Transcripts For CNBC Squawk On The Street 20240714

About their role there seems to be some debate about this good morning, welcome to squawk in the street im carl cantonia. At the cnbc, they are delivering at the conference in new york city that was sec jay clayton as you saw. Moments from now, kobe bryant, the basketball legend quickly becoming an investing legend we will talk money in sports, futures in a tirade full of economic data. Of course, delivering alpha. The big story today, a number of heavy hitters at the investors summit a pretty good discussion about the nature of our Capital Markets these days yeah, i mean, look, one of the things we are all trying to figure out is in relation whats going on with the fed, whats going on with business as a force of change. Thats something that andrew is bringing up. Bring up at the Business Roundtable which is very interesting. Its a month or so already right things have Securities Exchange commissioned. Im curious to hear what mr. Claytop had to say. Thats what people buzz with me to figure out i dare to say this nonearnings, the term im using is greenwash how much is greenwash and how much is actual green what can ceos get away with in order to not hurt earnings and still fulfill the role of a modern ceo i think its fascinating its what people get to when they go to a place like this. Carl, the changing face of capitalism we talked about a lot on the show or in terms of whether its happening at all, frankly, and what it will mean for corporations and the responsibilities that they see and or the way they order those responsibilities shareholders values is certainly considered its pretty important. Were supposed to be talking about the quarter point. I think within you have one of these gathering, what people are trying to figure out is what do i do as a modern day ceo when my goal is not just to please my shareholders i have to please the stake holders. When i say i have to please the stake holders, there is a lot of people uncomfortable wit because they didnt grow up in a world is what they are supposed to do is make 30 Cents Per Share but making the world a better place. Making the world a better place per share is not something they are comfortable with i like that because they are all struggling if theyre struggling, maybe we can change. We will get to things per share, buybacks, at least three i count. You will have a busy morning, we are watching mike pence with ke kernon later today and you will handle proctor as well look this proctor story is kind of say mazeing. Because there was this tremendous battle and i dont know if people remember, proctor thought that try and loss and were talking about nelson peltz, nelson joins the board. There was a lot of rancor, not a lot of attacks i want to talk about when shareholder democracy works and a guy gets on a board that doesnt want it and it turns out to be okay maybe it is a blueprint for how to fight for shareholder democracy if you think its worth anything, with you i think it is. We talked a lot about the performance of the stock, of course best in show. Right and organic growth. Its somehow reappeared on the top line. Right from the day nelson peltz got in. I think p g would say we had much of those plans already in place you know that, its still a back and forth. I will be very curious to see you dont think the whole 48 entirely because of nelson coming in and talking about small is beautiful are you really and developing things that millennials like . Are you saying that none of hat has it has to do with a man that flew in and read testimony ryiot act . Im not saying some of it they had to do with things in place. They still have that age factor . I think they had too waive those things im allowed to interview these people theyve waived that. As for clayton, guys, as you heard a moment ago, Andrew Ross Sorkin talking to him about what these negative Interest Rates mean, the difference between a direct listing and an ipo. Take a quick listen. I do look at it and say what does this mean for how coming back to my job, what does this mean for how the market functions . There are a lot of functions in the marketplace that, lets put it this way, they have never they have never modelled before, negative Interest Rates. So he says he wakes up in the morning and looks for things truly mispriced. Speaking of which markets, the rate cut by the fed, the second of the year. The fed has conducted a third consecutive repo operation the rates seem to be pretty quiet this morning, jim, david, what did you make of powell yesterday . And do you agree with some assessments he was a little smoother, greg said minimizing miscommunication to maximize flexibility . Look, one thing he finally seems to realize is the whole point of the press conference is to say absolutely nothing. By the way, there were some people one of his Student Council president s from local high School Interview him did he have junior high people as he went on and on i thought he was a Kindergarten Teacher calling on everyone. You havent said anything, what about you . He has to make it figure out so there isnt a general every Single Person in the room question that is nor nixon just calling on dan rather. There really was a protracted lets see who else can ask questions . And powells got to get that under control. Hes too democratic when it comes to that. Meanwhile, we can see from the bottom of the screen, the fed had three consecutive days, he was asked about it by our own Steve Liesman or stevie you like to refer to him. Yeah. Yeah and seemed to indicate they have the situation under control. Yeah. I thought that steve asked him questions that indicated that he had nothing under control. It was kind of you want to ask what the most embarrassing moment was, i thought that steve knew more than powell did about what happened. But powell was like, okay, listen, we know more than anyone and but he didnt back it up with facts he didnt discuss specifics. No. He left them the generalities. Thats what he did the whole time is generalalitys. Lets Say Something like midcycle correction i parced everything he said, carl, it was really clear he said absolutely nothing and thats good. We all expect him to do something. We want him to be belichick. You got to do your assignment. We want him to be denny green, he se what he says he is we want him to say rate cut surface rate cuts . We cant get inflation going i feel hes become so boring hes more boring than janet yellen oh, wow. Thats cold. Then there is the president , guys, who his criticisms yesterday on twitter aside was asked on fox this morning if powells job was safe. His quote was, its safe, yeah, its safe, sure, why not thats probably the highest praise weve gotten from him in several months its safe what is this marathon man . Its not safe, its safe w what the [ bleep ] is that we dont need dustin hoffman, unless its going to be a constitutional crisis, hes safe hes safe. We would have gotten rid of him long ago if he could have. Yes, absolutely guys, when we come back, well talk money and sports, an exclusive with basketball legend cope bryant. Well talk about his latest investment venture and the opportunities in the billions that he is looking at. More from nyc and delivering alpha in a moment. See thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade three years ago, basketball legend cope bryant officially announced the launch of their partnership fund, brian joins us to discuss how the fund has grown. Thank you, carl remember i think you sat on this side last time as i recall, it was pretty memorable. What has surprised you whats impressed you since that day. We continue to grow we continue to make smart decisions, Smart Investments across the medium data space its been a heck of an opportunity. Weve had a heck of a time building our relationship with our investors. Here we are today. You got how many active in the portfolio right now . 18. 18 active. Weve had about ten exits. Its been incredibly successful. We watched the funds grow from in excess to over 2 million. Its exciting. I read somewhere of the ones that have gone public. Dell yes paba. National exhibition . Yes how many more can you build as long as there are great ceos, we will have more. Whats your assessment of the ip window right now . Its wide opened. There are exciting values. Its a matching to price we hope it holds were pretty excited in terms of what we see. In terms of characteristics of the leaders you are looking at what do you have in common well, you got to have strong entrepreneurs is looking at the people yes, its important to see those returns. Its great to have great opportunities with our investments and entrepreneurs to help them grow and put them in situations where they can be successful. What i love is you kept kobes name not out of it. It was not public for a while. We have been working toke how long now seven years . The point its not about us. Its about the teams that are being built. The entrepreneurs, the companies. We want to do our part and help where we can we want to be behind and helping people. Also, to attach a name to it immediately comes with a certain stigma its important we lay the groundwork early this way you establish validity and credibility within the industry, its very important. What does euro lo decks bring in i read you bring in seth curry, others in this space i imagine what im trying to do is simply help athletes grow and grow their value for us as athletes, its difficult you retire, you step away from the game because its been such a liquid business for us, how do you build value postretirement, postcareer . What do you do im trying to give opportunities to some of these other guys and viceversa is that a significant part of your client base is athletes or how much different does that drive the vision of the fund look both athletes and tremendouspreneurs people assume you are good at everything its not necessarily true. So whether you are building a sports franchise or a business, it doesnt mean you know how and where to invest your money we want to make sure we are giving back to the communities that are so great to us. The one thing, so Many Companies in sports are having to make political decisions. Do you side with kaepernick or do you not sure. How does that complicate decisions you have to make and why has nike been pretty decisive on this one it doesnt. Nikes vision is a simple one, ever since phil knight started the company, the answer is to listen to the athlete. Nikes core value is the athlete, itself. You have to stand by what the athlete believes in. This is what you support so it doesnt commission things at all you got to theic to things that you know is right. Jim congratulation on your success. Gentleman. Kobe, you seem to have gone wired to what i think is the most successful area of business right now which is gaming. Fortnite do you see a nation that will have gaming power parlors everywhere, where kids are going to be trying to get ncaa scholarships for something that will be our National Past time im having a hard time hearing him. Yeah, i think i caught jims question look, gaming is critically important to i think the cultural ecos and for what weve seen, its not just about the games that were looking at investing in frankly, what we are trying to invest is the athletes and theyre building hundreds of fames for themself and their businesses using it. Scopely is another one, their star tracking is a huge hit. Behind that is the revenue engine theyve done that for other games they know and game figure general. Thats what were looking for, the fundamentals behind what everyone is seeing on the consumer side. Kobe, the true hot sauce. I remember when franks got a gigantic bid really unbelievable from mccormick. Some say it will be big. I know there is a lot of athletes involved with this one. I question how fast is it growing . Could it be a home run that you could ultimately flip to a giant consumer Package Goods company or is it one you want to grow yourself no, ultimately, we want to be able to grow i think we have to be patient about it too right. Especially for athlete my biggest fear for athletes getting into the investment game is were looking for unicorns all the time, home runs all the time its important to be patient and make smart decision and invest in data you understand, things you can get your arms around, things you can help grow and take it from there moore is an exceptional ceo as we bring in that new team, we expect great things from this hot sauce. This is a hot company, not just a hot sauce. We had jerry jones on the other day talking about streaming rights how that might change, you could get a big player bidding for nfl. He thought it might improved the evaluation of the cowboys by 50 . Does sports ownership interest either of you at this point . Ill let you answer that question because i dont want to get myself into hot water yet. So were going to let carl answer that. Then were all in trouble. For us, were fiscally disciplined. Were looking for great businesses, Great Companies and great teams. In that happens to be on the sports side, of course, were going to look there. There are great sports franchises thats not necessarily our focus. Were trying to build a franchise here ourselves i mean, are you smiling nothing at all, huh . I dont know what are you talking about. Media overall has to be of some interest. Of course like jeff said, its just important to make smart decisions. Were not limiting ours in anyway whatsoever. But we will look at opportunities as they present themselves and go from there we had a couple big downgrade of noble growth today. Oecd, world banks, negative Interest Rates around the world, implying investors are looking for low returns maybe for decades. How does that make your job more difficult . Do you think thats what it is the good news for us, were investing in private markets and looking at longterm success the reality is this is a stockmarket that you know can do no matter what the little engine that can and thinks it can, thinks it can. We see a lot of bad news, but were focused on the good news we continue to see Great Companies doing great things. You look for brands that can sort of navigate through treacherous waters you looking for brands that have that longterm stability. Like we said, were looking for long tail. Its important to have brands that have great value, great substance, that can carry on for a long period of time. Jim. Kind of a long shot but one of the most exciting growth businesses in this country i think will be gambling sports gambling. You guys have unbelievable fire power. Kobe, your name is known world wide has it ever hit your radar screen perhaps thats something that can be a huge business for you . Yeah, man, its something that were giving it some serious thought to i think the stigma of gambling has been slowly eroding over the years, you c the nba opening to gambling it is becoming a platform that has great amount of potential that would be something we have to look at. I think, kobe, are you unique, adam silvers endorsed gambling the name we would trust is kobe. If you got involved, im not allowed, its in my contract you can take the whole draft king, all of these things to a new level. Where what we would be doing iser day we would be gambling. You would be getting a cut because we trust you so i mean maybe for things you can look at just because your name is worth gold when it comes to gambling. Yeah. Well just be very patient and make sure we make the right decisions. But i appreciate and understand where you are coming from. How about that sounds good, thank you, kobe. This is harder than any locker room interview. Its like si is starting to get you. I see you your vision and i appreciate your vision give me example of the portfolio you have, the most gold you got advising most recently our company art of sport, aos, the side that i really enjoy most of the business and how we operate, help operate businesses is the storytelling side of things you know what does the brand represent . What does it stand for how are we trying to inspire and work, close with brian lee and making sure that story is coming across no our athletes. People might not realize, as i recall you had something to do with the design, the logo design right the keyboard. The story is extremely important. You have to be able to communicate your message what you stand for across the board and be consistent about that you got to find what your story, not that you divvy from it very much find one that is consistent enough that hos longevity. Congrats, guys, on this anniversary. Thank you for coming back and we hope you will come back again. Those three years went by fast. Well keep trying kobe, jeff, thank you, guys. When we come back, its delivering am that edition of cramers mad dash. Well look at some of the downgrades we got today, includes costco and a double downgrade for u. S. Steel back in a minute was ahead of its time. Still, we never stopped making it stronger. Faster. Smarter. Because to be the best, is to never ever stop making it better. The 2020 cclass family. Lease the c 300 sedan for just 429 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Take a look at futures the day after that second consecutive rate cuts. Some downgrades to the Global Economy. A bunch of downside to get to. The opening bell is iniv fe minutes. 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. Tv aas many safety features powas the rx, the new. The lexus rx has met its match. If theyre talking about you. You must be doing something right. 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. But shouldnt somebody this is be listening . Pression. So. Lets talk. Were built for hearing whats important to you, one to one. Edward jons time for investing to feel individual. All right. Were counting down to the opening bell we got about three minutes until we get there were here at delivering alpha its a special delivering alpha. Why not . I have to tell you. I have sad news. Tell me. Bernstein this morning. They take costco to a cell i dont believe it. It is unamerican. I am talking about sap racing. U. S. Saturation. Theyre talking international delays david, the most important thing they are talking about is membership exhaustion. Exhaustion. I am not a member yet. Still, there is still one person now, david, the reason i have a problem with this is because valuation downgrades tend to come back to haunt you, you downgrade cost core rational slow bo et to china. What happens if they get it right, you find yourself fighting at this time whole way. Im thinking about netflix kind of fought it. All the way. Right. Over the last year, if hes continuing to be negative. He se actually right which is not performa. Brandnew fletcher. To me, Brandon Fletcher says sell costco and i think he could be right today. And that will be it maybe so. Unless he knows something, like roku is having two down days is it highly valued costco is probably the most in a group probably the highest of the large cap itself, versus dollar general, versus watch right okay we got an opening bell on the other side we will talk about and well have reporting on these directv reports we have been seeing in terms of at t, also an update on Philip Morris. Carl, i have an opening bell ill send it back to you. There it is, david, the s p 500 at the bottom of the screen, it is identity, the Software Provider is celebrating its ipo. We will talk to the ceo. The nasdaq is celebrating an ipo. Data dog, an Analytics Platform for developers we will talk to that ceo in the next hour. Jim, as you know, reportedly turned down a pretty nice bid from kiss i sis colora from cisco the 37 billion piece. Look, i sense that to me this is a crucial day ill tell you what, for both tech and the banks we had tech not doing well yesterday. We had the banks doing well. Thats what im watching im watching j. P. Morgan they hit an all time high yesterday, carl. When i look at that that is the leadership i have waited for since this whole wally began i know a lot of people are negative i am making the rounds, having a sweet roll, a bagel and some fruit. Everyone is negative here, carl. They want to sell these stocks, they september sell these stocks to get someone to say they like the stock here is pulling teeth. Like marathon man. Marathon man. Its not safe. Its the second marathon man. And goldman, of course. Yes its very dangerous be careful you are right, jpm, a shade below the recent high 120 and change dimon of course had a bunch of comments Business Roundtable about a china trade deal and negative rates jim and david, Doug Mcmillan is going to take over now as chair of the Business Roundtable we will watch that of course, the chairman and ceo of walmart jim, you mentioned the costco downgraded bernstein they do acknowledge they missed this entire run and said there is no real hiding from that. Yes well, look, i think the problem is where of these analysts is, you look at these expensive stocks and they just get more and more expensive, classic example, upgraded today by Morgan Stanley okay this stock, its up 3. Probably up 10 my travel trust owns it. Its so over valued on earnings, but not on future. And there is a lot of guys who said you know what, i am going to forget parameters of valuation and i am going to look at total addressable mark. Thats what people go on, a lot of the ceos that come on mad money, within they ask them a valuation, they have a total Addressable Market as if why should you limit us by pricing multiples, that to me is the most worrisome thing i see for stockholders, there are very few stocks people come on and say i know my stack is over valued they have a new reason to buy, david you remember yes, i do how did that end . Not well. Thats something to keep an eye on the end began march 10th of 2000 is there thats when we started talking about ophthalmologist, so and so has the most eyeballs, carl, if i want to watch one thing, i want to see how successful j. P. Morgan how successful that costco downgrade s. Costco is something you should be taking profits in if you care at all about valuation. Because its 35 times earnings and we know thats high. Doug mcmillan whom you just mentioned, lets not forget, his stock is at 23 times earnings. These things were about maybe half of that not that long ago so multiple expansion is something i dont like thats not what people worry about here theyre worried about the republic warren versus trump. People worried about Elizabeth Warren carl, i get her name constantly. What happens if Elizabeth Warren gets in . You get people on twitter a hard time for doubting microsoft, which is at 141 this morning, close to an all time high bob mipisani is her post9 you know, its true the Second Quarter and First Quarter buybacks not as strong as the Second Quarter and First Quarter of last year, but dont kid yourself, this is probably going to be the secondbest year on record microsoft announced they are essentially going to buy back about 4 of their shares and these announcements do lead to essential buybacks. I know that is a little cynicism microsoft is one of the buyback monsters in the last 14 or 15 years ago they bought back north of 4 of their stock. What this means is we constantly tell people is all other numbers being eequaled, microsoft shares are 25 higher now than they were 14 or 15 years ago. They will be higher still. All other numbers being equal. The buyback craze, it is not as strong as it was last year its still continuing in a big way. Other than that, the continuing story is the issues around the global definement. I think the downgrade other than with costco. Mccarrie downgrading u. S. Steel. They had an earnings warning the global slowdown is real. I know we talk about fedex and how much is fedex specific . Some ill time purchases they made u. S. Steel specifically said we had a boost from the tariffs on prices theyre now down again theyre down because the Global Economy is weaker. European demand is down, raw material costs are down. And thats a big issue we seen margins are up so margin pricing is a real problem for them so steel stocks all trading down here. Jim, we had three Steel Companies warn after nu core x and Steel Dynamics well, i got to tell you, steel, u. S. Steel was really tough. Because remember the president was tweeting as recently as may about how his policies are going to lead to a lot more jobs u. S. Steel not as well run as nu core obviously, furloughing a lot of people not doing that well in europe. When you have three companies that say pricing isnt holding up, what it tends to say is you know what the policies the president arent working i come back to say the policy the president is impacting china more than us we have more staying power than they do. If you are nucor, u. S. Steam, no i am concerned about u. S. Steel. That was a gigantic miss that is in tampa that j. Powell does not have to worry about. J. Pow emdoesnt have to worry about herman miller. J. Powell has to worry about steel. I think a lot of people dont understand it, its a big part of the economy that matters. Its bad lets move from a 1. 7 billion market cap to one of 270 billion. Thats at ts market value right now and i did want to address these reports in the wall street journal this morning about a potential examination by the company of splitting off the directv unit we talked endlessly about the weakness in directv and the loss of subscribers, quarter after quarter. The lack of sustainability of the directv now product. But i do want to add here, that after speaking to any number of people familiar with the situation close to at ts thinking, they are not focused on any sort of split right now of directv from the overall business you know, ive always as you know, jim, had an issue with these considering kind of stories, companies consider everything, particularly when theyre in an activist fight you have to consider everything, it doesnt mean you are going to do it. In this case it does not appear at t is at all focused on the possibility of splitting knauf some fashion directv now there has been a lot of speculation him well, is it possible you can do a reverse trust, rom it into dish, of course, run by charlie gerigen, create that combination and conceivably create value ergen was at the goldman sachs, i spoke to him and other reporters afterwards, it did not sound like he is particularly focused on that, that is a possibility he always plays his cards close to his vest, it is often said he is a poker player. Regulatory wise its not clear something could happen, more to the point, dish is focused on a whether sprint can get the deal through the states right now where it will go to court and, b, creating national 5g wireless carrier. So, jim, directv has had a difficult time its not near worth what they paid in 2014 it still does generate 4 billion in free cash flow. It certainly still helps it is unclear what kind of multiple they can get outside. Its a deterioratesing business. So at t is simply not focused on this despite what the journal reported this morning. Is there any chance that elliot, the activist here thinks its poorly run and it could be run better it certainly could be run better and disposed of . I have it. I dont understandity does so poorly, im not kidding. Well, it doesnt have a broadband product per se the nfl is one of the key offerings it has people are cutting the cord, its as simple as that. People are not watching the market gauge which is why i have it you do and many others do for that reason. Its not enough to sustain it. Its still got 22 million subscribers. Its nowhere near where it was when week might sold the business sometimes you get hacked. There is no doubt elliot pointed out in a very long letter, disappointing to some extent with a lot of the performance of the businesses that at t has purchased over the last two years, wondering about the whole strategy, questioning john sten keys stenkes business it will take a little time we have a self imposed deadline for the end of january i will be interviewing bob eiger. He has a new book out. The ride of a lifetime. You are interviewing bob igor i got that from you i front ran you. You are sharing that news with me now . Thats interesting. Great to hear congratulations on that i love it its a big thing recognizing that one of the things he talks about is the fabled of which i know you covered philadelphia Shareholder Meeting where you basically got the end of eisner. Is there a moment where this could come to fruition where we see the end of the stephenson regime just because of pressure . I dont think people are that happy with it. No, theyre not theyre not that happy listen, their advisers will tell you hey, stock price is up 30 take into consideration what it did last year and the year prior, it has been a decent year for at t shares. They do say, what i find interesting is everybody wants to come back to the wireless business its doing well as you said a few weeks ago. I seen it on surveys and in terms of service surveys. Yes. You know whats funny he has been running away from this wereless business the last seven years, now theyre 50 ebitda i think it is ironic at t has chosen to hang its hat on the performance end. We never talk about verizon trying to get away, they put yahoo in there well. Those were minor bets but they had this thing called oaths they were willing to take the hit there. Its a much smaller thing. They did the writedowns they did the writedowns people not particularly. Not the size another deal, guys, i wanted to also or a situation they wanted to also discuss as well was Philip Morris international, of course andal altria ive updated a couple of times. It is moving along but slowly, as you might imagine this world wide potentially regulate and or ban vaping is having an impact it is having an impact we all know that Philip Morris owns 25 of juul they paid 8 billion for that stake. It does not have a control position its not an economic issue necessarily. But it is something perception wise that is figuring into this in terms of how Philip Morris is perceived and negotiating a deal of this type against this backdrop of ever changing and seemingly higher restrictions on vaping is having an impact so it is moving slowly thats about all i can share at this point im not getting a great deal of they got lawyers all over the place as you might imagine as you also might think, it is having an impact on their ability to get this deal. I had michael corn on, these ceo whichal altria also owns. I think the amount is substantially. Im sorry, the billion . The juul state and the kronos is much, im sorry, i misspoke the desire for altria to get away from tobacco was doing well, now i think its a fiasco. They are trying to figure these things on. Every day they are considering banning. The ip product, lets be clear, is not a vaping product. The Philip Morrison heat not burn product i said many times to the extent people have been trying to explain the rational, its about like em, innovation, r d the window opened now for new products but weve got this whole gentleman about vaping carl, i felt i have been trying to figure out juul. I figured out juul its a fancy method to deliver cancer with flavors and thats okay everybody has a right to do whatever they want there were roundup and companies that made asbestos you said to me, i know they will be purists about that i dont giveadamn. One thing is clear if Foreign Countries seem to like it as a method to get off cigarettes what happened in chosen . They did it for a cupel of days . What happened in china in juul china and india are the two big worry spots i would argue for juul as far as synergies go, guy, juul would argue that alrtria altria will lean heavy in addressing policy rick as we saw with big tobacco 1. 0 as the one thing juul will benefit from, besides the money. Dow is up 62 bob, one last thing . Were waiting for it to open at the nasdaq. Remember these Software Ipos have been terrific recently. They priced at 27. The prior price talk was 19 to 22 they upped it to 24 to 26. The Software Ipos have been doing terrific the problem is high growth within you have a problem with any kind of issue with growth like slack when they had their first earnings report, we saw a drop after that. Other than that, these Software Ipos have been high. A lot of data today lets go to Rick Santelli in chicago. Rick. Indeed, as a matter of fact i continue to think that pretty much the data was good other than the current account balance and i think that that obviously is tied into issues that may get resolved regarding trade, a parallel shift today in Interest Rates, what does that mean ten years down four basis points everything is down the same, postfed meeting, rates are definitely down. That isnt the whole story look at a two day two year, even though its down four basis points, its down from a close that really extended much more than the next chart. Which is a twoday chart of ten. You can clearly see the difference there maybe whats most amazing is many Times Leading up to big events, whether its a jobs report whether its an ecb meeting or in this case a very important fed meeting, markets try to expect whats going to occur so rates started to rise and there was a variety reasons that occurred. But afterwards, everybody takes a breath and marks get back to trading. Look at this cart from midjuly, whats really great here is the high in august, do you remember what a crazy august it was was right around 206, 207 for 10s. Then they blast it all the way down to 146. Guess what the middle point of that move is exactly where were sitting today of 176 finally the index complete wash really gained grounds after the fed rate cut most likely because there will be this race to the bottom but what definitely happened here is it washed out. Things take time to simmer, especially after such an important fed meeting. Now we go to the gang seekingal fast god, i wish i was there with you guys all right im take it, rick. Thank you, Rick Santelli we are, of course, here at delivering am fast Andrew Ross Sorkin also here. Really . Yes, he is. I get to sit next to you guys usually its across the way, cramers first take on regular old stock. Next thing i know i will be hearing about what jay clayton had to say really . What did jay clayton have to say . You know, we had a fascinating conversation about the public and private markets the idea there are so many public in the private marks without knowing or understanding what he will do about that then we got into a big debate about this Business Roundtable statement and whether he would sign it or not i talked to Steve Mnuchin last week he said flat out i wouldnt sign it i will show what you he had to say about all of this. Ive never been in the boardroom of a good company that wasnt thinking about customers, employees and community along with their shareholders. So thats just like sample size 25 years when you see good companies. They think about all those things and they drive. You know, shift stock what is their legal obligation right. Thats a different story and you know that is largely a creature of state law in america. Different states have done this differently. We have states where companies are incorporated where you do have multiple obligations or i should say can consider multiple factors and in fact in most states you can consider multiple factors. I think this debate is a little confused because people talk about whats right and what your prospectus should be versus what your hard legal obviously dpags are. We were talking to steve schwartzman. Also a member of the Business Roundtable who b the way did not sign but his view of this was, look, the way it was structured is theres five constituents, one of which is profits. He said i cant manage to five fathers. I need to have one thing to focus on if i do the one thing, his view is ill capture the rest. That turns out to be morgan freeman. I think scott, the lawyer from paul wise who told me they have said no, were no longer going to just do shareholders. They havent, but delaware of course is typically the law that you follow most closely given thats where most corporations are incorporated referring to stations like pennsylvania you and i have followed the likes of hershey which has relied on pennsylvania law to say no way, were not selling the company. A piece of news that just broke in the past half hour, Doug Mcmillan, the name to run the head of the business round table is going to be very interesting. Did walmart sign . Walmart did sign. Walmart was part of that he did sign. Hes going to continue that effort really, the original statement i think was written by alex gorski at j and j over seen by jamie diamond at the time to have Doug Mcmillan there, the big question is hes going to step out on the issue of guns, whether hes going to use that platform on behalf of and push the business round table on that issue even further. It does matter. Thats fantastic. Thank you, guy. Andrew, thank you. And you well talk at some point. Sure, anytime ill talk about it all day long. For now we have to send it back to carl. Guys, when we come back, a lot more from delivering alpha including jims interview with david taylor and nelson peltz. Were up to 3,013 on the s p dont go away. I get it all the time. Have you lost weight . Of course i have ever since i started renting from national. Because national lets me lose the wait at the counter. And choose any car in the aisle. And i dont wait when i return, thanks to drop go. At national, i can lose the wait. And keep it off. Looking good, patrick. I know. vo go national. Go like a pro. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Markets. The business of trading goods and services. 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Liberty, liberty, liberty, liberty 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. Good thursday morning. Institutional investor delivering alpha conference in new york city, getting some housing sales. Lets get to diana existing home sales in august increased 1. 3 to a seasonally adjusted annualized rate of 5. 4 million units. Sales up 2. 6 year over year, the second straight month of annual gains, leading realtors to say we may have turned a corner for good. The median home price in august 278,000 up 7 . Why so high . Because inventory is so low. Down 2. 6 year over year no question sales were juiced in august by falling Mortgage Rates in may, june and july and they did continue falling but bounced back up in september well see if these sales can hold with slightly higher rates. We start with the markets this morning, still digesting that rate cut by the fed new york fed conducting a repo operation for the third consecutive day. Later this hour jim will take the stage with nelson peltz. Were looking at reaction to the fed, downgrades of costco and u. S. Steel, a series of buybacks out of Companies Like microsoft and target. I just wrapped up a panel on stage here of delivering alpha the topic was Global Opportunities and global risks you can imagine when talking about the Global Economy, it was pretty gloomy up there on stage. We heard from manny roman the ceo of pimco, luke ellis of man group and others i think the Common Thread was the u. S. Is doing well thank you, u. S. Consumer the Global Economy is not. When it came to the biggest risk factor, i just wrapped up by asking facing the Global Economy, for a lot of them it was the u. S. Consumer and whether confidence can continue to remain high there was actually a little back and forth. Luke ellis was a little worried about whether fedex was a canary in the cole mine or whether that was a function of what was happening globally in trade that gives you a sense of where investors are, why the fed is split, why investors and economists are all split about the outlook for the u. S. How much of the Global Economy is going to infect us. Obviously you mentioned fedex and the numbers yesterday, which gave people pause. Two days ago Randall Stevenson the ceo of at t, talking about the Business Investment. He said it was flashing yellow, not red, but yellow. Of course, he concluded saying eventually it spills into the consumer so were watching it closely. The other risk factor is the Federal Reserve and how do they walk this fine line of inflation that is firming, even housing numbers are actually looking better what diana just reported and some of the other numbers this week, that was some of the weaker parts of the economy and at the same time cut rates to prevent a downturn or to keep the expansion going as jay powell said and whether he can continue to do that under enormous political pressure. Nahb, housing starts, now existing weve had housing in contraction as a part of gdp i think for six quarters. Its obviously a net crib tor rig contributor right now. You want to look at jobless numbers have firmed up enough that i think yesterdays steady response to what the fed did was not so much to say oh, the fed has our back, but if we need a rate cut, were going to get it and maybe we dont need it is the bright side way of looking at it. Its the Glass Half Full the market says if we dont get a cut is to deteriorate things from here im sorry, if things improve from here, therefore, we can win. I dont see the market as celebrating as much as microsoft doing an awful lot of work today for the indexes, by the way. Its added 20 billion in market cap today on an announcement that over the next couple of years is going to buy back 40 million worth of stock its Getting Better as the session has gone on and now i think 142 is, in fact, a record high speaking of delivering alpha and these markets joining us onset today, too, legendary wall street watchers jim grant, founder of grants Interest Rate observer is here along with byron, vice chairman of the black stone private Wealth Solutions group. What a treat for us. Good to see you. What does legendary mean . In my case it certainly means im older. You stick around long enough, you get to be called a legend. It sounds tell me if im wrong, but the way mike just described it, it could have come out of your mouth, this Glass Half Full thesis. Well, in one sense. Ive been saying the economy is doing well consumers are driving the economy, unemployment is low, wages are rising, savings are increasing so as a result of all of those things, i expect the consumer to continue to drive the economy. Despite a slowdown in hiring, despite some waffling in confidence, despite market volatility well, all those things are present, but its the biggest problem our Portfolio Companies are having is hiring good workers as long as thats the case the kmet is going to go economy is going to go on and continue to grow youre talking about a slow doun slowdown, but its still growth around the world. Jim, the same set of observations i think are being used by folks how is it doing . Its overduing. I think that the greatest threat to the world is fake Interest Rates. The systematic manipulation of the most important price in capitalism it is not a natural state of affairs that there are some numbers of trillion, it varies by the day of security price to yield less than nothing. This is the most extraordinary factor weve gotten to used to it weve gotten rather jaded. This great repurchase agreement the past three days, doesnt it feel a little like the gasoline lines of yes tteryear . Theres something wrong with the way the market is working and it has to do with regulation. When the federal fund rate was free to move, it was balance of supply and demand. This new regime in the last ten years having to do with the interest on excess reserve are probably better suited to print than video but this business of fixing a rate and then kind of bribing the banks not to put their funds into the market, this is contributing to the seemingly anomaly, but in fact well grounded in theory disruptions to the world of short term rates. There were some yesterday, byron, who said the repo squeeze was not a good look. At the very least, not a good look for powell on fed day. Yeah. I mean, my feeling is theres too much liquidity out there i dont think cutting the federal funds rate 25 or 50 business points is going to do any good Interest Rates are already low anybody who wants to borrow with already borrow cheaply the problem has been created over the last decade weve created the Central Banks of the world, the Federal Reserve, European Central bank, bank of england, bank of japan have created 13 trillion worth of money and theyre going back to monetary accommodation again. Theyre trying to keep a recession from occurring by flooding the world with liquidity. European central bank is going to do it too what theyre doing is holding back the dawn. Theyre trying to keep economies growing at some rate to prevent the next recession at some point it wont work, but it looks like its going to work for the next year or so. For the next year or so what happens in a year, though well, i dont know. Well have to see. Invite me back. Were definitely doing that. A lot of people are worried about a recession in 2020. I dont think thats going to occur. Donald trump doesnt want to run for reelection in a recession year but after that at some point after that i think the economy is vulnerable. You can only push the recession out so far jim, if this kind of repo eruption that weve had is a symptom of these kind of engineers efforts to try and as you say, kind of keep liquidity in certain places and prevent it from going into others, its a little bit of a rupture. Is it not something that can be dialed back . The portrayal is you can adjust valves and levers of the system and you release some of the liquidity back where it belongs. I think in part thats true the fed can certainly institute a more or less permanent repurchase facility. I think the greater question is whos in control is it the authorities as we call them, the Central Banks, or is it events . We have been led to believe the Central Banks are in charge, but i think byron almost said and certainly i took away from the talk that events might get the upper hand look at the action oil on monday and then the unscripted repo eruption on tuesday and wednesday. Thats great for journalism, right, byron do you think there were some theorists who argued that the squeeze and the saudis were somehow related. Do you think they play at all, or is this more about classic explanations of Corporate Tax payments i think that Everyone Needs an explanation not because they know, but because theyre going to be asked to explain theres some thinking that maybe it had to do with soft bank and with the dollar issue. Theres all sorts of ideas im sticking with the gas line model. It seems to me this is the case of overregulation and misregulation and mismanipulation. What we want is the price mechanism. Let me ask jim a question do you think the fed should have cut rates again and should cut rates a third time sometime before the end of the year no. Okay. So there we are. Weve had two cuts were probably going to get three. And the reason for that is the dollar is strong, theyre trying to control that, so were manipulating our currency. And the second reason is that our Interest Rates are still much higher than they are around the world. Positive, byron. So, you know, were trying to do somethingand the question i it may do some monetary good but i dont know if it will do any economic good. Although jay powell yesterday did try to foreclose the possibility of negative rates here, so he was on record. In fact, the market seemed to like that. As it should. Negative rates are i think what the market really liked is when jay powell said hes going to be independent, you know. What donald trump wants is not necessarily what hes going to do. What would you say, byron, the opposite have s p earnings estimates come in too far then i dont know. The estimates come in to a level that where the companies can beat them. Thats experience talking. Thats manipulation too so my view is the s p is going to end somewhat improved earnings, but were in a position now where the gdp growth is going to be about 2 , get 2 inflation, maybe 1 productivity, so 5 Earnings Growth as i look out i dont think youll do much better than that youre going to have rising Interest Rates, so you wont have multiple expansion, so the equity market will rise maybe 5 annually and youre going to have to adjust to that the 10 to 15 years are over for a while. This is a good act you got going. The sunshine boys, right take it on the road. Thank you for coming down. We appreciate it, byron and jim. When we come back this morning, penco ceo on the fed cuts also a programming note, dont miss aniexclusive with vice chair richard clarida. Dow up 64. 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. It also has the highest growth in manufacturing jobs in the us. Its a competition for the talent. Employees need more than just a paycheck. You definitely want to take advantage of all the benefits you can get. 2 3 of employees said that the workplace is an important source for personal savings and protection solutions. The workplace should be a source of financial security. Keeping your people happy is what keeps your people. Thats Financial Wellness. Put your employees on a path to Financial Wellness with prudential. Welcome back to squawk on the street. We are live at cnbc institutional conference in new york city. Our next guest joined me on stage in the last hour says it is u. S. Economy will have a tough Time Next Year amid the trade bar. Joining me as the ceo of penco good of you to come on cnbc finally. Thank you for having me good things happen. Yes were happy to have you here good things happen, but you were explaining why now is the time to be risk off or a little more cautious. I think you want to be cautious you look at the world and you say what do we know . We know that you are at the end of a 10 year expansion what we would call a miraculous recovery from the low of 2008. You know you have a trade war with china with many possible outcomes, but very little degree of certainty you have a tough situation in the middle east. You have uncertainty about brexit and i would say italy and so you want to be cautious i think one of the themes is that you dont want to be always full on in terms of risk and so right now be cautious on the mack tro standpoint . What does that mean keep buying treasury, dollar thinking about the risk, thinking about the down side, thinking about what you will need to do in terms of trading out of bad risk. Thinking about liquidity thinking about what may go wrong. Thinking about scenarios where you want to be able to add on weaknesses in certain assets if the time comes and i think youll always want to benefit from market downturn. So just shorten durations and focus on particular Asset Classes . To some extent, yes i think we have no strong view in terms of duration in the u. S. Right now. But i think we have agent markets. I think we have mortgages we like we like some credit. We like banks. I think we have a broad portfolio of securities that we like and we think were bulletproof for most environment. Do you think that jay powell can do as he promised, act as appropriate to sustain the expansion and keep it going in the United States . Yes, we do. Theres a lot of things which are out of his control and i think one of the complexity of the feds job is to deal with what is not an easy situation where his reading is not better than any others in terms of what may or may not happen in the months to come and whether we get a resolution in 2019 or not to the situation with china. Are you concerned at all about this recent tumult in the repo market . Is it something you are aware of, watching closely and wondering about . We are very focused on it as you would expect us to be because we are the largest bond manager in the world and so yes, we do yes, i would expect so. Its a typical problem and we think the confluence of events with taxes happening earlier this week and we think that the fed is all over this. You do . The intervening a third day, today, but you think its technical, not a sign of something beyond that . No and its different from 2008 and i think we shouldnt overread into a technical situation what more than technical problems. Do you think we could ever see negative Interest Rates in the u. S. I would say very unlikely its of course possible. But the u. S. Economy is not in recession recession. The best case is that the u. S. Would slow down to 1 , but we dont foresee a recession and theres absolutely no reason why rates should be negative. Theres not necessarily a recession in some country wies where there are negative rates is that the reason theres two reason. One, they have no growth for the better part of ten years and two, the central bank has been buying everything they can if you think of the mission of the ecb, they really have reinsured the weaker credit. Thats the way as a european i think of it. The ecb has germany to guarantee italy and spain. The result is obviously this very strange situation that none of us have ever seen of 17 trillion of bonds. How close is it until a recession and do you foresee one in the near term they are not far away and obviously germany, for example, is very exposed to china and the export sector. Thats not getting a lot better. Yeah. France has done better than spe expected, for example, which is surprising and the uk, who knows whats going to happen with brexit over the next two months . Do you think that brexit could really cause a significant market disruption if its a hard one . If there was a hard brexit and the uk leaves slamming the door on october 31st, it would not be great for europe. Send europe into a recession . Potentially. Would we feel it here in the u. S. I think the u. S. , i mean, one of the things which the u. S. Shows is the consumer is 70 of the economy and is incredibly strong for as long as we have the consumer driving the economy they were saying it all flow into chase consumers are in good shape, not worried about it is that something investors can bank on in the u. S. . As much as they can bank on anything, its reasonable. My partner dan iverson who is a ceo, likes housing we do like u. S. Housing. We think its in pretty good shape and that the market is clean and that its a good place to be. Speaking of flows, how much are prices over here in the bond market being distorted as a result of the fact that theres 17 trillion of negative sovereign paper in the world i think one other thing, when you run a big asset manager that you know, is that large pools of money outside the u. S. Look at the u. S. As a safe harbor from a yield standpoint i think that you can safely say that the 10 year and every Long Duration assets in the u. S. Has been bought by european and japanese investors so does it keep the yield below 2 , for example, despite what might be Economic Growth . I think my partner always says every time you see credit widen, you want to find income assets and they come and buy them and in 2018 in the last quarter where you had a real dip, you saw people coming out of the woodwork and trying to buy assets it will didnt really happen because it was a quick bounce, but i think you see pools of money. Does it explain the inversion of the yield curve or is that a signal as it always has been that a recession is coming look, we dont have a crystal ball, but its partly technical. And we dont think that the pricing of the 10 year and the inversion necessarily makes a lot of sense at this stage. How do you see the interply e between stocks and bonds usually its a good thing to have these low bond yields, but in recent weeks weve seen Equity Investors get spooked by the low yields in the u. S. How do you see that playing out . From an asset location standpoint, we under weight u. S. Stocks we think the main factor driving stocks are earnings and we think earnings should be flat this year i think we often say that on the s p 500 but if you look at the russell 1000 you basically see the russell is down 12 or 14 from the high and theres a lot of companies not doing so great. You have a panel right now on technology the one saving grace about the u. S. Stock market, just to state the obvious, is that the fang have done so well and have been so innovative in what theyre doing. If you see a manufacturing company, the environment is not great. To be honest, were not sure what to do about you dont know how much stock value you should do. That gets to the whole idea of Business Investment and the fact that its slowing and theres still concern that it creates into the consumer and the consumer led economy, of course, everything comes back to you. And thats the problem, people lose confidence and that slowly the consumer gets affected by the environment and have a slowdown in spending. But i would say the job market is so strong that that really is stimulative. One thing that came up is the election what are you anticipating and how do you think it will shape markets . Well, ahead of policy the potential is much more able to answer that question theres a lot we dont know. Its too early to tell and its definitely not a good thing to invest based on what we know right now. We mentioned this is your first tv appearance. Thats right. But youve been running pimco now for three years, so there was a lot of tumult early in your tenure. How do you think about the changes youve made and where pimco is right now in terms of an asset manager well, were doing great its a team effort its really not about me its about a group of people who want to go in the same direction, who want to get a good value for customer, and who care about performance we do one thing. We do fixed income we hope to do it better than most, but its been a great ride im incredibly proud i think we have this Great Partnership and were doing well its good. I always said its better to come and talk to you than me once every three years i think is reasonable. And he was on a panel with the guy who replaced him. Thats right. It was all full circle. Thank you for joining us. Im delighted. Dont wait another three years. Thank you. When we come back here, it is another big tech ipo in 2019. David dog making its debut with ensqwkn e re wh ua othstet returns. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. For farmers here, this is our lifes work. But when a recall happens, perfectly good food goes to waste. Now, weve got away around that. Looks good. Were on target. Blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. Its used by some of the biggest retailers everywhere. A nice wedge. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. We are getting a slew of headlines out of amazon. The reason why is because jeff bezos, the founder and ceo is making comments today at the National Press club in washington, d. C. The headline here is that he is pledging amazon will be one of the First Companies if not the First Company to meet the Paris Climate Accord and climate pledges 10 years early, by the year 2040 outlining a number of steps with regard to Renewal Energy projects and benchmarks that will get it there by the year 2040. Also interesting here, the idea that they have said they will order 100,000 new electric delivery vans perhaps signaling theyre kind of making more of a commitment to that side of things, but it calls into question that little bit of that dynamic between tesla and other electric vehicle makers. Amazon going with rivien with the first stage of their Renewable Energy project those are the headlines coming out now. He is still making these comments at the National Press club in d. C. Well bring you more details, but the headlines are 10 of acceleration of meeting the Company Goals of the Paris Climate Accord by the year 2040. Dont go too far theres the news of the delivery vans by a private ly held compan in michigan, donation to reforestation. A big corporate push. On the other hand, just in terms of business, when youre delivering for free, nominally speaking for free, you want to make sure you can do did pretty efficiently. It could be one other element. When oil was spiking the other day they said these free delivery Ecommerce Companies could have a head wind for it. No word, i mean, we dont know whether or not tesla was ever in consideration for this van order. No. Thats something thats movement in the shares. The shares are not moving tesla shares are up about 1. 25 . There wasnt a lot of reaction indicating there wasnt this expectation that tesla was going to be part of that picture overall. Its yet unclear whats interesting about the news, though, is the idea that you do have at least putting numbers to it right now, saying that 100,000 vehicles, delivery vans will be part of that process. Also saying as part of this whole corporate goal they will be 80 Renewable Energy as a company by the year 2024 and also about 100 Renewable Energy by the year 2030 at least if you layout these numbers and benchmarks, that tends to be what kind of gets peoples attention they can hold them accountable for it but tesla shares not moving much with regard to 100,000 being ordered from rivien instead. Lets send it over to sue herera for an update. Heres whats happening at this hour. In the United Arab Emirates secretary of state mike pompeo meeting with the crown prince to discuss the attack on saudi arabias oil facilities. The uae is a close ally of the saudis and joined the kingdom in the war in yemen pompeo continued to blame iran. I think its abundantly clear and there is an enormous consensus in the region that we know precisely who conducted these attacks. It was iran. I didnt hear anybody in the region who doubted that for a single moment. Tropical gredepression i mem continues to slam Southeast Texas with rain. Meteorologist are telling residents be tee prepared for another 12 hours of soaking rain. And a plan to have High School Graduates attend school for free it is estimated to cost the state between 25 and 35 million a year you are up to date thats the news update carl, ill send it back downtown to you. Sue, thank you very much. Cloud monitoring and Analytics Platform datadog set to debut this morning the Company Turning down a buy out bid for an estimated 7 billion. Joining us, data dog ceo cofounder and our own john ford with us here congratulations. Good to see you. Thank you do you want to give us any clarity on this cisco news i really cant comment on that im sorry. Thats just rumors. In that case, talk about what youre going to use the proceeds for. Well, were growing fast and we see a lot of opportunity in front of us. There might be many different ways we can use the proceeds we have acquired and there are things that worked well for us there are companies that are a big part of our organization and we might do more of that tell us whats driving growth in cloud monitoring. Is it moving at the same pace or is it Something Different about the timing of cloud adoption, the extent of cloud adoption, a certain size customer that really kicks in if they need your services . So were really in the middle of a retransformation. Companies of all sizes start moving to the cloud i would say Smaller Companies started moving and new companies started moving five, six years ago. Bigger enterprises started moving two or three years ago, but everybody is moving from their legacy i. T. To the cloud when you look at your kind of multiple clouds that youre monitoring, to what extent is that kind of proliferation of multicloud part of whats driving your business . Customers not just in aws but perhaps also in azure, but also google cloud are you seeing more consolidation or spreading across multiple clouds by and large our customers and enterprises in general prefer to be running on several clouds everybody wants to have more options for the future nobody wants to be beholden and as a result we see our customers running on several public clouds and also some public clouds and some private clouds in the future the future as we see is hybrid whats going to happen with consolidation in this space, the playbook in Enterprise Software is you get some big players who make transformational moves . I guess the equivalent is aws, azure, google cloud, et cetera then they start looking for applications and services that are critical to their customers to buy and it becomes a question of eliminating things like sale and marketing. Are we in that stage yet well, for what we do, as i said before, the future is very hybrid customers really value having separate vendors and a separate platform for managing the vendors which is what we will have them do so that part is not going to change aside from, that were looking at a very, very big market there might be some consolidation. There might not. There is room for many Large Companies to be very successful there. Olivia, why was this the right time to become a Public Company and do you expect that being a Public Company that is going to enable you to drive any consolidation or any things you wouldnt otherwise be able to do privately . For us it was the right time. The business is going well today as we exhibited in the prospectus weve proven we were more than just a single product company. We could actually build a platform we think its time to step on the gas and do more. I think being a Public Company is going to help us do that. Its someone a somewhat fraught ipo window, not completely off the rails, but weve seen other issues in different days who did up the range and then not perform well on day one can you characterize the process from your view well, i cant really comment on what the markets are doing. Well see. We havent opened yet. But as far as were concerned, what matters really is to solve our customers problem, build a Healthy Business and the markets will do what they do for a long time we didnt see technology companies, particularly Enterprise Technology Companies Based in new york coming pull they would get snapped up, things like that how significant do you think it is that youre a Cloud Economy Company Based in new york, not in seattle where a lot of the Cloud Companies are and that you made it to this milestone not necessarily a finish line but a milestone of actually becoming public we think its great but as far as the concern, we think being in new york, not being in Silicon Valley or in seattle really helped us become who we are it forced us to focus on customers. It forced us to focus on building a Healthy Business and thats what weve done. So whats your number one challenge, whether it is recruiting and retention, being in new york . Is it reaching these large customers who are in this hybrid and multicloud environment and convincing them of the Value Proposition post ipo now as you continue to hit the street and build this company to us my two biggest priorities are hiring as many as the right people as possible and one is retaining them. If we do all that with enough of the right engineers and the right salespeople and the folks in the back office everywhere, well build more products and get do market everywhere well be successful. Well solve our customers problem and Everything Else will flow from that this is what i think about every day. Thank you appreciate it. Well watch datadog later on today. Appreciate it. Thank you for having me. Were getting some breaking news out of airbnb lets get more on that. Putting out a press release stating its intention to become a Public Company in 2020 which would make it one of the most high profile ipos of next year this doesnt come as a surprise. Air b a airbnb is a decade old making it one of the most richly valued unicorns we dont know a ton about the financials it has been profitable for the last two years earlier this week it said that it took in more than a billion dollars in revenue in the Second Quarter. There have of course been a lot of discussion, a lot of rumblings that airbnb could be looking at a direct listing because it is well capitalized as of march 31st it had 3 3. 5 billion in cash on its balance sheet. Certainly it would fit the profile otherwise for candidates for a direct lists in terms of name recognition, people knowing the business and really as you say the company not needing cash immediately. Absolutely. Like i said, cash position, 3. 5 billion and its very different than the other high profile ipos were seen this year like uber and lyft. Yes, it is a big economy company, but it is one that is even up profitable over the last years. It is not burning money by billions of dollars each year. It has billions in its war chest, not going through it at the pace of some of the other ones this will be an interesting ipo, especially after the high profile ones of this year. Thanks for bringing that to us people will ask naturally if this wework delay is going to color ipos for very large cap tech companies. Right and its a worthy question, although i do think that airbnbs business seems to side step some of those issues. Obviously theyre not operating at an outright loss. The Business Model is relatively clear. Obviously we dont know how profitable exactly we dont know how much of the economics theyre sharing with the hosts. Thats one of the big issues with uber is how much they had to subsidize drivers anticipated even byby what policy risk affects their model which probably is not as complicated as the one that we saw. No, although echos of uber in that sense you have to kind of operate between some of the existing regulations and ruffle a lot of feathers in terms of incumbent businesses. Fair to say of the big ones this is one thats taken sort of the longest come to boil. I would say for sure. After this one i wonder if there will be other anticipated ones meanwhile, time now for the etf spotlight. Take a look at the spiders, s p bank etf ticker is kbe. It is rising a bit after the feds second rate cut of the year it is trying extend the weekly win streak to four while on track for the best month since april. Up 8 . Obviously yesterday the banks really did kind of take kindly to the feds move and also for jay powell kind of taking the certainty of future rate cuts down a little bit. You see all the big major banks. Most of them up except for bank of america, although certainly off the most of this morning banks helping here a little bit. Dow is up 90 its not far from 3,027 which is what youre going to want to see if you want fresh alltime highs. Well watch this cseloly a lot more still to come dont go away. Tv announcer its just as powerful as the lexus rx. As many safety features as the rx, the new. The lexus rx has met its match. If theyre talking about you. You must be doing something right. 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. This day where were reacting to the fed cut from yesterday, some have pointed out it does traditionally have a bit of an upside bias. How much that will work we dont know. Upside bias but afterwards maybe not so great tomorrow is the one Year Anniversary of when the market topped last year before the Fourth Quarter melt down it was september 20th. There was some weakness under the service back then i think before you got the tie in the s p. Were in a bit of a different position now, because really recovering from kind of a mini gut check in august. I think the markets willingness to take the feds action yesterday as a net positive by saying theyre open to another cut. If not, the economy looks okay for now. We have the fed funds right below 2 which seems like it might be enough to let the pressure off and let growth run a little bit. Sii was fascinate by byrons comment that powell will stay independent and not buffeted by the president s criticism. No doubt about that theyve almost kind of gotten beyond that. When the president is saying go to zero and nobody thinks that is a near term possibility, you can do what you think is right without really feeling like youre folding. Were going to get back to that delivery alpha conference next up, jim cramer alongside nelson peltz and david taylor. Well bring that to you live in 30 seconds stick around woman what gives me confidence about Investment Decisions . Rigorous fundamental research. With Portfolio Managers focused on the long term. Who look beyond the spreadsheets to understand companies, from breakroom to boardroom. Who know the only way to get a 360 view is to go around the world to get it. Can i rely on deep research to help make quality Investment Decisions . With capital group, i can. Talk to your advisor or consultant for investment risks and information. The 95,000. The 95,000 plus employees. Jim cramersitting down with nelson peltz at delivering alpha. As a journalist, i did my best to find out what was really going on i spoke with you extensively nelson, went out to dinner many times. You never once had a bad word to say. How important is that if youre getting a proxy fight right . David and i are buying furniture together now, jim, i told you that. His credit card, just so you know but the fact is david has been a gentleman throughout the whole thing and we communicated a lot, even through the proxy fight. And what was interesting is that over the years i found that the most important ingredient a ceo needs to have is to be a good listener nobody has a monopoly on good ideas, okay, and we have an attitude, well steal any good idea and be proud of it, and wed rather be rich than right, and david has that same attitude, and hes a great listener, doesnt have to do what we tell him to do, but he takes it in, examines it, makes a sound decision afterwards. And thats why were getting along so well. David, a couple years ago in the midst of what i felt and in retrospect was clear, an amazing transformation of the company, nelson came knocking i want to know looking back, do you wish you could have avoided the proxy fight or was it just necessary in order to have someone on the board it is hard to relive history. At the time it happened, we wanted to make sure we articulated our strategy and stand for what we believe is right. We shared in february of 16 a turnaround strategy we thought was very strong. We talked about turning around, working hard to turn around the u. S. And china, two biggest markets, talked about the need to instill superiority across all elements of the equation when it happened, certainly there was the first step back saying is this best for the company. What we did throughout the process is listened to investors and frankly we had many conversations about that many, many conversations and we ended up getting to a place at the end of the proxy contest where it was clear that investors supported our strategy, supported our board, supported nelson so we did what we thought made sense. I was thrilled to come on mad money. You said at the time it was the proxy fight, the fog of war so to speak, that nelson would be a dangerous man and could derail the transformation nelson, i have to ask you, why would you still want to be involved if someone said that about you . Look, you said it right, its the fight of war were in battle. It was unnecessary but that happens all the time the fact is it is over thats the most important thing. The fact is that we are working so well together, the company has responded. They sped things up quite a bit, and to davids credit when i did get on the board, they hired mckenzie our position, their position position, and came out with what i thought was an excellent compromise position. And you got a company today that is really doing well, and you know, jim, if you turn back the clock three, four years ago, any Consumer Company was dead in the water. Everything was going to digital companies, sold on amazon, sold on the internet. Well, i got to tell you something. Heres an elephant that knows how to dance, and i say that lovingly and there are other companies around that have responded to the new digital age beautifully and many others who dont, and p g is doing a phenomenal job. Theyve got great people, great product, and theyre moving faster. How did it work, david, tell me nelson is absolutely right youre talking about total shareholder turnover, 48 the day he joined versus the s ps bear Single Digits there are a lot of things you put in place, but have you written on the cpg category, never expected 7 . It is almost inconceivable ch a chichin is doing so well it is inconceivable that a company thats an Older Company could be viewed by millennials as offering products they want talk about transformation. You have been listening to jim cramer interviewing david taylor, ceo of procter gamble, and nelson peltz boy has a lot changed, david october 10th, 2017 i will never forget that day i was in cincinnati at p g headquarters, it was the date of the actual when voters cast their votes there in that proxy fight. It got a little bitter as jim referenced both men came out, spoke to me, said we won. In other words, david taylor came out and said he didnt get a seat, nelson peltz said i disagree, it was super close, matter of votes. One of the biggest proxy fights ever launched, i think it was the Biggest Company to be taken in that way, and ultimately peltz prevailed. And guess what, whether it was some strategies the company had been putting in place and sort of the spark they got from peltz being on the board, the company has seen its best sales growth in years, and it has been an absolute homerun for investors and it is not just that Consumer Staples are in demand, this is a company showing organic growth of 5, 6 they turned on the innovation machine, the structure was peltzs idea, a lot of which the Cincinnati Company gets credit for doing. Always interesting to see given what was a bitter fight, ended in a tie, those two together they have been working together well. Wonder if thats a template for activists. The largest activists dont want to go to proxy fights if they can avoid it. Thats not the ult maimate goal the goal is to get something done as quickly as possible. Elliott and at t and others, particularly large Mega Cap Companies when you see an activist get into the shares quick programming note, dont miss an exclusive interview with Federal Reserve vice chair tomorrow morning on the show, 10 00 a. M. Eerch time, richard clarida. That does it for us. Senator mark warner is joining squawk alley right after the break. Stay with us 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. 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. Good morning, it is 8 00 a. M. In menlo park at facebook headquarters and 11 00 a. M. On wall street. Squawk alley is live