Hedge. Our next guest says that apple, netflix, and facebook are recession resistant. Were joined by steve malonovich first. Its been up and down m micron had a tough number. But tech is holding in yeah. I wonder i mean, where do you think how would you characterize sentiment right now if not on tech than on faang alone . We actually did a survey earlier in the week. And on tech overall, investors are moderately bullish for the quarter and next year. However, theyre much more balanced on faang. Obviously with the regulation concerns there, there are some worries about faang. For the most part, the big cap tech names are holding in. I got a question for you on sometimes faang member apple whose headline is out about them this morning suggesting that iphone 11 demand is better than expected but ive got two buckets of concern about apple. Im hoping you can adjust. On the near term side, it has to do with supply because of the looming threat of tariffs december 15th. Might apple be ordering more iphones to ship into the u. S. Sooner to get ahead of that to last them longer there u the cycle and then longer term on the demand side. Once we get to the back end of the cycle, do you expect consumers around the world especially in china to slow down because of 5g and the lack of it in the iphone 11 yeah, so we have a pure perform on apple which is essentially a neutral. It could be theyre ordering more phones. Youve got all three phones available at the same time which you havent had in the last three years. I think were through the worst. But as you point out, we do think this cycle is going to be maybe slightly down in units you really have to wait until next year with 5g. I dont think a 5g phone is going tobacco be a terribly dift experience i think you will see a stronger cycle a year from now. Also with this, us, roy, i wo get your thoughts on this. Certainly stoked by these talks about whether we could be moving closer to recession. Do you see certain names and these are recession proof . What i saw and what ive seen, ive actually seen this since september 23rd or somewhere around there im a bier uyer of apple. Ive owned apple for 15plus years. I think tim cook understands the landscape. When steve jobs passed away years ago, they said apple lost its zest ive never sold a share of apple in my clients or personal account. The world is changing. I think apple is going to be in the forefront. Im a big buyer of apple i find it ironic that apples up 4 today but apple makes me sleep at night. Whats important to me is i want my clients to sleep at night a 1. 8 dividend. The 10year treasury less than that i want my clients to go to bed think even if apple stock doesnt move, theyre going to get a good dividend rate. We just showed a graphic that suggested that youve also youre feeling pretty bullish about netflix as well. Is that the case does netflix make you sleep at night too . Theres a lot of Competitive Companies coming into that space. Youve got comcast youve got disney. Im still a buyer of netflix is there going to be some competition . I think theres enough to go around for those competitors in that space netflix, Reed Hastings i think is very innovative years ago when he adjusted the price on netflix, the stock took a little bit of a hit. You can buy netflix for a 30 discount im not selling netflix right now. I have a tendency to buy stocks that are undervalued i think netflix is going to be a player for a long time to come steve, speaking of competition here, this journal headline this morning that disn disneys banning advertising from netflix across its networks well see whether or not it gets harder to book stars from Netflix Original shows in the coming weeks but does this are the gloves off . Yeah, youve seen bob iger go off the apple board. So youre seeing a lot of competition on on that side thats coming. My colleague does have a buy on netflix. Its going to be interesting i think, you know, they spend 600 million on seinfeld to assure themselves theyre going to be one of the top two or three playser. I think you can stay in the top two or three, youre probably okay but theres going to be increasing competition having said that, apples not trying to be the next netflix. Theyre about the apple tv app, if you will. I think over time, you know, theyll find different strategies with the same space steve, whats going on in hardware and particularly to the peak ecosystem cant help but notice this week hp has the layoffs going on the same week that microsoft which we used to think of as a Pure Software player is announcing major hardware, not just for windows but also for android coming up. Whats going on on the changes even on the device side of the hardware ecosystem well, hardware has been a tough spot to be in. Had a strong 18 in the pc business things have slowed in pc and servers. The group is finally catching a little bit of a bid here because of the value aspect. But hps cuts yesterday were much more because of their printer business, the supply business is in trouble theyre cutting 15 of head count. Pc has been pretty strong. Intel is pointing out theres been a pull forward into the first half so i think pcs could weaken into next year. Microsoft, its strange theyve been in hardware in the first place. Surface has done relatively well i dont think it works theyre trying to sell it with office a little bit there. I think now that clouds really driving microsoft, hardware is a little bit of a side project for them theres certainly been a lot to ad to the debate this week. Good weekend to you both well see you soon thank you thank you so much still to come, Facebook Ceo Mark ZuckerbergLive Streaming a suri mti yteayrpseeengesrd dow is up 165 right now. Squawk alley will be right back well, it is jobs friday and although todays report missed estimates, stocks are up for more on this, we are we are joind by shawn matthews. Also with us simona acuda. Good morning to both of you. Simona, what is your take on this report and the revision given how much of this is due to government versus the private sector in my book, this was a decent report i think given where we are in the Business Cycle, i think this reinforces the idea we are slowing but still growing. I was satisfied with the details especially with the hours numbers. S okay. And shawn, given what we saw about the Services Sector and the signal that sends about how things are slowing and then, you know, the onbalance, some would say positive information were getting out of the jobs report, how do you parse both of those and whats your take for the week i think theres definitely a mixed message going on the economy is slowing but the question is what is the trajectory Going Forward economists are trying to wrestle with that. You look at the bond market. It went down and came back so i think Financial Assets are looking through this and saying, okay the fed is going to be there to ease and ease aggressively which im not sure theyre going to build in for now for now youre seeing the market rallying in anticipation of the easing to that point, that is one of the reasons thats been pointing to for this really kind of whirlwind turnaround we saw in the market yesterday after the dow is down 300 points and then finished the day up triple digits as well could potentially be good news because the fed may now cut more than was previously anticipated. Do you think thats actually the case especially after this jobs number today i think there is certainly an element of that. I think whether its true or wishful thinking, it remains to be seen. To me, given that the fed has already cut twice and given the combination of numbers that weve received this week and especially the labor market which still is very strong, i dont see urgency for the fed to move again well see what signals you get from speeches and from commentary from chair powell and others but, you know, overall the economy is in a bit of a holding pattern. Well, shawn, what does this say, do you think, about the environment for Business Investment if were going to get another leg of growth, it seems like thats important but the trade environment has had a number of ceos telling us, you know, there are uncertain which way to go. Then with the labor market as tight as it is at the same time, is there enough slack to really plan on investing in growth . I dont think so. And if we look at the marketplace, if youre a ceo right now sitting in your seat, youre clearly wondering whats going to happen with the trade environment. Now youre going into the election cycle as well so you want two vastly different kind of approaches to business thats out there visavis candidates who could be actually in the white house so i think as a ceo, youre very guarded right now. You do have the problem where theres a labor shortage especially in some key areas and youre going to just kind of muddle your way through this which is why i think Capital Spending is so low its hard to plan for the next two years, you know, and certainly if youre going to have a big Capital Project in place, youve got to be thinking years out opposed to the next three months or six months you can continue to try to hire people on the short run, but the reality is its now about an election cycle thats in place as well as a trade cycle which no one clearly understands at this point thats a really good point. Weve been asking all morning long, whats the difference between the capex slowdown and the lack of a hiring slowdown . Should viewers think of it as a multiyear commitment . Once youre in, youre in for a long part of the cycle whereas workers you can hire and firer on a much shorter term basis absolutely that is part of that but there is a Silver Lining in this dichotomy as well capex is a much smaller part of this whereas Consumer Spending is a bigger parts. Thinking of how much you can get from capex, but not having the upside is not the same as being vulnerable to the downside i think thats where the labor market plays a role. Because it helps stabilize you shawn, you just touched on something and i want to dig into it a little bit more everything we see in terms of this political climate, all of the turmoil out of dc right now, that is priced into the market i clearly do not think its priced into the market at this point in time. You have Elizabeth Warren emerging as the new candidate in front which has tremendous problems for the Financial Markets as well as for health care and some other key components so it really depends on the next three to six months what happens. But if she emerges as a clear front runner, i think the markets will have a tough slog as they work through what that looks like pretty much the four or five front runners are beating trump now. Those are skewed but its a coin flip at this point for whoever gets in to compete against trump. Will they win or not but if its Elizabeth Warren again, i think there are key issues that are out there that is going to have significant implications to asset prices Going Forward. Try to narrow down what you think tough slog means Sanders Health is now in question biden some argue has withstood of damage. Well see if she takes any marginal share even at this early stage. But what kind of liability is there to stock prices if shes the nominee . It just and thatll be based on, you know, what the thought process is but if she is the front runner, i think that has to be priced in at some point. That really depends on whats going on in the Business Cycle and where Interest Rates and how aggressive the fed is going to be to bolster prices i dont think its priced in right now. I think people are just coming around to the fact that she is the front runner i believe shes definitely the front runner at this point in time and i think prices have to readjust because of that simona, your take on the effective politics in the election cycle and the markets over the next several months its thats definitely going to be a bumpy ride, i think. Still i feel in the near term the most important signal we are looking for is trade policy. The election is important, but its still a little bit further away and i think there is a possibility that we get a bit of deescalation on trade i would say there is well, to that a reason why you might look for that. To that point, the president is making some comments on trade right now. Just came out. And theyre the best numbers weve had in over 50 years the unemployment number is down to 3. 5 . So that goes way, way back we havent had numbers like this in a long time wages are up by almost 3 . Thats a fantastic increase for everybody out there working. Were very happy about those numbers. The stock market is substantially up as it was yesterday. And our country does well. Europe is not doing well asia is doing poorly to put it mildly we continue to keep doing well but the unemployment numbers just came out. 3. 5 unemployment and that is a tremendous number. The lowest in over 50 years. So very happy. And i think really very important. Again, ill say, wages are up. When i was running, wages were nowhere. They were going down and people were having two and three jobs and they were making less money than they made 20 years before now wages are up one other thing having to do with poland. So poland is a country, great people we have a lot of polishamericans living in the United States. I just signed i will soon be signing and sign certain preliminary applications we will be giving a full visa waiver to poland that means that people from poland can easily travel there and people from here can easily go back and forth. They can each people from the u. S. , people from poland can very easily go back and forth between the United States and poland so theyve been trying to get this for many, many decades. And i got it for the polish people in honor of the polish people in the United States and in poland. So were very happy with that. Yeah [ inaudible question ] i heard adam schiff got four pinocchios he should have gotten them two and a half years ago thats a nice question let me shake your hand thats a very nice question. Almost a surprise. I figured that was a trick question [ inaudible question ] well, well be issuing a letter. As everybody knows, weve been treated very unfairly. Very differently than anyone else if you go back in history youll see how unfairly weve been treated weve done a fantastic job everything to me is about corruption we want to find out what happened with 2016 and as you know theres a lot of work going on in that i dont care about bidens campaign, but i do care about corruption his campaign, thats up to him politics, thats up to them. I dont care about politics. Politics is as i think i made clear and yesterday somebody asked me a question and i gave an answer, but always in the form of corruption what i want to do and i think i have an obligation to do, probably a duty to do it corruption when you look at corruption, when you look at what biden and his son did, and other people and what theyve done, i believe there was tremendous corruption with biden but i think that was beyond corruption having to do with the 2016 campaign and what these lowlifes did to so many people to hurt so many people in the Trump Campaign which was successful despite all of the fighting i mean, despite all of the unfairness. So we are looking at corruption. Were not looking at politics. Were looking at corruption. [ inaudible question ] i dont know somebody said that a long time ago, was that in 2017 . I dont know youd have to tell me when all i can tell you is this when i speak to foreign leaders, i speak in an appropriate way. If you notice, they dont mention that because it was so good the only time they mentioned it was when adam schiff made it up. You talk about pinocchios. That should get ten. He made up a story it was a phony story adam schiff. So they dont talk about that anymore. You know, when this came out, it was quid pro quo well, there was none also yesterday the ambassador who i heard was tremendous and a tremendous person, he was 100 for what were saying. 100 and if you look, he also said there was no quid pro quo. Thats the whole ball game but now the democrats dont bring that up anymore because they lost. Look they never thought i was going to release the call between the ukrainian president and myself when i released that call, they were jumping around like you wouldnt believe they didnt know how to respond. And then they found out that the call itself was so bad for th them weve handed the call out and they say wow were proud of that call when i speak to a foreign leader, i speak in an appropriate manner now, were also doing trade deals with china were doing deals with a lot of people for the country so im not looking to insult people i can tell you that. But we could probably find that out. [ inaudible question ] has nothing to do it no, i want to do a trade deal with china but only if its good for the country. And it could happen. As you know, theyre very much coming over next week, as i understand it. So id like to do a trade deal with china but only if its a great trade deal with china. One thing has nothing to do with the other. Do you want the house to continue with the impeachment inquiry . The way theyre doing it, theyve taken away our rights. If they proceed, theyll just get their people theyre all in line. Because even though many of them dont want to vote, they have no choice they have to follow their leadership and then well get into the senate and were going to win. The republicans have been very unified. This is the greatest witch hunt in the history of our country. So we beat the one that started immediately. We went through two years of mueller. And that came out like a ten it came out perfect. And a few days go by and they start this nonsense. And this is just as ridiculous so the democrats unfortunately have the votes they can vote very easily. Even though most of them dont believe they should do it. And i do believe that because of what theyre doing with pelosi and their real leaders aoc plus three thats their real leaders. I really believe theyre going to pay a tremendous price at the polls. We saw the first glimpse of it two weeks ago in a great state, North Carolina we saw a gre