Hour plus wework woes the shareholder wants to shelf the ipo well have those details and discuss them later its the momentum crush. Investors are fleeing the stocks with the biggest gains and could be a warning sign for the Broader Market so Pay Attention power lunch starts right now welcome to power lunch. Stocks are under a bit of pressure take a look at the nasdaq. Thats getting hit the hardest as the momentum gains are selling off. On the flip side, we have small caps continuing their outperformance from yesterday. Up by 1 two headlines affecting your money. Stocks did jump higher on a glimmer of hope in trade talks but then they turned right back lower when President Trump said that he has fired the National Security adviser john bolton over policy differences. That news also sending oil sharply lower. We are live to wrap up what has been yet another very tumultuous day. Thats right. Another dramatic departure from the Trump Administration we got a little more context here we heard from the secretary of state and the secretary treasurer about bolton resigning from the white house the president surprising the world and much of the white house staff when announcing that by tweet earlier today it was very sudden the way the rest of us found out about it. The secretary of state was asked if he was blind sided by this news heres how he responded to it. Im never surprised and i dont mean that on just this issue and i think you would say the same thing we work closely with the president of the United States we have a pretty good understanding. So our mission is not to talk about these workings. So saying there with a smile im never surprised. That smile might be an indication offed fact that pompeo and bolton were reported to be at odds for months bolton now out the question is is how is that going to shift this Administration Foreign policy. I have been asking whether or not that decision to invite the taliban leadership to camp sadai ahead of the anniversary tomorrow was one of the factors for this. The White House Press secretary told me no theres been many factors. Another official here texting me saying this was death by a thousand cuts. The white house explaining this by say iing the president and h National Security adviser disagree d on a number of thing. But they wont say specifically what they were or why it came to ahead today. Thank you very much now the apple product event is underway out in cooper tino lets see what we have heard so far. Thats right. They are right now talking about the iphone 11. Its going to be much faster with better battery life an hour more they have a great dual camera thats going to have a much wider field of view. But they still havent announced the price tag for the next generation iphone. Were waiting for that but we did get a price tag r for apple tv plus. We have been waiting for that since march. Now we have a launch date as well take a listen to tim cook. Were excited to tell you that the first shows will be available on november 1st and will be adding more apple originals every month and apple tv plus will be available in over 100 countries it is just 4. 99 per month for the whole family that 4. 99 is there was some speculation it could . 99 a month. We should note netflix and disney all moving on this news hitting new session lows we see disney down 2. 5 . Netflix down 3. 25 and roku down 9 we also got a price tag for apple arcade announcing that will cost 4. 99 a month for that unlimited Video Game Service with 100 games thats launching on september 19th in 150 countries. We also heard of a next generation ipad as well as new apple watches with more capabilities and a big focus on health well be continuing to listen and listen especially for the price tag for those new iphones. Lets get to our panel to breakdown what we heard. The managing editor of mobile nations and joining us for the first time after announcing the new firm gentlemen, welcome to you both walter, lets start with you in terms of what apple has announced. We spent a lot of time on the watch. We dont know the price on the phone. What do you make of it so far . Its a typical apple announcement theres a run up in the stock and sell off the day of the announcement because there hasnt been a tremendous amount of new unno vags the company sold 230 million phones with the the iphone 6 that was five years ago. Its a new camera. That helps them mitigate the unit decline that exists out there. But again, this is just more of the typical apple launch except for the new services they are talking about thats 5 a month. This is the new era where they are trying to move out from being an Equipment Company to recurring revenue business so thats the new thing for today. The iphone stuff is is kind of status quo what am i getting for 5 a month . Our partner, we have been debating this for months with investors trying to explain this is a really big deal this is not a joke apple is not doing this lightly. They are really serious. Were in this transformal period for tv moving to internet tv apple, this isnt like game over its not like netflix. Its going to be a lot of winners in this space. And for 5 a month, lets before we get to that if you buy an apple device and calculates theres 250 million apple devices sold each year 250 Million People will have a year subscription for the Service Without paying what am i looking for you have a billion devices. They will be able to turn this on a massive global installation. Youre going to be able to turn it on and watch it whether a samsung tv or television, youll be able to watch this product have they announced any of them the morning show is up. You have annual investment youre paying nothing for most people but still, eventually, the decision will have to be made whether you pay whatever it is at that point. For what for originals . How many shows do you watch in a year . So they need to have three shows that you like over the course of not the fist year but the second year. The second year they need three shows that each of you are going to watch this is going to upside surprise in terms of how big a deal this is the price of the iphone 11 is starting at 699 so going lower. They haved on price for years. Now the replacement cycle has extended as long as its been. You have upgraded rates and operators across the world now maybe they are saying we cut some prices after the last phone didnt sell well that seems to help us in the more recent quarter to mitigate the declans. They had to do this to co. Pete with huawei and the lower pri priced markets people talked about them cutting price in the past. Theres been plenty of successful years they havent done that and to grow the revenue or mitigate the declines but clearly this was an aissue after last year. They saw success with price declines in the international markets. They are going the opposite way right now to try its the lower version. It was lower. Then they had the 10s and max to try to expand you on a higher price increase revenue still ended up declining. They dont disclose units anymore. What we saw the revenue decline in iphone. I want to bring you in. Youre the gadget guy. I think theres some confusion going on with some of the stuff said the iphone 11 is a replacement for the 10r. Its kind of being rebrand ed into the standard brand of the iphone which is is a cool way of doing this, which is the iphone 11 pro instead of what we saw before with the max version so theres some shuffling with the the rebranding the iphone 10r was 749. So only a 50 in price apple shifted back in price. The biggest thing is to offer the camera and offer the initial service ises that come with a standard iphone at this price point and battery even greater offered last year. The biggest reason is these c cameras are designed to kind of meet the current pace were seeing from the pixel line not really exceed them which was going to be a challenge for apple in the later year, but the video capables are going to help set it apart especially to the front facing camera this is all around a good thing. The price difference isnt as significant as you think more people part apple tv trials because if you have more devices out there at a lowerer price, more people are going to get a oneyear subscription. You get the tv service. We dont have all the details. Apple is focusing on subscriptions. I think apple really wants to build a robust subscription business music isnt beating spotify, but its number two. I dont think they give enough credit for how well they are doing. Lets bring julia back in they are calling it the pro the iphone 11 pro. This one has three cameras and its the most advanced and detailed iphone yet. This is made out of surgical grade stainless steel and introducing a number of new finishes this will come in the 5. 8inch version and then also a 6 6. 5inch version they are talking about the capabilities now but spatial audio, and what they are calling a super retina display. So basically applying the mac book pro to a new iphone we know its starting at 699. Thank you this is similar to the format that was brought up last year. Were kind of getting rid of the xr design and replacing it with the pro model. It falls in line with some of the naming schemes a third camera that does even more having the display up front with the visual experience and ramp them up, this is the same kind of experiences we have gotten from previous generations gin just increase that one level higher you have lost me. But i have a lot of model names and prices the phone can do an appendectomy its going to be great should i buy the stock or not . The stock is at a premium to the s p. Its been outperforming market and they are returning to growth they are doing a lot of Earnings Growth through Share Repurchase. Since tim cook has take b over, thats seven times higher than what they used to spend. And hes the products that we have today they are still off their high the stocks also close to a trillion dollar market cap once again. While they are spend iing about that much every quarter on Share Repurchase if youre into Share Repurchase still as a way to drive evaluation, thats your stock. That was more meaningful when the stock was at 25 discount to the market just not as compelling as they get into the Television Production business, they are going to find a new way to spend money Steven Spielberg doesnt work cheap. 2 billion is as much as disney is spending in year one this could easily be netflix is spending 15 billion theres a a lot of head room to go that f they see the benefit to device purchases and other parts of the franchise and watch timing, everyone is is try ing to keep you in their ecosystem for longer amounts of time if people love the morning show, if if they love this content, why wouldnt you spend more . Tim cook was at a differenkimpbp can the years ago. He was asked could you be outspent as netflix. He said, look, this is day one for us well see. But in four or five years, well see whats possible. Apple has the Balance Sheet to really be a major player in this space. Buying the content brings legacy problems in terms of distribution windows and entanglements. If you look at what netflix and amazon are doing, its easier to just start fresh versus buy a Media Company and try to figure out a solution so i would be surprised if they did that i wouldnt be surprise d if we look up in a few years and they are spending 8 billion a year especially if its drives device purchases and new sub skringscrs stick around. Ahead on power lunch. We have a problem. Despite concerns, the companys road show could begin as soon as monday details, next. Plus the great rotation. Could it be a warning sign for the Broader Market as we continue to monitor apples product event, well bring you updates as they happen were back planning to go full speed ahead even against the wishes of the largest shareholder. Saga is the right word for it soft bank urging the Parent Company to abandon the deal altogether according to people with knowledge of the discussions, soft bank is concerned about the valuation that we were could get in the Public Markets. They are trouble having investor demand and onethird of the 47 billion price tag that soft bank signed in the latest funding round. That big markdown could spell a trouble for the attempt at raising another 100 billion vision fund. But wework does not appear to be giving up easily two separate sources said its still all systems go wework is still moving forward with the deal. There was a big meeting to discuss plans last night im told an official launch date has not yet been set im also hearing discussions about governance changes its unclear whether they will come to pass if this deal does move forward either way, wework needs the cash ipo could bring billions more dollars to the table plus they submit a credit. Talk more about this. We want to bring in a reporter with the wall street journal. Elliot, they are looking at this bond offering now. They have a lot of debt to raise on the ipo how much do they need the money . Weworks Business Model depends on it. Thats been the story with them from the start every year they keep doubling their evaluation and doubling the amount they raise. If they are going to keep growing,uate they need to keep raising money. The evaluation issues as they prepare to go public are going to be a big problem for them they are saying its a 14 billion evaluation the ranges was supposed to be in the 20s and maybe could still get there. What do you think they need to strive for many billions like you said, its the weird puzzle where you need to raise 3 billion to get 6 billion in debt then you have to pay it back so if the evaluation is lower, they have a lot more debt compared to the size of the company. The short answer is as long as they want to keep growing, which is the pitch they have made, they need to really sort of double their spending every year thats been the pattern for the last history so handicap the risks for me. If they shelf the listing and lose access to a loan, if they reduce the listing, that puts soft bank reduced the size of the ipo and the evaluation that hurts soft bank and its ability, who is one of the biggest backers. And its ability to raise a funding round. On the other hand, if they go with an ipo and it flops, theres a big risk there so handicap the risks for me its a really bad look if they were to have a big markdown because they are trying to raise a ton of money on the pieces they are a really good tech investor it have the hot Office Company of 99 and 200 they pulled in 99 after similar arguments were being made. To elliots point about the impact on soft bank, it seems like the impact would be almost greater than it would be for wework it would raise less money, but its writing down the evaluation of their stakes on their books so the impact wont be felt there. But for soft bank, this follows uber and slap. They are certainly a pattern here although its important to note for wework in comparison with uber and slack, those are trading in the Public Markets maybe lower than where they intended to initially. But they are still doing their thing. With regard to wework, there was a note today that said if they dont have about 7. 2 billion worth of capital to fund their Free Cash Flow losses over the next few years, over the next four years, they are basically out of business. They need this capital to stay alive. So its a matter of this is a company that risks going down to zero if they dont have the capital to fund their operations especially given the various plans we have set forth. The stressed for a recession in 2020 and in that is scenario for 9 billion in capital to fund their operations so this cash isnt really like a nice to have its a need to have for this company. I thought your comparison from the late 90s was entertaining we had sam on earlier this week saying nobody has made the Business Model work. But is it actually the case that theres a precedent for this business it just doesnt come with the multiple that wework would like. I actually think it you look at it today after a hiccup with bankruptcy, they are a decent business so you can make money by Leasing Office space and subleasing it for more money thats a sound Business Model. What is the multiple investors are willing to pay for that. Wework has been high on that well see thank you both appreciate it very much. Now lets go to mike for trading nation golds rally has been put on ice in september the metal falling below 1500 an ounce. Analyst ls target iing a record high of 2,000 an ounce in the next year or two pretty sharp pull back. What do you see as a gut check for the rally . First, its important to distinguish that gold was really trading lock step with bond prices as rates were collapsing, good got a bid to move higher. The safety trade is coming off this extended condition. And i think could continue to unwind, which i think, in our views, this should be bullish for risk instead so i think theres more downside here support starts at 139 followed by 136. 50. Theres some gaps in the chart there. A little over 141 right now as suggested, the macroconditions when they are right can work very well what do you think its place is is in a longterm portfolio . We talked about this about a month ago. I said, look, im not interested at these levels. And im still not interested because i think there are places you can invest and from these levels make more money. The thing that worries me about the gld is is its not backed dollar for dollar with gold. So its meant to trade in sentiment. That makes me nervous. And im more interested in companies that make money and i can can measure. The market has been giving conflicting messages its the two best performing industries through the end of august so i think you sit this one out for awhile if you do want to own it, you own the actual metal at less than a 5 of your total portfolio. Well see how this general unwind of august hottest trades goes that includes golds and bonds. Thank you very much. For more trading nation, headed to our website or follow us on twitter. Apples big event still going on all the news you need to know about it and what it could mean for the stock coming up on power lunch. Something is happening in the markets that has investors concerned. How worried should you be . Well be right back. Welcome back heres your cnbc news update at this hour. House minority leader holding a News Conference this morning following congresss summer recess he immediately went after house democrats. We had six weeks of back in the district of listening to our constituents i didnt hear anybody talk about impeachment. Its time for the democrats to stop focusing on trying to tear the president down former adviser Michael Flynn appearing in court today a tentative date of december 18th was sent for sentencing he pleaded guilty in 2017 to lying to fbi agents. Hes been ordered to testify before congress on september 25th and hong kongs leader rejecting any attempt by the United States congress to make new legislation targeting her territory. She also called on the people in hong kong to stop demanding action from the u. S. You are up to date it this hour. Back to you. Thank you lets check on the markets right now. They were fluctuating on major trade headlines and john boltons departure at the white house. Now the dow has turned negative again. Its down about 35 points. The s p is down 11 points. Thats a different move. And the nasdaq down half a percent. We were watching for this sort of turn of the tide and the the momentum trade with the tech names of late. Apple is bucking that today. The shares are briefly positive. The event is still underway. With the stock roughly sted day right now, but its announcement about the 4. 99 a month pricing has hurt shares odisney and netflix. Well continue to upon month tort that for you. Lets see how its moving. Its ready there as well. You can see about 57. 25 after o1 62. 24 that news from the white house that investor john bol to be has been fired as the National Security adviser that set Oil Prices Falling to the lowest of the session at that point off by about 2 they recovered a bit, but are drifting lower as well well be watching the Energy Complex for the overall prices in oil stocks. Also remember today after the closing bell, you get the American Petroleum Institute Private sector data for the past week is and tomorrow morning, you get the Energy Departments official Weekly Oil Inventories data. So potential oil catalyst this afternoon and tomorrow morning back over to you more news for the apple event. Lets get straight to julia. Thats right. They announced the iphone 11 was going to start at 699 they Just Announced the iphone 11 pro with three cameras will start at 999 and that will have four hours more in battery life and the iphone pro max will start at 1099 and that will have five hours more in battery. So theres similar price points to the last generation they said that those two iphones will ship on september 20th with preorders starting on friday big focus here on battery life, on strength of the screen. They showed a visdeo of them being shot with water, which is the water resistance, something theres been a lot of talk about. Stronger glass and this is the fastest chip ever in a smart phone. So were going to hear more coming up, but some interesting numbers there for the price points of those iphone pros. Back over to you julia, thank you. We do have a major change underway in the stock markets. Got some investors worried we are looking at the rotation thats taking place. I think its a good thing its a little confusing to, plain, but let me take a stab at it we saw a bond yields bottoming out. Theres been a rotation. They are back in they tend to be reflective of the Global Economy banks have been improving. Energy stocks are improving. Retail stocks, these are all sectors that have been lagging in the last couple months. Whats been doing a little bit worse . Defensive names that have been strong all throughout the year Consumer Staples have been done, Real Estate Investor and utilities. This is what we talk about when were talking about rotation its not necessarily a bad thing. So if you take a look at the momentum names, this is a word we keep using a lot. Its generally means prices have been improving better than the average of the market. If you like at paypal and mastercard, we see some of the tech names out there they have been down. You put up the next full screen for me kimberly clark, consumer staple names that have been strong. They have been on the weakside in the last several days so its those momentum names that have been moving in different sectors that we have seen we have seen rotation into cyclical names thats been a little better. We have a nice rally in the transports and there you see southern, john dooer, this is just the last few days since wednesdays close this is associated with the yields we have seen. It sends a signal to the stock market overall i want to show you the transportation sector. The transports have been really strong look at this this is that fourday rally in the transports a classical group. So, yes, were getting rotation. It could be a little confusing big momentum names like Consumer Staples havent been doing as well but this is a good sign. Back to you. Thank you very much so the investor kpo dust out of stocks is it a warning sign for the rest of the market lets bring in michael, welcome to both of you michael, let me start with you bob detailed the movement in bank stocks. That must warm your heart because you like them. Do you think this is the beginning of a rotation into the stocks that bob enumerated or sort of a little rebound i think its probably too early to tell whether its a longterm trend r or quick trade. We have seen money moving so fast among sectors that its hard to draw longterm conclusions. But we have notice d a lot of things that bob represented as well and financials would be one of them we like that sector. We think its fwn been undervalued for awhile evaluations are attractive, Business Conditions are pretty good and consumers are spending and borrowing. So wealth management, business transactions, a lot of these companies are it hitting on multiple fronts from an operations standpoint. Whats the sweet spot for you in the Banking Sector . Big banks, smaller banks, what we have exposure to a lot of those sectors. Asset management and the big banks, we like them all. The biggest potential operating leverage might be in the regionals because theres the best chance for Middle America spending the bigger banks have been a lot more well dwaned so are we a little jumping the gun in calling this a rotation or is it really just that . Over the last year and a half, people complained the risk and reward but you have seen the major periods of rotation. If i look at banks, we got so overbought it yields lower than they had been since the financial crisis. When we see that rebalance, which is is what we talked about at the end of the month, it tends to be effect quity positie what you had in 2016 when we were coming out of the concept of were we going into a recession is you had an enormous rally point for the banks. But we have had a 20 basis point move in the tenure thats equated to the Money Center Banks and as discussed, the regional banks have the most leverage to a yield curve thats not so much that its steepened. Its that its moving higher i get move iing the banks completely, but when you look at the moves in the russell and retail stocks, thats sending a signal that the economy is Getting Better whats changed to make it go higher is the balance we have seen in these particular sectors more to a dead cat bounce . First of all, retail, which underperform ed by 20 is is no outperformed by 6 over the last four days. Its been an extraordinary move. A lot of the deflation trades that was out there, youre talking about gold or yields or some of the defensiveness. Even the food stocks that have rallied that dont make a lot of sense. Banks make a lot of sense. If you look the a the transports, this is a company thats been trading it at a trough earnings multiple the economy is not falling object its face. Rotation has been part of the market for the last couple years. Did you believe the economy is not falling have things in recent weeks improved to the the point youre saying the economy isnt as bad as everybody thought let me explain that on the manufacturing side, no, you looked at the pmis and the market pmi pz. That was better than expected. That was at 57 you have Consumer Confidence numbers. You have Consumer Spending whether you think its good art bad, you have seen credit numbers come out and revolving credit they are making more than they were we have had some reair force mags, that a lot of this was drimpb by ecb policy the relative value trade had a lot of the u. S. Dynamics being pulled down. Final question to you behind your thesis in liking the banks, you think the Economic Data will be okay and Economic Growth will be okay at the very least. Does that thesis extend to the other cyclical sectors that bob mentioned, namely transports and energy stocks. So do you favor them or still think they are not right no, absolutely, we have exposure in all those areas. Our firm view is very similar to what tim was saying. I think the safety trade got way overdone in the shortterm over the course of the summer and theres a lot of risk to continued Economic Growth. And i think investors were focusing on them but whats been missing is all the good news that really is in terms of operating performance, whats been going on in the the economy, now that investors are noticing that again, the safety trade is receiving were seeing it recede in bond yield and in sector rotation were seeing it recede in gold and silver in the longterm, the safety trade may be very legit. But i just think it got way overextended in the shortterm we have exposure in a lot of those areas. Transports, industrials, energy, materials, and underperformed. Were hoping far kick from them. Thank you very much appreciate it. Now to the bond market rick is tracking it. Theres a lot of moving parts. Look at it august 1st starts the twoyear note yields. August was a crazy month look at one week of 30s. Today we have covered 30 basis points in a week some say look at ford. We have a big room of newly issued corporates. This is fords paper against 30year bonds starting in august, now fine tune it to june it looks like its matching up we dont know if its going to match up in an ongoing issue, but markets are a little nerv s nervous. It doesnt take much of a spark when you have this type of bubble ishs scenario in interest rates. What is this . What are you hold iing . A match, of course. You dont want to see anybody light it of course, it is. Thank you, rick coming up, we get back out to california. The apple event just wrapped up moments ago. Well bring you the latest details. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. By the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. You should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. The apple event wrapping up moments ago. Lets get the latest details thats right. Tim cook just leave iing the st. There were three new iphones in the spotlight. The new apple iphone 11 will start at 699. Thats notable because thats 50 less than the last generati generations lowest price point iphone also announcing the iphone 11 pro. This is the first time apple has used the word pro to refer to an iphone this is really differentiated by the cameras. It has the three cameras on the back that will start at 99 the pro will have four hours more battery life. The 6. 5inch version of the pro will start at 1099. The iphone pro max and will have five hours more battery life and in both of those phones, they will include a faster charger. They are also water resistant and crash resistant showing som pretty striking videos of them being shot with water and dropped on the ground. Now, all of those iphones ship on september 20th, although you will be able to start to preorder them on friday. They also announced theyre going to launch a tradein program for iphones and that the new that the apple store on fifth avenue in new york will reopen on the 20th as well guys, back over to you julia, thank you very much. Lets get over to our tech panel to break down what weve just heard from apple so far. Rich greenfield and water piasick are partners and analysts at the newly formed lig Lightshed Partners i just asked walter, what do three cameras allow me to do that i couldnt do before . Why is that such an attribute . So previously you had two cameras that allowed you to take a normal shot and then zoom in on something without having to do that pinchtozoom thing, which removed some quality when you did that this version allows that same zoom in that gives you that increased quality, but also allows you to zoom out, which is going to be really important for those kind of, you know, artistic, you know, panoramic shots. Lets say youre taking a shot of someone on a lake you can capture that whole area instead of just the stuff thats just in front of you lets talk about the thing, of all of these things that stand out to me, the one that really stands out, gentlemen, ill start with russell and turn to you is the idea of four hours longer battery life. That is a selling point to me. Without doubt this is four hours longer battery life on the first model and five hours longer, if you go with the slightly larger model which will only be a 100 difference for that larger screen and bigger battery. Both of those things are really significant. And its one thing, nobody thinks that their phones battery lasts long enough. To take a phone that was already rated to be one of the best in the industry and add four or five hours to it will be a very big deal i have both phones. I have you want to know about me lets talk about me, shall we . Lets talk about you. I have an android and an iphone i think i have an 8 or something, and my iphones battery is better and this is going to make it even better first of all, i forgot to mention this in the last segment. Thank you for having rich and i on today and our fellow partner, brandon ross, for the first day of Lightshed Partners. We congratulate you did you time it to the apple event . We cant say whether we exactly timed it to that, but it was, you know it worked out well. Luck is the residue of good desi design were fired up about the new venture and how were going to attack this Research Business and some other things that we have planned back to this apple iphone, is the extended battery really a key selling point to you in this so you pay more for it that was the pitch last year, right . Better camera, better battery, same price better camera, better battery, same price. So the more interesting thing really is that 700 11, which is the 10r, which is a price cut, which is new that is a new the 10r was the big seller last year and they sold it at because it was cheaper than the 10 whatever iphone 11 is now 50 cheaper theyre trying to drive volume in the years prior, they were increasing price when volumes were going down. What cousin this do to their margins . Thats going to be a great question for the cfo on the next call the margins have obviously held up incredibly well, given some of the headwinds that theyve had in currency and other things, but that will be something for them to discuss on the call how should we think about this upgrade cycle, if you even want to call it that there are, what, 9 hurrica00 min phones activated globally . What percentage are likely candidates for tradeins people are holding on to their phones longer now than ever, even before the original iphone its been five years since the iphone 6 that was the only super cycle theyve ever, where they sold 230 million phones next year, 5g, the technology is not expected to be broadly available so even though they will brand it as 5g next year, its unclear if thats going to be is there no answer for this particular cycle at some point, if you keep lengthening, you trough out. At some point, theres people out there with their iphone and 6 and 6s, that theyre breaking, or 8, that youre sick of your battery life dying out midday. Time to get a new phone. And you get a price discount because you have the iphone 11 at 700. Now, if i go and buy one of these new phones, im going to get the tv service exactly for free. Thats a big part of this is going to be, you buy an apple device and it comes with this new service. He made it sound like that not that many people are going to do that how many people buy some apple device over the course of the next year . 200 million plus torre drivhe other driver wi competition. You have Cable Companies that will be getting more aggressive. There are 5g networks that are broadly launched overseas. You need competition to drive some of the upgrade cycle, as well could we be at a point now where the phone is to good that it cannibalizes with the laptop . Thats been talked about before, in terms of the ipad, as well when they went to the maxsized phones, that that hurt ipad sales. But ipad sales came back right, theyve been a really good product for them in the past year. Anything you think disney, netflix, roku should do right now to fight back, or do they need to . I think its a total misperception or a misread from the market overall this is not about apple verizon disney or apple versus netflix or roku. This is about a complete transformation of how humans on planet earth watch content and theyre going to watch it on streaming services and we should be talking about how fast cord cutting is going to accelerate when you get 200 Million People around the world are going to have access appletv plus without paying for it disney is pricing far cheaper than anyone thought. If you signed up for d23, theyll price it for 6. 99 thats what sent disneys stock up, the low price. Each of these services is coming in everyone thinks at netflix at 12. 99 is far cheaper than the value they get out of it think about it, the price of getting a cable subscription is over 100 a month. This is the real transformation. When you look at what comcast has done, theyve been really innovative in leaning in and getting you access to all of these Services Without having to leave the comcast settop box. Thats probably where the future is headed, meaning, you sign up for a service and it comes with all of these Additional Services an unprompted final answer for the table here, which is owned by comcast thank you very much. Russell holly, thank you walter, thank you, and congratulationon ain ntmen. S cega, and we will be right back. My biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Doprevagen is the number oneild mempharmacistrecommendeding . It is already working in cities like tokyo. Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back to power lunch. Im diana olick in washington. After covering a Senate Banking Committee Hearing with treasury secretary mnuchin, he was short on details about the reform of fannie mae and freddie mac, but he did make it clear that fannie and freddie need a government backstop paid for by private capital and they also need to be recapitalized. Currently, they each retain 3 billion in capital, but secretary mnuchin said they would need a lot more. If i were to give you a range of a number of, its more like 100 billion than it is 6 billion. And the treasury secretary also reacted to the court ruling friday saying the treasury sweep of all fannie and freddie profits was illegal. He said, they may appeal that to the supreme court. Back to you guys all right thank you very much, diana olick. And thank you for watching power lunch. A busy hour it has been thank you very much. And closing bell starts right now. Welcome to the closing bell im here at the jpmorgan post. That stock up 0. 8 today, over 3 in two trading sessions weve got the constructive comments from chairman and Ceo Jamie Dimon coming up. Broader markets, though, lower, down 0. 4 on the s p 59 minutes left of trade and im Morgan Brennan in for sara eisen lets look at what is driving the action today weaker Economic Data put pressure on stocks early, but hope for a trade deal has helped to raise most of those losses. A highlevel departure from the white house that plays into the trade negotiations oil falling on that news, as well and apple. That event is just wrapping up