Transcripts For CNBC Squawk On The Street 20240714

Within reach stocks set for a higher open bullard still sounding the alarm for the economy and manufacturing. Apples moment of truth, the iphone 11 hits stores globally will it move the needle for investors . And washington versus big tech, Mark Zuckerberg meeting face to face with some of his harshest critics on capitol hill, including a surprise trip to the white house s p is aiming for a fourth straight day of gains as we wrap up the week. Volatility could be in the mix, given it is quad witching friday you got two fed president s making the case, rosengren thinks the fed should have held steady, bullard pushed for 50 basis points well see what clarida tells sara eisen in an hour. When you look at what u. S. Steel said yesterday, i know u. S. Steel isnt a big market cap what it said about the economy and steel case, very good, versus Herman Miller very good, Big Industrial just not doing well i think that it depends upon who you look at, like, i think bullard looks at everything. I think you recognize that industrials really hurt him. Industrials doing badly. Not okay you didnt even mention corning or fedex or new core. Like i should have. Because fedex is a Gigantic Company and that was a wakeup call i do believe i know we spent a lot of time at the network talking about surveys and talking about this guy and that guy. Some guys dont do homework, rosengren has not done his homework hes a dogmatic fellow if you followed him, i think you would get a democratic president without a problem. And i think thats not necessarily his goal listen to blinder this morning, he said, yeah, i dont like trump. Okay maybe your data is skewed toward that if youre ford motor now, this is not a good time not a good time. Gm, not a good time. These are not unImportant Companies. Now, housing is doing well but key lock, the home equity loans havent come down because the short rates, the autos, the rates havent come down because of the short rates the short rates have to come down inorder to be able to restart that part of the economy. When people point to the city economic surprise index going vertical, you dont buy it no. Look, darden wasnt that good. We dont want to lose darden thats one area of the economy that is okay. Industrial production beating estimates by three times im not buying the numbers anymore. I think the numbers are better from adobe, you get better numbers, retail is okay. It is walmart, amazon, it is target, it is costco, downgraded yesterday, costco saying yeah im hearing Something Different from you, a new level of anxiety about industrial, yes. Im worried about industrial lets go back to the carmaker for a second jim taking a strike now, losing money as a result, but you seem to be fairly lugubrious. Im worried about preemption. What . Federal preemption against california oh. Back to the cafe standards and that am i not allowed to go back youre allowed to im not sure why that would necessarily be bad. 2 billion for ford. Ford is part of that, the company you want to maintain or hit the california standards, not the administrations lower standards. Have to make two cars in the great United States. I mean, i think the president views california as an outlier country and trying to rein it in. This will go through some judicial process the president hasnt won on this yet, right he hasnt won is it based on the consumers ability it buy a car or more on this regulatory question i think the Car Companies are having existential crisis. Excitiz existential. Theyre laying off Canadian Workers because the parts are not moving around. People have to recognize, we dont get the United States mexico canada treaty, we get the auto companies, we get boeing boeing doesnt get back on track, these are caterpillar numbers arent that great. These are Major Industrial companies. Yet, boeing is up 10 since the last record high. People keep thinking it is just one day well wake up and it is fine expedia was on mad money last night, travel is good. What did he have to say very strong, very strong. Okay. Hotels are good thats the consumer. The consumer, the consumer, the consumer we hear it all day long, on air, every darn strategist we talk to. Im minimum micking them no, sounding more alarmist than they. I dont want the strike i think the strike is bad. I do believe that the fed a lot of people told me, jim, youre relying on fred smith, who should retire. Fred smith should retire and United Parcel took the hit early on and they are in ascend ans. I worry when they say people like me are whistling past the graveyard. That tweaks me a little less optimistic. Gave you pause. Gave me pause. It hit you. It did. I read it over several times and i said, okay, well, fred smith, some of it is bad execution. But some of it is hes saying, listen, it is going to come here. Dont be foolish it is going to come here. Pointed out stevensons comments earlier this week too, flashing yellow. And bullard gets that bullard watches the show we know he watches the show. He hears i dont think it is all fed speak. Rosengren has charts charts we have to move on let me say that rosengren is ill advised here to your point, jim, were watching some Consumer Products like apple the companys iphone 11 line and the apple watch series 5 going on sale today as many analysts say preorders have been stronger than expected. Tim cook greeted customers about an hour ago, in new york city. They reopened the flag ship store, open 24 hours a day, 365 days a year. Katy huberty saying the demand trajectory is improving. Risk to the upside i have to tell you, the crazy thing here, i interviewed david taylor yesterday, ceo of Procter Gamble where is the strength . Where has it been growing . China. Starbucks. Spoke to Kevin Johnson recently, in preparation to go out to the annual meeting, where is the acceleration china. Yum china. Where is the acceleration . In china but apple, preorders what is this now apple lowered the price, very value conscious in china. Thats where analysts say the real demand is coming from. If you think about, if the chinese hated us, you would see the people, you would see a decline in starbucks, decline in p g, 10 growth in china, 10 growth, i find that amazing. Reuters had pictures of the Shanghai Store this morning. Im going to read here from the headline beijing and shanghai the store short queues of diehard fans contrasting with the hundreds who camped out ahead of previous launches thats bad. Wow. Okay, i didnt know that i read all these web bushlike notes which said the preorbit p are big. Cost costco, they had to close in shanghai, too much demand, couldnt handle the traffic, couldnt get the cars through. Costco is there anything more american than costco . No maybe the yankees. Very american very american very american i said american. American american. Pronounce it like american we have to move on. December 15th do you see any sort of impact on apple, isnt that something investors should be concerned about . We dont know i think the tariff im calling it in flux tariffs in flux. Plenty of people assume it may not happen if the talks go well right now, still december 15th we have key talks, a lot of people presume something will go right on the talks i know because i report that there are people who are hopeful that it doesnt go well. Because theyre not giving in. By the way, this fentanyl issue, the chinese were serious, then they would arrest 50 57 fentanyl purveyors they would arrest thats right from the heinz ketchup 57 variety 57 known fentanyl pushers. You know what they do over there, sometimes they theyre a little more flip of the switch over there you know, they have a capital punishment. The list of seven deadly sins. Hes someone i report off of. You know who loves you no. Bannon. Steve bannon. Is that a joke . Saw steve yesterday are you mocking me. From delivering alpha yesterday . Big hug. Interesting to listen to. He recognizes there is some of the stances i take are, you know, including my regime change stance in china, that i think he thinks im a little too far that way. The regime change . It is coming president xi, president for life give me a break. I would make a bet that trump is in office longer than xi if the democrats dont get their act together trump over xi. Did we solve that thing who is the bigger enemy, xi versus powell i dont think so. Sure, why not, as he said on fox yesterday. Why not . Where powell, is powells job safe. The president said sure, why not . My exwife has chickens you know what she is worried about, foxes you put that big combine i had on the other day, you know what happens, it takes foxes and shreds them, just shreds them like there is no tomorrow. Thats horrible. Why i like foxes. They eat the chickens youll never get another egg if you listen to that we have to move on i want to make that point that that combine shreds foxes. George clooney. Wes anderson. Mark zuckerberg made the rounds yesterday in washington he met with the president tweeted they had a nice meeting, but a chillier reception on the hill from lawmakers seeking tighter regulation i said to him, prove that youre serious about data, sell whatsapp and sell instagram. Thats what they should do spin them off. Sell them right now. And show that you have confidence in your core product. According to our reporting are you kidding does he even know does he even know . Does he even know what whatsapp is what does he think honestly, there an example of what we have to deal with congress person. Hes a senator. Senator oh, man, only 100 of those guys. Is he ever is he ever instad . He wouldnt know he wouldnt know face plant versus facebook. Very aggressive in terms of trying to have the releasing more aggressively and held responsible for the content on their platform i respect it. But im saying that facebook is not the enemy theyre getting it from everywhere, right . It is the ftc, it is the senate, it is but it will go on and i dont know how many multiple points you take out of facebooks stock price to account for the risk of continued endless investigations it may result in something down the road. Why does Free Enterprise have to be punished by a senator . Why does Mark Zuckerberg have to sell instagram and whatsapp, why . Hes not going to until hes forced to under antitrust law, which will be years away and a judge would have to do it and it is not happening anytime the prc, they have more freedom. The prc gives businesses more freedom. And, by the way, the prc just approved the 26 whats going on the prc just this is a segue. They just approved the fin star deal just now maybe now nvidia will be approved that was a segue somebody said move on. Not really i am angry about the senator i am because what is that prove it that the core business what does he have to prove, zuckerberg . And next thing you know, you dont need youtube it is a free country it is it is free. As of now, they cant be forced to do these things. Still has the rule of law. Were hanging on thank you the senate, we got this thing the bill of rights, they ought to give it a little give it a google you know, check the google box on bill of rights. Yeah. How come youre not fiery with the squawk tease, so nice and polite on the tease. I know. I got to get warmed up wd40 spray after and wd40 instead of deodorant im still the foxes still upset me ever see a fox run through a field . The ceo took me aside and just you ever see what this thing can do to a fox . It can shred it like nine ways to and the geese. I havent brought out the fox. Geese are one thing geese are okay a lot of geese cramers mad dash and opening bell coming up on this quad witching friday. Next hour as well, sara eisens exclusive with Richard Claire day, the central bank facing challenges with another Interest Rate cut on the books. As we look for another potential record close, first since july 26th well see. Were ba ia nu ckn mite i dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. I mean, if you havent thought abfrankly, youre missing out. Uh. The mobile app makes it easy to manage your policy, even way out here. Your marshmallows. Get digital id cards, emergency roadside service, even file a. Whoa. Whoa. Whoa. Whoa. Whoa. Whoa oops, that cheeky little thing got away from me. My bad. Geico. Its easy to manage your policy whenever, wherever. Can i trouble you for another marshmallow . Breaking news up of saudi arabia, our first pictures from the site of those two Oil Facilities that were attacked last saturday. Hadley campbell is live on the ground, currently on a tour of the aramco facilities and has the latest hadley reporter good morning, guys. This is the second stop on our tour of saudi aramco this is a 70yearold facility as you can see behind me, this is one of the areas hit in these attacks. We heard from the Saudi Defense forces, they were saying as many as 18 drones and cruise missiles were involved in this attack they said they were iranian made but didnt pinpoint where they had been launched from one thung i want to mention is they consider this facility the mother ship. The largest oil and gas stabilization facility in the word, the mothership of the saudi aramco operation remember, of course, they were explaining to us in terms of the fires, if you dont get the fires we saw after those explosions after those terror attacks under control within the first 15 to 20 minutes, they say the damage that the attacks had inflicted would have basically been irreparable and it was just mainly due to the immediate Emergency Response force in terms of pointing hoses at the sphericals that they were able to get fires it the levels where the whole facility wasnt destroyed. The video over the weekend, those werent completely out for seven hours, but they said it was the critical ability to get at the flames in the first 15 to 20 minute period that aloud them to save so much infrastructure of the facility. Remember, of course, were talking about 5. 7 Million Barrels per day not immediately off line here. Already this facility is up to 2 million after the weekend was complete they managed to get things back on track at least enough to do that the numbers of course coming from the oil minister earlier this week completed the ability to get back to 11 Million Barrels per day in terms of the end of the month and 12 by november theyre sticking to those numbers because theyre asking them again and again in terms of what we can see the completion of all of this work. This is the largest oil and gas stabilization facility in the world, it is the mother ship, the center really of aramcos operations, the lifeline of the saudi economy here as you see behind me. Well continue this tour, but, again this is one of the many sphereoids hit by the attacks. Just so were clear about what happened here, were talking about 11 hits on this complex alone. Also five hits in the columns and stabilization area that we showed you earlier well continue our tour. Ill leave it there with you back in a minute really quick, while i have you, journal yesterday said the kingdom was seeking some diesel and gasoline supplies to save crude for exports. Do we take that seriously . Reporter ive heard that behind the scenes, i havent yet had that confirmed as soon as i do, youll be the first to know. It was expected that the conversations we had in the last few days, particularly at the back of the press conference with the oil minister that the fact they have such a large amount of capacity was going to be able to pad them out for the coming months as well. Something to keep in mind. Guys, i got to go. Hadley gamble, thank you very much. Jim stewart, the Pulitzer Prize winner weighs in on bob eig, disney and apple. Look at the premarket, more squawk on the stree cties in men aomt. Tonnu our 18yearold was in an accident. When i called usaa, it was that voice asking me, is your daughter ok . Thats where i felt relief. 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From the graduate buying her first stock, to an institution investing in thousands. The markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. Thats the tomorrow that we envision and to get there, well have to rewrite it today. There is a lot to watch today on this race to get a new closing high, whether it is tim cook and apple today, india cutting taxes, china, negotiations ongoing, repo market quieted down. Opening bell, six minutes 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. But were also a company that controls hiv, 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. All right, time for weekend and mad dash before we get to the opening bell. The time has come for nvidia perhaps to get the thumbs up from samper and you know what samper is, to buy mellanox, jensen huang told me this is additive it fixes their whole outside ring, mellanox, look at a box, data box, mellanox is on the right side and nvidia on the left they would own the whole box there is a big spread, mellanox. People thought the chinese were why is all this happening . Because a Company Called 26, roman numerals, xxvi got the two merged. We now call it samer. Different but basic idea. Xxvi has military and theyre asking for three year holding period, but this i did not expect it is a sign of what i would regard as thawing in thawing in relationships. Your hope is mellanox deal, which theyre reviewing, will be approved jensen huang said it will be approved this is a harder deal. This deal is a harder deal to approve than the mellanox deal with nvidia. The chinese told me they want the deal to go through so if youre the spread is gigantic. Yes, the spread between what nvidia is paying and where the stock is trading is large because of the concerns that antitrust will take a very long time if at all if at all. From the chinese. You still think there is a chance it doesnt work there is always a chance until they approve it, right this is this is dispositive. This is dispositive, this xxvi deal an encouraging sign encouraging sign chips at large had a nice run, we got a table of stocks in the s p that are up 10 plus since the last record close. It includes Western Digital and sea gate along with a slew of housing, lennar. Jpmorgan saying flash, there is so many positive comments and i got to tell you, the group had such a big move. But it can go further. Still cheap on a price to earnings the opening bell, the s p 500, cnbc real time exchange, big board, invista celebrating the ipo at the nasdaq. Exagen, rheumatology testing, had its ipo yesterday. Ipo, exsmile direct, held in. Smile direct is a controversial one. I know they would like to tell their story a little bit better people who think thats after what happened with invisalign, people presume there is too much price cutting in that area more to work on that but these little ipos are making people money it is the big ones, the gigantic ones, did you see how much post mates got valued at . No. How much they raised a couple hundred million. I like postmates it is an incredibly well run company. Is there anything worse now than the grubhub door dash, postmates, uner eber eats, they killing each other. They are. Money keeps flowing in from venture capital. It is crazy. It is fascinating what softbank chooses to do it has deedee competing with uber in brazil it owns both and it is funding both and theyre both killing each other thats just great speaking of killing each other, juul. Yeah. And users juuls market juuls value is probably been declining i reported on last week and i think down again. Axios today says at risk of being one of the worst corporate investments of all time. Really . Thats a little overstated. They only put in 12. 8 billion. Axios has been in the business game for like a little while, not really just in the past weekend, the president threatened to ban flavors. You got the cdc numbers are terrible an eighth death, india bans, off the shelves in china what else can go wrong plenty. Congressional subpoenas. I think instead of wasting their time, attacking facebook, why not . I think that this is the crisis. Someone got the people on twitter say, you say the crisis helps, they have not had a party. They have not hosted parties of teens. And seen what happens. It is required it is a Public Safety issue, right . Yes yes. So is smoking for that matter. By the way, so is guns and schools. We dont seem to have done anything about all right, david. About children getting murdered in school, but were worried much more about vaping were ready to ban that. You got to those are those kind of relative arguments i hear i get that on twitter all the time from people who are numb skulls how can you be against vap, shouldnt you really be against measles . Im against things that hurt people, all right . Im not saying it doesnt. Vaping doesnt kill people, people do. You remember that line, the nra. You know since ive seen your documentary, ive been on a everyone has to watch this documentary. Yes, you can take the british point of view, these people are going to die anyway, lets let them dilate e later. That girl in michigan, i mean, that girl in michigan, to me, is the essence of what is happening. Just tell people. The teen in michigan who we profile got addicted at 15 and basically her Family Structure fell apart as a result of her addiction. On the other hand, juul had 19 billion, juul could be an interesting ipo. Versus the poor girl in michigan come on, david capitalism, yeah, thats exactly what im talking about. We hope youll watch tonight. You got to watch this thing. Roku, pivotal initiates with a sell, target of 60, the stock is down 50 bucks in two weeks. This thing has become the pinata there was a note today about roku for optco roku went up a great deal. And ever since the parent Companys Network unveiled the antiroku thats the thing. You put the box on, and youre not paying for it if youre a comcast customer, that helps thats cheaper than paid rate roku went up a great deal, the ceo of roku never claimed this would happen people got too excited because they were so anxious to have a cord cutting story they wanted a cord cutting story. It is the play on streaming to a certain extent. It is the beneficiary, doesnt pick a winner. Doesnt care but when comcast is out there with the product that is going to be free to those customers, lets you do the same thing, at least it is having an impact. I have the amazon product didnt cost me that much. Fire stick . Yeah, fire stick. Im an amazon prime number. Why 40 bucks is kind of it is not free. It is close. Very close. Advertise it over the life of the subscription. Exactly i think roku is a little overvalued the problem is it has been overvalued for since it ever let that sphere of 30 to 40. It is overvalued. A lot of technicians had noticed this earlier in the month. Just giving its valuation, the stretch above, it is 200 day saying it hardly would be the best entry point at this level but it has come down other one is etsy. With upgrades in a week or so. Today it is rbc. The shipping, the change in shipping to be more positive is good i like the fact theyre also something millennials care about, try to be neutral in packaging in terms of what Carbon Neutral a lot of companies are trying to be Carbon Neutral not green washing. A lot of kids are going to be protesting or not it is a big thing. Taking a stand against Climate Change is amazon. That was a big didnt you think that was huge want to be Carbon Neutral and want to move toward it fairly quickly at amazon. To jims point, make a lot of delivery vehicles electric that was an interesting announcement i think. I thought it was overlooked that can drive the whole industry you have to make 100,000 vehicles for them gorkts this goes to the larger conversation we have been having at this desk about the changing nature of what business sees as responsibility or whether it does or, you know, does amazon is it friendlier with the millennials as a result of doing Something Like this. Right. Does it change the perception of the company does it then therefore help it in some way in terms of the bottom line also i dont know but david taylor, i openly challenge the idea that they have a lot of products that you cant open, because they have a lot of plastic theyre shifting some to cardboard. Theyre really trying to figure this thing out, get ahead of time they know that the millennials hate plastic jim fetter ling has his work cut out for him, the ceo of dow chemical ceo of dow chemical. Yes. They are trying also to deal with the waste problem. You talked about plastic with peltz and taylor yesterday take a listen to this from delivering alpha. I cant open them and i want to know, why do you need so much plastic i brought this guy i hate this thing, this Dollar Shave Club i can open the door. And i want to know why do i look at this church and dwight. Why . It is paper, since 1907. Why do i have to go through all this plastic i am in the end needing of this. Can we please eliminate some of the plastic . I would agree jihad on that too. A little by the way, curb your enthusiasm they did that too. There is too much. And as you when you try to open something, a lot of it, one thing they set off line is interesting. Some of these drugstores like that, they want to make it so you cant a lot of it is in reaction to the drugstores get at those things and they have to come together. But the fact is that if Procter Gamble demands there be more recycling, they have the power, theyre very powerful. It is interesting, you showed the shift from dollar shave. Packaging i get harrys, i get dollar shave, i get schick and procter for some of the houses i have. Im always trying to do to shop and try to get a sense of what people do procter is having an amazing year actually kind of broke news a little bit, i dont know if he wanted to, but just saying that, again, China Business is strong. That broke news. Whatever but china, china is the bright light for procter now. China is coming together you have the xxvi deal, the starbucks. China. China. Coming together so when starbucks lowered their organic both target, not hard guidance, but week or two ago, you dont think it was related i went over that. More of it was tax honest to god, i went over that thing with kevin, i really dont think that i think that was a very misread of the announcement because he had come on the week before, mad money and this was not he did not repeal the guidance the multiyear guidance. More next year. Multiyear guidance. Im fine with what kevin said and i think the stock is a buy i think kevin is you know, that senator has got facebook moving that senator hawley . Yeah, senator hawley. He has facebook going. Josh hawley. Senator hawley. Look at this, facebook is having its biggest move did he put a back above the 50 did he raise his price target he may have yeah. Listen, instagram and whatsapp, spun, it would be worth what worth 500 million growth rate. Maybe he thinks facebook should be a billion dollar company. Jim, at what point im not making fun of senator hawley, okay no, im not. At what point do you worry about double tops here as we struggle to get above 3015, 3015. The chartist in me, the fibanacci guy in me, i think we have to have a breakout. Im worried about the transports the transports got to show a little mojo. Im worried about this whole zscaler on tonight, this huge group of Silicon Valley stocks, seem like they peaked because of competition. Crowd strike, zscaler, semantec for the first time in ages, the key to this market, okta is finally up. It is okta is finally up. You know okta. I do. Im remembering an old key to the market, ulta, wanted to look at it. Has it ever recovered from that quarter . No. But i think that i believe this is a i believe this is a recovery quarter i think they can pull that off. For i think they need to i think they can reaccelerate. Okta is the contouring. Kids stop doing contouring or something. There is a slowdown in contour. I have to tell you, the royalty club is the biggest in the country. Have you ever used the loyalty club, you can get like 100 off. What . Even asking a question like that you go to sephora okta has to break out here on your burj day, with sephora, they give you special stuff. Viva is another company, you probably follow them out west, viva is just another stock, it is up 66 . Peter gasner these are the stocks that have stalled that were the heart and soul of the whole spring move. Im very concerned not to mention roku, which we mentioned already. The momentum name and is has been giving it up for a little bit now. Disney, by the way, the day after the book drops, spent some time with bob, people feel that stock has stalled. Thats a great longterm opportunity. There are stocks that have stalled that have just stalled disney now may be the waiting game for streaming and starting to see how the numbers and what they start with and when they start and then that quarter, so, you know, you may want to wait. One last thing, jim, pfizer and merck up as mcconnell appears to not be on board with pelosis plan. All the drugs are moving. I dont think Speaker Pelosi, not as Speaker Pelosi is not trying to redo the Health System she wants Affordable Care act, i think shes a practical person and wont go wont rock the boat bigger issues to worry about she does. Which you talked to her about this week. Pfizer is leading the dow, up 61, to bob pisani. Happy friday, everybody we are knocking on the door to new highs. Tug of war between cyclicals and defensive stocks going on this week, for the moment, today, cyclicals are taking winning out here retailers up a little bit. Energy started up, now turned negative, banks, industrials, also fractionally to the upside. This has been a remarkable week. A lot of theoretically bad things have happened this week and the market is largely shrugged them off. Want to remind everyone that, you know, stuff could have gone wrong very easily here shrugging off iran issue, the big surge in oil that we have seen, that whole thing of spike in repo rates made a lot of people crazy about market plumbing and seems like a long time ago, but that was this week we shrugged all of this off. The old cyclical rally, thats faded, a little better todayment if you look at value, cyclical groups in the last few days, retail, transports, metals and mining, regional bank, all cyclicals, most are also value stocks in the last week. That rally that happened a few weeks ago, it is kind of faded right now. Thats something to keep an eye on we keep rotating the more defensive groups like consumer stains and utilities this is why the market is not far from new highs retail in particular, want to point out, this week, some of these stocks just getting slammed. Theyre stable today but ever since the tariff wars in may, these stocks have been getting slammed. They rally briefly two or three weeks ago and this week theyre back down again. That rally in the group has been very, very short lived elsewhere, this is a quadruple witching day, happens four times a year, the quarterly rebalance, the expiration of stocks and index options in futures, thats a mouthful the s p 500, here, not far from new highs. I want to point out, were getting a rebalancing today. This is the s p quarterly. And we talk about all the buybacks yesterday, big buyback from microsoft, big buyback from target this results in a reduction in the share counts and including reduction in the share count, they wait in the s p 500. And today is when they do the rebalancing. These companies here are going to see share count reductions. Why . Theyre very actively buying back their stock apple in particular one of the classic buybacks it will go down a little bit today. That happens at the close. You get a lot of shares changing hands and the gain is trade all you want, but dont change the stock price. Thats the game going on to the close. Want to note here, s p 500, 3027, the old intraday high for the s p. 3025 the old closing high. And, again, carl, knocking right on the door of that. New live pictures coming in from the site of those Oil Facilities attacked in saudi arabia last saturday hadley gamble is live on the ground hadley reporter so were here once again in the mothership, the Largest Oil Gas and Stabilization Center in the world, in the heart of saudi aramco one of the five damaged columns, stabilization columns here in the heart of utilities area. This is where the boilers are, the water, this is where they create the steel they need for this kind of a plant remember, a few days go, the Defense Forces came out with what they said was evidence that iran was involved. They didnt say where it was coming from, but said weapons did originate from iran. They were talking about 18 uavs, drones, and 17 cruise missiles some information ive gotten, off record, seems to suggest these attacks were coming in so low, they werent going to be picked up by any massive billion dollar Defense Systems that the saudis have in place many of them bought from the United States. So if you look behind me, you can see once again, one of five columns hit at this facility that really is the heart and beating heart of the saudi aramco facility at large and what i found interesting over last few minutes, listening to the folks here telling us about how quickly they had to get to the flames before the entire facility was at risk, they said they had to get to the flames between 15 and 20 minutes in orb th in, or they werent going to be able to save things like this. There were 15 strikes on this facility alone and in terms of that Rapid Response, the explosions we saw, that video we had coming out over the weekend of the attacks not just here, but the other field as well, they said in terms of this facility, they had the flames under control within seven hours. That first 15 to 20 minutes, that Rapid Response time was critical and crucial to making sure this facility was able to get back online as quickly as it was. Guys hadley, it is david im curious, to what extent are these going to be able to be repaired on site some of the sphereoids are fairly complex and might require being fabricated outside saudi arabia again and shipped back over there are you getting any updates on that reporter absolutely. So really interesting, already that sphereoid that i showed you at the other area of the facility, theyre working on that, fixing where those basically where they were drones or cruise missiles, anybodys guess, the holes, they were well under way in terms of repairing. We have been told they have been most impressed by how the manufacturers, the supply to saudi aramco has stepped up and helped them in terms of getting as much material to them as needed as quickly as possible. We were seeing not just what happened with the repairs, but we were able to see one of the plates taken off i think you can see the video we sent in as we were riding along on the bus, the massive hole in the side of the plate. Thats the kind of thing they had to start repairs on. So, they were telling me the manufacturers have stepped up here and are working very hard with them, 24 hours a day to try and get these facilities back up online as quickly as possible. But at the same point, they said it was the critical Response Time that really enabled them to save as much production as they have and to get back up online as quickly as they have. Guys hadley, had they given you any guidance what they need to do to defend do to defend themselves against low level attacks . This is a good question, right . Anyway, ive been having these conversations on and off the record remember, of course, i asked the oil minister are you prepared to ask the americans to come in and help you he essentially said youre talking to the wrong guy youve got to talk to the defense minister when we heard from the Defense Forces, they were telling us what happened and what had been hit and what they thought was coming from potentially iran there, just not where it was coming from, but they didnt give kbus any guidance on the systems thatwould need to be put into place to prevent further attacks. If youre looking at this from the geopolitical perspective, it has to be eyes on the ground thats the israelis. Its something to keep an eye on as we head into the General Assembly. Russians think theyve got the answer too. Youve got to stop it you need sophisticated systems well beyond what we have right now. Once they get those drones powered by solar, look out thats the big question for energy at large. Hadley, thank you. Thats hadley gamble with some great coverage the message from the fed sarah is in washington where shes got a big exclusive. Hey, sarah. Good morning, carl. What a way to wrap up a dramatic week for the fed i am at the Federal Reserve for an exclusive conversation with the vice chair number two Richard Clarida, everything from growth to inside the Federal Reserve. Thats coming up next on squawk on the street. [upbeat action music] pilot were going to be on the tarmac for another 45 minutes or so. I cowe can do theyour screening at her house. Hi. 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Im justin rose. We are Morgan Stanley. But shouldnt somebody this is be listening . Pression. So. Lets talk. Were built for hearing whats important to you, one to one. Edward jones. Its time for investing to feel individual. Time for jim in stop trading. Shockers, lorenzo leaves. Its sudden. People dont like the sudden departure of a cfo look out, we dont have enough explanation. The stocks going down its disconcerting to everybody. I dont know i wish i had the answers, but i sure know the question what the hell happened to the cfo . We need clarity. We need clarida and we need clarity. So tonight . One of the most Important Companies the stock has been flat lining is z scaler. Cyber security the competition is intense now jay chaudhry said some deals are taking longer to close stock dropped instantly when he said that. Gotcha. I remember. Remember, the senator wants to break up facebook, fine its doing well. Stocks flying i mean, i guess did he deal with some of the parts . I dont know if the senator has done that yet. Thats why the stocks rolling. Very young man. One of the youngest. In his 30s. Weve got to break up facebook thats what we should be focused op. Jim, well see you tonight. What a fiery hour. It was a fiery hour and thank you, david, for being fiery. Youre welcome. Every so often. David, just joined loyalty club you get 100. When we come back, the exclusive with fed vice chairs clarida. Dow is up 58 as a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Good friday morning. Welcome back to squawk on the street. Were at post nine of the New York Stock Exchange. Sara eisen live in washington, d. C. Where shes going to sit down with the vice chairman of the Federal Reserve Richard Clarida. Markets trying for a fourth week higher you need 2,77,219 were shy of right now. Our road map of the hour starts with major averages closing in on market averages the week the Federal Reserve cuts rates we will speak with vice chair clarida on that decision if just a few minutes. Rocky days ahead for roku. The stocks sliding with the device wars heating up. Were also going to speak to the chamber of commerce ceo tom donohue and well get the latest on the talks between the u. S. And china. S p is aiming as we said for four Straight Days of gains as we wrap up the week but volatility might be in the mix because it is kwud drquadruple g friday repo market was the big topic of discussion during the week new york fed was in again today for a fourth time. The rate under 2 some are saying sort of back to normal. Yesterday sara and i spoke with manny roman who runs pimco, one of the largest Asset Managers in the world. They were focused on it. He said all technical in his opinion and not a sign perhaps of the inability of the fed to control rates. Watch that, obviously big ramifications for the fed Balance Sheet. Speaking of which as we said, sara is in d. C. Alongside a special guest. Sara. Thanks, carl. Good morning from the Federal Reserve. Im here with the vice chairman of the fed Richard Clarida thank you for taking the time. Big week for you guys, big day as we close in on record highs Biggest Surprise i think out of the fed is that the divide inside the fed is growing. Why is that . Well, you know, sara, first of all, we have 17 folks around the table and the fed has a long tradition of candid frank discussion about the economy i think its the strength of our system, chair powell indicated that the other day i think what it indicates is the economy is in a good place, but in the 11th year of expansion there are also some risks and the committee is looking at those risks and making a judgment on where to set policy. We think that is healthy and where the committee is united is our common goal which is to sustain maximum employment and price stability and thats personality. Its a little confusing as far as the outlook where Seven Members say there will be another cut this year and 10 members say stand pat or raise rates. Whats the market supposed to take away from that . Well, i think what the market is supposed to take away from that is that theres a range of views on the committee right now about the appropriate level of raise to sustain expansion we all agree were in a good place and we all agree the momentum is solid, but theres a range of views it also comes down to Risk Management as chair powell said, we think the adjustment we made this week and in july is providing some insurance against some down side risk to a favorable outlook. So two insurance cuts how much insurance do you need to buy this economy . Well, of course, and im going to say probably what you expect, were going to take this meeting by meeting were not on a preset course and as we get into the october meeting and beyond, well take it on a case by case basis again, we will act as appropriate to sustain a strong labor market and price stability. One of the descenters says you need to be more aggressive hes in favor of 50 basis point cuts saying he believes lowering the target range by that amount at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated down side risks why not do more . Jim expressed that view and we understand that of course, there are views on the other side as well from the other descenters, but i think the center of gravity on the committee is that the second adjustment was appropriate and, again, going into october and beyond well go one meeting at a time. Also out this morning saying that this move risks further inflating the prices of risky assets and encouraging households and firms to take on too much leverage. Why is he wrong . Well, we look at Financial Stability on a regular basis on the committee. We assess Financial Stability and right now we as a committee do not see those elevated risks. Were very attentiveto that. Were very focused on that i think he was making a general point about past situations, but i think where we are right now, the committee thinks that were in a good place. How likely is it that we just saw the final cut of the year . I didnt want to put probabilities on it. Again, as the summary of Economic Projections indicated, seven participants thought that under the baseline view that further adjustment would be appropriate policy, but again, thats not a commitment. We didnt vote on it well take it on a case by case basis. Well be very attentive to the data and the risk to the outlook. Risk to the outlook, how much depends on what happens between the u. S. And china on trade . I think thats an element of it let me talk more broadly about the risk we clearly have a slowing Global Economy. Just this week they marked down its Global Outlook obviously the u. S. china relationship is important. There is a slowdown in capital fending and Global Manufacturing and also some pretty important disinflationary forces but obviously u. S. And china are part of that and we refer to trade policy uncertainty as a factor in this, but its not the only factor. Global groware those all get or better right now . Certainly relative to where we were at the beginning of the year i think theyve been getting worse. And certainly i think the Global Economy in terms of projections for Global Growth have been marked down since july for example, the oecd downgraded it relative to this summerer in terms of Global Growth its getting worst. In terms of trade and global investment, its been pretty soft for a while now. Have you been surprised to see the resilience of the u. S. Economy in the face of a worsening Global Economy im not surprised in the sense that the u. S. Economy is a resilient economy. We have really been the star pupil in the class of the Global Economy for some time now with very strong labor market, strong growth, and low inflation. And i think a lot of other countries in the world would envy where we are right now. Im not surprised by the resilience, but we dont take it for granted either so thats why i think the Risk Management approach that chair powell outlined is the appropriate place to be right now. Do you feel youve tightened too much last year you know, sair rarra, i donk at it that way we take these decisions a meeting at a time. I think whats important, and you and i discussed this in april is that chair powell communicated early in year we would be adopting a patient stance for policy and we were very patient from january until july of this year. And the economy has done well this year. Both in terms of underlying growth and labor market. So well just take it one meeting at a time. You mentioned were the star pupil in the world in terms of economic do you care that the trade weighted dollar index is near the highs and continues to rise . As a Federal Reserve vice chair, one the first things you learn is that the treasury secretary is giving the u. S. View on the dollar, so im not going to comment on the dollar what we can say is that financial conditions are a part of the outlook the dollar is a piece of that but also credit spreads and equity values. Of course Dollar Exchange rates up move up and down for a variety of reasons and thats all ill say about that. The other Global Growth story is the tremendous amount of negative yielding bonds right now, 17 billion how do you see that . Is that problematic . Well, first of all, its a symptom of very, very slow growth and powerful disinflationary forces in europe and japan. I meet with european colleagues on a regular basis and japanese colleagues and certainly they would like their economies to be away from negative rates because its really a symptom of the challenges they face but importantly and as your viewers understand, the u. S. Is part of a Global Capital market so those negative rates impact our Capital Markets in some complex ways we have to factor that in to take that into consideration. How is that is that the explanation for the unburdened yield curve and the demand for u. S. Debt thats certainly an element of it. Were in a Global Capital market and i think i myself think a lot of the reason for the flattening of the yield curve this year was capital flowing in the u. S. To take advantage of our higher yields compared. So i think we have to factor that into the yield curve and the low level of treasury yields and other elements of the economy, but yes, its a big factor. The president on twitter, and i know youre not going to go there on the politics or the tweets, but he puts out this idea that its an enviable position that governments can borrow for nothing or even get paid to do so and that their currencies are much weaker and therefore theyve got the edge in this global competition is that a valid argument again, i think the way that i think about it is that those negative rates and those low rates are a symptom of very, very slow growth the european economy is growing at about half the pace of the u. S. Economy in japan theyve been fighting off deflation now for two decades. So i think the u. S. Economy is in a much better position now even though our rates arent negative thats a symptom of strength, not weakness. The chairman says he does not think we are going down the path of negative rates. Let me just restate what the chair did say which is that the fed looked at the possibility of going to negative rates after the financial crisis and it decided that in the u. S. Contacts that that was actually not a desirable place to go. Its certainly not something i anticipate that we would be considering. Is the takeaway from that that you would be reluctant to lower rates further from here because you dont want to have to get to a place where youd have to do that during a recession . I think what the evidence shows and what our thinking shows is that the federal funds rate is our primary instrument and we have the ability to use that instrument and in particular because we face potentially in a future downturn, our thinking indicates that its important to act when you can responsibly and preemptively to try to stay away from that bad situation. Talking about acting preemptively to stay away from bad situations, fourth day of repo from the new york fed talk about the alarm bells setting off in the Federal Reserve. Excellent question. Lets provide a little context this week there were some shocks in the repo market really due to two factors. One poorly tax payments and the need for primary dealers to finance some Treasury Holdings they had acquired. We and others in the markets expected some adjustment upward in repo rates and i think the reality is that the upward adjustment in the market was larger than the markets than we expected we acted decisively on tuesday and the rest of this week by doing very simple overnight repo operations to providely kw liquy its the federal funds rate, not the repo rate. Repo dislocations did spill into federal funds and as weve indicated in all of our statements, the objective of our policy is to keep the funds rate in that range and when there is a risk that goes above that range, we have said we will act and we did act. But its not normal, right, what youre having to do so is it a sign that people should be concerned about its not a sign of concern about the economy. The economy is in a good place but it is an indication that the repo markets and the federal funds markets are absorbing some supply now and there are some adjustments there that weve been making. Chair powell mentioned that he would be willing to expand the Balance Sheet organically in order to deal with this. Lets talk about that first of all, in july, at our july meeting, we made the decision that we were going to stop shrinking our Balance Sheet so its been constant for almost two months weve also indicated repeatedly throughout the year at some point we would revisit that decision and we began to let our Balance Sheet grow organically as chair powell indicated at the press conference, we will be discussing that will be on the agenda at the october meeting. Let me just say when that process commence, it will not be qe its central banking 101 essentially, currency is our liability, so as the demand for currency goes up, in order to keep the Financial System in a good place, you essentially have to provide that liquidity by allowing the Balance Sheet to grow organically it was true before the crisis and it would not be qe. Dont call it qe. Got it wanted to also ask you about oil, huge story. Big spike. Does that change the outlook at all . I began my career decades ago in college in the 1970s and oil shocks were a big part of the economy. Our economy is much different than it was then for a couple reasons. One, we produce a lot more oil we still import or net some oil but much less. So when oil prices go up, you know, gasoline prices go up. On the other hand, Oil Producers in the u. S. Do well. So our metrics indicate the u. S. Is much less sensitive to oil shocks than it was decades ago and of course obviously since the initial move up earlier this week, oil prices have come down somewhat as well. Also raises the question about the resilience of the u. S. Consumer it has remained strong through out some of these head winds how much confidence do you have that if the consumer can continue to be strong and carry this economy i have a lot of confidence. The consumers in my professional career looking at economics, i cannot think of a time when in the aggregate the consumer has been in better shape the savings rate which i view as a robustness feature is elevated, so households are now saving which means they have an opportunity to boost consumption. Household net worth is at high levels the level of distress in the household sector is low. Obviously employment gains are strong wages are growing up were in a circle with the consumer and of course since consumption is nearly 70 of the economy, its good that the consumer is in good shape. Finally fed listens tell us a little bit about this effort, what youre learning from the regional feds and how you might change your communication as a result. I know its an important effort for you. Well, thank you, sara, for asking fed listens is an innovation that chair powell has put in place and essentially what were doing is were going around the country by the end of october we will have done 14 fed listen events in every Federal Reserve district and here at the board of governors and the key point about fed listen is were listening, were not doing the talking. In tack were casting a wide invitation list to hear from folks beyond bankers and academic, Small Business people, folks involved in education and training i think i would say two things the first thing that were learning is the really substantial and important benefit of operating an economy at full employment, the real important gains across the economy to having a strong labor market were also hearing the importance of price stability on both sides we dont want to go back to the bad old days of hyper inflation or double digit, but we dont want to go to the japanese situation of deflation so i think were hearing those on both sides. Where are we on Inflation Inflation right now, sara, on our preferred measure, which is the pce index is starting to trend up towards 2 . As chair powell and others have indicated, oive indicated, over the past eight years our preferred measure of inflation has been running below 2 and we think its important to put in place a policy in which inflation will eventually operate at our 2 objective. Without giving a hint as to the next move, thank you very much for having us here at the Federal Reserve. The vice chairman the fed, guys. Another interview coming up i just wanted to mention, we have the exit interview for christine lagarde. Ill have that for you monday. Well be here in d. C. To do that and i will see you guys then back to you. Showing the weekend in washington great stuff. For more this morning were joined by jack and jason head of Asset Allocation happy friday, guys good to see you both jack, i have to imagine clarida saying he doesnt anticipate negative rates is good news in your view. Oh, yeah. Its funny, were hearing a data dependent fed in a headline driven market and i think that were getting a sense that perhaps this group of 17 policymakers are collective deer in the headlights. Weve got this global nanny state in Monetary Policy where if youre a Business Owner and you cant make money in this market, youre effectively an idiot, because 10 , one in Ten Companies in the u. S. Now are zomb Zombie Companies they can barely cover their debt service. Thats part of the reason why the fed has to keep lowering rates and why the fed cant raise rates. So whats happening is these companies are now crowding out profitable businesses from productivity, from raising prices, and from hiring people sears is a great example it should have been out of business ten years ago. But to your point, thats not new. Thats not a powell dynamic. No. No i dont think you know, i think anyone, super man could be in that role and be faced with the same problem so market implications for that, jason . If you agree with his view that were in this strange chapter of Monetary Policy. It is unusual when you have full employment, inflation thats trending to or at target effectively and you have a central bank cutting rates claridas comments were interesting because he kept saying Risk Management to me thats the reason why theyre cutting. The fact that he said other risks, global trade, Inflation Expectations coming down, Global Growth has decelerated, that seems the bar is pretty low to want them to cut rates at this point in time. Meaning what . That theyre done . No. I think the bar is low if you get any more weakness in the data or improvement or an actual trade deal, there is a lot of optimism in the market. If we dont get that, the fed probably cuts once more this year they want to make sure the curve is not inverted. They can say were data dependent and we step aside. Back to their point about Risk Management. Jack, i want to come back to this one in ten thick. 10 of allcompanies are just existing to pay their debt and can do so because rates are so low it seems like a lot. Where are these companies other than a company retailers these arent necessarily s p. These are among the russell 2000 and also globally its 13 given that theyve got effectively negative rates, even among Corporate Bond borrowers its a very low bar. I mean, its a barlower than a li limbo stick to try to be a going concern. We got a taste of that last year when short term rates start to rise and all of a sudden these Credit Conditions started waivering. Thats the concern we sort of backed ourselves into this concern and now how do we get ourselves back out without a lot of corporate pain and suffering . For us strategically were going to generate income from the consumer side of the debt. So well look at mortgages well look at that kind of loan. Were trying to minimize our exposure to, you know, corporate debt for right now we dont expect any central bank tightening, soo we dont expect the conditions to deteriorate we are on this tight wire with. One last thing on the consumer is it your base case that the capex slowdown melts into a hiring slowdown and then we do have to worry about the consumer thats not the base case. If this persists, situation on trade gets worse, not better, thats a possibility thus far we havent seen that spill over to the consumer job hiring is still very strong. Job openings are higher than people looking for jobs. We dont see any signs of that ultimately manufacturing where youre seeing the weakness is about 10 of the Economy Services is about 80 . It takes much more significant draw down for this to spill over. I wonder if gm will make claims look noisier and well have less claims. Thats where you look at a four month average you have to move that noise from the data. Its going to stay interesting. Thank you, guys. Good stuff. Thank you. When we come back, New York Times columnist jim stewart will weigh in on bob iger, disknee a disney and apple to managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. In terms of mega media mergers, this one would have been a block buster. Disney and apple its a deal which disney ceo bob iger says one day might have become a reality he writes, quote, i believe that if steve were still alive, we would have combined our companies or at least discussed the possibility very seriously iger had been working with jobs since 2005 to sell disney shows such as lost or i tunes. Pixar deal was an important one. Iger on the board until recently now the two companies are engaged in a fight over content in an ever crowded streaming space. Joining us now, cnbc contributor jim stewart. The book wont actually come out until next week. Were looking forward to reading it but an interesting excerpt, of course, to get peoples attention here. I would certainly love to see what are the paragraphs around that particular assertion, because on the face of it, i have to take that with a big grain of salt. I mean, a little bit of history here pixar, which was run by steve jobs, he was the ceo. And john lassiter. And disney distributed the films. In that period steve jobs and micha Michael Eisner fought like cats and dogs which is why toy story 3 never came out during that time iger took over, he bought it in buying it, steve jobs became disneys largest shareholder after he died, laurene jobs came the largest shareholder. Steve came on the board. Iger went on the apple board it was all peace and love. Disney pays steve jobs 7 billion. Of course now they were getting along. Iger is a charming guy the idea they would merge until now, i mean, they were not competitors back then. The only link was pixar and that wasnt an apple company. Now my question is why did it take so long for him to disengage . New the fact that amazon was able to go out and essentially assemble a huge studio operation has kind of made everybody think well, that must not be so hard. To your point, hastings told variety that they got outbid which did go down and says november it will be a whole new world as production costs score. Thats one reason that was one the worst performing s p names today. The margins for everybody, while this keeps going on are going to go lower, lower and lower. Its going to be a game of, you know, who has the deep pockets and how are they willing to reach and how long is the stock market willing to support people like netflix who are willing to spend an amount of money to gain dominance. The jury is still out. How many streaming services are there going to be . The dominant producers are going to be in a very, very sweetspot once this shakes out, the barriers are going to be very significant. I think one of the big questions, and this is where i think its very intriguing to me that apple is giving away this, if you buy one of their products, who can tie this access to the viewer to other musthave products amazon blazed that trail when they linked on their delivery mechanism which is the face of it had nothing to do with each other, but it worked out really well i think now weve seen podcasts, for example, is putting its new box free for users and thats a smart move i think too i think we are going to see more and more of this supposed free giveaways which will lock in the eyeballs and this huge battle thats looming. And looming is under way and were following it slowsly always appreciate your insight jim stewart. The president is making headlines this morning. Carl, thats right. The president is in the oval office hes got the Prime Minister of australia hereright now. These remarks are ongoing. Well have them on camera short be ly, but he is with the treasury secretary who said theyve sanksank sanctioned the Iranian National bank the highest level of sanctions. Well bring you more detail on that when we have it, but you remember the president tweeting a couple days ago hehad authorized even higher levels of sanctions against the Iranian Regime this coming as the president is in a diplomatic piece today alongside the Prime Minister of australia and as he goes into the United Nations General Assembly next week facing this crisis with iran the president ratcheting up some of the pressure here and now telling reporters in the oval office we have sanctioned the Iranian National bank. Well have more specifics as soon as we have it. We did wonder kind of openly whats less the sanction there are a handful of thing. There you go. Sanctioning the national Iranian National bank, the question is what are going to be the implications of that Going Forward s forward . The iranians having struggling for any kind of financing over the past couple years over the crushing weight of these sanctions already in place we need to get more information about what this will prevent the iranians from doing what they were able to do earlier this week we dont know the answer to that. He also says theyre making progress with china, but theres been hardly any headlines from this deputy level negotiation trade talk this week. Thats right. Well, what we dont know and shes been reporting on this, we do expect that the chinese delegation is going to go to usa farm country to meet with farmers, so its possible we get an announcement of some kind from the chinese there alongside American Farmers about purchases of agriculture products. That would be something of a bra breakthrough the entire premise was that they need structural change as the relationship between the United States and china aids here at the white house have told me all along the president doesntsee ag purchases as enough to get us to a deal, so the question is whether this progress on more than just purchasing the soybeans and other products. Thats a lot of information, or at least the best we can do for now. Appreciate it. Lets get to sue herera, get a news update. Good morning, everyone. Heres whats happening at this hour Southeast Texas continues to face dangerous flooding emergency. At least two people have been killed as the remnants of prop cal storm imelda swamped parts of the state with several feet of water in just a matter of hours. Forecasters warn the storm could drop 5 more inches of rain today. The number of vaping related illnesses and deaths is rising once again the cdc says an eighth death has now been confirmed and more than 500 people have been sickened. It comes one week after President Trump announced plans to ban the sale of flavored ecigarettes sin tech start up is now valued at 35 million based on the latest round of funding which raised 250 million and that puts it ahead of airbnb ap could this be the worst pitch ever check out this video from Yankee Stadium last night anaheim pitcher on court one, it went high and outside and the yankees went on to win the game and clinched their First Division title since 2012. That was high and outside, definitely thats the news update this hour ill send it back downtown to you, david. Yeah. I think i could have done that you just lob it up thank you, sue. Lets get to an etf spotlight this morning were keeping our eyes on oil as we wrap up a week. Crude has been all over the place. Down 14 earlier in the week in reaction to the saudi oil the attacks on saudi oil installations, but the oih are all well below the highs they saw earlier. Xoc is outperforming its counter part top holdings on the xle is amongst the leaders there. You see all the stocks having a strong fairly strong day today and a good week. Weve been hearing from hadley gamble about the saudi efforts to repair some of that damage and get that production back online. First time weve had a chance to get our eyes on it. When we come back, an exclusive interview with the u. S. Chamber of commerce breaking down the latest in the china trade talks. The Economic Outlook and aot l more dow is up 78 close to going positive for the week were back in a minute boston fed president who voted to keep rates steady at this weeks fed meeting saying additional stimulus is not needed adding lower rates to address uncertainty is not costless meantime, the business round table cut its growth forecast for the year because over half the ceos surveyed said the trade war had hit their sales. Joining us in an exclusive interview, tom donahue you said earlier in the week you didnt think there would be an graelt agreement on china and a real agreement will not be buying more crops that was backed up today by at least one treasury aide. Tell us what you think would mean a real agreement. Well, first of all, yesterday and today the staff level, workers both from bob lighthouses group and from steiner are meeting. I dont think anything very exciting has happened there yet. But we knowthat there was high level meeting among some of them with ambassador lighthizer what we hope to get out of this is a signal that when the leaders of ambassador lighthizer and his colleagues get together with the chinese negotiating group, theres going to be serious progress that will get the president s of both countries wanting to sit down and begin to put down a serious deal that starts with what they pulled away from some months ago. So this involves those silos of intellectual property absolutely. Well, ag i think youre going to see maybe some thoughtful purchases by the chinese which would help our agricultural groups the president pulled back a short time on some of his additional tariffs you might see some continuation of that. I think this is a chance for the working folks to get together and if they feel theyre doing all right to send a positive message. If theres not going to be a positive message coming out of this, its going to be pretty hard to go to the next step. We had business round table there was a duke survey of cfos this week. Both of them showed sentiment at three year lows. I wonder if you think thats reflective of your membership base, if its overstated and how much could it rally if we got some kind of serious deals you know when weve been watching the economy very, very carefully and ive been in town long enough to be here for the predictions of 40 recessions and i was here for the four of them that happened. And so weve been careful. Why a lot of those never happened is people took corrective action. And ive seen the numbers in the last two or three days are really moving up bloomberg said this morning, sorry about the competition, but they said, you know, it looks like the real pressure for a recession is over. I think it is critical that we move ahead on the issues that this country can deal with now get up on the hill and confirm and get approved and this will happen the canada mexico u. S. Deal, get people talking on the china side in a positive way and maybe jump on the work that came out of the senate in a very bipartisan way for half of an infrastructure bill that really could give people something to vote for before they run for rehabilitation youre not going to get an infrastructure bill before the election come on, tom, no way well, let me just give you one paragraph. I want to move towards it. Weve been talking about infrastructure for the last five years. And when you get republicans and democrats and universally voted out of committee with everybody voting it, there is a need and pelosi in the house and folks over in the senate know they havent voted on very much before this election and thats the thing and its only the small part roads, riches, and a little transit might be a good start. Were talking about that in strayed. Why not talk about it in infrastructure nobody argues it doesnt make sense. The question whether it can happen legislatively i dont know if youve been on since the business round table updated their statement. You commended them for it. Why are you sort of why is the chamber kind of agree with what the business round table thinks about a month ago well, maybe we have some common interest because most of the business round table members are important members of the chamber, but the issue is from my point of view what the business round table came out and said is what has been the fact in many, Many Companies around this country. I mean, they spend well over 30 billion a year just on training workers and making opportunity available for folks. And there is a renewed understanding that there is an opportunity to get good numbers, to run a good company, and still stand up straight and do what you to help our communities. Weve been doing that in education as Many Companies have weve been doing it on issues that create jobs as companies have i applaud them for talking about it but youve still got to make your numbers if you make the ifyou dont make the analysts happy, youre not going to be happy. One last speaking of analysts, as you know, we got guide downs on earnings from fedex and corning and adobe. People watching this gm strike, i mean, the longer it does take to put together any kind of agreement or bill, these managers are going to have to bring down some numbers, right well, yes and i do think the strike as the gm is important because it involves dozens and dozens of Major Companies who are the suppliers. I do think the fedex deal is unfortunate, but theyre the major connection, one of the major connections in the supply chain between the u. S. And china and those issues are going to be paramount and i think youre going to thats going to be in the minds of the folks that meet this week and next early next month because you hit it right on the head. If you dont catch this thing before it runs away, it could be a long winter. Tom, thanks for the time as always have a good weekend. Thanks. You too lets take you to break, but before we do that, look at shares of roku wow. Crushed again today. This after Pivotal Research downgraded the stock talked about increasing competition, streaming devices our Parent Company in producing a device that would be free for its customers. Thats been a key there. Slowwn odof momentum overall for growth stocks. Its been a rough two weeks. More squawk on the street when we return. 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. The market is coming down with a case of deja vu find out more on trading nations at cnbc. Com. More squawk on the street is coming up. Orlando isnt just the theme park capital of the world, 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. From recession fears to ipos, delivering alpha, encompassed high profile speakers, high stakes content. Leslie picker joins us with highlights that was fun. It was fun. A lot about the surrounding macro environment. They were skeptical the u. S. Recession was on the horizon, despite recent warning signs in the markets. Recession indicators are up people are worried about it. You see very high, 30, 35 probability. In i were to bet, i would say that wont happen because of tail winds i dont think were going to recession anytime soon, it is hard to see it with employment levels, income levels, job optimism where it is Manufacturing Sector has turned down well, not calling for recession per se, he did say he thinks the economy will see Slower Growth next year. We see the u. S. Economy slowing down and the level we have in mind is we are slightly above 1 for the first half of 2020, and obviously the elephant in the room is the trade war with china, and other distinct incidents across the world nearly every speaker at delivering alpha mentioned the trade war as a head wind to growth, and several people spoke about Consumer Confidence as this bright smpot in the u. S. Economy. If anything were to change on that front, there could be trouble for the u. S. Economy, guys Interesting Group indeed. Thanks, leslie. Lets send it to jon fortt with a look at whats coming up on squawk alley. Show time for apple, new iphones, watches, ios 13 it has been about a year since they said theyre no longer reporting unit sales of the rehone, investors dont seem to ca that much well tell you if they should coming up on squawk alley. 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. 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. Welcome back to squawk on the street. Stocks are higher, off the best levels of the Early Morning so far is tthe s p 500 is away from record levels. Lets drill down on one of the best performing groups, the Health Care Sector that move higher, comes as lawmakers continue to debate drug pricing bills on capitol hill biotech stocks and pharmaceutical giants like mckes on, eli lilly pushing health care higher. I will send it back downtown to you guys, carl, at the New York Stock Exchange making a stand today. Thanks, dom. Fed vice chair richard clar tis sat down with sarah. He said theyre not committed to a course of action he voiced concerns of a slowing Global Economy and trade uncertainty. Addressed the latest cash in the overnight repo operation for the fourth straight day. Not a sign of concern about the economy. The economy is in a good place, but it is an indication that the repo markets and federal funds markets are absorbing some supply, there are joumadjustmene have been making. If that werent enough, monday, she has a first on cnbc interview with christine lagarde, questions for her as well. Thats a big one. Meantime, settling into a little range, slightly off highs. Good weekend to you, david squawk alley starts in a few minutes. It was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. But were also a company that controls hiv, 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. Classical Music playing throughout hour 36 in the stakeout. As soon as the homeowners arrive, well inform them that Liberty Mutual customizes home insurance, so theyll only pay for what they need. Your turn to keep watch, limu. Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Good morning it is 11 00 a. M. At the newly renovated apple store in midtown, manhattan, 11 00 a. M. On wall street squawk alley is live