You guys know better that not nasdaq indicated down and s p anyone doing a secondary in your ipo is unparalleled. Down by one. That is a testament to the investors we brought into the down was down by 180 points ipo that believedin us again we did that a month ago over the yesterday. Every move we see seems to be premium of the price trigger by the moves of these the larger conversation being had about investors i think trade talks. There is a difference here lets look at the treasury this is why i think this is succeeding a, not only are you nailing the market the 10year looks likes it numbers, but, b, because you are yielding 1. 592 . Only for five years and you had to take in crazy amounts of 30year about 2. 1 money prior, right dont you think thats a huge part of this i do. I think we had very strong investors previously when we were a private company in todays environment, if we twoyear trading at 1. 462 needed them to do a 100 insider one Earnings Report of note today, Delta Airlines will participated ipo, they would have done it we didnt need that. Release earnings around 7 00 we had enough with the story that was resonating a. M. Eastern can i ask a question, please . He had bastian the delta ceo the professor you go for the science will join us did your chemist start with later today due at 8 30 a. M. The bigger molecules and start eastern time with the most important part on the trade front, those they didnt design it from scratch. Jean is our chief scientific highlevel tooks will resume officer. She was the founder of the today in washington. Company. How did she do it u. S. Equity futures have been she developed two kinase volatile overnight after a report that said u. S. And china made no progress in deputylevel inhibitors, not necessarily smaller circles. They werent closed loops. She had a history of doing this talks on monday. Successfully twice prior to higher level meetings are founding supposed to begin today. I cant imagine doing one report says the chinese there was that side of the story. My side of the story is i have delegation is planning to leave been part of four that have been brought to market. Earlier than expected. The balance of our team resonated to the street when we were out marketing the offering, you know, earlier this year telling cnbc the schedule has right after the government become, quote, fluid shutdown are we increasingly moving chip stocks taking a big hit on towards where chemists are going to be designing some of these all of these early reports but drugs rakter than molecular biologists what i think you saw was a have mod rated wave of immuno oncology coming getting you over to eunice yoon. Into favor clearly we should talk about what is in addition to obviously everything happening outside of going on in hong kong over this oncology and gene therapy, were apple app that seems to have going back into that wave. Been pulled. If your portfolio was eunice reporter thats right. Exclusively within precision first of all, on the trade oncology, which predominantly talks. Would be tkis, you would be up expectations here about any type 200 since 2015. Of meaningful deal have been because it works. Managed way down exactly the state media has been less athena, can you use this beyond lung cancer absolutely. Than encouraging and so the way that our pipeline the global times said there is was built is specifically little hope for pleasant looking at oncogenic driver surprises out of washington this mutations. That could be for lung, colon, week this pessimistic take comes smaller indications in breast, these are subpopulations of after the hong kong newspaper tumor types. You probably know the oncology quoted sources saying deputylevel officials didnt story as well. Make any progress this week incredibly successful company. They went after trek, which is a because the chinese have refused different target than ross 1 which is what we focus on to talk about forced technology predominantly. Its for solid tumors. Transfers, which is a demand of the u. S. Thank you the americans didnt want to we havent made clearly as much discuss lifting tariffs, which progress on solid. Is a priority for beijing. Business and science. The chinese delegation said to what about come on. Be leaving one day early forget about the money. We should be caring about our as andrew was saying, the white health thank you there are bigger issues than money. Thank you very much the nba doesnt realize house told kayla that isnt coming up, the widening fallout quite correct. That they dont have any from the nearly monthlong worker strike at gm. Information that the vice well hear from a top industry watcher on the ripple effects premiers schedule has been now hitting other businesses and what they stand toose lthe changed. A senior official said a dinner longer the two sides cant come is still on for thursday night together stay tuned youre watching squawk box on cnbc separately, the New York Times has been reporting that the Trump Administration was preparing to green light granting certain licenses for nonsensitive components of american suppliers for huawei technologies, which you remember was black listed Foreign Ministry commented urging the u. S. To ease its um houston, weve had a problem pressure on Chinese Companies including huawei but it didnt its human nature to hate problems. Comment directly about the trade but why is that . Problems inspire us to rewrite the rule books. Talks. One update on the nba and its the history books and future books. Spat with its chinese critics. Thats why so many people work with ibm the nba commissioner adam silver on everything from city traffic to ocean plastic. Is in shanghai the exhibition game between the from flight delays to food safety. Lakers and the nets is still on. Problems even got us to the moon and back to give you a sense of how on one tank of gas. Sensitive things are, the press and who knows where theyll take us next. Briefing has been pulled to take care of yourself. It shows how sensitive things but natures bounty has innovative ways are. The other thing that is to help you maintain balance interesting, there is a lot of and help keep you active and wellrested. Other things asking what does because hey, tomorrows coming up fast. Natures bounty. Beijing want want silver to do because youre better off healthy. Today, we might have a little hint the state news agency has been talking a lot about how the u. S. And nba has a double standard when it comes to free speech theyve made comparisons between the houston exec and former owner of the clippers Donald Sterling who had made some racist remarks but in the same way, the nba hasnt punished morey for comments that is the comparison being made now there is a suggestion that morey coming up when we return, should be punished similarly as breaking inflation data. Well bring it to you, the sterling was latest read on Congress Super the great irony there is on prices out in just minutes well bring you those numbers. The flip side, so many players, instant analysis coaches and others im all of it when squawk returns in a moment thinking of the criticism lobbed at lebron james and steve kur cme group can help you navigate risks and others that havent been and capture opportunities. More outspoken we enable you to reach Global Markets when asked questions about this, theyve tried to avoid the and drive forward with broader possibilities. Question at the same time on many other issues, including cme group how the world advances. Politics, theyve been very outspoken about how they feel about the president of the United States and others their people are criticizing them in a different way. I want to ask you about this apple controversy. Because apple appears to have removed an application that had allowed users to see effectively what is your take well, i think it was interesting because apple today said that they are now going to pull that app out of their app store for china. This app allowed the hong kong protesters to track the movement of police. Apple said in a statement that they decided that people were using it in a way that it wasnt meant to be used as we were talking about as well, this all comes after the peoples daily, which is a author tative communist voice had criticized apple for the inclusion of this app. It is just another mine field. You see apple as well as other Foreign Companies will have to face when dealing with such a look lucrative market. For years, theyve gone after them to remove the waze app. There has been a lot of criticism in the United States and the San Bernardino situation. In some situations that seem even bigger, theyve been unwilling. Reaction to the hong kong protest as well. Theyve threatened to visit the apple store. Im sorry, becky. All right. Go ahead welcome back to squawk box, everyone were just a few seconds away back to your point about the from the weekly jobless claims nba, what will be interesting is and cpi numbers. Futures ahead of all of this to see how packed the stands are future down by 60 points s p off by 6 tonight. Even though, there has been all lets get to Rick Santelli standing by in chicago yes, lets see if its as this criticism from the nba and cool as ppi. The Chinese Government no, it is not. But still moderate, unchanged on perspective, theyve said the september headline consumer nba has hurt the feelings of price index. We are expecting a 10th higher 1. 4 billion people this game has been sold out. And if you strip out the allimportant food and energy, a lot of the talk about the its also a bit inflationlike price of the tickets, the prices are hundreds of dollars. 1 10, half of expectations no revisions, up 1 10 and 3 10 that is common a lot of talk has been about how many famous american players respectively lets go year over year, up 1. 7. Will be at that game maybe a little cooler. Capacity of 18,000 will not be 2. 4 oncor year over year, and that is a number that continues broadcast. That will be really interesting. To be very solid above the 2 there has been a lot of level. And if we look at real average discussion on line the topic about the shanghai Weekly Earnings for september, they were up 9 10 versus our game has received 250 million last look up 1. 1, if we look up views. People are saying they are Hourly Earnings year over year, up 1. 2 really critical. Definitely up light. People said one of the ways they jobless claims, youve been are going to show criticism is waiting patiently. We move from 220 to 210,000, and by waving the Chinese National even 10,000 shaved off last week originally reported flag at the game but they are 219, now stands at 220, and saying they are not going to go continuing claims move from 1. 6, to the game. This is like an al gory of 5. 5 million, to 6. 84 so a smidge higher how far apart the two countries the aftermath, were sitting at are. We had ted cruz on levels and Interest Rates that were considered the highs yesterday on the long end. He was ee vis rating the nba for the curve has steep ened a bit more being so timid in coming to the short rates have moderated just a bit, and the dollar index Houston Rockets exec defense. Definitely losing a bit of mojo, but still in the grand scheme of things, its about twothirds a and coming in and being really cent away from the best close in strong and defiant 29 months. Joe . They have so much power there. A lot going on back to you. There is a lot going on weve got people over here were not getting updates on the thinking that nba totally score of the basketball game any more, rick suddenly im interested in preseason basketball. Anyway, thank you. Steve liesman joins us now capitulated. You guys totally mangled your theres a game going on in china right now. An nba game nba game, preseason game apology. We are this far apart. Between the nets can you the chinese think the nba and believe it was the nets, sorkin . What was the chance it was going over here, the nba is already to be the lakers a reason for it getting criticized in their which may explain why joe had to be as vociferous as he was. About i wonder. Defense. Go ahead he was going there i think from the chinese his team was going to be there, government perspective, they are saying the nba and a lot of right . Is it really impossible to find the score . American companies dont im looking to find the score. Are you really . Understand china enough. Yeah, im looking and its they dont understand the not so easy. History, the sensitivity about i think this may be the first time anyone ever googled a hong kong, how difficult it was preseason nba score for china. And maybe google wasnt set up this is when you read in the for the algorithms for this. Report today, they are saying i dont think anyone has ever cared before, andrew you may be the first that they feel that uk china liesman, what are you looking at got swindled having to give up its not a very clear Inflation Report here. Hong kong to the brits, very i mean, i think one way to do it long time ago. Is to keep it to the simplest still something they feel very soar about possible numbers, which is it is not the brits arguing looking at the year over year rate 1. 7 on the headline and 2. 4 on this point we were talking about that on the core, which is above the fed sort of expectation there when tuesday. They can refuse to go to the it comes when it comes down, when they adjust the inflation white house if they win but when nup, the cpi for pce, its about they ask steve kerr about it, in line. The dance he did yesterday on its at or close to the feds target goal which is the well i havent really studied argument of some of the guys who the situation and im unable to were against rate cuts hey, youre at the target. But when i look at this number, make any informed decision let me tell you whats going on. It was awesome watching him. We did 01, 01, 01 three months you saw Tucker Carlson in a row, then 03 four months in you have not seen a memo. A row. It bounced back, a reversion a part there are some negatives. I know it is money ill tell you some of the you have not seen an internal internals here vehicle prices have been coming came down. Nba note to all players, dont they came down 0. 6 they were up 0. 3 say anything you saw th hosts gasoline prices down two months in a row what else, transportation, that was the vehicle prices down two that is unbelievable. Months in a row. But then you have things like recreation was up 0. 5. By the way, think about its unchanged this month. Im just going to cut it short disney and all their business and say theres no definitive inside china drift here with whats going on with the Inflation Report. A lot of players have their the numbers appear to be at or own interests there as well. Around where the fed wants them to be. Some guys look at other numbers and say theyre light. Somebody must have said to others say its a victory some is of these players, look, getting at or close to where we should be here on this issue. Meanwhile, just so you keep it down know its 46, 47 lakers are up 4746 points. I know but corporations that the right supports know all about the money over there weve been looking the other way now we care about the human rights of the people we trade with is that the idea, we do business for 20 years and nobody on the with right said anything about it whats that . We dont when it comes to saudi arabia and other countries 20 years there is so much hypocrisy we dont care i heard the whole thing, joe weve been in this marriage a long time. Weve looked the other way for a everywhere we are all part of the same lot of problems with this marriage a lot of the problems have to do hypocrisy. Both of us with money for as much as were trashing our family and the squawk the nba, we could trash all you have the business round table coming out saying every Family Company is supposed to have a thanks, eunice. Purpose and mission and this and that you knew that was a joke. Im not saying its a joke. Totally in bed with the mob im saying does it change the dynamic you add an element, having spent a lot of time overseas the trade earnings on the agenda foreign policy, if we made them today. More capitalist, they could well talk strategy next become more democratic senator from nevada. Right and i think you guys are both u. S. Equity futures are up right. One guy brings up tpp, which was now up anything that comes out, as we an idea that would have brought them into would have sort of surrounded them with labor standards and environmental one. Head to break, a look at the and then joe is right. The dems abandon it just as biggest winners and losers surely as the republicans. This is an oped in the new premarket in the dow. York times today. Manju. Its fascinating because he writes in no uncertain terms, it turns out the wests entire political theory, what you were talking about china, has been spectacularly wrong. Ferocious Economic Growth in the past half century, but chinas growth has not come at the cost of a political choke hold. A darker truth is dawning on the world. They havent just failed to liberate chinese people. It has corrupted the rest of us outside of china can i respond to that i have just a little experience with it, not a lot, but this one program worked in russia its when we brought russians for farmers here, this is our lifes work. Over and when we employed them in u. S. Companies. But when a recall happens, that worked really well in terms perfectly good food goes to waste. Of showing them both u. S. Now, weve got away around that. Looks good. Business methods and u. S. Were on target. Blockchain on the ibm cloud democratic methods thats when we lost a lot of helps pinpoint a problem anywhere from farm to shelf. Intellectual property. With the chinese its used by some of the biggest retailers everywhere. Intellectual property, the others the other thing is a nice wedge. So more food ends up on your table, that if you make a bigger middle is that daddys lettuce . Class, the entire drift of yeah. And less food goes to waste. Humanity is greater wealth comes with demands for greater Political Freedom. Let me finish. Let me finish. The question is when do you pull the plug to evaluate the program and say its not working the idea that china eventually will be a country that provides some measure of Political Freedom to its growing wealthier middle class, i think its not time to give up the ghost on that i am a globalist i am about engagement. I dont think what we did before was not working. And now ill just leave it to and less food goes to waste. Im not your charity case. You guys to debate culturally were going to i am not your excuse to buy a i mean, its complicated new dress for the annual fundraiser. Yeah. Its complicated how it i am not the poster child for your big donation. Finally works out. You are trying to become a i am out of debts and in my own home. Consumer culture economy. I am off opioids. Im graduating on time liesman one thing we knew, joe. And on my way to a great job. Chinese people were demanding much more environmental i am. We are. Accountability of their local what it means to live united. Government as things as they got wealthier there. Maybe not Political Freedom, but certainly there was a lot more of an environmental because a lot of them were getting really sick. Thats right. You were the model for the americans. I dont know if anyone has seen that tv show absolutely. My kids believe my wife and i to be russian spies the guy living next to you jim comey . Hes very tall hes there and i dont know it gm has reached its fourth week wage losses for workers and suppliers are mounting quickly joining us to talk about the growing fallout, patrick anderson, principal and c. E. O. At Anderson Economic Group theyve been releasing reports weekly on the financial strike adding up. Is it not, patrick time now to get you ready for is it adding up to the point where both sides are saying, the trading day ahead. Were ready to do some things . Its adding up to quite a here on set, chief investment bit. And now in the fourth week, and officer for the americas at dws essentially its going to be the entire fourth week now were looking at potentially part of the fifth week of lost group. I was walking over before you wages. Most of these workers have now lost two paychecks came up here, you were in a bad they tend to be wellpaid workers, but few americans can take two paycheck losses mood, sour look on your face i said are you bullish and General Motors, even last it is early week we said they lost 660 you said, no im not. Million. Their average daily losses now i said im great but im not are about 90 million, we estimate so it is a very, very expensive strike now that has hit the entire southeastern michigan economy. Its cost over 400 million in bullish. Lost wages youd like to be in the stock that was last week its going to be more this week. So its expensive for both market you dont feel that way now but sides. People forget that becomes payroll tax and federal income you would call it short to med tax. And michigan income tax. Yum turn so, you know, michigan isnt really a place thats so flush i dont expect the park et to that it can afford this either, i dont think. No, the economy has been slowing. The midwestern economy has been reasonably good recently remain high. But the economy is slowing auto sales are slowing as you just noted transaction prices for autos are you would lighten up, get going down because demand is slowing. Defensive. Weve sold record numbers of cars the Automobile Industry in the what would you do . United states is healthy we have good products. However, Companies LikeGeneral Motors have a cost disadvantage with Corporate Credit state when you look at the most efficient of their rivals. And thats really what most of this debate is about where the dividends are safe its, as ive written about here, theres three big issues on the table we believe the trade conflict and the least difficult to deal with is just plain money, which between the differences between would be a wage increase for the u. S. And china workers, which General Motors said at the beginning they were for those trying to understand willing to offer what happened here ahead of the so theres big issues on the table which is why the strike is divorce. U. S. And china are in the now headed through a complete process of separating. Month. Why the expense to the workers, i think they are headed to a the expense to suppliers, the expense to the company is adding divorce. A difference of ideology. Up and im actually quite concerned if we go into a fifth week where are all the suppliers the lure of 1. 4 billion all of them in michigan . People allows us to look the many of them are in lansing . Right around lansing, east other way on a lot of issues because this has gone so lansing. We have two General MotorsAssembly Plants that produce a lot of the products. Also flint but you have michigan, you have northern indiana, you have ohio, public, it forces people to pick and then you have places, for an aisle example, in kentucky and it is incredible how far tennessee and texas. But the midwest is still the center of the American Auto wevegone industry ontario also is very important, especially the ontario basically from windsor out to london that area of the country, that area of the continent produces an enormous share of the manufactured goods right now were looking at if you define that as a state, wed if we look at late 2020 past the essentially be looking at a singlequarter recession in this area of the country going well outside the Automobile Industry. Elections. The chance of that happening for and a lot of towns which have the next year and a half, you are going to be wrong there. Auto industry dominating the it will go above 3,000 or bee economy are really feeling the pinch. Michigan is an important state for the election, too. Lee 2,700. I just wonder, who is going to it is a long cycle. Blink, do you think, patrick a lot of things are more its not just blinking here elongated than usual its three days we talked about it with china, too who needs the deal more . After the last slow down from well, both these parties are these highs, that has a hard intertwined remember, if General Motors doesnt make profits and time doing that. Last time we were on feeling make products that Consumers Want to buy, there arent any more bullish jobs for the uaw where are you . Are you feeling a little better . And if General Motors adjusts its work so its moving its i think Interest Rates plants around wherever it wants and acts like, say, an falling again are forcing Electronics Manufacturing company, the uaw may not feel it has a role or its workers may investors to get near the same not feel it has a role so there are serious issues on the table here return if you look where the markets General Motors leadership signalled this very clearly last have been, it is only 2 from fall when they unallocated those last september three plants, three storied plants that had a reputations weve marked time. Earnings have done the same and histories. And that they need to be competitive in order to weather thing. I do think this trade conflict the next downturn. And thats really whats the or war that has redefined this major Sticking Point on the table. Its not just about money. Its about the future. All right relationship, im not sure if it are you optimistic about the rest of your schedule, michigan, is a divorce but a i mean im not. Im worried about you, you know, recertification of a partnership with what ive seen so far are you worried . And creating an unforced error i am worried, yes i bet youre worried. Theyve got some tough you bleeding into the equity have some tough games coming up. Good look, though. Markets. That said, will force investors we appreciate you coming on today. Hopefully this works out as to be vested if they are going well okay, coming up whats ahead to maintain the purchasing power on wall street of their capital and force them bank of america, shes going to be joining us to make sense of to get morris being. I think we are in counseling. The wild market moves. Check out the futures at this hour 45 minutes before the market i think couples counseling. Opens, and wed open down. Weve got all this time dow off 36 points. Together s p 500 off 3 1 2 points 20 years you dont want to throw that stay tuned youre watching scott walker on away you dont want to go into the cnbc squawk on cnbc singles scene behind the chainsaws. Well find a way that these are not irreconcilable smart. Yeah. Ok. Youll find a way. You think we are going to if youre in a horror movie, you make poor decisions. Its what you do. Divorce and throw all of those this was a good idea. Shhhh. Years away, andrew im being quiet. Youre breathing on me if you want to save fifteen percent if youve got kids, it is or more on car insurance, you switch to geico. Its what you do. Still a relationship lets go to the cemetery there are going to be weekends we do things together and Difficult Conversations and we are going to date other people S P Companies are growth minded entities. If we dont look east, well look south. Are we still going to have sex . Is china you okay with that . You took it to a different plants capture co2. Place. I was serious about that, i think it is so important for what if other kinds of plants captured it too . Both sides it is but you also have the if these industrial plants had Technology Hard liners on both sides amping that captured carbon like trees it up making it more difficult we could help lower emissions. To come together with some deal. Carbon capture is Important Technology we are going to do a half and experts agree. Thats why were working on ways to improve it. Measure deal with grains so plants. Can be a little more. That would have been easier like plants. To do last week. I do think china took a miss man how can i deliver step with the nba thing. Superior longterm results . Now the American Public that it begins with a distinctive approach to managing money. Didnt even know these talks that for over 85 years were going on is up in arms. Has focused on keeping confidence up when markets are down. It makes it more difficult for an approach where Portfolio ManagersPresident Trump to make a deal work well independently. And even better together. America knows about hong who dont just invest, but are personally invested. Can i find a proven approach kong he cannot afford a recession designed to deliver results . With capital group, i can. Going into 2020. Talk to your advisor or consultant china is not thrilled with the for investment risks and information. Prospect of Elizabeth Warren both sides have allowed the welcome back to squawk other to deck taictate coming in box, everybody. The futures this morning are indicated a little bit weaker. Although it seems that the markets at this point are waiting to take their next cues why was he so optimistic . On whats happening with the i dont know. U. S. china trade talks hell talk to people in dow futures are down 33 points washington but not beijing s p futures off 3. Nasdaq off by 9. And the closely watched anything they tell you from were not going to do that, i guess. Washington could be negated by we were. The president. What if the nba becomes the did you see how they did that at the last minute . Andrew lets look at a few stocks to watch. Check out shares of sprint and pingpong they want the gm to be tmobile good news for both of those disciplined because they think companies. Mississippi dropping its legal it is just as bad as what challenge to the proposed 26 sterling did that will never apply. Billion merger between the two wireless carriers. Hans, i got lost. And this comes following an agreement between the two sides are you raising cash which would, among other things, what are you doing no, no. Expand high Speed Internet we are trying to be vested in access to the states rural areas. Youre looking at sprint stock up marginally, tmobile off things where we can get growth slightly a little bit of that is a play but also look at shares of dow component united health. The stock downgraded to hold from buy at jeffries which points to tough on the international front, we competition from health care rivals anthem as well as policy are looking at more developed uncertainty related to recent markets and Bigger Companies court rulings. Of course, the upcoming we are trying to navigate in a president ial election which is taking a toll, really on the whole space. Responsible way. Were going to start this you look like you have the were going to savita eventually weight of the world on your if we come out of commercial shoulders. Are you okay break. We may be able to tell you the nets are up 5755 at you good is it starting to weigh you down a little bit halftime halftime, so were at a i worry about the dating break. Break in the action break in the action its a preseason exhibition nba analogy. I am not sure there is a market game, but it happens to be in china. Yes for guys with bow ties very closely watched. Who are we hoping for i do. Guess were hoping for the i think we are in counseling lakers to beat the alibaba guy i was thinking the nets because theyre here all right. What do you think, sorkin, do thank you both we want the lakers to beat the coming up, more on squawk alibaba guy . Box. The story of one of our favorite im a new yorker. I was in new york when the nets stocks this morning. Were in jersey why Bed Bath Beyond shares are it makes me so upset i have to root for the nets at this point. Sorry. Were watching. I cant believe it closely watched lakers and nets soaring. No, i did not get in game is underway in shanghai sfx [phone ringing] chinas government purportedly prohibited team and nba post game news conferences for the latest youre not allowed to wear anything here, are you, becky, cant say anything with uighur it was a washington game. The washington game where the fans had google uighur google uighur they had tshirts on, took their signs and ticked them out. Espn, its crazy. They resorted to talking about sports i mean, who would have ever thought that espn would be talking about sports Jonathan Chang is china bureau chief at the wall street journal. Are you a basketball fan, too, john i am, but im a raptors guy because im from up north. Definitely, yeah you had a few things what a great, great year. I even became a whats that, raptors fan. I think were all fans after last year. Is there any way the nba comes out of this without looking bad . I just dont see how they do this now, jon. No, i dont think, i dont think there really is a way for them to come out of it unscathed. There is a little bit of damned if you do, damned if you dont on the apology china makes it so black or white. They really arent really in the mood to have any compromise. You have to go all in or get out of the country you know, its possible the nba manages to get through this and, you know, without being blocked entirely but it is going to be tough going for the next couple days, thats for sure. Is there any way they could give china the apology that its looker for and just say other you still have service . Call the Insurance Company its them, calling us. Companies in the United States, its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. Everybody understands whats happening here i said ask how soon they can be here right now . 1. 4 billion consumers, you know, whats now . 500 million basketball fans or he says theyre surveying our property now theyre probably at the wrong house more, whatever we kind of understand that i dont see any hovering theyre over a barrel, dont we . His name is hovering . Or do we really want them to be look up . By automating claims with Machine Learning and analytics, the one entity that stands up and says, all right, its not cognizant is helping Insurance Companies advance going to be about money, its how they serve even hard to reach customers. Going to be about human rights cool does anyone really expect them to be able to do that . No, maybe the only ideal can expect that to happen. At the same time, the nba has so much more clout than any other brands that come in here arguably, china needs the nba as much as the nba needs china. Of course, thats a thesis the nba may not really want to test, but thats you know, thats what a lot of people are saying and they have a point. But you know in our conversations with chyronese basketball fans, you know, no one would dare talk to the wall street journal and say otherwise. But they all say, look, i love basketball i have been a basketball fan since yao ming was drafed. But china you know country comes first, basically, so thats sort of the deba it that people are sort of weighing in their heads here i think the nba if theyre smart, i think the comment that they realize announcer fidelity is redefining value if there is any entity that with zero account fees for brokerage accounts. Can say you need us more than we need you even apple, i dont know, i and zero minimums to open an account. Dont think can say that so of all the maybe the nba is at fidelity those zeros really add up. The one entity that can say that maybe ill win has some sway over china because saved by zero its so important. John, i just wanted to play back this quote. We were talking about it earlier with steve leishman. This is in the New York Times today in an op ed, it says, chinas economic miracle hasnt just failed to liberate chinese people, it is now routinely corrupting the rest of us outside of china what do you make of that yeah, look, thats an argument made by a lot of folks right now who say an engagement with china over the last 20, 30 years hasnt brought the democracy or sort of gains that welcome back to squawk box. Weve expected you know that political legalization of the economic legalization. And you know, thats a thesis that i think we are still all Bed Bath Beyond hires former trying to figure out here and you know some people have already made their target operating officer determination, but i think with each one of these episodes we hell start there soon get a new test case. The nba is different it doesnt follow the playbook the revamp with big names. Of the past. They usually cave in and apologize, a lot of people say the nba will show more spine they actually have shown more than others. So whether or not its enough, thats a different debate. But certainly you know this story isnt finished yet. We can get a payoff formerly with in ordnordstroms d things happen quickly. No knows if hong kong is the winning, you pull out a thread, other giants who knows if that brings there is a certain skill set. Something, i dont know for lack of a better word an arab spring a magic gut or something leak that maybe not. Maybe not. This guy has got it. That whole thesis, andrew, could change in an instant im saying, if i had to stock theoretically. All right. John, thank you. You want to believe your ip. A store with inventory that was well update you on a score again in a couple minutes. Halftime. Oh, its halftime. Going to sell to anybody one thing, once they start men, women, children, teens, it again, it is the normal would be impossible. Halftime the times . Agreed. All right we are under an hour until the you see what i mean, you can opening bell on wall street. Have a retail skill in your so lets talk markets and what you should be watching today, blood. It will translate. Joining sus the managing director and head of u. S. Equity there is a reason stock is up and quantitative strategy at Merrill Lynch global research. Today. Have you gotten the heavy one . Savida, were watching china its not just the nba game weighted one . All of this falls into the trade you got one talks. Its not just basketball. What do you tell people yeah, ahead of this well, its interesting is it hot balls i there they so far the the feeling is there beads in it . Market has seen reconciliation no. I think the question is do we want a hasty trade deal if it it would have been used to make comes at the expense of longterm growth so thats the question this isnt just about soy beans. Its about tech. A heavy curtain its about National Security a weighted duvet. I think those are the issues that companies and investors need to be thinking about. So you know, here are our trade why havent you gotten one . Ideas. You dont have the money for it . I think defense seems to be a i havent had time. Great place to be for the fourth well go this weekend quarter and the future it makes you feel like you because of the geopolitical tensions across the globe. Are in the womb. I mean, were hitting a fever are they beads of glass . Pitch in terms of income and i want to be swadled. Equality and shifting to protectionism. There are all sorts of competing when we come back, lights out forces that i think will bolster the idea that nobody is going to in california. We have an update on the cut defense spending at this point if time. Millions of people in the dark right. That would be a pretty as wild fire risk forces massive shortsided thing to do. Although you could see a situation where its going to be a very nationalistic spending power shut downs and you are only going to get and first, a look at the latest dollars coming from your home country . Potentially winners and losers i think the other argument to your point is go domestic. So think about u. S. Companies that will benefit from u. S. Growth and for now, multinationals look a little bit risky. One of the things we track aciduously in our quantitative work is earnings revisions we have noticed analysts have been revising upexpectations for Domestic Companies far more than for multinationals through the at t network, edgetoedge intelligence so i think what we are seeing gives you the power to see every corner of your growing business. Across the globe is a lot of uncertainty about this idea that from finding out whats selling best. Has globalization actually been good for Corporate America when to managing your fleet. Its been bright for margins, but has it really been good for our competitive family Elizabeth Warren defense spending so thats the warren factor i to collaborating remotely with your teams. Think that we talked about giving you a nice big edge over your competition. Separately separately. So i think that there is a lot of optics and fear around thats the power of edgetoedge intelligence. The idea of a warren win and not being negative for corporation at large as well as for defense spending you know, from a political perspective, the one sector that i think we want to avoid heading into the elections is healthcare because healthcare its down. Its down, i think it could go down further. If you look back in 2015, we have the same story. In 2015, healthcare was super crowded by disastroindustrious. Its super crowded today the seconder heated up in the its one of the sectors theyre looking for growth i went by a sector by sector call. Earnings have been great, fundamentals were great. They were great in 2016. What mattered more is headlines and politics i think thats keeping generalist investors out of healthcare for the time being. Thank you meantime, i want to go down to the New York Stock Exchange where our good friend jim cramer joins us now a couple stocks we can talk about. We can also talk about the nba and china, jim. Do you have a score is it halftime were in the halftime but, curious to get your thoughts. Atkinson is a fabulous coach. Id love to hear what he has to say. She probably one of the more thoughtful people. The nets free spirited remember who the nets are owned by maybe coach kenny is a jam here. Who are you rooting for i actually just ordered the nets package the nets are fun whats your take on how to play todays market . Given whats taking place with china or not and we dont know, obviously, washington. You know, i have been trying. The various discussions we just had about healthcare there is the deminishing number of stocks that you can like here, almost every day and i find, for instance, i had hormel today i got my hormel Pumpkin Spice spam this thing sold out in seven hours. If you are just down there buying hormel, you are kind of running out of ideas i think there is a tremendous lack of ideas and new ideas to buy. Delta looked good. Then you got to sell delta i mean, this is, wow, its a tough time okay. I want to hear more of your ideas on dell that i am sure you will be talking about that on quk t see isawonhetrtn a couple minutes where we will see you. Squawk returns in just a moment announcer welcome back you are watching squawk box live from the Nasdaq Marketsite in times square. Good morning, everyone. Welcome back to squawk box. U. S. Equity futures are basically flat lining. Weve seen a big roller coaste ride on concerns that the trade talks were not going well and the vice premier would leave a day early. There has been contradicting headlines out there. White house telling cnbc the schedule has not changed dow futures down by about 11 points s p 500 futures down less than ive been a caregiver for 20 years. Half point pge shut off power to millions no two patients are the same. Of homes predicting the next step for them can be challenging. The total number impacted is in today were using the ibm cloud to run new analytics tools the millions that help us better predict and plan a patients recovery. Residents scramble to buy flashlights and food ultimately, its helping thousands of patients some were frustrated by the short notice and difficulty return home. And who doesnt love going home. Finding information. Pg es website was shut down by overwhelming traffic for the second day coming up, the worst year for ipos see which have actually performed well Delta Airlines reporting its earnings ed bastian will join us live to talk about those numbers talk about those numbers Retirement Savings with pacific life sponsd and crea bypa pacific life. Ng. Which means you can retire, without retiring from life. Having the flexibility to retire on your terms. Thats the power of pacific. Ask your financial professional about pacific life today. We take you washington, d. C. A few moments ago. The treasury secretary and the chinese delegation arriving at u the tr as this video rolls as we have endured a wild overnight session in futures as we got a bunch of conflicting headlines about the u. S. Trade what we do know is the delegation arrives for u. S. China trade talks of course, we have complete coverage keep an eye on europe as well, ten year is back on as september cti runs up cool up 1, 7 greer on year. We year on year. Jim, we know what we went through last night in some of these taped bombs about travel schedules and currency plans the times with the piece about limiting access to American Capital now. We have become hostage to events that are not totally out of our hand, i whether your beauty routine is 3or 57,. Make natures bounty hair skin and nails step one. Its the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. Natures bounty, because youre better off healthy. Welcome back. Venture capitalists are expected to invest 100 million this could be record setting in the private market but the worst year for the ipo joining us is rigup founder and managing partner jeff lewis who was the first outside investor i want to talk to you about rigup. This is so different in terms of what is taking place with how we are thinking about these Consumer Companies jeff, im curious if we can talk about this broader concept which is why you think all of these ipos have done as poorly as they have absolutely. I think a lot of these companies have been overvalued almost to a tee. Almost every Single Company that has gone out has been overvalued in later rounds. Geoff, private investors were supposed to be the smart money is that what is happening here i think at the end of the day, people are never as smart as they seem from a distance the challenge has been so much more capital in the growth stage, the later stage there is too much capital on the private side chasing too few companies. These prices have really gotten bid up that said, there are always exceptions to the rule we believe in three or five years, when rigup goes out, it with be an exception you have a new valuation today and have raised some new money. How have you thought about the valuation piece of all of this i think several different points to make but i think the important dynamics are, there continues to be opportunities for Companies Like ours to serve markets that arent being served we build technology for energy enter prize companies that decemb desperately need it to manage a Blue Collar Work force in the gig economy. From our perspective, there is not a lot of Technology Businesses focused on building this layer, it allows us to be a little more aggressive and the ability to be very rigorous thinking about Unit Economics and growth your company is a platform or oil, Energy Workers and employers. Correct to separate issues, you have money coming in. You have a 300 million valuation. I cant comment on valuation. You raised 300 million correct given its vintage and looking around and thinking, did we value properly how do you think about that . I cant speak for the others who have gone out but for us it is about highreturn growth. The opportunities are readily available in the markets we serve because the workers we serve desperately want to make more money, get more jobs, have more empowerment the Energy Services desperately need more so they can make money. You were one of the original investors in this company. As these things get marked up and at some point, there has to be an exit absolutely. This business, we believe, is very fairly valued you were earlier talking about the Energy Shortage in california with pg e energy is a massive industry 100 billion just with tam rigup has become the default platform for people to get to work, make more money, freedom to work on the jobs they want across all facets from downstream to renewables we believe this is a business carving out a dominant position. Based on the fundamentals, the valuation is a very reasonable one. I think the piece of this in terms of valuation im trying to get it and understand, there is an argument that these monies are staying private too long so by the time they get to the public market, there isnt the same command there used to be and the growth for investors to participate in how do you think about that . Dont think thats going to happen here. It has happened with a lot of other companies. There have been other labor marketplaces that have gone out night and day. Something like upwork, fiber, those are like Michaels Craft store to rigup as home depot it hasnt raised that much capital. Theyve only raised under 500 million. This round at 300 prior to that, i think less than 200 this has been a relatively capital efficient business on top of the metric. Investors need to be weary but we think this will be an investment to the rule final word . Do you think youll try to pursue an ipo or sell the company . I think well try to build the best business we possibly can. For our investors and stake holders, Founders Fund and the first investors, the ownness is on us to deliver thank you for waking up early on the west coast. A pleasure. Thank you. Well tell you about a new call from goldman sach that says the only thing between us and the earnings sector. Looking at the european markets. Biggest earner is the cac. Well be right back. Make fitness routine with pure protein. High protein. Low sugar. Tastes great high protein. Low sugar. So good high protein. Low sugar. Mmmm, birthday cake pure protein. The best combination for every fitness routine. You should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Hi, welcome back, everybody. Third quarter earnings season is upon us and the expectations arent pretty. Our next guest out with the call he says the quarter will end up being negative orl if the normal surprise splaz out, we could end up with flat to slightly positive numbers thats according to mike thompson, managing director at Goldman SachsAsset Management mike, youre looking for earnings decline of 4. 1 indeed. This would be potentially the first and possibly last quarter of negative growth as we get out of the really tough comp period as a function of that tax reform bill so, yes, right now the consensus down negative 4. 1. Weve been seeing about a 3 to 4 surprise. I think your best opportunity to get that deficit up would be the technology sector, which is currently the read on that from the market is down 8. 5 prrs. For earnings. Yes i feel like ive heard this story several times the last many quarters. We keep thinking its going to be an earnings recession and it turns out companies have under promised and over delivered. Do you think that would be the case i dont see why that would be the difference theres been a lot of hand wringing heres a little more of good news as we move away, again, from 2018 when we have that inflated earnings because of all that extra cash that Companies Got from tax reform, and in 19 it really stole a lot of that earnings potential right there because the comps went higher. I think you now get to see a better picture of what earnings are, and they look better. They look better presuming you continue to have avoid recession and you have even inexorably slow growth. Expectations of next quarter already over 3 , then it even getswere looking at an 8 expectation for Earnings Growth. Thats such a long way out and there are so many things that could change things between here and now i mean, just the china trade talks because they have a huge impact on what any of these companies are reporting a month from now, let alone six months or tway year from now. Absolutely. I think the one interesting thing is that if you listen to the narrative from the market, you know, at Goldman SachsAsset Management were considering a lot of this stuff. But you do concern yourself about kind of the impact on trade, you know, the trade issues and the notion of a global slowing that would have an impact. But if we avoid if we avoid recession and theres enough economic strength, we think that these earnings continue to kind of move forward. And let me just kind of break this up. Lets think about the s p. The s p has the ability to generate earnings, not just from basically the businesses they have the ability to buy back shares. In fact, thats what theyre doing. Do you know, i was actually looking at an s p report, and every quarter they add. 7 of Earnings Growth just by virtue of buy back. So on an annualized basis youre getting 2. 8 annually in buyback yield add that to the 1. 9 that you get from the dividend yield. Youre at 4. 76 starting. So the headline is, okay, were looking for negative numbers, but maybe dont believe the hype just yet . I think the numbers might be actually not all that bad. Mike, thank you its great to see you. Good to see you all right coming up what is coming up lots coming up were going to talk about facebooks decision to allow Trumps Campaign ad cnn schoez not to run should facebook shareholders be worried about regulatory backlash delta numbers well bring them as soon as they cross. A first on cnbc interview, c. E. O. Ed bastian on squawk box on cnbc you can get a satisfaction guarantee. You can also wonder why our competitors dont offer that. Schwab, a modern approach to wealth management. Announcer fidelity is redefining value with zero account fees for brokerage accounts. And zero minimums to open an account. At fidelity those zeros really add up. Maybe ill win saved by zero so servicenow put your workflows immhm. Cloud, huh . Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Announcer let the trade talks begin. Highlevel trade officials meeting in washington. Will a deal get done and what does it mean for your investments . Earnings from delta. The companys c. E. O. Joins us for a first on cnbc interview. And facebooks stand on political ads. The social media giant doubling down on its policy to allow speech from politicians to go unchecked. Is it the right move well debate, as the second hour of squawk box begins right now. Live from the beating heart of business, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures are now back down 35 points or so wild ride earlier when most of us were sleeping down 300 points, then turned around and actually got positive now down just fractionally after a positive session yesterday well keep an eye on it. Yeah, dont turn away anything could happen at any moment heres what else is in our headlines at this hour apple has removed an app from its store that protesters in hong kong were using to track Police Movements apple had been under fire from chinese officials which it accused the company of being complicit in helping those protesters the app had only gone online last week. All of this comes as u. S. china trade talks are set to resume and well have more on that in a few moments. Fidelity investments has joined rivals in eliminating commissions for stock trades schwab went to Commission Free trading and was followed by e. Trade and t. D. Ameritrade. The government will be out with the Consumer Price index in less than 90 minutes time. Economists think the headline inflation will be up 0. 1 with the exfood and energy rate up 0. 2 we should note earlier this week economists had similar expectations for the Consumer Price index which showed a decline of 0. 3 last month Delta Airlines just out with Earnings Company reporting profit of 2. 32 a share beating consince estimate of 2. 26 joining us the c. E. O. Of Delta Airlines good to have you on the day, mr. Bastian. Your stock had been doing better, i think youre the second best performer in terms of airlines. You dont fly the max, but interesting that overtime pay among your pilots could be a part of adding to some of your costs which people have been following kind of closely. Youve had to make up for a lot of the canceled flights. Thats a good problem to have, i think. It is a good problem to have. Thanks, joe. We had a great quarter in our third quarter. Demand for our product has never been stronger, and clearly not having the max helped us on the margin i dont think it was a main driver of our results. Our revenues were up close to 7 in the quarter we were able to flow that through to bottom line, expand our margins by 200 basis points. Eps was up 30 , and the result was a 2 billion profit. And, yes, we did have some cost pressures giving the large volumes weve been carrying. We addressed it it n a call wit the analysts a couple weeks ago. Well increase our costs going forward. That said, Fourth Quarter were looking to grow our eps meaningfully as well thats probably what people are looking at in terms of stock. I mean, its not a huge move up 1. 5 who knows by the end of the day. But is that something that people would have noticed that you warned about costs maybe going up a couple weeks ago, and then thats reflected in the report is that what you would attribute you beat earnings why do you think the stock is down because of the guiding costs a little bit higher . I think some of the cost growth is the investors are catching up with the news. Well be addressing that on our call in the Fourth Quarter we had some accounting matters, about half of that cost growth above our baseline cost that well be addressing then there is another point, we had wage increases for all of our ground stach and flight attendants of 4 that went in effect october 1st then tenning to reinvest in our business weve grown our business, top line, 15 the last two years its hard to keep our unit costs down in the 1 to 2 range when youre growing your volumes at that level so long term, our outlook is great. Our cost outlook long term is to stay within 2 and were still within that range. Hey, ed, if part of this is because of overtime where youre picking up additional flights because your rivals who use the 737max cant do some of those flights, do you think that these are going to be longterm market share gains that you hold onto and if thats the case, do you expect to hire more pilots instead of paying them overtime . We are hiring pilots, were hiring flight attendants, ground staff, all categories of the company. Were in the process of hiring 6000 people this year, and at least a like amount next year. I do expect the share gains to be held. Our net promoter score, which is our key measure of customer satisfaction, is also at an alltime high. It was up five points year to date so i think long term our growth story is intact. Were going to have some costs to invest to keep the product in the Service Strong and keep the satisfaction growing capacity is something that, you know, its hard to theres good times and then sometimes it seems like it gets too good is it in balance right now, ed i think its in balance, joe. I think one of the things thats weighing on the Airline Stocks as a whole is the question about how the max returns next year. Right and what will be the sequencing of it i think that will be the capacity story that most investors will try to look out for, given that we dont have it its not as much an issue at delta. But to the extent there is incremental supply above demand, that will certainly put a pressure on pricing. Ed, can you speak to that specifically i know its not a plane that you fly, but obviously investors are asking you questions about it. Theyre thinking about it in terms of the multiples, the comps theyre putting on you relative to everybody else where this shakes out in terms of the timing on that plane and these new reports that suggest that theres a at least some kind of skirmish taking place between european regulators and faa and others well, we dont fly the plane, andrew, so im probably limited in what i can say. But i said all along i think its going to take longer to get that plane back in the sky than anyone had thought given some of the sensitivities, particularly some of those political skirmishes that youre talking about with the regulators we expect to see that plane in the first part of next year. We look forward to competing against the plane. One thing about the max, all the other airlines that had it i think have done a very good job of holding onto their key profit pools and their key revenue pools. So to the extent that they did not have that incremental lift, it was obviously in the weakest, some of the weakest markets they flew so competitively, our outlook looks strong and any share gains we picked up in the year im sure were going to continue to fight hard to hold the international, is that a positive or negative is it slow internationally, ed well, international is choppy on the u. S. Side, which is our bread and butter, about twothirds of what we fly is domestic we were up 8 in the quarter internationally theres been pockets of weakness, particularly in asia certainly the tariff issues on some of our automotive and heavy manufacturing customers have cutback their travel to asia europe was a bit weaker given primarily currency effects so it was much more expensive to fly out of europe. So as a result, the u. S. Inbound traffic into europe was strong, but exit europe was a bit weak but that said, we also have seen a lot of capacity come out of the european transatlantic lowcost markets in fact, thiswinter we expect that market place, the lowcost european transatlantic to be down almost 20 in terms of the many of the bankruptcies weve seen in the last number of months ed, to that point, how many flights a day do you fly directly either branded as delta or cobranded with partners to china right now . China is about 3 of our total revenues so it really is relatively small. And were at a max in terms of the level of flights that were allowed, either u. S. Carriers going into china or the chinese carriers coming out of the major markets into the u. S so i think the capacity is largely fixed at this point until theres a new set of bilateral discussions between the u. S. And chinese authorities. Its relatively small for delta. All right, ed bastian, we appreciate you coming here and talking over the results and as we said, i think delta, most carriers are down for the year, but delta stock up, off a little bit today can i update you before we go to break . On . The two nobel prizes for literature you dont want to do this story because one persons name, polish author, olga tkarczik that was 2018. Two of them. This is rare two of them. 2019, austrian author peter henke. I like these guys, the way they talk the first one was given because of a narrative, imagination with encyclopedic passion represents the cross of boundaries in the form of life that was olga. And then the other one was even more complicated an influential work that with linguistic ingenuity has explored the specificity of Human Experience i want to read both of these things just to bone up on amazon now bone up on both of these subjects, sorkin, dont you think . We can all benefit from that. Thats the last of the and as thats the last of the real nobel prize economics is not real its from a committee coming up when we return, conflicts conflicting reports, i should say, over ongoing u. S. Trade talks sending futures this morning on a wild ride what investors are expect as negotiations are hashed out or not. Squawk box returns with all of the details when we return welcome back to squawk box. Reports that highlevel trade talks have yet again stalled sending markets on a wild ride this morning want to get over to kayla who has some details and maybe some news thats actually made the markets turn into this bit of a roller coaster kayla. Its hard to know, andrew because every hour it changes. Talks with chinese principals will still take place today. Despite what im told, there were difficult and tense conversations among lower level go negotiators this week. Its the level of talks thats being most closely watched now the south china post reported than will leave tonight signalling displeasure and frustration to the u. S white house negotiators were caught unaware of that news. A spokesman saying there was no change in the schedule and the Senior Administration official telling me the u. S. Still believed there was a big dinner planned thursday and the vice premiere was going to be departing friday evening an hour later a principal from the u. S. Said the situation was fluid and whether talks extend to friday was still an open question that maybe some in the chinese delegation could leave or that the round could indeed end early. But that was still an open question media reports today show a couple olive branches that the u. S. May offer to change that. One green lighting license for huawei suppliers, and two, rolling out an already agreed currency deal. A Senior Administration official tells me the president still hasnt made up his mind how he will proceed hes going to, based on how negotiations go today, but heres how he responded when asked about a deal publicly yesterday. I told that to president xi i said, you know, this cant be like a 50 50 deal because the 50 50 deal, youre like up there, were down here so 50 50 doesnt work, right you have to have a little balance. This has to be a better deal from our standpoint. And i think they fully understand it. Reporter chinese officials have said any deal would need to put the two countries on equal footing. It would need to treat them equally. It would need to be a win win situation. Clearly, becky, what the president is describing is not that well see how talks go behind closed doors well bring you the latest as we have it. Kayla, maybe the most important point for the markets now is what you said about the fluidity of the situation. Things changing so quickly, which may be why were now seeing the futures relatively flat compared to what weve seen earlier in the trading session things changing relatively quickly. The chinese officials not shy about using press outlets to telegraph exactly how they feel. And exactly what they plan to do and how they could throw a wrench in these talks and how the markets could respond. That is a very clear message they are trying to send to the white house and to the president. Well see if it lands. Kayla, thank you. Kayla tausche. Joining us for more on all of this is the c. E. O. Leland miller leland, these are some of the most complicated things to try and discern even if you have sources close in washington. You dont know what the other side is thinking the sides could be changing their minds pretty rapidly, too. How do you read the tea leaves how do you play this mind game thats taking place . The most important part of reading the tea leaves is figuring out whats white noise. The reality is almost everything youre hearing right now is white noise. The fact the deputys meeting didnt accomplish anything no surprise news flash. No one in that room had authority to do anything the idea the chinese are threatening to leave early is a power play mnuchin and lighthizer left early last time around maybe that. There was bad news from a chinese perspective earlier this week whether youre talking about sanctions, blacklists, visas being pulled away. The chinese have reason to try to show their displeasure with this but all the nittygritty is going to happen today and tomorrow in the trade room and they have a lot planned. If tomorrow happens look, anything could happen if they cancel tomorrow, its not because of what happened in the deputys meeting its because they dont get what they wanted to i have a feeling theyre going to get more substance today. You think the chinese will get more substance than they expected the chinese had to do one thing in order to go into the talks. They had to be prepared to buy a sizeable amount of agriculture my understanding they signalled that they signalled that they may beat expectations on that you heard what President Trump just said, saying we need more than a 50 50 deal because were at the disadvantage here right the idea that youre going to walk out with 10 billion in additional soybean purchases doesnt seem like it would live up to the expectations that the Trump Administration and lots of americans have thats exactly right. I think thats the tip of the spear. So you get soybean purchases, you get your commodities purchase magically, huawei is going to see some licenses soon weve been told. You know, you start hearing about the i. P. Chapter one of the reasons theres been no progress so far is the administration hasnt formally put a december punt on the table and theyve been unwilling to talk about a pull back of the september tariffs. These are in play right now we have october 15th the tariffs are expected to go from 25 to 35. October never gets brought up they dont see it as substantively important. Markets are looking at this as an enormous bellwether the white house isnt. Its laser focused on december theyre focused on september if they can pull it off in october tariffs are not going to increase, thats off the table . There are chances than not we see a punt todays talks go as well as they perhaps should at the same time i think if you see a punt, its good news if you dont see a punt i dont think it dispositive to a deal in november. All right lets play out this little turn of events. E vice premiere of china leaves early lets say then october 15th the tariffs go from 25 on those goods to 30 then what happens . How would you read that . The leaving early if it happens and they send a signal about that, thats not good. What you want to see, the biggest tell you could possibly see is after these talks end, if they schedule an immediate followup and lighthizer goes to beijing, which is my understanding what will happen if there is a really good meeting in the next several weeks. All of a sudden this stuff kicks into high gear if you dont, if they cant come to any type of agreement today or tomorrow and things fizzle and youre just seeing a little lag, little huawei, that is a negative sign. What would you do in terms of being able to hedge bets on this you say the positive potential outcome versus the negative. What would you say odds are of getting either one the white house wants to move this direction and the chinese are happy buying ag. The question will be, i think, the next step look, there will be how much political pressure the chinese feel at home from from the bad news that happened earlier this week, but also how much theyre willing to move on i. P i think that this step should move forward in a relatively positive direction its whether the white house realizes that maybe the october tariffs are a bigger signal for the chinese than we think. What do you think about how the nba situation is playing out, apple has now pulled this app the chinese said hong kong protesters were using to track police there that to me shows a whole new world in trying to deal American Companies in trying to deal and operate in china. On the one hand it shows, look, decoupling or even moving towards a direction is going to have serious repercussions for Corporate America, for financial america, for everyone. On the other hand, there is a real push back in whats happening with the nba across partisan this is not this is an america issue, this isnt a partisan issue, which is unusual these days. I think what the chinese are going to soon realize, they can play this card, but its going to its a not going to work for much longer. Is this a new card or this card has been played daily for the last 40 years, and for the most part, we have not taken true notice of it. That is exactly it. But i think an issue like this, everyone is watching the nba now people are right. Now people are taking notice what youre going to see is the idea an airline would concede to china or hotel chain would concede to china thats not what people are paying attention to. Now i think people are going to put the big picture together and there is going to be a concerted america pushback on this youre saying decoupling. Go back to my weve been in this marriage sort of with china. Symbiotic relationship were getting divorced were not getting divorced. Were going to Stay Together . Are we going to live in separate bedrooms are we going to live in separate places are we going to get separated . Are we going to be able to patch things up . Separate bedrooms, but flirt in the hallway along the way what . Was that ambiguous enough this is getting weirder and weirder. Im trying to figure out what the nuance, what that actually means. Part of the decoupling where are the kids . The kids are screaming in the background as all kids do but this is were in counseling both sides are willing to do certain things, we can preserve this, we dont throw away all this the ambiguity is intentional im throwing into the situation here you say decoupling were not going to draw a fine line between the two countries and separate what we see is supply chains moving their own direction you have a 5g battle separating the world. We already have a separate internet this is the new normal. Were not going back to where we were before. Thats exactly right. This is a longterm trend. Separate bedrooms. Forever flirting in the hall. Smart okay. Leland, thanks. Thank you it does help, youre kind of simple it helps me to sort through all this you see what im saying . Bring it down to this. Its a decent analogy it is we have a long history together. I dont think we should throw it away ill think of a better analogy for next time. This is pretty good i like the hallway okay. 9 fed, facebook and your corporate headlines, all straight ahead well bring them to you when squawk box returns right after this announcer time now for todays aflac trivia question. When was the first u. S. Thanerhechlauned e sw wn cnbcs squawk box continues aflac coach saban we have Health Insurance. Did Health Insurance pay for everything . No, we still have bills. Aflac gives you money directly to help with those. Aflac and your deductibles, knee brace, whatever you choose. Aflac sounds like a winner. Umhum. Umhum. We try. Get help with expenses Health Insurance doesnt cover. Get to know us at. Duck aflac dot com problems. Its human nature to hate problems. But why is that . Spe us , bend things, make things better. To rewrite the rule books, the history books, and future books. Thats why so many people work with ibm, on everything from city traffic to ocean plastic. From new schools, to new energy. From flight delays to food safety. Problems even got us to the moon and back on one tank of gas. And who knows where theyll take us next. Announcer now the answer to todays aflac trivia question. When was the first u. S. Satellite launched the answer, january 31, 1958, called explorer. Joyous day that happened as i recall shares of Bed Bath Beyond are soaring. Company announced late yesterday it is hiring chief merchandising officer mark tritten effective november 4th tritton hemmed streamline the Shopping Experience at target both in store and online he led the revamp of stories introducing privatelabel products in collaboration with bigname brands like vines and hunter boots he previously worked at nordstrom, timber land, and nike Fidelity Investments have now eliminated trading commissions on its online brokerage. That matches the move by charles schwab, and e. Trade financial previously they charged 4. 95 for online stock trades. The dropped commission begins today. Of course, not all of them are doing this if you really understand the model behind robinhood, which is the first one to drop the commissions, the way that they are able to make money and drop the commissions is they sell the trading flow and all of the data on your trades to folks like citadel and other hedge funds. So it is a bit there is an argument about front running and about what that actually even means and the idea that youre selling the data there is no such thing as a free lunch hello. Exactly you cant get it for free. But do we care again . Thats actually the fund amount at question at the moment apparently we dont. At some point i imagine we will again. You know, google maps, take my info. Take your info. Give me google maps, take my info dont take away my google maps, right, right in this case, though, the question is are you giving out your info and are people able to use that info to trade against you and make you get a worse deal because theyre fronting the numbers this is your stock trading. As a result, you may get a lower spot in the line a lower spot in the line. It may be a penny, it may be less than a penny. Its all on the margin then the question is, is that penny, how valuable is that penny relative to what you paid for it the regulators havent said this shouldnt be happening. When we come back, maybe well debate this. Are you ready for this the nba tipping off in china in just a few minutes we are going to talk hong kong fallout and much more when squawk box continues may show you a little bit of that as well as we head to a break look at u. S. Equity futures. Off 50 points on the dow quk xetnsn 16 points. Sawbo rur ia moment welcome back to squawk box. Apple now removing an app from its app store that hong kong protesters had used to track Police Movements the app is called hk map. Live. It was rejected by apple earlier this month, but then allowed to go on the service last week. Apple said they verified with authorities of course, hong kong authorities we should say the app had been used to target and ambush police and threaten public safety. After apple removed the app, some protesters said they may, quote, visit its hong kong store. We have talked about this a bit yesterday on the show, but this is a new development in terms of them taking it off the service, and then the secondary piece is when other authorities go to apple in the United States, for example, and im thinking of ways and sheriffs have already done so and said to google, stop putting this on the ways service. Apple, stop taking the service there are other apps in the United States and europe where you can see where police and other people are how its being used, i dont know but its interesting just interesting that every step is going to be so much more closely monitored from any corporation. Right and i think getting forced to choose sides and so is this just a political issue right here i mean, is this i mean, the question mark is i dont know. I dont know enough about it is it to this specific issue . I dont know enough about it in this situation. I dont know if there were police that were targeted. Certainly seems like the situation where youd like to hear more. If we had a g8 in seattle again or Something Like that right would we be mad if apple shutdown an app that allowed those protesters no, id like see them do it if thats the case and i will say the difference with ways is you know where police are stationed when youre speeding and youre trying to look, ways is the one that made the argument that knowing where police are it actually slows people down. It reduces they were never legal it reduces speeding rather than increases it. I dont know if thats true or not. Still to come on squawk box this morning fed chairman jay powell insisting starting the treasury repurchases was in no way quantitative easing. Well talk about the feds move right after this break then facebook stand on political ads. We will talk about their handsoff approach and what it could mean for the 2020 election trade talks were stalled, back on again, back off again. Dow futures right now down 72 points well tell you what you need to owefthe opening bell on wall street. Squawk box will be right back. Is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. But in my mind im still 25. Thats why i take osteo biflex, to keep me moving the way i was made to. It nourishes and strengthens my joints for the long term. Osteo biflex now in triple strength plus magnesium. Woman what gives me confidence about Investment Decisions . Rigorous fundamental research. With Portfolio Managers t 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. Welcome back, everyone the fed discussing permanently increasing the size of its Balance Sheet. Is that the same thing as quantitative easing . Senior eric no, maam iks reporter Steve Liesman joins us with discussion on the fed Balance Sheet debate if it smells like quantitative easing and it quacks like quantitative easing, what do you think, steve i think you have a opinion on this, becky. Just a little lets talk about q. E. , how much q there is, and how much e it will lead to. The fed will resume growing its Balance Sheet. It is concerned markets not see this as a round of quantitative easing q. E. , remember, a program from the financial crisis where the fed bought large quantities of mostly large term bonds to spur Economic Growth. This the fed says is not going to be that the new move it says is in response to a lack of liquidity in over night funding maurkts that drove the fed funds rate above the fed target rate. There are two parts to what the fed will likely be doing over the coming months and perhaps forever here part one, replace the temporary operations with a permanent increase in the size of its Balance Sheet. You can see on this chart the recent bump up is the temporary operations that raised the size of the Balance Sheet they need to make that permanent by going outright and buying treasuries, probably buying treasury bills, though, on the short end. About 200 billion worth of operations, but no particular time line on that. Part two, resume growth of the Balance Sheet in line with nominal Economic Growth. That is 4 to 5 annually on 3. 8 trillion we did the math so you dont have to. Thats plus or minus 15 billion a month. Maybe forever. The fed says, part one, adding the 200 billion in reserves, just getting the market the supply it needs where the funds rate is going to tradein line with the market. Thats normal operations going back to the precrisis year when the Balance Sheet grew right along with nominal growth, it is a q. E. In size, isnt q. E. In intent. That isnt designed to drive down rates and spur Economic Growth in other words, they say at least theres not a lot of q and thats not going to lead to very much e okay. So i have an opinion, but i value your opinion what do you think, is this q. E. Infi infinity let me start with one thing if the fed wanted to do q. E. , they would say theyre doing q. E. A lot of the whole way the q. E. Worked is by telling everybody were doing kwfrq. E. The market gets out in front of that, you dont have to do all of it or it has a bigger effect. Theres no reason if the fed really wants to do q. E. To keep q. E. Quiet i think thats one two, this is a third of the size of the smallest q. E. Operation there is not a whole lot of quantity also, it is on the shorter end of it all. Its just a little bit of q. E. If you need to call it q. E. To feel good, becky, you just go ahead and call it q. E. I dont think its q. E i dont think its q. E a big fed Balance Sheet here to stay forever . What it is interestingly is an acknowledgment the fed went too far in reducing the size of the Balance Sheet, which i think you excuse because the banks kept telling them we only need this much. Then when the so and so hit the fan, they needed that much i know its skinny q. E. Little bitty tiny bit we decide skinny market what was it yesterday . Skinny deal skinny margarita, skinny bundle mike santoli is here, too what do you think, mike . With steve here, its going back to a time when the fed just accommodated hold on the exhibition game between the nets and the lakers tipping off in shanghai. Its currently 00 the Chinese Government has mandated that there be no team or league news conferences in conjunction with that game its not being broadcast anywhere in china, but thats from looking at it, it did not look like there were any empty seats, which was the question we were talking about with eunice earlier today. 18,000 seats were sold out we only saw part of the crowd. The score was 00 also worth noting the nets are owned by joe tsai, one of the founders of alibaba. One of the vociferous spokes men on behalf of china what did he say he came out three days ago and was effectively on the side of china that itself created a separate debate, did he go to the nba first, did the Chinese Government go to him and say we want you to make this statement on behalf of china its complicated nonetheless looked like a pretty good game depth see much didnt see much of t. I was looking at the crowd. Want to get back to the markets. Steve finished the point we were going to santoli, why dont we do that. Santoli was agreeing with me when he was cut off, for the record well see about that. Howard ward is here, chief investment officer, tgm Institutional Investors joining us from chicago. We will begin with mr. Santoli agreeing maybe, or not agreeing. If you say the current fed policy is to keep rates within this target range, it is just maintaining the same policy to buy what you need to do and do reserves at the short end. I understand that the Balance Sheet grew 5 a year before the financial crisis nobody ever talked about it or noticed it or cared. Thats whats going on now how much were we before its a lot more regulatory requirements for excess reserves, and thats really where the nut is on this thing market is smaller by the way, the pool of treasuries is vastly larger, too this is the normal. Were never going back to where we were. 15 net billion buying the bills. Treasury securities, 10 trillion this year. I think becky is having an interesting moment here, which is remember the moment in apollo 13 where tom hanks says we just lost the moon . Yes i think youre right in saying, we just lost the ability to go back this is the new normal. Were never going back as we knew it, its never happening again. And if thats the conclusion you have, i think you are 100 right. 100 . Were never going back to an 800 billion this is a moment Balance Sheet. Except everything they told us about how this was temporary, this is not. Everything has changed the economy is outgrowing it over time. Its not because the economy grew three times in size the economy did anybody think the Balance Sheet was the absolute perfect number, we had to maintain no, but i will tell you that it means that there was a much bigger need for this and that it is part of the easing overall. It is why theres so much liquidity out there. If you want to take it out of the equation, it means something to have that much liquidity there. Its for the most part. It means something to have it out there. It also means the fed is going to be a part of the treasury market. Right by the way, in less of a percentage than the ecb and the bank of japan are relative to gdp, that is true, too but maybe mr. Howard has exactly lets go to mr. Howard a, do you agree with what steve is saying . B, how do you play it . I view it as a form of q. E. Light. I dont think its really q. E. Because unless theyre buying couponbearing debt, bringing down longer yields, i dont think its going to have any real impact. Q. E. Skinny you had to say q. E. Light, not q. E. Skinny i had to Say Something different weve had a number of guests come on the show in the past week who have suggested that effectively not that theyre getting out of the market entirely, but that they are truly lightning up what are you doing very defensive. I mean, its unusual for me to be very defensive, but im more defensive than ive been in a number of years. The data is lining up in a negative way were looking at now earnings estimate revisions have gone from plus 10 going into the year to 2 they may be negative does that mean staying in the market moving to defensive oriented stocks . Or does that mean Something Else defensive oriented stocks plus cash holding onto it in a moment i think you have a better opportunity the next three to six months to deploy cash. Stocks you have you should be defensive. Would i take Capital Gains with the idea of getting back in at a lower level . No, i wouldnt do that i think were going to have an upturn at some point next year i think we have some rough sliding ahead. Were entering a phase hold on were entering a phase in the market where we are likely to see contracting earnings and contracting multiples. This is the most dangerous phase for the market its when most of the losses occur in stocks and were on the precipice of that happening. I have to get to jim. Im trying to understand what you said, there will be an upward trend sometime next year. Next year, probably late spring of next year. I think youre going to ahead of election season you think there will be an upturn . Thats a very good point. If we get to that level if we get to march, april, may and the economy is doing better and the pmi s are rising, not falling. Elizabeth warren is the leading candidate, frankly, shes probably a lovely person, but i think her recipe for the economy and for regulation would be very bad for the stock market and sends it where . Jim, youve been very patient. What are you hearing where you sit and your reaction to what howard is saying well, i think theres one element thats being forgotten here if we do see p. E. s contract and multip multiples contract, we are going to see the fed respond to that we have free money in the world. You have to ask yourself, where is money going to go if not the u. S. Stock market . I think that the fed could save it as its done in the past. This china thing has been fascinating. We havent really talked about it at all. But if you thought like i thought, you know, that we were going to become numb to these headlines, clearly were not the vixx is running at almost 18 over the last year, over the last five years. 15 . To me that means that people arent complacent. To me thats a positive for the stock market, not a negative i just wonder, though, dave was talking about this in the last hour. Is it right for the fed to cut rates and spur yeah no, not jim it was david, yeah, david. Spur investors to take more risk into what is really a riskier time no. Im not sure that makes sense. So the spectrum by reducing rates and theyre really pushing you into the problem thats coming ahead yep gentlemen theyll tell you. Would you reduce the risk themselves thats true would you spell skinny with a q, joe . Sqinny. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Welcome back, everybody. Facebook making headlines this week after rejecting a Biden Campaign request to remove a Trump Campaign ad targeting joe biden. Facebook said that the video did not violate Company Policy joining us to talk about facebooks role in all this is leah goodman, former fec commissioner and partner at wiley ryan Sarah Fischer axios media reporter thank you both for being here. Lee, what do you think, does this invite additional scrutiny from regulators . No, i think that facebook, like all publishers, has to have reasonable editorial policies in place. And i think what were seeing here is an exercise of their editorial freedom to feature candidate ads without Fact Checking and allow the political process to be the arbiter of truth and falsity in political advertising by the candidates themselves sarah, that sounds like a personal a completely respectable expectation. Thats certainly what weve seen in the past. I would almost argue that everything is becoming more politicized and youre seeing everybody forced to choose sides, much like the nba is. When its squeezed between china and the United States. Its a heightened political environment. What are you seeing . I definitely think its a heightened political environment, especially for facebook which is facing so much scrutiny on capitol hill not just over this issue, but over a lot of issues at the end of the day, this isnt a new thing. There have been Media Companies that have accepted ads with false content or misinformation for decades. I think whats new here is that people look at facebook, they think its huge, and theyre worried that if it allows misinformation on its platform, its going to completely twist our political system i think people are focusing a little too much on facebooks exact role in reality, tons of networks are accepting this ad and have accepted other ads of misinformation before. In the hyper political environment facebook is getting the brunt of this. Maybe i should put it this way. Do you think its more likely politicians go after facebook, not regulators who might follow the rule of law, but politicians tend to follow where the public wants them to go well, facebook is condemned whether they do or whether they dont. Yeah. And, you know, they dont want to be the arbiter and they dont want to take sides in these political debates. Their stated policy i think is fair when it is candidates direct speech, whether its free posts on their web pages on facebook or whether its paid advertising, they are going to allow the people and the other politicians and the press just like were discussing it here, theyre going to let the political process be the arbiter of truth and falsity especially where the speech is direct speech by a candidate to the american people. Lee, what do you make of networks, papers, tv, outside of the Facebook World who oftentimes look at ads, see if theyre accurate or inaccurate and say, we are or arent publishing these things . There is a legal overlay to those editorial decisions across media. For example, broadcast media cannot sensor candidate speech under the Communications Act they must carry and disseminate an advertisement by a candidate, and they are afforded liability protection, particularly for defamation, when they do cable casters, such as cnbc, they have editorial rights over the ads that they run, and they also do not have the Legal Protection against defamation, so they have a little more proactive approach to regulating what they disseminate in paid ads and do not on the internet, it is different. The internet, facebook has editorial control over what it posts and doesnt post, both free post as well as paid ads. And they have immunity protection under section 230 of the Communications Decency act so the editorial decisions are drawn not only by the editorial choices of the various media platforms, but the liability lee, do you have a problem . Last year, i dont know if you recall, cnn and fox in an almost bipartisan approach, removed a commercial that President Trumps Political Team had put together portraying immigrants as a violent threat. Was that do you agree with that decision, disagree with that decision . What i agree with is that all those media you just mentioned, they are cable programmers they have editorial standards, and they are allowed to apply those editorial standards to the ads that they run, unlike broadcast. Facebook, however, just in the area of candidate advertisements, and solely candidate advertisements, they are taking a handsoff approach and they say, we arent going to referee truth or falsity, opinion versus fact, candidate versus candidate debates lee, sarah, i want to thank you both for joining us. I get the feeling well have you both back soon to talk about it. Thank you when we return, much more on the markets and the china trade talks. Well be right back. Announcer in the next hour of squawk box, a round up of what investors should take away from the china trade talks plus, the gm strike, day 25. Will a deal be reached before suppliers feel a pinch that plus your later corporate headlines when squawk box returns. At synchrony, were changing whats possible every single day. But what does changing whats possible mean anyway . Well. If you run a business, it means a lot. For starters, we provide you with Financing Options for your customers. That way, you can help them buy the things they love instantly and pay over time. And that turns them into serious fans. Hang on, theres more. Want Customer Insights . Weve got those, too. We use data to show you what your shoppers have already bought so we can tell you what they might consider buying next. And you can offer them the perfect products. That ceo gets it. From adding unique capabilities to your companys apps to bringing you loyalty programs, our technology and Financial Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . I can shine. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Trade keeping markets on edge volatility in the futures as u. S. And chinese negotiators get set to meet in washington. Apple getting caught up in the unrest in hong kong. The company deciding to pull an app used by protesters and inside a global ride sharing giant. No, its not uber or lyft, but it books more rides than both. The final hour of squawk box begins right now live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with becky quick and Andrew Ross Sorkin futures right now down 56 this morning. Theyve been kind of wide range in the last 12 hoursor so, in the premarket session. Down much more than that it was positive at one point now down 53. Everything keying off of any comments or overtures out of china. Its october 10th, believe it or not. Remember when that seemed so far away october 10th, here it is october 10th s p down 4 1 2 nasdaq indicated down 12 treasuries been in a pretty tight range recently were in the mid to high, 1. 5. Almost 1. 6 on the ten year lets get you caught up on some of the stories investors are going to be talking about today. Apple has removed an app from its app store thats been used by some of the hong kong protesters demonstrators have used this app called hk map. Live to track movements by local police at least according to the Hong Kong Government apple said the app which the Company Rejected earlier this month was approved just last week they say it violated its rules because it was used to ambush authorities. The official newspaper of the communist party in china blasted what it called apples complicity in the hong kong protest. Third Quarter Results out from Delta Airlines this morning. The company Beat Estimates for adjusti adjusting quarterly profit revenue was a little below what the street was looking for it was helped by demand growth by pilots, airport workers delta doesnt have any of the 737max airlines it was able to poach from its competitors that did have the airlines sidelined used a lot of pilots in overtime that added to their costs. They get double time for it which is why theyre hiring more pilots now costs are suddenly an issue pilots were sitting around in a lot of other airlines. Southwest pilots who are now suing boeing saying they didnt make the overtime pay they were anticipating Delta Airline shares down by 3. 5 also check out shares of Bed Bath Beyond. Housewares retailer named target chief marketing officer as its new c. E. O. Succeeding interim c. E. O. Mary winston. It is effective november 4th that stock is up 23 Steve Liesman is back. Hes got breaking news this morning. Steve, what are you seeing Dallas Federal Reserve president Robert Kaplan out with an essay this morning. He said the fed may may have raised rates inappropriately last year. Hes behind the last two rate cuts the fed did, but wants to take a little time now he said hes concerned he said it is appropriate before the july and september meetings to have lowered rates. Concern recent weakness could spread hes a little bit concerned about the consumer here. Says if we wait till the data or the weakness was up in the consumer, its too late. But he wants to reserve judgment on the need for future rate cuts kaplan is not a voter this year. Looks like hes a voter next year from what i can tell. And just fy i, i will be interviewing minneapolis fed president tomorrow at the foreign relations. Who is voting its either this year or next year hes a Voting Member . I have neal voting next year. Hes an alternate this year. Same with kaplan seeing fed Bank President s putting out statements like this, i mean its a little interesting the jockeying before the next meeting everybody is trying to get out there where theyre coming before they get into the room. I thought powell was a little more circumspect about the need for rate cuts than the market seemed to think it was i always have concern about leaning too much where the markets priced is this messaging meant for the markets . Its not as much of a done deal by the way, they debated yesterday according im looking at the probabilities for its not as much a done 2k50e8 th deal they debated yesterday not to price in the way of rate cuts in the future. I have the possibility or probability of a rate cut this month at 82 , but the debates been about next month sorry, the next meeting december, where its just 47 . That had been above, then it went below and its been even lower than 47. Thats where we are now. Were banking on the october cut, debating december steve, thank you. Pleasure. Okay. Top trade negotiators from china and the u. S. Getting ready to sit down in washington it is the first time theyll be meeting in more than two months, but there has been already questions about how far these conversations will go. Kayla joins us this morning with more as the market tries to bet on that great question kayla. Andrew, you can see the media crush starting to form behind me Chinese State media, u. S. Media from a variety of outlets awaiting the arrival of the chinese vice premiere here at the office of the u. S. Trade representative where the talks have taken place at a high level on and off for the better part of the last two years. This one appears to be crunch time you have had a flurry of media reports all throughout the week in the wake of some very hawkish moves by the Trump Administration to introduce a Chinese Business blacklist for certain Type Companies also banning visas for certain chinese officials tied to Human Rights Violations in northwest china. All of that seems to frustrate the vice premiere. Chinese officials now telling certain chinese outlets that they will cut their visit short. They will wrap up talks today at the end of the day thats a day earlier than planned. It was something that caught the white house unaware last night when these reports first broke a white house spokesperson on the record said there had been no change in the schedule and a Senior Administration official telling me there was still a dinner planned with the delegation for this evening and the vice premiere was expected to leave tomorrow. Im told now by a principal the situation is fluid, that talks are openended, that its an open question as to whether tomorrow will still be part of the trade negotiations, whether the delegation will split, whether the vice premiere will, in fact, leave early that is an important point to chinese officials who view some of that diplomatic format as very important signalling as to their frustration, how serious they are and whether progress is, in fact, being made. Well be here, well be monitoring it for you. As to where the president stands who is the final Decision Maker here and has been unpredictable throughout the situation, Senior Administration official tells me last night he has not made up his mind andrew okay. Kayla, thank you so very much for that report. Were going to continue this conversation lets talk more about whats at stake in those latest trade talks. Joining us right now, joe what . You go. Founding partner, nicole lamb hale managing director at crowal nicole, do you have friends back there . Do you know anything we dont know about whats actually going on behind the scenes with the talks right now . Can you tell us . Well, i wish i could. I wish i could give you some certainty there. I mean, theres a lot at stake this week. Our clients at crowal and dufenfelts, both sides are suffering. Were seeing a slow down in the u. S. In terms of Manufacturing Activity extended beyond agriculture. In china as supply chains begin to shift to third countries, they are beginning to feel pain so theres a lot at stake here for lack of a better term, were looking for a skinny deal, something that sort of, at best, i guess, moves it to a year or two from now we dont solve all the i. P. And contentious issues, but we get something on paper, we delay additional tariffs, get some ag buys is there hope fonicole, in your i think a skinny deal is probably hopeful it disappoints me, though, because at the end of the day, the structural changes in terms of i. P. Protection and in making sure that subsidies are not given to Stateowned Enterprises to level the Playing Field i mean, those are the big ticket items. A skinny deal just kicks these issues down the road and i have to tell you, im very encouraged, one ray of hope. Crowal recently issued its global fraud and risk report where we found that 94 of chinese executives that were surveyed with Chinese Companies believed that i. P. Protection is something thats critical. And so that gives me some hope that maybe the Chinese Government will accelerate its efforts to improve i. P. Protection, which is a structural issue that we need to really focus on. I dont know if youre going to make us feel any better about a fat deal is it a skinny deal, thats the best we can hope for its metaphor day here. Weve been using small deal metaphors like that since last december, at best a 90 day, remember it was going to happen in 90 days that was impossible. It was ridiculous. The best you could hope for was a small deal its time to be honest now were talking about fake deal or lipstick on a pig deal right because were talking about little concessions right now that would get us halfway back to where we would have been had we not started this whole thing. Thats not to say that we shouldnt be contesting challenging where china is going, whats happening in its system take the nba situation, for example. You know, to go ahead and get ahead of the question youre going to ask anyway. You cant ask a c. E. O. To be both a Public Affairs officer and the chief executive looking after the Balance Sheet of a company. Thats serving two masters it just doesnt work theres hugh costs to where this whole thing is going weve been pretending the round table thinks it works. Theyre doing what they have to do in the moment. I get that i have the opportunity, the luxury of kind of calling it a little truer this doesnt work. This is not going in a good place. Theres no happy outcome well, thats depressing nicole, it sounds like you youre in the obama administration, and what i usually hear from democrats, they sort of want to take on china, but they want to do it with our allies and they dont want to do it through tariffs. Are you in favor of the tract thats been used so far to bring china to the table or should we have done it the some other way . Sounds like you think i. P. Is a problem. Right and the subsidized the state industries, those are all problems you would have done this well, i have to tell you, the critical mistake that was made by the Trump Administration was pulling out of t. P. P tariffs dont work economists have said that for years. Now were in a case study. Were living in a case study of how tariffs dont work i think that being involved in a multilateral effort like tpp that would bring our allies together and force chinas hand would have been the way to go. Hillary wasnt going to do it either neither was and the president , president obama tried to do it and didnt have the democrats had more republicans on the side for tpp than democrats so i know what youre saying, trump ended it, but that didnt have a chance anywhere well, i think it could have, and i think that its something we should begin to look at again. Thats a longerterm play at this point and i also have to say i think that we need to be more culturally sensitive in our negotiations its very disappointing that the vice premiere may be leaving early. Some of the negotiation tactics i think we need to be careful about because there is a culture sensitivity nicole, when you say the tactics, are you saying we placate the chinese . No, im not at all. What im suggesting is that certainly announcing efforts that really box china in before we even come to the table again arent the right way to go and that happened today. I see real quick, before we go, how do you think u. S. Companies should deal with china, and clearly the nba is a clear example of where this all meets in the middle . Sure. I think that u. S. Companies should remain true to their values i think that its not a winning game to compromise your values you mean money takes precedence over everything, nicole thats basically what i wouldnt say that money is a value. Thats i mean, thats what were seeing with, you know, we blame the nba, but then we went back and said, you know, find a corporation that hasnt sort of appeased china because of 1. 4 billion these are tricky issues, and you cant solve them by tweet. You really need to sit down and have discussions and try to come to a this is bipartisan. I also think these are the type of things the government should be sitting down and discussing and not leaving corporations to decide on a casebycase basis exactly that is 100 right. They should be discussing important point, is this u. S. china or multiple the big thing that happened, choosing to make human rights part of the conversation that didnt even come out of the oval office. That came out of somewhere else. All right thats an interesting point, too. Well, thanks, daniel. Thank you good to be with you. When we come back, well take an inside look at the worlds second largest venturebacked company, chinese Ride Sharing Company didi it may book more rides than uber and lyft, but its not without its own problems plus a year of some big name ipo disappointments. Well talk to one c. E. O. Of the stand outs on what she and her company did write. Stay tuned youre watching squawks on cnbc. Difficu welcome back, everybody. All this week we are taking an inside look at the worlds most valuable venture backed private companies. Deirdre bosa joins us now. She has a heavy weight in the ride sharing industry. And no, were not talking about uber or lyft deirdre, good to see you becky, were talking didi, chinas ride sharing giant the second most valuable company. Based on the funding in 2017, this is an important distinction because that was before the implosion of we works i. P. O reports suggest dee dee idi is g priced in the valuation. Didi is another softbank investment another potential black eye for the recent record as hes raising money for vision fund 2. Like uber, softbank was a late investor putting money in the 6 billion valuation. Didi is a ride sharing monster that makes our own american platforms look tiny in comparison last years average daily rides were twice that of ubers, 15 times that of lyfts while uber has been getting out of unprofitable businesses overseas, its overseas markets, didi has been doubling down. Remember it defeated uber in china. It has poured billions of dollars into ubers rival in Southeast Asia and now it is battling the american ride sharing giant in one of its most important markets, that would be south america. Now, like our ridesharing players, though, didi is bleeding money and facing many regulatory challenges. According to reports, it had been operating at a loss for six straight years and paid out 1. 7 billion in subsidies and discounts to passengers and drivers in the first half of 2018 alone guys, back to you. Okay, thank you, deirdre. One stand out in the 2019 i. P. O. Class is turning point therapeutics the stock is up 20 since it started in april joining us to talk about the business pre and post, how did i do good. Almost. Athena was accurate contouriotis. Your last name is much easier than mine. Let me ask you this we started this segment or came into this segment talking about sort of the ipo class, this vintage. What do you think is going on right now in terms of how the market is looking at all these companies . I know that theyre not, one, monolith youre stand out compared to what weve seen. The reason we outperformed the other biotechs throughout the year, across almost all ipos also biotech is we have delivered on the promises we made we did a lot of marketing before launching our ipo. We had a very strong scientific platform we have more than one molecule we have now advanced essentially almost our third into the clinic since the ipo. Weve had consistent improvement in our Clinical Data for our lead asset and having that Clinical Data really was the premise for us in terms of building on the foundation of our science. And being able to be able to support yes, we had strong science, but being able to show when we translated that into the clinic i want to ask you about that, by the way youre our biotech expert here it is interesting so these are kinase inhibitors you have a small molecule that is less likely to be mutated around by lung cancer. So, what weve done as you know very well, targeted oncology is a precedent that precedes us, but what wen an en