Good thursday morning. Welcome to squawk alley. I am Carl Quintanilla with jon fortt, Morgan Brennan at post nine of the New York Stock Exchange watching the markets and trade today, long awaited china trade talks are back on. Kayla tausche is in d. C. Good morning, kayla. Reporter good morning, carl. The rumor mill of potential breakdown in u. S. china trade talks, saying theres a big day of negotiations china, they want to make a deal, but do i i meet with the vice premier tomorrow at the white house. The idea was floated by chinese officials and media overnight they would leave washington early in a fit of frustration over hawkish measures the u. S. Administration unveiled earlier this week. Now the president and top negotiator from china will meet in the oval Office Visits happened a handful of times this spring. During the visits they resulted in agricultural purchases or tariffs being delayed. Thats the reason the market is optimistic this time around. Earlier this morning, going into trade talks, the treasury secretary sounded optimistic tone as well how do you expect it to go today . Reporter thats the treasury secretary, if you couldnt hear him. He said im looking forward to talks today. Right after that, there was a congenial greeting of the vice premier by the treasury secretary and u. S. Trade representative here at the ustr building a couple blocks away from the white house we await news on whats going on behind closed doors, but certainly a positive development in the eyes of the markets after much confusion overnight guys, back to you. Kayla, ill be talking to you shortly, no doubt. Kayla tausche covering ustr. Were going to cover this and impact on the tech sector with Business Insider ceo henry blodget, and neil sakara with us as well. What a morning with huawei licenses, reports of licenses, tech is at the center of this. Who knows what to expect. Reality, tv president is keeping us hanging all about him. Wouldnt surprise me to see a concession and that the market is right to see that because the white house doesnt want to see it escalate . Usually when theres a private meeting between the president and somebody on the other side, theres an exchange and concessions. Wouldnt surprise me bigger issue with fit bit, apple and others, it is hard to run a business in this environment so the sooner we get to some sort of situation thats stable for awhile, the better for business. Neil, that raises the question of what is normalcy now, purchasing managers, corporate treasurers, human resource, people that have to hire, fire, and companies of any size, whats normal now, whats normal enough to let them plan i think it depends on the size and scale of an organization in technology what you saw with fit bits announcement is being a little smaller in the amount and number of products you create in china will require you to move those manufacturing facilities offshore, perhaps to vietnam and philippines, doesnt necessarily solve the administrations point. For larger companies, you can continue to build and manufacture in china, except a lot of goods have to be deployed and sold in europe, and i think the new normal, carl, is for depending on your scale, you have to realize that china will be an up and down market, you have to manage how you build your teams in china, how you put your manufacturing facilities throughout the world neil, how does this change how you invest for us, venture capital, contrary to popular belief is not about putting significant amount of capital in companies that are really hot now. A year ago we invested in a team of a Stealth Company that was basically all u. S. Armed special forces who were very much tech building software. That company we believe is in Competitive Position to succeed. If you sell the software, it happens to be drone and ai software into Defense Department or into Large Enterprises in the United States, it is pretty important that software is no longer built offshore, specifically in china. So i think from an investment standpoint, thats one thing were doing. We also specifically dont raise capital from those areas, as investors, you can make hard choices to raise capital from the best, most elite investors that happen to be in the United States henry, i want to go back to fit bit shifting the supply chain, manufacturing operations out of china we have seen, mind you, it has been a slow trickle, we have seen Companies Making the moves. Once a Company Makes a move to make the invomewhere else, build out the production capability somewhere else, it is hard to reverse that, which begs the question if tariffs stay in place on the existing imports or you see more tariffs go into place and they stay in place longer period of time and more companies do that, the argument could be made the tariffs are working. It is reimagining supply chains, at some point it willstop bein such a negative. Working, if the goal is to punish china, working because it is better for u. S. Business and u. S. Consumers, doesnt seem like it from my perspective. It begs the question, weve had this conversation on our air as well, if not hardware, if not Tech Products that need to be manufactured, where should investors put money now, software, enterprise leave that to neil goldman comes out today, neil, says Enterprise Spending will be challenged survey work, backed up by Morgan Stanley in a separate report yesterday, down grades of cisco, are you worried hardware is in trouble . We do think hardware can be an up and down market. We had a portfolio company, a year and a half ago when zte outsourced manufacturing, their partners struggled, included one of our Portfolio Companies so 90 of our portfolio tends to be software, and we believe even on the enterprise side, near term, software may struggle as the economy turns, but generally speaking you can build companies quickly and in the cloud, theyre highly relevant to security you can build software and have it scaled faster than hardware we tend to focus in those areas. Speaking of software, amazons top spokesperson taking a swipe at the president while on stage at geek wire in seattle. Jay carney, obamas press secretary, doesnt feel the white house is working in the best interest of the country says virtually with no exception, everyone i dealt with in previous administrations, whether i personally agreed or disagreed with the right policy decisions or way to approach things, i never doubted they were patriots. I dont feel that way now. Comment of where the country is now. Yes and a very strong statement from amazon they have been the president s punching bag his entire tenure, has taken it by taking blows this is clearly a deliberate move to say okay, were going to dig in here. Jay carney is the perfect one to comment, he worked in the white house, can comment on the Prior Administration this is obviously a deliberate move interesting to see where it goes from here. Neil, what message do you think it sends people who are in the president s camp are going to dismiss this, not only as somebody from amazon but somebody that worked in the obama administration, but people in tech and tech policy that might be sympathetic to this position, people that watched amazon not really punch back against the trump administration, what does this say . I think amazon is doing getting in front of a real issue, they have a target on their back like facebook has a target on their back from the administration and others in washington you know, amazon is a 40 of the ecommerce market, 4 of retail, but thats something thats going to be addressed, the fact that theyre so dominant in Retail Technology with noeks folks in e valley, making sure washington realizes innovation is important. Companies like facebook and amazon are important, we invest in and around their ecosystem to build the next amazon, the next facebook and in tech, you have to realize that tick tock and other Chinese Companies arent seeing the same impact that u. S. Based companies are, take a step back. Understand that amazon needs to defend itself now, there is a lot of negative sentiment in washington and amongst consumers how large they become. But we should all realize how they helped move the country forward for a couple of decades now. Yeah. You mention Government Contracting before, amazon is a government contractor, right theyre doing work, jedi getting attention at dod competition they do quite a bit of work with the federal government i wonder how much is online, what is at stake you get comments like this from carney and i guess does it speak to, well, well leave it there whats on the line look, aws, a lot of questions were raised when they were competing for the Defense Department multi billion dollar contract there are literally billions on the line for amazon. When mr. Bezos acquired the washington post, given some of the statements from that particular organization and other Media Outlets theyre associated with. Amazon knows the administration will come after them, they need to get in position to defend as in oh va ors they created the cloud as we know it today, and as we look at innovation going forward, theyll be a leader. We as a country should think about these companies in a positive light while still providing regulations that help control them so it is billions on the line and i think theyre getting in front of what will be a problem with the administration. Neil, henry, thanks, guys Big Questions to deal with appreciate your help great to be here. Thanks. In other news, pg e shares plunging after a judge opened the door to a rival bankruptcy plan this as they should down power to thousands in the bay area josh lipton has more. Reporter morgan, were in berkel berkeley hills, one of the areas impacted by planned power outage we got here early this morning street lamps not on. Classes at uc berkeley cancelled. If you look over my shoulder across the bridge, thats the skyline of san francisco, thats not impacted this all coming as they shut of power to hundreds of thousands of california customers. 34 of 58 counties across the state expected to be impacted. The utility says they have to take the action due to Public Safety concerns, high winds could damage Power Infrastructure and could potentially lead to devastating wildfires. Pg e saying we know it could take several days to fully restore power. This is not a decision that we take lightly this is the measure that is needed as a last resort. Gusts of wind as high as 65 Miles Per Hour expected to continue through the morning not all impacted counties are high risk, but utilities are saying it is taking the action at precaution. The outage resulted in runs on supplies like batteries, coolers, flashlights, gas stations and grocery stores, too. Tesla is telling customers to power up the utility saying it could take five days or longer to restore power. The economic damages could total 2. 5 billion, and all of this coming as you mention at a critical timing for pg e that saw bankruptcy protection in january, citing liability costs from fires the last couple years. Yesterday, the judge presiding over the case opened the door to a rival bankruptcy plan, that caused the stock to crater this morning. Back to you. Tremendously disruptive to a very productive economic region in the country thanks. Still to come, let the games begin. Nba tipping off in shanghai earlier today, amid the geopolitical tensions. What are the leagues next steps . Le rurdiscuss when squawk alyetns woman what gives me confidence about Investment Decisions . Rigorous fundamental research. With Portfolio Managers focused on the long term. Who look beyond the spreadsheets to understand companies, from breakroom to boardroom. Who know the only way to get a 360 view is to go around the world to get it. Can i rely on deep research to help make quality Investment Decisions . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Talk to your advisor or consultant some things are too important to do yourself. Get customized security with 24 7 monitoring from xfinity home. Awarded the best professionally installed system by cnet. Simple. Easy. Awesome. Call, click or visit a store today. We are looking at session highs from major indexes, boosted by trade optimism as the president prepares to meet chinas top trade negotiator tomorrow one sector often caught in the trade war crossfire semis, and chip makers, but it is seeing more than 30 gains this year. Guys, good morning you say semis are a great long term investment, tend to be. But theyre so much up in the air, not just when it comes to the direction of trade negotiations, but also just choppiness in supply, demand issues in semis until you look at 2020 now. Whats an investor to do we like the set up in the 2020 near term well be more cautious we think looking at the second half, theres a pull in on top line into Third Quarter, earnings have been pulled into Third Quarter ahead of the tariffs, and the 4 q guide is a little softer. Plus youre seeing valuations pretty high. Most estimates are still high of seasonal trends going into 4q. We think theres a down side going to year end. That said, next year should have much better backdrop from auto industrial and probably less trade tensions going into election season in the back half we have gotten industry that has its own issues, also has this trade issue to deal with. When is the last time you saw that with a particular industry that not only has its own indigestion but macro. Retail qualifies for that, but also structurally, Big Questions, structurally, not so much cyclically like semis are dealing with the market is mostly taking on risk on, risk off tone within this band regarding trade issues, not necessarily isolating the absolute targeted likely victims for an escalated trade war. Do you think this is a big economic threat for the world or not. Semis have traded, maybe apple too, sure in theory on paper, theres retaliation possibilities, but its almost like the market is saying this is too crucial a sector for china or would it be a move too far, too dangerous to do much of anything to compromise to me it is separated in terms of how the market is treating them. When you see the smh of 38 , despite inventory woes and other industry weaknesses, softnesses that you just talked about and that we keep hearing about, are you surprised to see a move like that where does it go from here definitely, i think a little reaction of the headlines week to week. Earlier in the week, smh was down as well you see investors react to headlines. What we see near term, theres softness given companies have pulled in, some are more muted, that said 2020 should look much better given that we should see more lax on tensions had a pretty good year this year, probably see some softness year end is retail useful, mike, looking at how to deal this i look at walmart, it performed better over the week, three months, six months, 12 months than amazon has. And given all of the turbulence in retail, in a way amazon is retail too, i wouldnt have expected that. Retail itself has been completely separated into tiers. You have the anointed walmart, target, costco, home depot, they can absorb any effect or put it on suppliers, whereas you have chain retail seem like potential victims. I think when it comes to retail, it is about the next round of tariffs. Like an on off switch, happens or doesnt, that will change the tone. You say your intels or nvidia. This chart doesnt tell you that. It doesnt. But looking at the future, looking at volatility, might that be a way to go . It could be my big picture view is the market really, really is itching to get past the last known catalyst of talks on tariffs it is good to be there or not. It is not going to be the story i think for the remainder of the year. It will be european tariffs. Could be, or could be the market it is like the trading on this stuff today and yesterday, day before, it is like the in game betting. Fine, you can bet on the next play, have fun but doesnt tell you how the game is going to proceed from here i think thats going to be maybe the business of the next several weeks. Thank you the second largest backed Company Continues to dominate the ridesharing space with valuation of 56 billion. Deirdre bosa has more on that. Reporter good morning. China has the two largest vc backed companies, didi is ridesharing on steroids. It has taken 90 of the chinese market, largest in the world, after defeating uber there three years ago, more than a half billion users, does far more daily rides than uber, lyft, grab, combined beyond ridesharing, does food delivery, car leasing, Financial Services didi, this year is expanding in latin america. A key battleground for ridesharing where uber is bleeding money to compete. Guys, the expansion is costing money. Like uber it is spending to attract drivers and riders according to reports, a didi executive said for every ride in china delivered in the last quarter of 2018, it lost 2 of fair pay, suggesting they could be looking to raise more money the thing is, it is a tough Capital Market environment for the ridesharing industry the reaction to Public Markets for uber and lyft hasnt exactly been warm. And softbank is facing scrutiny over two other high profile money bleeding bets, uber and wework the trade war is costing vc and private equity funds to pull back there are reports the valuation in secondary markets has fallen substantially below the 56 billion number, guys, and shouldnt be too surprising based on what weve seen the last few months. Back to you. Wow some big numbers there thanks for putting it all together for us. When we return, apples new smart helmet well fill you in on that next. And a quick look at the markets now. The dow up 237 points. Both the dow and s p close in on 1 gains, moving with the latest trade headlines here more squawk alley after the break. Markets. The business of trading goods and services. Nasdaq operates among the largest markets in the world. And our Technology Powers markets from indonesia to chile. Great markets are built on a foundation of trust and integrity, forged through leading Edge Technology and a smart regulatory framework. As technology advances, regulation must keep pace to allow the markets to evolve. Today we see an opportunity to modernize regulation, to make markets more accessible to investors and entrepreneurs of all sizes. From the graduate buying her first stock, to an institution investing in thousands. The markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. Thats the tomorrow that we envision and to get there, well have to rewrite it today. I am royalty of racing, i am alfa romeo. But when i started seeing things, i didnt know what was happening. So i kept it in. He started believing things that werent true. I knew something was wrong. But i didnt say a word. During the course of their disease around 50 of people with parkinsons may experience hallucinations or delusions. But now, doctors are prescribing nuplazid. The only fda approved medicine. Proven to significantly reduce hallucinations and delusions related to parkinsons. Dont take nuplazid if you are allergic to its ingredients. Nuplazid can increase the risk of death in elderly people with dementiarelated psychosis and is not for treating symptoms unrelated to parkinsons disease. Nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. Tell your doctor about any changes in medicines youre taking. The most common side effects are swelling of the arms and legs and confusion. We spoke up and it made all the difference. Ask your parkinsons specialist about nuplazid. 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 it has been a rough year for ipos with lock ups for dozens of newly Public Companies set to expire by years end, could another wave of selling be coming soon. Joining us, kate rooney at post nine lock up expirations make people jittery. Zoom and pinterest next week. Uber is the one people are watching by far the biggest, 80 of stock is locked up in november, the lock up expires. It kind of changes the supply, demand dynamic people are saying weve seen the stock struggle already, if vcs come in and decide to sell, analysts say they likely will, they need an exit, ten years in this case, you also have employees. If you have been at uber 8, 10 years, youre looking to diversify. Dont want all your net worth tied up in one stock, let alone one that hasnt done well. The psychology wont wait for it to recover and then sell. Thats true and you dont need to sell, it would be an issue if everybody sells at the same time there are cases you would want to hold on to it there is a need for early employees to diversify, holding this much uber stock if you say im going to go to a high flying startup, trade that salary for equity, theyre watching the shot clock going this is my exit. I wonder how high the stakes are for some of the lockups, given the direct listing discussion in Silicon Valley now. Very true startups that are watching this go on, have been watching uber, lyft, and these performances if this ends up pressuring stocks like analysts say it will, it could add to argument for direct litzing that bill gurley and others argued for cfos was delay an ipo, say maybe direct listing is the way to go, you get volatility up front, dont have to wait six or three months to deal with it. What about chain reactions, sentiment that could shift if you see selling of the ipos because of the lockup, vcs taking in less money than expected does that effect what gets funded or doesnt get funded next it could effect private markets. I think Public Market investors may see that selling and think the smart money is selling why am i here holding uber thats another dynamic that could happen the reason theyre selling isnt necessarily because the stock isnt doing well or dont see long term value in uber, their job is not to be Public Market investors, their job is to bring the company to ipo, then go on and look for the next new high flying idea in Silicon Valley. Thats what we are looking forward to too good thing were keeping viewers aware of whats coming down the line meantime, european markets are closing. Seema mody joins us with a look at todays action. U. S. , china trade talks watched closely. We are decisively higher into the close. A number of companies warning about the impact of u. S. china trade talks. Even the conglomerate in amsterdam says increasing head winds from tariffs impacted business stock is down 9 on the day. Look at the uk pound a joint statement from uk Prime MinisterBoris Johnson and leader of ireland raised hope a deal can be reached as the october 31st deadline nears. In response, higher by 1 on the day, pound against the u. S. Dollar another earnings story we are watching is in luxury space. Lvmh shares up on a strong earnings report, fueled by fashion and Leather Goods division, despite sharp drop in hong kong sales due to protests. Wine and spirits achieved organic Revenue Growth of 7 we should know that so far, upbeat year for luxury stocks in general, all up double digits in 2019 bernstein analysts warn upheavals in hong kong, International Trade confrontation, if all of this continues could be a larger head wind for luxury stocks, especially if recession hits, analysts say a blow to the u. S. Stock market and chinese Real Estate Market could dampen luxury spend that could change that story weve seen so far for luxury stocks jon, back to you we will keep an eye on that now lets get over to sue herera for a news update sue . Good morning, jon, good morning, everybody heres whats happening at this hour two florida businessmen tied to Rudy Giuliani arrested on Campaign Finance violations, resulting from a 325,000 donation to a Political ActionCommittee Supporting president trumps reelection. They were arrested on a fourcount indictment. The city of sacramento will pay 2. 4 million to the children of Stephon Clark he was shot by Police Multiple Times in his grandparents backyard after report of someone smashing car windows officers shot clark 20 times, but no one was prosecuted. Police guarding the gates of a synagogue in east germany, a day after a heavily armed assailant tried to force his way inside, shot two people to death in an attack live streamed on a popular gaming site. The suspect will appear before a judge today. Extinction rebellion protesters continue to cause disruptions as they occupy the terminal building at london city airport. It was the start of a three day obstruction. More than 500 people have been arrested in london since the protests began monday. You are up to date thats the news update this hour jon, back downtown to you. Thank you, sue. In case you missed it, apple stores at least are riding into the future, selling a smart helmet the company adding the helmet to Stores Retail brick and mortar and online this helmet adds lights and led display to the traditional helmet offers a variety of signals, like stop sign, turn signals bikers can activate those lights with the apple watch or touch pad on the handlebars. Helmets are on sale for 250. Not an apple product but on sale at apple retail locations. They connect of course to apple products as well youre a bike rider, you going to get one of these . I dont ride at night enough to justify it, but the kids would love it. Anything with lights alltime high, not just session highs. A breakdown on the fallout between china and the lakers and nets playing in shanghai earlier today. Dow up 224 we believe in education built for all people. , [woman] snhu was the best experience of my life. [man] without snhu, i wouldnt be the leader i am today. [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Owning and running the biggesta Small Business is finding the right people. In hiring our first recruiter, we decided to post a job on linkedin. They had to have worked. At a recruiter firm and be bilingual. When we saw ana marias profile. She had a ton of experience in hr. The interview went really well. And she seemed like someone who could really sell mckenzie to perspective employees. We found the best person to find the best person for us. Post a job today at linkedin. Com grow welcome back to squawk alley. The lakers taking on the nets in china this morning the nba postponing scheduled media sessions as the rifts between the association and china continues. We are joined by economist of sports and college of holy cross professor victor mathisen and phil taylor. Good morning to you both phil, ill start with you. You penned an oped about this certainly the nba isnt the First American brand or company to see some blow back in china where free speech or freedom of expression is concerned. The point you make is other companies havent fostered as much reputation for speaking out on social issues and standing up for human rights as the nba has. Explain that thats true the nba, two of the things the nba prides itself on are International Reach and its willingness to let its players and the league itself take a stand on issues outside of sports the nba pulled their allstar game out of charlotte, North Carolina over the transgender bill a few years ago, theyve had players speak out in terms of wanting better gun legislation, criminal justice reform, all sorts of issues like that this sort of issue in which theyve been somewhat reticent to comment on human rights abuses and the hong kong protesters has put them in the targets, the sights of some critics that say theyre being hypocritical i think the nba has more to lose in this situation than other companies because i think morris expected of them in terms of speaking out victor, im curious your thoughts i realize that china is a key market for the nba and really for so Many Companies and so many brands, but who needs whom more does the nba need china more or vice versa, especially when you get reports, saying that the game today, the stadium was packed well, so the nba will survive without china without question but it gets a lot of money there. They have a 500 million media rights deal with local media in china. They have players that have big shoe deals over there. Thats a real issue. And of course it is easy for the nba to be a Progressive League in the United States when they have a fan base that trends younger and more urban and more nonwhite than the other big leagues in the u. S. , so basically when they have lebron james and steve kerr, Greg Popovich go out, talk about social justice, theyre playing to their american fans unfortunately, that same promotion of social justice doesnt play well with chinese fans or with obviously the Chinese Government well, phil, i mean, social justice doesnt always play so well here in the United States when it comes to sport either, so one pundit was telling lebron james to shut up and dribble not too long ago now the nba is expected to speak up how are the athletes and i guess from our perspective now the brands, the teams supposed to navigate this social justice blow back not just in china but the u. S. , when it is good to stand up for American Values and when apparently it is not. It is a difficult tight rope to walk and the players so far have been pretty silent as well as the coaches, steve kerr, Greg Popovich have made somewhat noncommittal statements about the whole issue so far it is a difficult thing. I think players feel as though sometimes when they do speak out about social justice, social issues in states, theyre told to shut up and dribble but then here in a situation in which they do attempt to keep quiet to some degree, theyre criticized for that as well i think they feel as though, a lot of them feel as though theyre damned if they do, damned if they dont it is a loselose situation for them but also, i think the thoughts of criticism and criticism about them being perhaps hypocritical do have some merit, but i think its also true that they shouldnt necessarily be expected to speak out on every geopolitical issue there is around the globe quickly, victor, looking at all of the turmoil play out between the nba and china, what does it do to plans of other American Sports leagues like the nfl . So the nba is unique among American Sports leagues in that it does have an International Reach, and thats of course because all of the worlds greatest players come to play in the nba. Theres no question that you can trace back chinas popularity with the nba to yao ming coming here, not just a token player but a star in the league most other leagues had difficulty expanding outside the United States or outside of traditional baseball or hockey markets, so really if the nba has the most to game from globalization, what we see here also may be the most to lose. Victor, phil, thank you thank you. As we go to break, lets get a check on the markets all major indexes are higher, not quite session highs, not far away dow up 215 points, s p up nearly 1 rick santelli, what are you watching i am watching yields. Theyre moving higher. Im thinking how does conventional wisdom play into what im seeing in the marketplace . It is huge, big. Want to know how nen tethbrk. Tu iafr e ea nted a p with the cooking. But she wanted someone who loves cats. So, we got griswalda. Dinners almost ready. But one thing we could both agree on was getting geico to help with our renters insurance. 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Licensed humana sales agents are standing by, so call now. Heres whats coming up top of the hour. Trade talk twists and turns driving stocks the latest from washington, debate the markets next move. And a call on stocks, apple, Morgan Stanley well debate those and the inaugural cnbc adviser adviser list is out. Thats all coming up at noon plenty of material today for a santelli exchange. Lets get to rick in chicago rick there certainly is. Look at the two biggest things everybody thinks about, whether it was corporate advisers in the big sur va, walk on the floor, pick up a newspaper, read a website. It is all about the trade war and all about european Monetary Policy all of that wrapped of course in impeachment politics in the u. S. So lets be honest and disrupt some conventional business come. The domestic press, global press, not enamoured with trump, less every day, and the chinese are savvy how they interpret that maybe theyre going to play the long game. Conventional wisdom. Nothing happens with trade, if it does, it takes a long time to effect the economy i think theres another way to look at this i think basketball, hong kong present a two front trade war for china. One is about trade, one about global perception. The latter is changing dramatically, and not in favor of china you know, if you look at past president s, whenever issues get murky, they seem to try to change the 24 hour news cycle. You know what will change the news cycle with regard to china, hong kong, negative aspects of that, that could be getting a trade deal done. Dont underestimate how powerful and tantalizing it might be to the chinese, dont underestimate how quickly and far the market can go on it, no matter how long it takes to get the developments with trade outcome thats positive into the economy as a whole. The second is christine lagarde. Conventional wisdom. I suffered from it, shes a Political Animal it will be more negative policies but some of the things shes saying lead me to think Something Else is emerging in the eurozone because in order to get germany to step in, you have to get current policy to step back and i think Christine Lagardes recent comments underscore that may be her new tactic. If her tactic is to understand the flaws of just doing more of what mario draghi has been doing, she is not going to get germany and fiscal policy. But she seems to be taking a different road remember, conventional wisdom never makes anyone any money you have to think outside the box. Morgan, back to you. Rick santelli, thank you. When we return, the theme park at the back seat of your lfi y ionhe wel lloun t latest Vr Experience when squawk alley rirns returns [spokesman] if youve tried college but never finished, group cheering snhu lets you transfer up to 90 credits toward you bachelors degree. [woman] it doesnt matter how old you are, you can do it, you can finish. [spokesman] finish your degree at snhu. Edu with the rise of ride sharing and the push toward Autonomous Vehicles the next tech play ground might be in the back seat of your car. Cup tessa brewers takes us for a ride. Its like a theme park in the back seat. Is there any danger of the driver getting hit in the back of the head . Reporter an iminnersive Virtual Reality experience incorporating data from the cars experience whether turning, braking or accelerating the car is stopping the game is stopping too. Its synchronized in real time when the car accelerates your virtual experience accelerates. Reporter ceo nooels voneny is in a proof of concept phase partnering with ford and Universal Pictures for a halloween experience this month at universal hollywood he hopes to have his software installed in vehicles by 2021 incorporating gaming, entertainment and education. A lot of people want to work while theyre on the go, but if they get motion sick they cant. Reporter this could mean big business to other industries too. If you can put on the headset. Reporter the headset manufacturer such as facebooks oculus which provided the gear for this experience. Carmakers who install the software will share in the revenue. Porsche, daimler, mercedes and audi which owns a Minority Stake are exploring the options. Content creators like discovery, disney, our Sister Company universal, are looking to provide the visuals. Its firts opportunity weve had to take the content weve been building and put it in place where consumers are. Reporter these experiences are likely to become more complex and mobile in the future im having a very hard time interviewing you and shooting demons at the same time. I have to admit. Yeah. You look like youre having a lot of fun back there, contessa. Is this really going to cut down on car sickness . We know how it is with the studies show when you can synchronize the movement of the vehicle and what youre experiencing that motion sickness can be greatly reduced or eliminated. The drivers, they have what did you feel is it true okay. Well, i had had a very long uber ride from l. A. X. To Universal Pictures i was not a good test case i will say, typically i would not able to tolerate watching a movie in the back seat of my car. I cant be on my phone or working on elon musk t email the fact that you might have spacial computing and not have motion sickness would mean a huge leap forward of productivity for me. Its just in the back seat they dont want an airbag to hit you when you have this on or distract the drivers when the cars are autonomous this potentially has an audience or a total Addressable Market of billions if you look at 50 million rides per day in four of the biggest Ride Sharing Companies globally, already you have a captive audience waiting there. Was it fun . Oh, my gosh it is so fun. I had never done vr before for me putting the headset on for the first time and then im talking to somebody but when i turn my head i cant see him sitting there, it was so weird would i be the type of person to get in the back seat and play, ford is saying were going to interviews the people who test this out at universal and see if this is what they want or what do they want what do you want in the back seat of your car that is the question. Yes. I was thinking about let us know what you find out. One could make throughout the segment but i wasnt going to make any, so thank you. No problem. Thank you squawk alley is back in rethe minutes. Dont go anywhere. Nt tech enou . Everyone, look at your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . 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The company which was spun off of Virgin Galactic teaming up with sat revolution and a dozen polish universities to design up to three Robotic Missions to the red planet with aspirations to begin launching as soon as 2022. Virgin orbit is working on getting its launcher one rocket which would be used for the missions operational first orbit is hoping to conduct the rockets maiden flight before year end. Bottom line, if successful these missions could actually be the first purely commercial trips to mars and it comes in what is a busy week with Virgin Galactic getting a 20 Million Investment from boeing and the nasa administrator getting ready to meet with elon musk at spacex this evening. The satellite announcement before the launcher is ready. Cant we do supersonic travel before we go to other planets . Whats more important . I think it depends on the company and what theyre focused on all this takes long lead time and capital. Both all well see. Baby steps. Speaking of which waiting for incrementalheadlines on the trade talks, thinking we might get an appearance of the delegation and the ustr outside the office but not yet keep your eyes peeled. A long afternoon session ahead dow holding in at 219. To the judge carl, thanks. Im scott wapner traversing the trade talks, china and the u. S. At the bargaining table as we speak stocks watching, waiting and wondering, there is a chance of a deal it is 12 00 noon and this is the halftime report. High hopes, as highlevel trade talks get under way. Whats next for stocks if negotiations dont go well the standoff between the nba and china putting the spotlight on nike should investors ignore the noise and buy it another bull call on apple the stock near alltime highs. Is there a risk buying at these levels the Investment Community is ready to