bahamas in the wake of Hurricane Dorian seven deaths have been reported. Dorian setting its sights on the u. S. East coast. Wcau meteorologist crystal cli has the forecast for us. Dorian is moving at 105mileperhour winds moving at eight miles an hour to the northwest. You see the latest track, keeping it at a category 2 strength storm and driving through the rest of today northward. It will then make a hook to the right overnight and on into parts of friday where the biggest concern will be from savannah all the way up to Cape Hatteras storm surge possibly up to eight feet and rain totals possibly up to 15 inches thats the latest. Thanks. Meantime, the Dallas Cowboys and Ezekiel Elliott have agreed on a 90 million sixyear contract extension that will make him the nfls highest paid running back 50 million of that will be guaranteed cowboys owner jerry jones commented on the signing on squawk on the street earlier today. I just turned my pockets out upstairs it means im 100 million lighter as of this morning seriously, zeke has been arguably our best player were glad to get him booked in. Were glad to have hum on the team. Whats not to be happy about . Thats the news update this hour guys, i will send it back downtown to you. Oh, yes, we are all over it thanks. Goldman sachs holding the annual retail Conference Today with executives dealing with ongoing trade tensions and tariffs. Courtney reagan joins us live from the conference with highlights courtney reporter hi, sara. There is a lot to talk about the ceos of course being asked at the Goldman Sachs conference about their best tariff mitigation strategies, their expectations for the second half, what inventories will look like, as well as even store bases over the next two years. As you could imagine, the health of the consumer is front and center today starbucks ceo patrick breeze merced he does believe that the u. S. Consumer is healthy and the greater macro environment is helping his business here domestically, even though the company set its profit forecast for the year below analysts estimates. Tapestrys ceos is new this is the Parent Company for coach and kate spade i had an opportunity to speak to him very briefly he also believes that the consumer environment is healthy in this country and he believes that thats going to help propel their multibrand strategy forward in the come years. Tariffs a big point of uncertainty for many retailers, particularly if a number of Companies End of passing along the higher costs in the form of higher prices. That depresses overall Consumer Discretionary spending that. Is a big concern, especially if you are an apparel company, for instance, because apparel has been very deflationary over the last several years as volume has grown. They are going to have a really hard time pushing forward those higher prices. Sarah, back to you. Thank you. Elsewhere in consumer news, the Carlyle Group announcing a plan to partner with former dozier ceo Patrick Doyle as they icon summer Retail Companies pushing into technology. Patrick doyle joins us here at post 9 his first interview after stepping down from dozier. Its been a year since you demd down from dominoes. I am excited. I took a little bit of time off and was out hiking in montana and enjoying things and thinking about what was going to make sense for me to do next. Really ultimately decided that there is this opportunity to buy great businesses with great brands and cash flow that may need help figuring out how to transform with technology. I spoke to a few groups, and carlyle is fantastic i mean, carlyle with their global reach, the scale that they have, the expertise really a Terrific Team that is focused on growth as the way to create value. It just is a perfect partnership. So were going to look for some businesses that are existing businesses that can use technology to transform them frankly, a lot like how we ran the play at dominoes. Tell us more. Size of business, public, private, what exactly are you looking for . Public or private probably up to 10 billion in enterprise value real scale businesses, which is ultimately i think important if you are going to Bring Technology if and create competitive advantage by doing it inside, you need the resources to invest in into the technology and analytics to make that work. So scale businesses, existing businesses could be private or public, and well see. What sort of technology do you look for without the pressure of the Quarterly Earnings that you dealt with at dominos, when you think five, ten years out about where Consumer Companies need to be thats the key in terms of doing this through private equity is having the timeframe to do it i mean, it took some time to build that at dominos and so really to me, you know, it could be retail, it could be restaurants, it could be hospitality, Health Care Everything where you have the direct relationship with the customer thats the key because you are creating the data. You know what they are doing, what they are buying, how much they are spending. You can get far more efficient with media spends. So really to me thats the key, is that they have got the direct relationship with the customer so they are creating that opportunity for using that data and kind of using the analytics that you can drive efficiency. In retail does mall exposure make you nervous you know, honestly, there are great retailers doing incredibly well i am the lead director at best buy. They are doing incredibly well so it really is, it comes down to how they are executing. Best buy has been putting on a clinic they have been doing incredibly well they are using technology. They Sell Technology but you think its less about where they are located and how they have adapted to this new world. There are those that are struggling with it and there are those who are doing incredibly well. You mentioned a number of Different Industries in terms of what you might be looking at what is going to be the signal this is the right one . Clearly, things have to be available for sell do you see yourself rolling up in a particular industry or doing one large acquisition . Over time it will hopefully be more than one acquisition the goal is to find the first one that has the right fit that we are excited about that ability to transform if its private, it may well be a family trying to figure out how to do this they have got a great business they are proud of. They want someone who can come in and really help them drive that forward but over time ill go very deep on the first one, help figure it out, make sure we have the right team in place, that we got the right strategy then we go on and work on the next one it could wind up being two or three over time. A question i have when people talking about investing in technology at Fast Food Companies and restaurants is the supply chain and whether the eventual goal is to replace the labor force with technology. What do you think about that its interesting. We look to obviously have a lot of things at dominos. People want their food handmade. I honestly think that replacing the people making the food is probably the least interesting but clearly, you know, how they are ordering and how you are getting the food to them and, you know, and how you are marketing to them, all of those things i think are huge who is doing a good job at this. Dominos. Their sales growth is slowing down, facing delivery pressure from yum and papa johns. Dominos team is exceptional. I have no doubt they will continue to grow the business. They are fantastic but i always have said if you look at the Restaurant Industry, dominos has done a great job with off premise starbucks is probably the best on premise with what they have done with technology but dominos is in a great place. You put starbucks above, say, chipotle today, yes. I think they are investing and they are working to get caught up on that but i think up until now, id give starbucks the edge on that. I guess do distressed situations interest you . Because the thinking is you can either invest in tech or manage your Balance Sheet obligations. Right probably not a distressed business we are looking for good businesses that have strong cash flow where there is this opportunity to transform how they operate, how they go to market, to bring the technology into that. Thats what we are looking for. We have been datalking about this with mcdonalds how do you get traffic up . Its one thing to have promotional pricing and new menu offerings. To get people in the door has been challenging. Yeah, businesses executing well get it done honestly, the Restaurant Industry is not going to grow fast i mean, its probably a o1 to 2 order count grower so it is largely a share game. These people executing incredibly well will take share. Its going to be an expense to those not adapting quickly enough. The stocks are add record high some stocks have done so well this year i wonder if you think thats a reflection of the truong consumer we talk about, the fact that the u. S. Is not in recession and not heading there because its on the consumers back, or just the Business Models, the asset light models, the fact that bond yields are low, that sort of thing . Its an example of what we will be looking for at carlyle, is businesses that are generating the cash, that have the right model. Thats where y i think they are attractive and what we will be looking for. When you saw the chicken sandwich popeyes story which involved social media, involved an inability to get what their customers wanted, what were your thoughts its interesting. They generated an awful lot of news around the popeyes brand its a terrific brand. You know, i dont know how much was on purpose or not to run out, but they generated an awful lot of discussion around it. I thought you were going to ask about alt meat, alternative meat is that here to stay sure it is. Absolutely i dont know how big its going to be, but there are consumers demanding things thats how you get on strand. Patrick doyle, good to have you back. Thank you, sara appreciate it. Now joining Carlyle Group its me . Thats you. Sorry, i was texting. When we return you get one tease per hour. Make it good. Thank you, sara when we come back, stocks are continuing to rally. We asked that ageold question sk it going to a the playbook on volatility when we come back l . The playbook on volatility when we come back as the playbook on volatility when we come back t . The playbook on volatility when we come back easing hong kong tensions and a slew of global trade data helping fuel todays broad rally. You see the major rinks. Joining us now Wells Fargo Asset Management marggy patel and cio of quantitative equities, olivia angle. Is now a good time to buy and people are making a mistake if they are underweight equities . Why . Yes, i think so i think one of the reasons we had this correction macro uncertainties also reflects the fact the fed was too tight last year and they have changed that. They are tastarting to ease with a lag, say, six months from now, i think we will see committee growth pick up, stocks will follow. We have had a 5 correction in a lot of sectors. Olivia, you tend to think, i believe, that there is not that much cheap in this market. Is that true thats correct. I think this is the time we want to be focusing on defensive quality but not overpaying for it there is a lot of things that are cheap in the market, but i think they are cheap for a reason so were finding, were trying to find, and its a challenging job to find the names in the segments of the market that are reasonably valued but providing some cushion against this late cycle macro driven volatile market. All right cheap for a reason is what macro driven and sort of what sectors, cycle sectors yeah, possibly banks and autos in that category given the Interest Rate cycle, given the trade wars its too early to be piling in there. I think where we can find better value in names that are going to be more stable, we think that there are names in the traditionally not so defensive parts of the market like in the Consumer Discretionary part. The restaurant sector. We actually think when you are looking for characteristics of Sustainable Growth as your previous guest was saying, the restaurant sector really shines in that category also, in the Tech Services segment, its not so exciting as the highflying really expensive tech categories, but a much more defensive play and you can find reasonable value there you know, im curious what you are seeing within wells fargo itself i assume you have a view on that in terms of people staying out of equities or being perhaps reluctant to make the allocation that their advisor might advise . Well, we see Investment Advisors very positive about the markets. Actual actually their clients are, too. A lot of the advisors walk their clients back from the ledge whether we had that crash in december, when the market bounced back a lot of the advisors got a lot of credibility. People missed that so people are much more optimistic, i think, than in previous slowdowns that we have seen olivia, how do you think about the strength of the u. S. Consumer and how much staying power that has to keep us from turning lower in the economy i think it would be dangerous to be betting everything on the u. S. Consumer being super robust i think its better to have offsetting position that is are resilient. I am not saying we are in an imminent recession, but the market is going to react as though there is one going to happen from time to time, and so we dont want to have that volatility in equity portfolios. Thats why we are looking at su Sustainable Growth. A lot of people say lets avoid the volatility in equities and find value in either corporate debt or fixed income to what degree are you trying to play around stocks in particular we are not worried about shortterm volatility as investors are really looking for longterm Wealth Creation stocks that have Sustainable Growth within fixed income we think that the high yield market in the u. S. Looks very attractive for the fixed income investor. Yields of, say, 4 to 6. 5 . Huge premium other treasurys and defaults under 2 . We think that that will have modest returns, less than stock, but for the fixedincome oriented investor we think that is an attractive place to be right now. And again i guess to end here, you see the risk being overstated in terms of the equity market broadly speaking yes, i do i think its a little bit of Wishful Thinking to hope we have a recession to pile in and buy stocks down 20 . This looks pretty much like the kind of corrections we have had over the last few years. 5 to 8 . The economy is too strong and too sustainable to have a recession and a Big Stock Market crash, we think. Well, thank you both. As we go to break, take a look at box. Surging. Dow up 158 squawk on the street is back in a moment. He start of every r. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Talkshould alwayssor be working harder. Oney thats why, your cash automatically goes into a Money Market Fund when you open a new account. Just another reminder of the value youll find at fidelity. Open an account today. We believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Stocks kicking off a typically uglymont. Ugly month, strategist says the markets could be about to rewrite history. More squawk on the street is coming up. We are following overseas stocks higher. Time for our etf spotlight financials recovering this morning after falling nearly 2 yesterday on Global Growth fears. Weak manufacturing data on falling bond yields. Goldman sachs and citigroup among the large banks up 1 . Kre turning positive rebounding from yesterdays lossings. They are now higher. At least if you look at that etf, by a percent. Yields going up certainly helps that trade. Lets send it over to jon fortt so we can get a look at whats coming up on squawk alley. With state attorneys general turn up the heat on google, have google and facebook not only lost the east coast, d. C. , but have they lost Silicon Valley in terms of morale, in terms of sentiment. Well get into that coming up on squawk alley. It was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Are we supposed to dance . Boy bands without dancing are just ok. Get a better than just ok unlimited plan with spotify premium included on americas best network. Only from at t more for your thing. Thats our thing. Welcome back to squawk on the street. Im dominic chu. Stocks are rallying on the string of gop political headlines. The s p 500 has nearly wiped out yesterdays losses cyclical sectors like tech and industrials are bucking that trend, that recent down trend that theyve seen along with Energy Stocks as well. Now, thats in large part due to a big rally in crude oil prices, which are now trading in the green over the course of the past month as well thats lifting energy names like devon energy, hess, apache, conocophilli conocophillips, theyre all up about 2 or more today well see if that holds up throughout the course of the day. Geopolitics and supplies and demand all playing out i will send it back downtown to you guys, david at the new york Stock Exchange thank you, dom. Time to turn to sarah so we can find out whats coming up on the big show at 3 00 today. Of course well see whether we can sustain this rally. Its lost a bit of steam weve got some of the defensive groups under pressure like utilities and health care. Were going to speak with Sarah Bloom Raskin about todays fed speakers, and the buzz si oped about politicizing the central bank slack will be reporting Quarterly Results for the first time as a Public Company that stock down doubledigits since its june ipo, getting a nice pop today well see you then. A lot more on todays rally as the dows up 158. Squawk alley starts in three minutes. In the last year, there were three victims of cybercrime every second. When a criminal has your personal information, they can do all sorts of things in your name. Criminals can use ransomware, spyware, or malware to gain access to information like your name, your birthday, and even your Social Security number. 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Ultimately, its helping thousands of patients return home. Good morning, it is 8 00 a. M. At youtube headquarters in san bruno, california its 11 00 a. M. On wall street and squawk alley is live good wednesday morning, welcome to squawk alley, im Carl Quintanilla, with morgan brennan. Watching the markets here, dows up, but google is going to start us off, the ftc announcing this 170 million settlement with youtube earlier this morning, about to hold a press conference on that in just a moment were going to take you there live