Transcripts For CNBC Squawk On The Street 20240714

Overshadowing the iphone 11. Do either move the needle for investors . Plus, quote, bone heads, president taking on the fed, calling the extcentral bank naie and telling them to cut to zero. Is wall street afraid of Elizabeth Warren more from jim on what hes hearing from leaders in the financial industry about the 2020 president ial race start with apple, though, shares rising one day after the big product event, not only did the company unveil a new line of iphones, and other devices, created lots of buzz with news of apple tv plus that this is what tim cook had to say on stage. Were excited to tell you first shows will be available on november 1st and will be thank you and will be adding more apple originals every month and apple tv plus will be available in over 100 countries that launch and it is just 4. 99 per month for your whole family were going to talk to Morgan Stanleys katy huberty the event was compelling to a large degree because pricing was aggressive. I went through every single note im so glad you have her i didnt know that she is the one who i think really captured the zeitgeist of the moment and the term i would have used if i were working with her to say we have consumables now. Apple has a lot of consumables no different from im interviewing david taylor from Procter Gamble they have a line of consumables. Now cook has it. 4. 99, when i like is thats that level that i dont think about. I just dont let it be in my bill every single month, like the like the photo protection, the cloud. It is a great price level because it is a level that we will not think about we talked yesterday about a lot of the ones, how many can you have that are 10 apple has this store, the New York Times talks negatively about the store today, apple has a store and you buy things there and it is the only place you dont bother to check out. Just ive seen that ive seen some of the pr programming. We didnt get anything on the card, you were hoping for. Little discussion of privacy, some said might be a talking point. Yeah, i tried the card is a mystery. Why they dont talk this up, because it is cards are per se not exciting. But they have it is another theme, you get it, it is in the app store. The video games, that was important. The thing that really stood out to me, i know the man to my left has never bought me he thinks about his parents, fallout shelters in 1962, they have a brandnew watch. And you dont have to flip your wrist. But most importantly, it is a 199 when the ipod mini went down to 199, thats when it exploded. Thats when it exploded. 199 will explode the watch. A very, i have big deal. That to me was the most important takeaway. They didnt raise the price for the high end either. No. 199 is an important price. That was a lot of peoples take away, also the iphone prices come down. At least for you can get one for 699. Yes, very sensible, something that people and they are already applying to some of their including the watch,i believe. Yes i think this there was a moment where the Senior Vice President , phil shuler, said the new video is computational photography mad science. There is so much Machine Learning look, i think when people take pictures, have to understand, theyre doing it for instagram Everyone Wants to be a professional and this is a professional level camera for instagram huberty, by the way, reiterates outperform, target 247. She posts a study, survey of the Morgan Stanley summer interns asking them the most important features when you buy a new phone, number one. Want to guess . Battery life additional hour number two, compatibility with my other tech and number three is camera there you go. I wonder if those people shake hands, look them in the eye. They do they do. I had plenty of interns. My friends children now who im trying to help secure internships if i can, it is after junior year, very important, they serve during the summer and it means you get a job at Morgan Stanley or Goldman Sachs, theyre an impressive bunch. They look you in the eye. They dont just text you they look you in the eye. They do a good job they have super days for interviews these kids go through that sound brutal them still want jobs at these places. Im thrilled they actually the handshake is still in use . Absolutely demand they sit down with me and i enjoy a rigorous discussion with them before i would even think about recommending any of them arrogance and ignorance has been a hallmark. Back to apple and the streaming thing, to call it to call their streaming an also ran is even being kind. Oh, david. Come on. 4. 99, i dont care what the price is you sign up to watch what . What they send me because i like that they have. It is cheaper than a cup of coffee at starbucks, does it matter 5. 97, no so much lower than disney 6. 99, thats the price that changed everything in streaming. 6. 99, period. For 24 bucks less a year, great, i can let me tell you why youre so wrong. I get Jennifer Aniston and reese witherspoon. Hey, sunshine hes still in the demo. Sparky, get this. Here is the deal dont sunshine me and sparky me. Im sparky you, thats the lowest level imaginable. You try to lock for aprok for a icebreaker what are you watching . You know what hes watching . Hes watching narcos this is a man who has taste. Youll be blown away he was watching a netflix show interesting. Im saying he has taste what matters making the decisions about what is on oh the board didnt hire tim cook because he was a programmer or a movie studio executive. Im saying youre take meg literally. What im saying is they are watchers like us watcher like us. They love entertainment. Im saying they are not just technologists. Theyll build it over time and maybe a few years from now talking about it come on. Youre so patronizing what i mean, i want to go back on this. People say, cramer says that what im saying here, what im saying is that it is going to surprise you some things ive seen are so cool that i say to myself, you think these guys that are technologists wouldnt even think about it they are much more than that what got my attention is the watch, the face that stays dont have to do the compass, you come out of the subway, you know which way which face are you using now. Im using the sunrise one. I alternate all the time tim says you got you got the mickey mouse i change everything. If youre on the cybex it works in the pool. I dont like anything on when im swimming i think he ought to wear this one. It would hold up better. So hubertys target nearly 250. Fair has to rise the price target. She will have a better, more articulate way to explain why i believe the 4 . 99 will have interesting 4. 99, you go to the movies, have you been to the movies say again. Have you been to the movies i went last week for the first time in a long time. You went to see something diet coke is the same price as what hes paying per month the popcorn, the big popcorn and put that crummy butter on it now you got ones i got a guy who spilled a margarita on me. I went to one of those places where you eat. People are talking and theyre eating i cant hear a darn thing. The guy spills a margarita on me. This has to do with the Apple Streaming Service you go to the movies, full year of apple. Im going back on this again, im saying that the guys who run apple, if you put them were going to be able to sit here a couple of years from now and tell you, i told you. Youll have it, youll watch it youll think Jennifer Aniston is the watch has done fairly well i will admit that. Do i see you do karaoke for 4. 99, im done with you. President sending another message to the feds. This morning he tweets, we should get down to zero or less and then start to refinance our debt, interest costs could be brought way down while at the same time substantially lengthing the term the usa should always be paying the lowest rate, no inflation, only naivete of jay powell that doesnt allow us to do it. Other countries are already doing a once in a lifetime opportunity that were missing because of bone heads. Thats the word of the day today. I think he should have used sunshine or sparky i know jay i used chowder head when people confuse me with people i think dick fisher was on earlier, hes a genius negative rates, we dont want negative rates, thats a sign were not a robust economy is bone head appropriate for a fed chief who actually he appointed by the way, he appointed. That was his appointee. It was. Do you think bone head is as we well know, he tires of people quickly and in this case he cant fire him. Right. One would think given the frequency of tweets, if he could, it would have happened a long time. I think that you got a keen eye for the obvious. Keen sense for the obvious is what i made a career out of. This is just if you came home from school, and you and your mom heard that you called someone a bone head, i dont think it would go well i dont think it would go well you get that five fingers there, five days later, still see five fingers. Were seeing negative rates, back a bit in germany. Minus 53. That sounds impressive no you it does robust. Yeah. They could print money over there and put people to work it is really she is so rooted in history, it is strange. This you do believe trump is on to something and we talked a lot about it with get those rates as low as possible and issue long, longterm bonds to fund something or other he does sort of indicate that as a thats not wrong, the opportunity to reduce interest costs. Nobody is talking about borrowing money longterm and using it for something productive. I talk about a 50 year bond that we all love to make our roads great again. Nobody in government. Nobody in government. Mnuchin, secretary mnuchin will be on squawkbox. Good opportunity that is what the question is how much would you need congressional approval to do that gigantic 50 year i dont know thats something to hear. Now you have jpmorgan, dimon, saying theyre preparing for zero Interest Rates. Lowering their guide on net income. Someone posted they were looking at five yesterday. That was the best tweet of the day, carl. It just shows you, they prepare for everything or say i dont know what theyre doing. I dont know which is a better way to do it. Shows you how much can change in less than a year. Obviously ma obviously marking the anniversary of the 9 11 attacks today. Youll see military Service Personnel coming into the floor. Nypd it is a morning where were going to remember, not just victims and their families but the first responders, the servicemen and women who fought in the wars that followed, jim, you did some great work looking at the loss of infrastructure and just how long it took to build it back. 343 343 members of the new York City Fire departmentwere lost in that day and subsequently in the last 18 years since, couple more hundred have died through the 9 11 related illnesses. Not to forget that youre going to be seeing a moment of silence at the New York Stock Exchange in a few moments. And the president obviously in washington, d. C. Today, i think hell be laying a wreath in arlington, well keep an eye on shanksville, pennsylvania, as the commemorations continue from all over the country today it was at 8 46 that the north tower was nrbl linitially hit. 9 03, the south tower. And 9 37, the pentagon, followed by the collapses of the building and well mark time as we do every year amazing work being done today by politico, oral history of those who were involved. Karl rove talking about the moment he first heard about the news told then president bush initially, this is what we have, and bush looked back at him and said get more. I think that there is a room in the Museum Memorial where it has the minute before what the world was like, they show, and then a minute after and everyone has to go to this. I remember now that there is so many people who kids who were born after and they got to think this should be a National Field trip. I think that that museum is the most moving museum in they have the background of everybody. And it is just vital we all should have gone to pearl harbor bloomberg has a piece about a new documentary from a filmmaker aimed at kids who were too young to remember, how did she get the idea for the project when she heard about third graders on a play date and googling 9 11 attacks. When you do that, you get imagery not appropriate for kids there is a new wave of journalism and filmmaking aimed at helping younger people understand what you and i understand too well. I think thats great. The recreation of it, whether the phone calls and the stewardess, the unfortunate jumping that they tell people, be careful, whether it is the williams moment, talking about that is happening, we went in, friends, we came in, were going to go there for two hours and then see a show and go on high we just went home. It is just it is hard everyone must go everyone in the country. When we come back, well get the moment of silence at the big board in remembrance of 9 11 dont go away. You should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. The nyse and nasdaq about to observe a moment of silence as we remember those who lost their lives on september 11th, 2001. Youll hear the words never forget a lot today but it happens to be true. That we will never forget. Nearly 3,000 people killed, 6,000 injured, 10,000 10 billion in infrastructure damage i did a documentary about the quite stirring, amazing is something going around . Ng in. Yeah, uh, welcome to cold season. 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Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Experience the style, craftsmanship, and technology that have made the rx the leading luxury suv of all time. Lease the 2019 rx 350 for 399 a month for 36 months. Experience amazing at your lexus dealer. All right, were counting down to the opening bell 3 1 2 minutes before stocks start trading here we have time to squeeze in a mad dash. Yes, last week we had the ceo of Palo Alto Network he talked about directly going against companies that were really doing cybersecurity for the cloud. Hes going to do firewall for the on premise and that was the call to sell z scaler. Zs i like zs. It is a good company you see it is down thats because they dropped a bomb in the yeah. It is take longer for big deals to close. Tell people what they do, jim, so they can understand it there are so many clout related things people can get confused. What is one thing we dont want we dont want anyone to hack the cloud and get our stuff. Theyre effective at making sure that doesnt happen. Now, vm ware, vm ware is starting to do it. This them on last night. They talked about, were gunning for these people and what has happened is that it is working in the sense it is getting crowded. What is good for palo alto is just quite bad for what is the bomb that z scaler ropped. Hard to close, hard to close big deals. You hear that, what it says is someone is looking at z scaler versus another company and taking their time rather than just buying z scaler they guided down from what we thought they were going to do, down to zero to 1 cent to two cents basically. And what i come back is they say, wow, this is a crowded segment and cash to clear. We should also point out this underlying rotation we have been talking about, this violent move that continues it is part of this too getting swept up in that high multiple. This momentum selloff we have been referring to, this movement to value. Morgan stanley this morning says 75 done, whatever that means. Of the move is done. Of the move is done who did that . Same guys have been good. Not the research sign. Like for the yes, that whoever does that work, it is really sophisticated i agree with that. Theyre almost done. I think youre starting to see yesterday, you saw some of the stocks bounce. They have not bounced. They just have been dead cat, dead cat, dead cat how about you got downgrades of clorox and costco and upgrades of micron and alcoa. Clorox, very good piece about how clorox slowed meaningfully thatwas a very damming thing Morgan Stanley reiterates it was very rigorous piece. It made you feel like why am i still in that . Here is a quiz what stock sells at three times earnings three three micron, i dont know. Game stop game stop game stop, which cuts their sales forecast, right . 50,000 people work for them they still have a huge number of stores and what it says is theyre not losing money, but people believe that when you have 11 Comparable Store sales, somehow theyre goners, they are very susceptible to cycles waiting for a launch lets watch that to the opening bell here, s p 500 at the big board this morning, it is the fdny and nypd, representatives of the 9 11 national day of service at the nasdaq. It is tuesdays children promoting longterm healing to those directly impacted by the events on september 11th, 2001. Cantor fitzgerald did more than 300 million they t the day they raise money a lot of good things today commemoration. To raise money. Game stop, you mentioned, jim, not the only one cutting guidance dave busters, despite a beat. They talked openly, they missed, their food and beverage is down badly. Most importantly, they talk about cannibalization. People felt that dave busters could save them all. Who is going to come in for sears, dave busters. They say we have enough dave busters for now we will not sack frifice our ra of return. What people didnt want to hear is that there are could be momentarily too many there is room, but they did miss the mark on a lot of the features they had tough comparisons, they had very good games that were introduced t ed the year before. I dont know if i want to buy it here they have a buyback. I dont know if i want to buy it i dont know if i want to buy game stop either. What do you make of this this move into value, added momentum, how long i think it is drying up it is doing some crazy things with some of the pnls of some of the Asset Managers out there at this point do you keep going with it . You can start i said last night, you can start buying starbucks, down at the end of the day. On roku you have people think about apple, right now, apple stock is saying im going to be right on the 499, they have a lot of interesting programming. I know there are other people who feel the programming is suspect. I am saying that it is a 4. 99 throwaway. Okay maybe initially they dont know what theyre doing maybe they only have a few i think people are taking longterm view and looking at the present value of the street. Present value analysis okay. Present value analysis. Okay. Elizabeth warren, last night, retweeted, an exchange that david and jim and i had on this show almost 100,000 likes at this point. Take a listen. She becomes president , what do you i had is going to happen to the banks well, it is not a it would be a suboptimal situation for the banks. You think Elizabeth Warren pushes banks into theyre already down 20 from the highs. Got to tell you, you get off the desk and talk to executives, theyre more fearful of her winning. Never heard anybody say, look, shes got to be stopped. Shes got to be stopped. I dont know shes very she keeps going up in the polls. Raised a ton of money. Will win in iowa, i believe very compelling figure on the stump. By the way, i hear it too, and it is another reason why companies are being implored to do things now. If you want to get something done, m a, anything, think about doing it soon. Come early to mid2020, if Elizabeth Warren is rolling along, everybody going to be, like, thats it. Right now lets understand what i was saying, little inartful there, you when you speak to the bankers, they say she must be stopped. Whatever ive been i had go arounds with her on my show a number of times. Not a secret. No. Shes going to move to break up the banks. The pharmaceutical industry would say watch out. Rich people rich people in general. Yeah. There is going to be a lot of scare mongering too on the republican side about all of things. Sure. Who am i . Im like a im hearing and trying to say what people what they tell me. They wont let me say, hey, aim so and so, i need to stop her. But me there is bone heads. A lot of bone heads. Bone heads in twitter. Others might respond, the banks are dealing now with an administration crushing their net interest margin. Right . Yes rates doesnt help either. Laying off 600 people. Theyre the part of the rotation into low multiple stocks and out of crowd strike and into citi thats what it says. Citi, eight times earnings, goldman, nine times earnings, dj running the joint, just kidding, the guy is really smart. Everything i say is taken out of context. David, i love you, man. Thanks, chief yeah, banks not leading the charge by any means. Worth mentioning, exchanges because even though it is not on these shores, it could you never know, hong kong, exchange, making a unsolicited bid to acquire the london Stock Exchange london Stock Exchange in the bid to buy the refinitiv business. It was when reuters split up and split up the data from the news, sold refinitiv to black stone and other private equity firms black stone turned around now and selling it in a deal to the lse. Well, at if that deal closes, the london Stock Exchange becomes too large for anybody to buy it and hong kong decided to make an unsolicited bid to prevent that deal and acquire the lse the refinitiv deal had the effect of putting the lse in play if you want to call it that where is it valued 2045 pence that values the lse at 23 premium to last nights Closing Stock price. But there is a lot here that could happen politics could get in the way. Regulatory, of course. Certainly are some overlaps. But there is also in lack of interest from other buyers that we have seen in the past nasdaq has looked at it. Fin tech. Well see what happens. They say, hey, were fully committed to the refinitiv deal. The board will consider the pre posal, they say, and make further announcements in due course were committed to making and making Good Progress on our acquisition of refinitiv as they announce from the beginning of august. I wanted to ask you, speaking of deals in china, hong kong, i watched the spread has not closed on nvidia. Mellanox, still 14 . Nvidia stock continues to go up as if we saw the exceptions to the tariffs by the chinese, i remember jensen huang said this will go. You have to watch. Theyre still afraid of chinese antitrust approval, even though it was accepted for the review which you could argue is a positive doesnt mean doesnt mean the review has ended it could go on for a very long time could be held in a obey ans. People who own nvidia are acting as if they will get it. I like those situations. We have got duelling views sky work and micron, western digital. Part of the upgrade is about reductions i think in some inventory levels, right . Capacity cuts. And, look, sky works is a huge component inside of apple and i leah griffin has done a fantastic job not navigating both china, the united states. Micron, people are saying the inventories are so low the stock was at 37, 38, we had an unbelievable call made by sanjay, the ceo, saying, listening, were bottoming tim archer, a ton stock for the company, look at that. I dont need to tell you where most of the downgrades came, do i . He said looking at the screen. Well, micron, actually right up to date, im with you. Im trying to do seven other things get ready for my faber report. Im sorry, sparky over there, just really all over me today. Yes, yes. Im all over you. Do you want to touch on ge, baker hughes. I do. You had five Straight Days that the Oil Service Stocks were up and, bam, bam, he hits you right in the face like a lion punch. He knew. What timing, huh how about that they have to take a write down on it once they do sell. Theyre going to be theyre going to move below 50 , going to give up board seats and theyre on their way to monetizing most of the stake and the proceeds will be helping to pay down debt. That group is so horrendous, let it rally for a little while. Not like culp had anything to do with the deal just trying to clean it up. Slumbchlumberger started to up want to go back for a second, the momentum stocks, restoration harbor, rh, down in the premarket, fantastic quarter, the stock is going it go up nicely there is a stock i need you to know about the stock. This is the ultramimate momentum stock. Okta if you see okta turn, it is for real, and it is terrific okay. That hasnt happened yet, has it watching. What . Im watching. I know youre keeping an eye. You talked about okta a bit. It is up 2 . It is the passport protection in cyber if that can go up on the day when z scaler is down, and crud strike is down, you there is hope altera too these stocks are after and before before the downdraft and after down look at spotify. 403. They made a great acquisition. The stock dropped 70 straight points how about chipotle, people thought they too were caught up in the socalled s. E. C. Problem of disclosure. Totally wrong. Inaccurate story s. E. C. Goes back and forth on comments about the way there should be certain accounting and it was not ever an inquiry it was just a kind of informal discussion among all the restaurant chains about what should happen, chipotle down 50 points, part of the before and after. Funny, spotify is down 27 . Thats tough. Funny, listening to gurley yesterday on the halftime talk about direct listings. Re tavery tall. Very tall slack has been terrible we do have this company come public tonight, direct smile direct. Thats one of those inv invisalign you can only do so much to look great. Teeth straight use makeup thats why estee lauder has been really good. Botox, thats allergan situation. Yes we compete with invisalign. The new term, the slow fee. The slow motion selfie did you see that part . Honestly, i think there is so much we didnt really talk about that not just the what i think will be the good entertainment, but low level video, this kept multiple changes and how this the way it is able to do depth, night perception and fusion. I think were all going to be as good as, say, i dont well, maybe like major directors. You know people will be able to produce some good content, Apple Streaming Service. Stop. Im talking about citiz ingi cinematography, you know what happens next content. Yes. Looks good. Good story, though. All the cinematography in the world is not going to help im your captain. Im going to talk about Philip Morris and there i, killer content. Thats a longstanding brand there, still going after all these years. Sunshine lets talk about this deal, shall we it was, what, august 23th, so a few weeks ago, jim and i were on the set here, blind sided at the time by the announcement thats all we got. That one paragraph, couple mergers of equal, soon after we indicated in our reporting that it really is a merger of equals on social issues, but not in the economic, more lukeike a 41, 59 split given the significantly higher market cap and the fact that they were going to do and are pursuing a deal based on a note premium and the view of the stock price. These guys have been in a tough position because it leaked they put the paragraph out that misled people in terms of thinking it was a 50 50 moe and havent had a chance to tell their story. They still dont what i can tell you right now is they continue to make progress towards a transaction, towards a deal, the Economic Issues having been largely dealt with, social issues, of course, are still being talked about but because the deal is not necessarily focused on synergy, shouldnt be that difficult. You can give up a ahead quarters and say, well base the headquarters, here or there, there is a decent amount of room, for example, im told, by people familiar with the situation. The key here is we may see deal in the near term not this week, but fairly soon, im told, and progress continues to be made it is important to point out that progress continues to be made, though in the face of what would have been a number o and said we dont think this is the right time and a number of shareholders who indicated they may not be particularly behind the combination. But that goes back to the idea the two companies have been unable to communicate. Why are he this doing this what i continue to hear from those able to chat about it a bit is it is really about having that window that is open right now, and being able to be a first mover when it comes to, jim, these reduced risk products now, vaping, obviously, is its own thing now. Philip Morris International has the icos product, a heat not burn product been approved. And they want to be here in the u. S. Because the fda is still the stamp of approval. Gives you the road map to take things worldwide and they want to be able to innovate around what they think is the first wave of these products as they watch their business go away for tobacco and so if and when it seems to be likely they do announce this deal, youre going to hear a lot more about r d spending, enknow vacation, the window is now, we got to get to market with these kinds of products that are going to be our future and that while synergies are going to be helpful here, it is going to be about that 70 overlap in the Shareholder Base of these tw what is fascinating is the market cap combined is less than it was when it was announced you feel like somebody will benefit and somebody will lose, if you got 70 overlap, why are shareholders opposed why will they be if and when they continue to be opposed. The architect of the breakup, just to give him his due, at its peak, this was the greatest Value Creation in history. You put different pieces together, better than apple. It is at the time, but its time has come and gone i cant be as optimistic as they are about the prospects. I think that these are wasting assets do you think their Shareholder Bases appreciate the fact that perhaps management understands where their there is the way you have to go. Management understands and tells a good story im not being facetious. Good story of what has to happen at the same time, look, it is a new generation of fund managers. Im going to ever lane today, they dont use any plastic this new generation is not waiting for the fda to bless or not bless. New generation is shutting down companies they think are bad actors had they announce it, they will be having to focus on making their story understood and being transparent about it and trying to get people to buy in it is going to need a shareholder vote on both sides regardless, that shareholder vote will be important given the opposition we heard already in this period where there is a vacuum, youre not hearing it all from two companies remember they split up, Philip Morris was supposed to be the growth vehicle and altria would be the income vehicle. One of the things that really shows you that where we both of them are income vehicles and both have no growth. People overseas are still starting yes your documentary on juul was frankly the beginning of what people started realizing what is going on you said it was much more than just kids. You had that one presentation, also the british, the british are okay with it, but i watch the juul thing and i just said, thats it. I watch your documentary, thats it im going against these guys you made your point very clear. Im going against them. Piper downgraded m because of the cloud of uncertainty. They said that very thing any interest in a deal without a premium could suggest more stress on the underlying fundamentals and management outlook for the future than we had anticipated or appreciated, said piper potential earnings from juul may be underappreciated. Should be a prescription if you want to buy juul thats where were going your documentary was fabulous. A Little Movement here on price. Dow up 75. To bob pisani. Yield is up thats what its all about yield up market from negative to positive here and the question is that rotation story so a little bit flattish, maybe on the Positive Side for energy industrials, banks thats whats been moving recently thats that that value trade utilities and reits,e ive secto ral rallying banks up since the end of last week this is when the yield started moving up, transports and energy what we call the defensive names that are out there the consumer staple names and utilities and the Real Estate Investment trusts. Put up the next full screen, you see have been down since wednesdays close there. There is the move here thats what were looking for. We call this the value trade overall here as far as what else is going on, nice to see some rotation, nice to see small caps moving russell 2000 up 2. 5 this week s p is essentially flat on the week can it keep going . I dont know it depends on the weeg can it keep going . I dont know depends what happens with the trade talks. Weve got positive momentum. Weve got although volatility. Weve got high levels of pessimism. Internally, these are positive for the stock market overall david was referencing some of the ipos yes, weve had a few big receipt ipos that have been down on disappointing earning numbers, but weve got smile direct that will be pricing tonight on the nasdaq teeth straightening. Talking about an 8 billion ipo. Were going to have cloud fair pricing thursday that will trade friday Website Security these look in very good shape. The ipo market is continuing to open up and do well. David mentioned bit for the Hong Kong Exchange by london. There are interesting geopolitical inspirations going on they have limited the inbound trading so hong kong has to lock elsewhere for business if Something Like this happened they would be the third Biggest Exchange in the world. They would be the big rival to the u. S. Exchange for global listings and yes, theoretically the Hong Kong Exchange is independent of beijing, lets not kid ourselves. We all know whats really going on here. Obviously the beijing authorities blessed at least this bid being made, so china has already said they want to be a big Global Player in the equity business. This is the big back doorway the probability of this happen suggest fairly low, but very important geopolitical implications on the day were remembering 9 11 victims, lets remember this is also about renewal downtown, that big beautiful World Trade Center down here its a completely different place than it was 18 years ago lots of new buildings. Lots of new people coming down here this is where we live down here downtown and its just a wonderful place to live and work as we remember those victims of 9 11 of course, one of the big draws, that beautiful 9 11 memorial guys, back to you. Well, said, bob thank you. Lets get to Rick Santelli having gotten Inflation Numbers this week. Hey, rick. Indeed they were a bit warmer than expected. Will that leader to hotter cpi well see tomorrow morning we continue to move higher of course were sitting basically on change in a two year but unchange in a two year. Theres been a lot of basis points you can see clearly at 8 30 eastern we put in the bottom and rates moved up we gave a bit back we briefly touched 1 3 4 30 year bonds, i think that part of the curve has been the best gauge of the direction of rates and the fact that we are taking back a big chunk of the drop in august look at august 1st of 30 year bonds and realize that the lowest close, not even talking intraday was a bit under 195 weve covered a lot of ground hovering at 222. Finally the dollar index september 3rd is when we made our high close for the dollar index going back to may of 2017. We have done a real u turn this morning. Were up a third of a percent. Kr carl, david and jim back to you and i hope you can watch us at 10 40 when we talk to John Claude Trichet. Well see you in a little while. Dow is up 43 points being led pie apple and cisco this morning. If you havent heard by now, were a podcast. You can listen to us, the opening bell hour of squawk on the street as cnbc. Com podcast or wherever you listen to them were back in a minute this is the age of expression. Everyone has something to say. But in a world full of talking, shouldnt somebody be listening . So. Lets talk. We are edward jones. With one Financial Advisor per office, were built for hearing whats important to you. One to one. Edward jones. Its time for investing to feel individual. They give us excellent customer otservice, every time. E. Our 18 year old was in an accident. Usaa took care of her car rental, and getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. You spend days researching bed sheets. And weeks picking a dog bed. So why would you settle for just any bank . Just do what you do with everything else. Ask the internet ask your friends. Ask your co workers. Were pretty sure theyll send you over to us. Because were not just a bank. Were an ally. Ally, this is pamela how can i help you . Jim, whats on mad tonight techs have been destroyed ive got the best after what i think has been an amazing prep. Thats a tease. Yes, it is. Well see you tonight, jim. When we come back, well talk all things apple leading the dow right now with Katie Huberty of Morgan Stanley in a moment through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Classical Music playing throughout welcome back to squawk on the street. We have some breaking news post sale inventories and trade on our inventories number is a final read up. 2 of 1 pretty much as expected because the up. 2 in the Rearview Mirror was our mid month read that gets tossed and remains unchanged. On the sales side up. 3. Now, one could say this is a bit disappointing, but i would say we break the streak of three negative Sales Numbers in a row that were march, april and excuse me, april, may and june this is up. 3. We want to Pay Attention to the effects on gdp back to you. Rick santelli, good wednesday morning, everyone. Welcome back to squawk on the street. Got a brief spike here on the dow. Got about 70 points to the upside but currently selling off just a touch s p 2982. The president taking to twitter again calling for lower rates. What this means for investor. Plus apples streaming price tags how the announcement might impact its competitors. And peloton gearing up for a road show. Well big through the details. The president once again attacking the fed on twitter this morning saying, quote the Federal Reserve should get our Interest Rates down to zero or less and we should then start to refinance our debt Interest Rates could be brought down by lengthening the term more interesting in the past few moments are the headlines out of dow jones citing sources that the white house is set to hold a meeting today to discuss indexing Capital Gains taxes to inflation, mulling Capital Gains tax cut. Will also focus on broader proposals to cut taxes maybe thats why we saw a brief surge. Always unclear to know exactly what hope if any there is for getting anything like that together legislatively. Hard to imagine. But the president also i thought, carl, had ruled out at one point this idea of index in terms of Capital Gains saying perhaps it would not be well thought of i guess maybe theyre rethinking it. Energy best performing sector in the s p again today crude moving higher again despite selling off slightly yesterday after the news of bolton leaving the white house tech stocks rallying as well on the heels of apple, Communication Services big theme in the market overall this week has been this idea of a rotation, a rotation into value, added growth. It looks like maybe some of those trends at least for today are taking pause nonetheless all the major averages are higher right now. As we discussed with kramer, some of that showing up on research this morning, downgrade at costco over at oppenheimer, cuts to market perform just a shade above where it is right now. One of the high fliers on trade over the past few months apple is the other big story the company debuting iphone 11, stealing the show with the pricing, but will that move the needle for investors in joining us for the outlook after the event, Morgan Stanley head, katy huber te hub huberty. Good to be here thanks for having me. Fascinating note out of you, you look for 247 you say yesterday was compelling in part because expectations were a bit muted thats right. Expectations were low into the event. Its also important to realize that iphone replacement cycles have lengthened from two years to four years and what that sets up for is an install base primed for upgrades there were a number of surprises yesterday. The entry price point for i fipe 11 and older Iphone Models are affordable apple is bundling tv plus which is a 60 value with the purchase of new devices the improvement in battery life and camera functionality are important to driving upgrades because this is what consumers say matter to them when they think about replacing their smartphone so you think this is people have been looking for a bridge, so to speak, between where we are now and whatever 5g is going to deliver in a year. You think this is it we believe this is it we see iphone growth continuing to improve off the march lows. We see Services Growth already accelerating we published on that left week that App Store Growth is surpassing our expectations this quarter. Thats before any of the new services that were announced in march come into the model. We also believe that the multiple will expand ahead of 5g that happened ahead of the iphone 6 and ahead of iphone x as services mix continue to grow and as investors start thinking about the fact that apple is yielding 9 between dividends and buybacks which becomes more compelling in a low Interest Rate environment. I think expectations ahead of yesterdays event were low and apple overdelivered relative to those. A lot of information, a lot of details, a lot of headlines. Was there anything that disappointed you or that you wanted to see more of . I think some investors wanted to see more features out of perhaps the watch and some of the other products, but you have to remember this time of the year apple is replenishing or refreshing many of their products they have to pick and choose where to focus we think they focus their efforts in the right places. As you know, iphone revenues have been declining whereas wearables revenue has been growing very fast, over 50 last quarter. So focusing the upgrade on the iphone around features and price points and bundling was the right strategy in our view im curious about china which remains an important market for apple. The lack of a 5g phone and the fact that their competitors have one in that market and that china is moving very aggressively to implement 5g, does that pose a problem for apple in the coming year its a good question. 5g networks needto be built ou before consumers can see the benefit. We believe that apples launch of 5g will align with the time when the Network Capability is in place weve actually been very surprised by the strength of apples business in china. The improvement in app store that we talked about last week, part of that is coming from china. The apple data out of the china government in the month of july improved materially. We also continue to see apple taking share of the active stall base of phones in china. The data is moving in the right direction whereas many investors and ourselves were concerned that the trade dialogue would start to impact demand thats just not happening in china. Youve written and it was a while ago now that you wrote that wearables and services would account for most, ifnot all, of the growth going forward. How low can iphone get as a percentage of overall sales before it gets worrisome sure. So iphone is, you know, used to be closer north of 60 of the business its now closer to 50 of the business at the same time, look at gross Profit Services back in 2012 accounted for about 9 of gross profits. Its now 30 we believe it will become close to 50 of gross profits over the next year. So that evolution in the drivers of growth and the drivers of profit is in play at apple during that evolution, weve already seen four points of pe multiple expansion and we believe there will be another roughly 3 points of multiple expansion the next year. As that evolution continues, as investors anticipate the 5g cycle and as apple starts to attract new investors on the back of that 9 yield i talked about. How should we think about pricing here obviously a lot of attention on the fact that this new iphone 11 is priced about 50 lower than its predecessor and you saw cuts on previous models as well given the fact were seeing this strong dollar, especially relative to so many currencies around the world right now, how do the price cuts play out in other markets and what does that mean for demand . The good news is that apple showed a willingness to be flexible on price. If you remember apple lowered the price of the xr in china in january and followed that up with price cuts on other products in the month of march earlier this year. So we expect the company to continue to monitor currency and adjust pricing where it makes sense. And this replacement cycle that you began talking about, just take us back to that in terms of are you looking for that to shorten again or youre simply saying that as a result of it lengthening the time is now in terms of upgrades for people who already have been waiting . Id make two points one, the pc market, you know, again, is about a four year replacement cycle. And as that cycle peaked, the pc market returned to growth, even though its viewed as very much of a mature market we expect that to happen in smartphones as well. The second is if you look at my model and street models, there is no schihrinking of the replacement cycle and thats where the upside in the model will likely come over the next couple of years. Finally, katy, on the card for those who are looking for granularity, do they deserve to be frustrated, or is it just too new . I think its too new. One point id make on the apple card is it can really start to drive traffic from Apple Partners back to apple stores and online thats important because apple pays the channel we think about a 7 margin not only can it drive incremental Services Growth, but it can help drive a higher margin on products because the mix is shifting back to apple direct through stores and online katy, its great to have you. Really important for our viewers, especially after a day like yesterday thanks very much. Glad to be here thank you. When we come back, quote, boneheads at the fed trump attacking the central bank yet again with the dow with six Straight Days of gains well speak with a long time tlk. Et bull on his market plus peleton is looking toward its market debut fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. I need all the breaks as athat i can get. Or, from the day youre born at liberty butchemel. Cut. Liberty mu. Line . Cut. Liberty mutual customizes your Car Insurance so you only pay for what you need. Cut. Liberty m. Am i allowed to riff . What if i come out of the water . Liberty biberty. Cut. Well dub it. Liberty mutual customizes your Car Insurance so you only pay for what you need. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back to squawk on the street. Quote, boneheads at the fed. President trump once again taking to twitter to attack fed chair powell and the central bank this morning and calling to cut Interest Rates to zero or less joining us with what all of this means former fed economist, ed yardeni, also Michael Purvis good morning to you both ill start with you. What does it mean for the markets when you see comments like this from trump you mean whether powells blocked trump on his twitter feed this call for zero rates or even less. I think powell is going to do his best to ignore all that. Hes said that publicly and he has to i think the question really gets down to the gulf between what the rates market is telling us its still very wide it got a little close the last couple weeks whats going to happen next week after the fomc is volatility one way or the other, whether it drives more sector rotation or whether it drives gas downward is to be seen here i think its, you know, whether powell is going to my expectation is it will give us 25 with a less dovish message than a lot of people think it will the data is not supporting a lot of cuts. The index for inflation and the economy in the u. S. Has been moving steadily higher for three months state. Ed, do you agree with that . Absolutely. I think thats right the question is doing quite fine for the Payroll Employment number seemed a little bit weak, but i think every other indicator for the labor market shows that the theres plenty of jobs. As a matter of fact, more and more businesses are saying they just cant find people to hire theres actually a labor shortage out there and all in all the economy is continuing to grow around 2 , which is what its been doing since about 2010 so i dont really see much of a need for more than 25 basis points at this next meeting. And then a long pause would probably be in order and im looking at this note from you from last week from fomo, fear of missing out, fear of negative Interest Rates i just loss you. Your note from last week. I just lost you. Can you hear me okay michael, taking a look at the markets right now, dow is up 23 points were basically hugging the flat line one of the big focuses has been this idea of rotation or value if you look at the correlations of the russell 2,000 versus the ten year yield or look at tech versus financials, that equity pair relative to the 10 year yield, that pair ratio is all the exact same trade its basically right now at trade, not necessarily longer term thesis on rates going higher rates got so low so aggressively when you step back, you look at the risk assets, sbx up 15 year to date. Within that rally, theres been massive polarization utilities been to record levels. Banks been to record levels. The other way. The backdrop of course is this massive contraction in rates if rates are going to be going the other way, the unwind is very powerful. Even if youre a longer term investor, you have to take stock of that. Ed, i think we have you back now. I want to get your thoughts on this fear of negative Interest Rates and why thats bullish for thoughts. People have been arguing whats driving the market up is tina, there is no alternative, or fomo, fear of missing out recently it seems to be fonir which is fear of negative Interest Rates and maybe the president s comment today will only heighten that investors dont like negative Interest Rates its basically a tax on wealth and so i think the closer that Interest Rates get to zero in the u. S. , the more theres a concern that were about to do what the europeans and the japanese have been doing which is having negative Interest Rates even in the bond market. And negative Interest Rates just dont work they havent worked in japan they havent worked in europe. The president s right. The negative Interest Rates would certainly be a wonderful way to refinance a lot of debt but if we want to keep the economy growing, i think negative Interest Rates create a very negative karma for both industrial and Business People what do you mean by negative karma . Be a little more specific in terms of what they actually do. Well, for one thing, its not great for the Financial System and the ecb may actually go still further negative and is considering creating some methods, procedures to offset that negative impact for banks but i think it just creates a perception that the economy will be in bad shape if weve got negative Interest Rates. It suggests that productive is nonexistent and that there arent really any good opportunities to invest in the private economy given that youve got negative Interest Rates in the financial economy thanks for joining us today thank you. Still to come, former president john claude tric herks trichet. Squawk on the street continues after a break. 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[spokesman] finish your degree at snhu. Edu it is time now for our etf spotlight. Were going to get a check on the transports its hovering around the flat line this morning, but the broader sector coming off fourth positive session in five dow transports overall up about 5. 5 in a week that averages outpacing the dow industrials year to date keep in mind over the past year its still down more than 7 looking at the data, part of the reason weve seen this ral ne recent sessions has been maybe some of the data has been not quite as bad as expected people have seen the trade headlines playing out. Take a look at asia pacific. There is still weakness there. I want to show you guys this chart. Volumes out of kong hong fell 11. 9 . Some may be protest. Volumes out of shanghai fell 11. 6 . The way they break this down, one of the protest indicators of overall Asian Pacific volumes is so what does it mean air freight 1 of the tangible goods that flow through the economy but more than 15 of the value of tangible goods flow think things like semiconductors, tech, engineering, some of these high value parts of the economy so what this is suggesting right here, maybe there is more weakness than some of the state data is suggesting coming out of china. What does that mean for tech what does that mean for trade flows between china and the rest of the world including u. S. And what does it mean for fedex . Data point to keep in mind. The fda is evaluating the first potential peanut allergy drug meg joins us now with more on that david, while shares are on the rice after the fda released briefing documents on the companys treatment for peanut allergy ahead of a Committee Meeting on friday. The documents provide a glimpse into how they view an experimental treatment and is in line with what investors have been expecting no negative surprises. The fda appears supportive of the all the patients in the study started by not being able to tolerate even a third of a peanut but there are side effects and thats where the fd as focus may be when the Committee Meets friday they have to doo wi with how it works. Its peanut protein given to patients over Time Starting with a tiny amount. Side effects have to do with allergic reactions the vote friday will be a big vote this is the companys first product of a pipeline of similar treatments for different kinds of allergy given the severity of peanut allergies, analysts project it could drop more than a billion dollars in annual sales. Back to you. How big is the potential market here for a peanut allerg drug ive got a toddler in school its a big issue when it comes to the classroom and how kids are getting lunch. I would imagine there is potentially a big opportunity here. Absolutely. There are estimates that maybe 2. 5 of u. S. Children are even more might have peanut allergy and it really depends on how parents want to treat it or if they want to treat it. Avoiding peanuts is what they are supposed to do now and some may choose to continue doing that for parents who want to try to give their kids extra protection, they could pursue this it isnt so their kids can eat peanut butter. Its to make sure theyre protected if they come across it accidentally in the environment. One to watch. Thank you. When we return, apples streaming play with their big rvnouncement mean fist the other seices well discuss when extracurriculsquawk on the street returns. Stay with us what do you look for when you trade . I want free access to research. Yep, td ameritrades got that. Free access to every platform. Yeah, that too. I dont want any trade minimums. Yeah, i totally agree, they dont have any of those. I want to know what im paying upfront. Yes, absolutely. Do you just say yes to everything . Hm. Well i say no to kale. Mm. Yeah, they say if you blanch it its better, but that seems like a lot of work. No hidden fees. No platform fees. No trade minimums. And yes, its all at one low price. Td ameritrade. Welcome back and good morning, everyone. Heres your c nbc news update at this hours the president and first lady led a moment of silence at the white house this morning marking the 18th anniversary of the september 11th attacks they were joined by dozens of members of the executive branch. Scotlands highest Civil Court Ruling Boris Johnsons Parliament Suspension unlawful next tuesday a Uk Supreme Court will rule definitively if that suspension is illegal or not a tornado struck sioux falls, south dakota overnight. Almost 40 buildings suffered significant damage and thousands of households and businesses lost power the tornado reached speeds of up to 100 Miles Per Hour but no fatalities or serious injuries as of this morning and the final election of 2018 was decided last night when republican dan bishop mccreedy narrowly defeated in North Carolina that keeps the number of seats at 18 for the republicans to flip the house in 2020 you are up to date thats the news update ill send it back downtown to you. Apple has been a big story all morning long undercutting netflix and disney with this 4. 99 for apple tv plus. What does this mean for the streaming companies at large good morning, carl. Apple tv plus 5 a month price tag is half of what some analysts predicted and it may be a reasonable price considering its launching with nine exclusive shows and its rivals have more content. That news of price tag sending the others plummeting. Ro roku losing 9 , disney down 2 apple pricing is lower than all the streaming giants including disney plus at 7 and netflix whose most popular offering comes in at 12. 99 a month will it get consumers to drop rival services or whether apple tv plus is different enough that at this low price point consumers will not feel they have to choose and will tack on an Additional Service . Jp morgan writing, quote, we believe the Monthly Subscription to be quite attractive, a positive catalyst for adoption even as apple scales up the original content over time to compete headtohead with netflix, prime video and disney among others netflix is protected, quote, we believe netflixs tenure head start scale sis unlikely to be dented by apple tv and its worth noting that rokus move lower is an overreaction noting apple tv could end up driving rokus viewership because that tv plus app will be offered on the roku tv platform. Carl, back to you. So julia, david and jim and all of us have been debating this now what 4. 99 means in the past its been 15 because of a show like this is like an option on a show you might like that might come along, right i guess thats fair you think about what you pay for hbo and maybe you only watch a handful of shows putting this up there on that board with netflix, hulu, amazon, disney plus, its not even in the same league. Youre being kind. Light content, no library. Im sure over time theyre going to be spending a lot of money to maybe be somewhat in the ballpark, but you cant consider them a real competitor right now, can you well, look, its a very different type of service. Theyre launching with nine shows, but what apple would say and what tim cook has said is they consider this all premium content. They want each of these shows to have the draw of say game of thrones or a show like that. So they would argue that each show is so spectacular that it will drive people to sign up and they have a little bit of something for everyone the kids content, oprah content, et cetera. You are right, it is a totally different category and i think that the speculation among analysts that this could be 10 a month was really an extremely high price point for this much content content. 5 a month is still charging something. Apple could have decided to bundle this in for a couple dollars extra a month with an apple music. The fact they are deciding to charge 5 a month is signaling they believe this is worth something. They believe its worth paying an additional amount for separately and theyre not going to throw it in free or close to free with apple music. It gives them a lot of room to raise prices if they increase the content. Thank you. Peloton is gearing up for the big ipo road show looking to raise 1. 2 billion resly has been following that in addition to other potential ipos she joins us now. In the throws of ipos were standing outside of Goldman Sachs which is pelotons lead ipo underwriter under way right now abou halfway through the executives of peloton are meeting with Goldman Sachs, the sales team, to learn really how to pitch this deal to investors as you mentioned, they have 1. 2 billion worth of stock to sell to investors. This effectively kicks off their road show process where they will spend the next two weeks to meet up with investors to pitch the deal they set a price range last night that values the company around 8 billion. According to the presentation that they posted this morning, theyre going to really focus their Marketing Efforts on five key areas for them number one, scaling their subscribers base they have about 511,000 subscribers to scale over time they tout their Strong Revenue growth doubling year over year, their low churn and the stickiness of their product, what they call addictive fitness. Strong unit economics. Also they say over the long term they can be profitable its important to note that comcast, the parent of cnbc, is an investor in peloton also as one road show begins, another one ends smile direct club set to price its ipo today after the market closes that one, too, raising upwards of a billion dollars according to the range theyve been marketing to investors and some analyst notes out indicate that Investor Sentiment surrounding this has been very positive and could likely price at the high end of the range leslie, hearing similar things you never know, of course, but hearing similar things in terms of the appetite. It can always change. Yeah, it can. Stay with us we want to bring in harness wealth ceo david joining us here onset. Youre in the business of advising and helping employees of companies that go public in terms of how they should understand the progress and what to do with new found wealth. Thats right. Exactly. I think the spectrum of these two ipos in comparison, we work shows its important if equity is a big part of your conversation and to understand the nuances of what that means, preferences on top of you and not just bank on the highest private market valuation as the end all and be all of what that equity can mean for you. How does it figure into the psychology of senior employees, how they do their job, how they think about their future its huge both the before and the after, i spoke with cfo who took his Company Public a few kweeyears. He gathered all the employees together and said i can almost guarantee in the 12 months after the ipo the stocks havent moved 50 , im just not sure which direction. Were strong believers over time it will be really valuable, but its a big shift from once every two years getting a new valuation that tends to only one g in one direction if the company goes well to being a public stock traded by the second. We focus so much on the success of ipos and names like uber and lyft come to mind, both of those trading well below their ipo price still today. But when you see Something Like that play out, hugh does it affect employee morale does it . It certainly does even with uber, it hasnt quite hit the six month lockup which is typical for employees to actually be able to sell to former employees people are watching it very, very closely and it factors into the San Francisco Real Estate Market and whether someone is going to move from an apartment to a house its a big factor and one that ultimately the average employee, even the senior one have a huge amount of control over. Do we have a lot of viewers that work for startups, dream about having a day like this come look in their own lives what are the mistakes people make when they come into this much money there are a few pieces. One is just early on making sure that youre getting the right advice i missed things i should have done with early compass where i was an executive figuring out, you know, does the stock qualify for the qualified Small Business program where you could have tax free gains. Is it worth early exercising to lock in long term Capital Gains. How if you are a senior level executive you think about selling ways that arent going to spook the market. All really important considerations. Do they tend to want to live large right away, or are they smart enough having gotten where they to be conservative in their initial spending trend it tends to be outside of instances where theres a one year instagram huge success story. I mean, its taken a lot of work, a lot of years, even once its public, theres that six month lock up, a structured ability to sell over time. Typically those who made that wealth over a period appreciate it. Whats the advice, for example, uber lockup stocks come well below where it was listed do you tell people to make an Investment Decision or should they sell if theyre an insider . You have to take a portfolio sort of in toll ttality if 99 is in one stock, even if its not where you want to sell, its probably worth taking money off the table. In the same way people shouldnt pull out of the market completely if theyre pullbacks or shouldnt invest everything at one moment in time, similar psychology with a single stock concentration. Leslie, it seems like another day, another ip otha you are covering as this pipeline continues to progress here one of the things youve noted today is that smile direct and peloton are within the biggest six ipos of 2019 so far. Theyre focused on the possibility of we work as well in terms of whats in the pipeline to go public, what are the biggest names investors need to keep an eye on and is there any sense that given the statement of the market that theres a rush to get them out there . Its a good question, morgan, because i would say people im speaking with say that september really the biggest month so far for the rest of the 2019 for Companies Going public i dont think we will see anything that necessarily surpasses the sizes of those deals that are currently either undergoing road shows, finishing road shows, or debating whether to embark on a road show but that said, i have heard also that some of the companies that weve talked about as being potential ipos are also in discussions with regard to m and a. It could be a situation where companies that are thinking about going public may want to pursue an acquisition perhaps with some of the companies that have gone public also the market continues to be attractive and if you dont have to deal with some of the overhang of being a Public Company and watching that stock price fluctuate up and down and what that means for employee morale, some Companies Opt not to do so. I do want to reiterate my reporting from yesterday which remains same on the we company which they are landing on that public offering. We maasai some governance changes by the company weve been hearing that. Thats Something Else they would do the key question will be whats the price. Road show again could begin very soon what do you do if youre at the we company and you watch valuation go from 47 billion to lets be generous here, 18 to 20 billion . Does thataffect sort of how youre thinking about doing your job . Hopefully at the end of the day the people there believe in the long term vision that adams outlined and theres upside to it i think the scarier part is 10 billion of soft bank capital, Additional Capital on top of that i dont know for sure. I assume there is a liquidation preference that sits in all that capital. What value you really own is actually getting compressed more than just the stock price if you were a Public Market investor. So youre paying attention, but the best you can hope for is that over the long term if you continue to grow and be a dominant player in that category that the value will come. Yeah. David, appreciate it thank you for taking some time leslie, thank you for all your reporting. When we come back, former ecb chief John Claude Trichet on the economy. We remain in a tight range dow is up 38 points. Were back after a break Classical Music playing throughout 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. The Energy Sector getting energized and there could be one under the radar way to play the ndutoronrally. Fi o me trading nation. More squawk on the street coming up. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Welcome back lets send it over to the cme group in chicago and Rick Santelli with a special edition. Yes, thank you. Id like to welcome my guests former ecb president John Claude Trichet. There is about a three second delay. Thank you for joining me 17 trillion of negative Interest Rates, corporate securities joining that sub zero fray my question is easy. Should marios bazooka be fired again . Has it missed the target and how should they deal with the ha handoff considering a slowing economy, maybe a germany recession and the frayed infractions affecting the globe . Well, first of all, youre right. We are experiencing exceptional times. The amount of debt standing that is in negative rates is gigantic and it is not only in europe it is also in japan as we know in europe its not only the ecb but also quite a lot of other countries like switzerland, sweden and so forth. I will not say what the Ecb Governing Council should do or not from now on. I would only say that i trust they will do exactly what is appropriate in the circumstances and the circumstances are very special in practically all advanced economy because you have a level of inflation which is very abnormal in comparison with the previous evaluation even in the countries that are experienced full employment, including the u. S. Doesnt seem to function as it did in the past and that creates the real problem for the Central Banks. It also proves that the Central Banks should not be the only game in town and that is my second question they cant be the only game in town were seeing that in real time there has to be more fiscal stimulus its been hinted at in germany my last question is a simple one. If we dont see some response to negative rates, how are we going to purge them . How are we going to have an exit should the globe go into a prolonged recession . First of all, i trust that the present situation is not assisting anybody in the long run. I in more normal times. Its a question of time, of course second, i also trust that there is not only the governments and the parliaments to step in with Structural Reforms on the one hand and fiscal action on the other hand, you have also the social partners. One of the major problem we have is tha increases plus productivity progress delivering something which is much too meager, much too small in terms of growth, and that, of course, is the problem of inflation so as you see, when i see all the partners step in, it means all of the partner, including the private sector and the social partners. I guess my final question with the last very small amount of time we have left, is if negative rates and all the stimulus and quantitative easing hasnt really addressed productivity or raised prices, then obviously a new strategy is needed any ideas what that may be along with the fiscal stimulus that may be needed . First of all, its always very difficult to devise the counterfactual when one says the action of the central bank did nothing, you have to compare with what would have happened had they not stepped in and i take it that what they have done was really necessity and helped considerably to avoid materialization of a deflationary risk that would have been a real catastrophe so as you see, im not that excellent. Excellent. I expect that the other partners would step in mr. Trichet, thank you for your opinions. Its going to be very interesting to see how mario draghi does tomorrow thank you for your time. David faber, back to you. Mr. Santelli, thank you weve been watching the California Legislature closely and its attempts to regulate the gig economy. Uber and lyft caught up in that. Lets get to deirdre bosa who has more on new developments this morning. David, take a look at what theyre doing in markets uber and lyft shares are climbing higher after California Governor Gavin Newsom told the journal that he still hopes to reach a deal with them over the socalled gig economy bill he said in an interview as it relates to uber, lyft, these remain an ongoing discussion and is committed to continuing those negotiations this bill could change the way that Ridesharing Companies classify their workers, requiring them to treat them as employees, leading to higher costs for companies, riders, potential legislation in other states but it underlines the fact this is far from a done deal. Well be watching closely and know youll bring usthe latest thank you. Lets send it over to jon fortt. Were going to keep talking about 85, among other things the head of the new york taxi and limousine commission, well talk about if there is a carveout, what that could look like if theres not, what it means for the gig economy workers, not just uber and lyft, but door dash and all kinds of deliveries thats coming up on squawk alley. Great riches will find you when Liberty Mutual customizes your Car Insurance, so you only pay for what you need. Wow. Thanks, zoltar. How can i ever repay you . Maybe you could free zoltar . Thanks, lady. Taxi only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back to squawk on the street. Im dominic chu. Nearly all sectors of the s p are in positive territory today, save financials and real estate. Energy, though, the standout upside performer the move also comes, and it makes it the farthest and furthest away, far and away the bestperforming sector so far in september. The big gains are being driven by upside in oil prices, youve got noble energy, marathon oil, apache, hess, all among the leaders in that sector so far. Even with the gains today, though, energy still the second worstperforming sector in 2019, just up about 6 or so in that time frame so energy a big daytoday, a lot of ground to make up. Ill send it back downtown to you at the Stock Exchange. Back over to you, carl. When we come back, well hear from goldmans rod hall, get his takeaways from the apple event having also already to katie huber tee. Dow is up 51 squawk alley starts next i wanna keep doing what i love, thats the retirement plan. With my annuity, i know there is a guarantee. Its for my family, its for my self, its for my future. Annuities can provide protected income for life. Learn more at retire your risk dot org. Good morning it is 8 00 a. M. Atapple headquarters in cupertino, california, 11 00 a. M. On wall street, and squawk alley is live