Transcripts For CNBC Worldwide Exchange 20240714

The worlds biggest Investment Banks, what Goldman Sachs has in stores for some of its top partners it is thursday, august 5th and Worldwide Exchange begins right now. Lets go lets go all right, good morning, good afternoon, good evening, welcome. Im Brian Sullivan thank you for joining us on Worldwide Exchange. Here is the stock of the day the ticker may say work. But something isnt working at least for investors right now. Online messaging firm slack shares, theyre down 12 right now in the after hours market. First Quarterly Report as a Public Company disappoints well dig more into these numbers in a moment. First, to the overall markets, where stock futures are going the opposite way, rising, dow futures up a nice 238 now. This is a report says the u. S. And china are set to resume face to face high level trade negotiations next month with preliminary talks happening as soon as next week. As stock futures go up, bonds go down, a little bit benchmark ten year note yield 1. 51 . We are deinverted, i guess is the term 147, 151 what exactly can we possibly expect from these reported trade talks . Maybe the bigger question, will they happen . Welcome back in tracie potts who joins us live from washington with more. Good morning, tracie reporter the chinese are giving us a lot more specific details on when they might happen than were getting from the the u. S. Now on thursday morning, a phone call confirming that the talks are back on and that is something that wall street seemed to respond to given what we saw earlier in the week after those trade tariffs were imposed. So, this, according to the chinese, is what is happening. Later this month, in september, the two sides are going to get together, essentially to lay the ground work for when these talks will happen and what these talks will look like the u. S. Has not yet confirmed, but the chinese say that the actual trade talks will resume sometime in early october. And they will include the u. S. Trade representative and treasury secretary steve mnuchin. The tariff as you know rocked the markets on tuesday, which was the first trading day after they kicked in on sunday but yesterday the dow was up on news that it looks like the u. S. And china are ready to sit down and talk again to try to end this trade war. Stock futures up as well. Tracie potts, nbc, thank you very much. Trade is not the only big global story happening right now. The political and brexit drama continues in the uk. Prime minister Boris Johnson has been dealt another blow in his fight to deliver a brexit of october 31st after members of his own party turned against him. Willem marks joins us with more on this story. Willem reporter important to note this point that some of the former members of the conservative party are no longer members of the party after he stripped them of their Parliamentary Party membership what that meant last night when the Lower Chamber here at the house of commons tried to push through this piece of legislation to block a no deal brexit at the end of october is that the government lost a couple of hours later in response to that, the government tried to call for a fresh general election and they lost again. Because hundreds of opposition lawmakers abstained on that key vote they say that allowing Boris Johnson to pursue an election now is a poison chalice, he will use brexit as a cudgel with voters and they want to make sure the legislation gets the queens assent approval early next week before they even are willing to talk about potential elections. When should we expect this potential new election reporter that is a very difficult question to answer right now, brian what we know Boris Johnson would like to see one in the middle of october. A couple of days after the date hes looking for, the 15th of october, there say meeting of european heads of state, a council in brussels. That would be a moment he thinks where he could potentially rest some fresh concessions from the europeans over this brexit deal. And then, of course, it would be a matter of days until that october 31st deadline. The labor party in particular, the main opposition here in the uk saying they dont like that plan one bit they would like to make sure there is an election after that European Council meeting at which point there would in theory be an extension to that brexit deadline. Everybody can heave a sigh of relief willem marx outside of parliament in the uk where the it is tough to follow, but we appreciate the deal, thank you very much. Also happening right now, Hurricane Dorian wont just go away the storm has strengthened, now back to category 3 status. The Storm Force Winds hammered georgia and parts of the South Carolina coast that is where we find Nbcs Jay Gray who moved north to wilmington, North Carolina, ahead of that storm. Jay . Reporter hey, brian. What kind of staying power this storm has, it has been unbelievable to see this we started in florida, now all the way to North Carolina. And the storm still not exactly clear on where or when it may make that second landfall. Here in wilmington, we have seen some rain, some winds pick up overnight into the Early Morning, calm now. Thats all going to change as we move throughout the day and the storm gets closer. It is targeting this area for that second landfall and that would likely come sometime late tonight and into the Early Morning tomorrow winds are going to be an issue, we could see gusts of 100 to 120 miles an hour. But it is the rain, it is the storm surge that is the primary concern and flooding is going to be an issue along the coast. And it will likely continue to be this way until the storm, maybe sometime saturday, makes that big turn, gets back out into the atlantic. Right now we are bracing for what is going to be another hit from this monster storm. Is the storm still moving at that incredibly slow speed with which we saw over the bahamas . When this thing hits, it is not going to be a fast moving storm. It could pound this region and then move up north for days. Reporter no, youre right. And thats the big concern it is forecast to speed up right now it is moving at about 7 miles an hour. And it could linger once it gets over land. If it does that, the flooding is really going to dramatically increase we have already had a lot of rain over the last month in these areas. And then you had water to that from the storm and there is just nowhere for it to go except into places it is not supposed to be this is a region where you are that is still struggling with the aftermath of Hurricane Florence last year, we saw signs for the Cape Fear River and water overflowing gas stations they cannot get a break. Jay gray in wilmington, North Carolina, thank you very much. Much more on the storm coming up. We speak with South Carolina Port Authority Ceo Jim Newsome about how that major port and the entire Business Community of the region is prepping for dorians arrival also ahead, big changes for the upper echelons of Goldman Sachs. David solomon looking to cut down on the number of people earning a partnership and paycheck. Slack sinking, Company Executives learning the hard way what it is like to be a publicly listed stock that misses wall streets estimates but first, maybe called the winslow perspective, one top fund manager says he has a secret sauce to navigating the twists and turns of todays market, a busy hour still ahead when Worldwide Exchange returns. I can. The two words whispered at the start of every race. 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. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back good morning it is 5 11 dow futures up more than 200 points right now shares of Goldman Sachs, they have not rallied theyre down 15 over the past year now ceo David Solomon may be looking to trim the top ranks where several partners at the Investment Bank reportedly eyeing the exits rahel solomon has more. As many as a dozen partners at goldman or 15 could reportedly leave by the end of this year. Thats higher than the typical turnover wall street journal says theyre negotiating their exit from the bank report says that Senior Executives including chief Technology Officer alesha wiesel and steven strongen are in talks to step down senior partner Jeff Neeleman quit yesterday, this is less than a year after being named head of the stock Trading Group and marty chavez cohead of the Trading Division is retiring, according to a memo sent to employees on tuesday goldman is in the midst of a top to bottom review, launched by ceo David Solomon, who took over last october as the Company Looks to diversify its revenue streams. The journal says that management has been trying to make goldman more efficient by flattening organizational charts, eliminating old technology, and also shifting some staff to lower cost hubs. New data out today from industry analyst coalition shows that the worlds biggest Investment Banks have had their worst start to a year since 2006 with combined revenue down 11 through june. Shares of goldman are down 10 under David Solomon. Back to you. Thank you very much well see you in a bit. Back to the markets now, futures pointing to a sharply higher open on wall street but as investors learn the hard way in recent months, two good days does not a trend make next guest says he might have a secret sauce, what he calls todays wotiered market joining us now, justin kelly, chief Investment Officer at Winslow Capital and manager of the four star winslow large cap growth fund, up just 24 , only at 24 this year come on. Thank you for having me. Thank you for joining us. Thats a great return by the way. How have you done it what stocks worked this year and have you been able to identify the sauce or some kind of a trend and what has been a really kind of a crazy market. Right, so the market has had a big narrowing this year. There is fewer companies that are able to produce strong Earnings Growth and a slowing economy. The winslow philosophy is that Growth Companies make for the best longterm stocks and two type of Growth Companies in particular that make for great stocks the first is what we call the sustaining Growth Companies. Those are Companies Like visa, mastercard, costco, that have a growth rate today that is similar to what they had a few years ago. And importantly will still be growing at the same rates a few years from now never cheap stocks, but work on the compounding of the growth. Now, the second type of Growth Company that makes for a great stock is what we call the improving growth story that is companies where the growth rate is actually increasing over time and some recent examples of that would be intuit, ferrari is another example. Ferrari yes, you win both on the market underestimating the magnitude of growth and potentially even some valuation expansion. It is amazing given the trade fight, given hong kong, given brexit, all this talk about slowdowns and the u. S. Economy, there are companies that are increasing their earnings power. Exactly theyre doing it mostly through innovation you see that with ferrari coming out a number of new products, ini intuit. Are there Small Companies that are doing well and worth your clients money or is it the big companys you get a lot of megacaps and there is this steam growing that theyre the ones that could navigate and adjust and a Small Company simply cant do it. Right so there are two big trends that are defining the market today and will define the market over the next decade. Firstly that global gdt is grp s growing at a slower rate than it did in the past. More recently it has been growing at 3 and will likely grow slower than that Going Forward. Thats an important trend. Second trend is that every company is transitioning to the Fourth Industrial Revolution or retooling their business from the analog world to the digital world. The megacap companies, the tech companies, seem to be more on the front foot of this trend because they can use their scale and also Large Consumer companies, think about how nike is spreading its investments over a Large Customer base versus say under armour as an example which has to make the same types of investments for the digital world, but they dont have the scale to do so. Were seeing dow futures up 200 some points on reports that china and u. S. Rate trade negotiators may meet at some point. Were seeing the markets move on a report there is a possibility of a meeting maybe right what does that tell you about the health or lack of health of this market . Right, so we have been in a twotiered mark thet this year where some companies can grow through the slower Economic Times and are been favored and coupling with the rate there is a whole other part of the stock market which has not participated because theyre concerned about the earnings risk to the company. Those would be a lot of the manufacturing oriented companies. We can see the global pmi has now dipped below 50. Any easing of the trade war tensions would allow many of those companies to see better Earnings Growth trends Going Forward and it will help. If we get a deal of some kind, it should help. Yeah, it will help the Earnings Growth profile and the equity risk premium can decline for the companies and be good stocks again. Justin kelly, pleasure to have you on. Welcome to Worldwide Exchange, our tight knit but wonderful family here. Thank you. On deck, trade tensions as we just talked about they may be easing a bit your next guest says china is finding that life without america may be just fine and later on, guess who is coming to the white house today . President trumps mystery ceo revealed 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. Return home. You should be mad at airports. Excuse me, where is gate 87 . You should be mad at nonseasoned travelers. And they took my toothpaste away. And you should be mad at people who take unnecessary risks. How dare you, hes my emotional support snake. But youre not mad, because you have e trade, whose tech helps you understand the risk and reward potential on an options trade its a paste. Its not liquid or a gel. 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Shares item s tumbling slowing sales growth in the second half the year slack shares down 12. 5 now. The slack ceo on squawk box at 8 00 a. M. Eastern. Softwaremaker adjusted results topping forecasts, now raising Sales Guidance for the year thanks to higher subscription revenue. That stock up 14 . Finally, Palo Alto Networks topping forecasts on Strong Demand on Cloud Security products they expect to grow sales at a double digit pace over the next three years, stock is up 6 . And another big guest on cnbc, they dont call us the worldwide leader in Business News for nothing, because the ceo of Palo Alto Networks will be on at 9 15 on squawk on the street. Analyst call to tell you about this morning, one crossing right now. Deutsche bank initiating coverage of lyft with a buy rating saying the stock may be bottoming out. Analyst argues the stock has been weak for various reasons despite what they call robust quarterly results, getting a lift on that upgrade, up 1. 4 . Deutsche bank initiating with a buy, but look at that, stock has gone from nearly 80 right after its ipo down to 47 still to come, why the fed could be the one thing set to throw some cold water on a recent rally the fed, could it hurt the stock rally . Plus, another scandal in japan, misconduct revealed at one of the top of the Worlds Largest automakers that story and much more when we come back right after this so servicenow put your workflows in the cloud, huh . Mmhm. Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Applebees handcrafted burgers now starting at 7. 99. Now thats eatin good in the neighborhood here, hello starts now with hi mple. 9. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. All right, it could be a solid thursday for theequity market, stock futures up 219 on the dow. Similar gains in the s p and the nasdaq the u. S. And china reportedly set to resume high level and face to face trade talks well take you back to washington with more of the news that is moving markets when Worldwide Exchange returns right after this built for you. So why isnt it all about you, when it comes to your money . So. Whats on your mind . We are edward jones, a 97yearold firm built for right now. With one Financial Advisor per office, were all about knowing whats important to you the one who matters. Edward jones. Its time for investing to feel individual. They have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again a trade truce, new reports that china and the United States set to get back to the table and talk tariffs the white house remains tight lipped the two sides really get anything done this time . That news sending futures higher as wall street gets ready for what could be backtoback days of gains in what is traditionally the worst month for stocks and one of the worlds most exclusive clubs may be getting smaller. Ceo David Solomon reportedly looking to cut the number of Goldman Sachs partners it is thursday, september 5th. Youre watching Worldwide Exchange on cnbc. I can make your hands clap welcome back and good morning. Thank you for being with us on cnbc it is 5 28 a. M. Eastern time exactly. Here is how your money and investments looks right now as were just about halfway through this 5 00 a. M. Hour. Stock futures, they are way up dow futures indicated up 225 points, similar percentage gains for the s p and the nasdaq on those reports, which well get to with aymeamon javers in a minute bonds sell a little bit. Ten year note yield, low, but back above 1. 5 . 1. 51 for the ten year note. What will we do with the sky high yields . He says tongue in cheek. A check on the asian markets as well, remember, yesterday we had that huge rally at hong kong stocks, one of the best days in years on news that extradition bill that some of the protesters were upset by would be permanently shelved. A little reversal down very, very fractionally here but japan may be on the trade headlines, raising nicely, nikkei up 2 lets find out what is happening on the european trade if theyre following our markets as well, they got their own stuff going on in the United Kingdom in particular were seeing every market but the uk rise, the uk with just more brexit drama, maybe another general election hey, maybe another Prime Minister in the uk already that market down half a percent. The rest of the markets in the green. Lets get more on that top story, cooling u. S. Trade tensions, delivering that boost to the markets negotiators from china and the United States reportedly are set to resume talks as soon as next month. Key word there, reportedly eamon javers joining us live from washington with more, i know as you have gone around the world, following these trade negotiations and everything else, youre not going to believe it until the two sides are eyeballing each other sitting across from a table. Yeah, thats right, brian we heard this day of september, september, september, now hearing october for the two sides to actually sit down face to face. Here is how it unfolded last night. The statement from the Chinese Ministry Foreign Ministry saying that in fact the two sides are going to meet. They say there was a phone call between lighthizer, mnuchin and the chinese side and the officials agreed to hold the next round of talks in washington in early october, the chinese side says. They said they agreed to Work Together and take practical actions. Later in the evening last night, a u. S. Trade representative spokesman confirmed that to me with a slightly different nuance here is the u. S. Trade representative statement from last night not necessarily specific about that october date, but saying investor lighthizer and secretary mnuchin spoke with vice premier liu hu. In advance of the discussions, deputy level meetings will take place in midseptember to lay the ground work for meaningful progress the u. S. Side is saying that theyre going to have these lower level meetings in midseptember and then a higher level meeting in the coming weeks, not specifically suggesting that theyre going to meet in october, but suggesting that all of these officials on the u. S. Side would like it make sure that the ground work is laid for what they call meaningful progress before they move to a principles level meeting and that could happen in october, but the u. S. Side not specifying that. Where are we this will be the first face to face meeting the two sides had since the president raised the tariffs on september 1st and committed to racing even more in december well see whether they can undo this knot of tariffs and trade. We got to wait for the meeting before the big meeting thats effectively what were waiting for. Right the chinese side talked about one meeting, the u. S. Side talking about a series of meetings escalating up the hierarchy assuming things go well we dont know what the sort of threshold is for the u. S. To commit to that higher level meeting. What do they mean by meaningful progress, we dont know yet. Whatever it is, the meeting before the meeting before meeting, the markets like it, dow futures up 200 points now. Eamon javers, thank you very much. You bet for more on the u. S. china trade tensions, were joined by steven myro, former senior official of the u. S. Treasury department and the u. S. Import export bank hes out with a new editorial this week saying hawks in washington speak of decoupling while chinese premier xi jinping is doing that his way. Welcome to Worldwide Exchange, thank you for joining us is this a world we act like from our side, that china needs us a lot more than we need them. Do you believe that from your editorial, doesnt sound like you do well, brian, i think the important thing here is what do the chinese think . Xi jinping has definitely taken a more aggressive posture since taking over in china and i think President Trump has helped him get to the point that they want to accelerate what they call their made in 2025 program, which helps them to become more selfsufficient. And he is just moving quicker along that path. You know, yesterday, mark cuban, owner of the mavericks, he tweeted out something, yesterday, the day before, he said businesses and even countries sort of find markets if china doesnt have us as a market, because of tariffs, theyre going to go find the market somewhere else, sell stuff to germany, australia, japan, wherever it might be. Do you think that china right now is actively looking perhaps to as you say decouple and find new markets and say, okay, we dont want our stuff, well sell it to somebody else. So one of the most important things in the near term to President Trump is try to get china to start buying soybeans again for the United States. Of course because it helps the farmers, a key component of trumps Political Base but they havent been buying many soybeans from us at all and they have been buying them from braz brazil whoever has been buying them from brazil has to go looking elsewhere. We live in the globalized world, brian. This isnt when people talk about a cold war between the u. S. And china, this is not a cold war like we had between the u. S. And the soviet union where we lived in basically two separate economies so, of course, you pull on the strings somewhere, it is going to have an effect elsewhere. They are connected. We buy a lot more stuff from china, than they buy with us thats part of the problem do you think we could have a world, a decade, five years, 50 years, there are two sets of economies. The chinese model and then there is the u. S. Model and the two are not linked or do we eventually have to get down to business because globally business is always going to be connected. I personally believe that it is impossible to decouple. That doesnt mean theyre not going to try so when i explain it to our clients, what i say is you got to think about this as almost trying to do brain surgery, you think how interconnected all the neurons and the different parts of the brain are and when youre trying to undo all those pieces, youre going to have very messy consequences. Lets say youre buying the house, you want the house, you cant quite come to a price, the sellers want to sell and you want to buy and so the idea that the negotiation is that youre going to, you know, maybe play hard ball, but both parties want the same thing they want the house to sell and we can move in do you think, a, steven, that the two sides want the same thing, and, b, do you think in some ways our negotiating tactic, this hard lineism with the Chinese Culture is counterproductive . It is extremely counterproductive, brian having negotiated with the chinese both in and out of government, the concept of face is so important. And to keep, you any, to one day call xi jinping the enemy and next day say hes my best friend, they dont flip around as easily as we do and the interesting thing about china and a lot of countries in asia is that once they decide to write you off, you cant get them back, but theyre not going to necessarily say no. Theyre just not going to say yes. So thats when we saw this announcement of the expected meetings in october, i kind of let out a big yawn because this is just going to be a lot of meeting and head nodding, but im very skeptical that well get any True Movement or momentum out of it. The market is moving. So you think it is an overreaction to the upside yeah, the market is still in love with this concept of a trump put. They want they believe that because of the election, trump needs to cut a deal, the problem is he cant cut a deal with himself. He needs someoneon the other side willing to shake a hand and i just dont believe that xi jinping is willing to do a deal with donald trump anymore. Interesting oped there china finds it can live without the United States. Thank you very much. Appreciate it. Thank you, brian. It is not just trade on investor minds, that is certainly a big deal wall street waiting policy decisions from key Central Banks all over the world starting with the ecb next week. And our Federal Reserve coming up in less than two weeks. Joining us now is joe buswelis before we get to the central bank stuff, steven myer was saying he thinks the two sides need each other and there is going to be something done but the tactic were using in trade and the negotiations is counterproductive. Do you agree with that i would and that image of the Trump Administration conducting brain surgery frightens the heck out of me, brian theyre so clumsy around trade it is frightening. Feels more like a hammer than a scalpel. I would say dropping an anvil on a fly, youre going to kill the fly but shatter the table. When i see the Market Reaction this morning, it is a knee jerk reaction this rally will be faded because of the risks around the payroll report tomorrow. Look, no trade deal, no reelection, that simple at this point. You think it matters that much i do. You can see the manufacturing contraction begin to roll around the world, spill over in the United States over the past two months update is now in line with the hard data. Manufacturing sector is contracting. Look, what he needs to declare victory and go home. Join the tpp 71 of which is imported from the tpp. He might as well go back to it then he can approach the chinese with 40 of the global gdp, and engage them in a structural impediments talk which will yield benefits over probably a longer term. It feels like were further away than we were a year ago it feels that way. The rhetoric ramped up the tariffs keep getting added on, not subtracted getting worse, not better. Right we lost those markets. Those markets wont come back. Brazil will own that the lost residential investment due to the uncertainty tax and the retaliation. Look, it is spilling over in u. S. Real economy. We can see this in the data. The white house, a lot of things, but dumb isnt one of them they see this. Thats why i think theyre going to want to sue for a deal as soon as possible to extract themselves from the corner in which mr. Trump negotiated himself into. The trade deal, joe, and brexit feel very similar in a sense that the process almost feels worse than the outcome i compared brexit, it is like when the actual thing occurs, if it does, there might be some relief because the process, the multiyear process, the fighting, if you will, has been maybe worse for the economy and confidence in the uk and even europe than the actual endgame. The daily back and forth is going to wear out the consumer theyre, like, what the heck is going on. It is the uncertainty tax that is stamping Business Investment here in the United States, to mr. Trumps trade policies ever there it is the existential question of who are we, are we english, are we europeans . That uncertainty tax has damped consumer spending, which is flat thats why the uk economy is teetering on the edge of recession. We produce a index. I know they are stressed out. They are stressed out we reached the highs just after the referendum, two standard of deviations above neutral theyre going to have a likely flat growth at best for the remainder of the year. The damage may have been done fighting, the outcome is not even the big deal anymore. Right. We may look back at this in history and realize the process was the problem. Classic lose lose proposition. Thank you very much appreciate it. Coming up, has dorian gained strength the Business Community in the carolinas is getting ready theyre boarding up and battening down the hatches what about those who literally work on the water . Jim newsome will join us next, what to expect as the monster storm rages on stick around 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. I can. The two words whispered at the start of every race. 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. As a principal i can tell you this. When one student gets left 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. 70 billion, thats how much ubs predicts natural disasters will cost insurers this year 25 billion, the cost of dorian, the most expensive since 1935. Residents and businesses from floridas to the carolinas, they have been making preparations for dorian for days now. South carolina, Port Authority, shut operations in charleston and georgetown but expects to be back up and running hopefully by the weekend. Joining us is jim newsome, ceo of the South Carolina Port Authority. What is the current status of the port and your workers . Good morning, brian we shut the port at about 8 00 on tuesday night and under direction of the coast guard, all the ships left we secured the terminal, which is tieing the cranes and lift machines down and latching empty containers together, theyre the most dangerous in the wind right now the port is closed were just waiting it out and were going to start opening operations tomorrow morning about 9 00 and hopefully work the first ships at 1900 tomorrow night. Have to survey the harbor, make sure all the buoys are in place when the storm passes. Are you that confident that you can kind of get back up and running in some fashion by tomorrow night, jim, given the size of the storm . Well, you know, you are never confident. You make all the preparations that you can our team is very experienced at these types of things. I think we had three of these events in the last four years. But you are more hopeful than confident. We have a good plan. And, you know, good infrastructure, which we build intentionally with hurricanes in mind we always hope for the best. Yeah, and we obviously have done our show from your port and you look at the scenes of dorian and the bahamas and that storm was moving some heavy gear around you see tractor trailer trucks that have been blown away, boats now that are sort of inland. Take us through the safety preparations all those giant ships and heavy boxes, how do you literally protect that from 100mileanhour winds the firstsafety measure is the coast guard ordered ships out of the harbor. They have progression by which they do that that worked extremely well in this case. The storm was slow moving and the path seems pretty predictable. That was done in an orderly way. The main thing to do is to tie down our container cranes. We have locking pins in the wharf, metal projectiles go into the wharf. And we have hurricane tiedowns there. Cat 5 rated. Each crane, and they weigh about 2,000 tons each, it is important to keep them locked down we have a procedure for doing that, loaded containers are typically the least of the worry because theyre heavy and we try to level those stacks. And tie every rubber tire gantry train with the container and the empty containers we latch them together in a big block with nylon straps our technology we cover it, hopefully doesnt get wet. The big issue, i think the big issue will be power and making sure that that is get backs in time. We test the technology we do about 8,000 truck transactions a day in a normal day. Did about 4500 on tuesday. And anticipation of being closed for a few days so i think were as ready as we can be. And im guessing, ive seen your control rooms there, jim, you have access to probably a lot of really good weather data that maybe the general public does not have. What are you guys hearing about the storm . Well, i think it is this path has been pretty predictable. It strengthened a little bit, which is a concern the next 10 or 12 hours here are going to be the most difficult flooding seems to be the major issue. But it is windy here we live in a building and it certainly is plenty windy. But again our team is used to doing this they do it, you know, very professionally and i think that we just hope for the best. Hope for it to pass and we can get back in operation. And everybody stays safe safety of our staff and equal in the community is the first order of business. Certainly is. You are doing it well, hoping to open tomorrow night. Thinking about you guys down there. All the workers, everybody around, be safe, it is a big storm. We appreciate you joining us, thank you. Thank you, brian. Take care. Not just the port of charleston, North Carolina taking similar actions the ports of wilmington and morehead city, North Carolina, closed today and tomorrow with updates and opening early on friday a lot of business takesi busine action ahead of dorian. Will the Office Messaging Software be able to communicate well enough to investors we get that stock to rebound it down 12 now a world of risk. Protests in hong kong, the ongoing trade war, brexit, so much more, we weigh in on the biggest risks now and how to balance them out when we come back servicenow put our 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. Learned ao play second language applied to college applied for a loan started a business started a blog shared a picture shared a moment turn your wish list into a checklist. Learn more. Do more. Share more. At home, with internet essentials. 5 52 a good time for your executive recap. All the headlines you need in about 60 seconds lets do this. At least a dozen Goldman Sachs partners are reportedly negotiating their exits from the firm wall street journal says goldman ceo David Solomon yields the banks upper ranks are too bloated. Also right now, internal probe at nissan reportedly finds the ceo and other executives received excess compensation in violation of Company Rules he is apologizing, promising to return any improperly paid funds. He says all this happened under a scheme designed by the ousted chairman carlos ghosn. Set to meet later on this month to consider disciplinary action. Shares of slack, they are down big right now off 13 following its first Quarterly Report as a Public Company those results topping estimates. But slack is forecasting a bigger than expected loss and slowing Revenue Growth in the current quarter. That is what sent the stock falling. By the way, dont miss the ceo on t on squawk box at 8 00 a. M. Eastern time mary barra set to meet with President Trump at the white house today. White house Officials Say a variety of issues are on the trade including trade, contract talks and revising fuel efficiency standards a couple of analyst notes, calls to note this morning comcast, you heard of them, upgraded to outperform from perform at oppenheim with a 50 price target among the catalysts, they point to the broadband strength, secular improvements in cable and comcast is our parent company. Lyft initiated with Deutsche Bank as a buy rating and get this, a 70 price target the Analyst Thinks the stock may be bottoming out has four reasons why theyre optimistic on lyft 70 is a price we saw for a day directly after the ipo the stock is at 47. A tough ride as a Public Company for lyft now back to the Macro Markets and your money stock futures, they continue to gain strength up about 245 points right now optimism that trade talks may resume we have been here before joining us now is dan brew of palisade capital management. We have been here before we have to stop meeting like this, dan. In 20 years we have been doing this together, there is always something going on never this calm world. But these are big things, trade, brexit, global possible recessions it does feel like more of a risky time than anytime in a decade i dont think thats an overstatement. How do you manage investments through this time of really sort of huge risks. Yeah. I try to do no harm and take the hippocratic oath sometimes you want to react to the days news you want to buy when you think when things are really good, like today and youll want to sell when it looks like there is no bottom in sight. Really what you just have to do is stick with some principles around companies that you really like, stick with quality, particularly right now and thats easier said than done, we have images of people throwing molotov cocktails at hong kong and police protecting protesters and maybe another Prime Minister in the uk in just a couple of weeks. It is hard to stay chill thats right. Thats right and the way but, again, if you can come back to some centralized financial theme or metrics and the one we like most is the return on invested capital. We look back five, ten, 15, 20 years, that seems to be the metric that outperforms in all different kinds of markets where are you finding this return on Investment Capital these days you know, Software Companies have a lot of it but a lot of what we call Industrial Technology companies, companies that look to deploy capital as efficiently as they possibly can and always are looking at reducing the amount of capital that they put into their businesses those are all companies that generate a lot of cash and have the ability to take advantage of dislocations in the marketplace by making acquisitions, at much more advantageous prices, they can take advantage of the situations that you have, particularly when there is turmoil. Sounds Like Technology of various kinds, you believe, is kind of an importantstorm so t speak. It is interesting we think of industrials, you think of caterpillar, deere, the deeper cyclical type of businesses but there is a whole cohort of companies that really are technologylike in their approach to running a business and those are the companies that you want to stick with and the types of businesses that are focused on those principles. And, again, return on invested capital, to me, is the report card for the ceo. Im going to dial it to my the industry i cover, oil and gas, is that why people have just completely, like, literally left oil and gas stocks out to die . Many oil and gas names, their valuations are trading at the same level as when oil was at 15 and 20 per barrel but nobody seems to care we were just looking at devin energy, the stock is where it was today when oil was 20, 21 exactly my point. Exactly so those we dont own any of those companies. There is no you dont find the valuation yet attractive enough, even though some of these valuations are at all time lows. Energy has so many things going against it and one thing going for it the only thing it has going for it is higher prices more recently off the 2015, 2016 lows but what they have against them is a whole host of issues. Emerging class of investors that just dont want to own carbonbased businesses at all at any valuation and a less disciplined industry in terms of how they allocate capital does not exist. And a lot of debt which well be doing more of it was a real pleasure to get you on thank you very much. Good discussion with dan no rbi this morning. Random but interesting will return tomorrow. Were seeing stock futures up 250. A lot to talk about with a bunch of big interviews on squawk box which, by the way, begins in about three seconds well see you tomorrow on Worldwide Exchange. Have a great day thatsabout right. Pretty close good morning lets talk in october. China says it agreed to meet with u. S. Trade negotiators next month. Futures jumping on the news. Slack disappointing the street in its first report as a Public Company. Shares are sharply lower well have the first interview with the companys ceo Goldman Sachs reportedly trimming the fat in its upper ranks, well tell you why some top partners are on their way out. It is thursday, september 5th, 2019 and squawk box begins right now. If you leave dont leave now live from new york, where business never sleeps, this is squawk box. Good morning, everybody welcome to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Im becky quick. Indicated quite a bit higher after the news that looks like the trade talks are back on for october with china dow futures now indicated up by 250 points this comes after a big day of gains yesterday for the market, with the dow up more than 230 points and the s p 500 and the nasdaq erasing their losses from tuesday. So well see where things head as we get closer to the open the s p indicated up another 26 points and already closed at the highest level since august 8th yesterday. The nasdaq up by 93 points, thats the indication if we open here the treasury market, lets see where the ten year yield is at this point looks like 1. 52 , back above